Als je geloofd in een herstel van de Iron-ore prijzen dan moet je dit aandeel
hebben
Cliffs: Mother Of All Stocks
Apr.17.17 | About: Cliffs Natural (CLF) Get Alerts
Leo Nelissen
Leo Nelissen
Long/short equity, growth, momentum, medium-term horizon
BN Capital
(2,701 followers)
Summary
Cliffs is currently down about 40% within a few months.
Macro headwinds are crushing this volatile stock.
I expect to get a great entry in this stock over the next few months.
Last week, the US military dropped the GBU-43/B on ISIS positions in Afghanistan. This so called 'Mother Of All Bombs' seems to get the job done after assessing the situation of the battlefield.
The switch to the stock market might be far-fetched and a bit misplaced. However, since the bomb only hit ISIS positions without civilian casualties, I think we can say that Cliffs Natural Resources CLF could be the 'Mother Of All Stocks' without entering politically incorrect territory.
Source: Mesco
Used under the right circumstances, you can make a homerun with this stock. However, it can also do some serious damage to one's portfolio under certain conditions. Let me give you a few numbers.
The stock rallied 450% from 2006 until the pre-recession peak. The recession pushed the stock 86% lower after which it rallied 550% until peaking again in 2011. The 2011-2015 decline erased 99% from the miner's market cap. The period between the first quarter of 2016 and the first quarter of 2017 added a stunning 570%. At this point, we are already 40% below this Q1/2017 peak.
I'm not saying anything groundbreaking when I say that this is not your buy and hold dividend stock. Especially because the stock doesn't pay any dividends. It simply is a macro vehicle and it should be treated as such.
On the second of January 2017, I wrote an article about buying Cliffs and its peers on dips.
Article: Buying Cliffs Natural Resources And Peers On Dips
Since then, the stock rallied roughly 40% to peak in the third week of February. At this point, the stock is down 40% to 7.12 USD. I did buy Cliffs for a short trade in January, but it would be a lie if I said that I made a killing. I was too focused on the macro stocks I already owned and didn't find the best entries and exits.