CMG

Market Cycles and Investor Blindness

This week’s Blue Harbinger Weekly focuses on broad market cycles, and how quickly investors forget about them and become blind to their dangers and opportunities.  We consider the staggered market cycles of the US versus international economies, and the impacts on specific industries such as railroad companies and heavy machinery manufacturers.

Ben Graham’s Margin of Safety and Current Market Opportunities

When Coca-Cola replaced their classic formula with “New Coke” in 1985 the stock tanked, and when they brought back “Coca-Cola Classic” less than three months later the stock rebounded significantly.  Similarly, when McDonald’s had trouble with Chinese meat suppliers in 2014 the stock tanked, and since rebuilding customer confidence the stock has come roaring back.  Chipotle Mexican Grill's (CMG) recent setbacks may be providing enough margin of safety for brave long-term investors to do something very smart.