In an attempt to post more regularly, I would like to start doing a better job of sharing my (many) lessons learned.
Check out the new page Investing Lessons. It is inspired by Saj Karsan over at http://www.barelkarsan.com/.
The first one will be regarding a cyclical.
I owned WJA.to around $10-14 in late 2006 and early 2007.The company did have some trouble slowly passing on rising fuel prices to customers, but their largest competitor (Air Canada) was, well… a bumbling idiot. WJA was stealing market share and there wasn’t much Air Canada could do about it.
It was actually one of my first success stories as shares quickly approached $20 (I had a fair value placed at $20-22) a year after I bought. I remember analysts tripping over themselves to raise target prices. I was caught trying to catch the last 5%.
WJA was still a company with a fair amount of debt and in major expansion mode in a capital intensive business. A friend of mine asked me about WJA after shares went from $20 to $17 about how you get comfortable with a cyclical. I brushed off the concerns as a futile effort to predict the future.
Fast forward 5 years and WJA has now just broken through $20 again. I did end up averaging down somewhat and didn’t loose money on WJA overall, but I still failed to realize how cyclical WJA is. As a capital allocator, this was a major fail.
This post has been moved to the Investing Lessons page.