Blast from the Past: A Whole New World (November 1987)

On October 19, 1987 the S&P 500 index lost more than 20% in a single day. We thought it might be instructive to look back at what the Turnaround Letter said at the time.

On October 20, 1987 we sent out a special bulletin to subscribers with the advice: “Sit tight and then look for bargains when the dust settles.” Then in the November 1987 issue, we said, “Generally, we think this is a time for cautious buying and not selling…There should now be some good values in the marketplace, particularly in the turnaround area.”

This turned out to be pretty good advice. From its low on October 19, 1987, the S&P gained about 10% through the end of the year, and it rose 57% through the end of 1989. The gain from the 1987 low to the present is more than 500%--without even including dividends.

Read November 1987's "A Whole New World" and watch for future "Blast from the Past" articles to be posted on TurnaroundLetter.com.

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Amazon = US GDP 1970

Amazon joined Apple in reaching a $1 trillion market capitalization. $1 trillion is about the same as the total value of New York City property and the total value of loans at JP Morgan, the nation’s largest bank in terms of assets. Jeff Bezos’ $160 billion stake would place him (personally) as the #33 largest company in the S&P 500 in terms of market cap, next to Coca-Cola, Disney and Netflix. We aren’t bold enough to predict whether the shares will continue upwards or if they are in a bubble reaching maximum inflation. Setting aside for a moment their investment prospects, let’s admire the truly remarkable milestone that these two companies have reached. Read More.

EV/EBITDA: What Is It & Why Are We Using It More?

In reading recent editions of The Turnaround Letter, you have probably noticed that we are increasingly using EV/EBITDA as a valuation measure, rather than the better-known price/earnings multiple.  We thought it might be useful to describe this measure and why we like it.

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Turnaround Letter Stock Pick Named Top Performer of 2017

 

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What Last Year's Top Stock Pickers Are Buying in 2018

 

This Forbes write-up follows up on the recent Top Stock Tips report--naming The Turnaround Letter's Crocs recommendation the top performer of 2017: With 90% gains, CROX beat out 100 other investment ideas included in the report; and the stock continues to have value investing appeal, according to Putnam.

 

George notes, "We see additional upside for the stock in 2018 as management's efforts continue to bear fruit, though the gains will likely be more muted than we saw in 2017."