Volkswagen AG - will you buy? Not a car but shares of Volkswagen which has fallen over 40% and if it falls anyfurther?
Its hot on my list...... To buy once the damage (fines, extent of manipulation, cost of fixing the issue) crystalizes and the share price completely prices this in.
No one can predict low and high of any share, if someone say that means he is fooling... there is lot of big companies which have fallen from their peak and never recovers..
I also think that you would need to have a lot of patience because when companies get caught up in a regulatory mess, it can take a long time to exit from it. See the example of IPCA where the FDA issue is not yet resolved. Also, you will have to compute the opportunity cost of not investing elsewhere.
Ipca isnt really a good example. But i agree its a long term bet. Let me give you a perspective A good stock offers static value when its confronted with short/medium term problems. VW faces this issue currently and has dragged down another good scrip Motherson Sumi. Now let me give you a perspective Shares of Citigroup, one of the most powerful bank, hit an all time low of 97 cents in April2009. It is a 95.56% drop from the same period last year. The bank's 52-week high was $27.35 on April 2008 and the stock reached an all-time high of $57 a share on Dec. 2006. I invested some money in Citibank - arnd ~US 6. Happened to be working for another equally troubled international bank then so was sure that neither could US allow citi to go under and nor would the crisis last forever and Citi had the credentials to weather the storm. Whats Citi today? It quotes when i last saw it was ~ US 48
Why i gave citi's example and not another of any other troubled banks like RBS etc is because VW to Germany is what Citi is to US and VW is to automibles what Citi is to Global Banking. Germany will not let VW collapse and VW is a market leader within the automobile space
Check enron and lehman brothers they were also american gaints but never came back, do not judge past example to build your portfolio
USA is a different environment.... And most events there are triggered which includes enron and lehman. There is enuf arnd how both corps were allowed to go bust. But many others in a worse off position werent 'allowed' to go bust. Question is : is germany anywhere close to USA in allowing markets to reign supreme? In my view its not and Germany cannot and willnot allow VW to collapse The share will take a further beating as the cost of scandal crystalises and the company absorbs them, suffers for an intermediate period and recovers lost ground over a few years. We can revisit on this forum in times to come. Until then happy investing if you have the stomach to digest the current risks
VW has impacted Bosch stock price as well. Do you guys think there is more downside for Bosch from here? How is current valuation looks like? By the way I am new member and I recently started readings various threads in this forum. You guys are logging great, vital information and inteligent questions and that too through healthy discussion. Keep it up!
Bosch is falling.. Could fall a bit more i feel since its gone below 20k. Excellent scrip : one of the best. risk reward beginning to look nice now I have started buying by bit, since the day before.