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The Zulu Principle: Making extraordinary profits from ordinary shares by Jim Slater

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11. Cyclicals And Turnarounds

Most companies benefit from an upturn in the economy and suffer if the economy turns down. However, a really great growth stock will usually manage to produce increased earnings even in the depths of a recession. Some companies with strong business franchises seem to be amazingly unaffected by the gloom and despondency around them. Cyclical stocks suffer much more than most – building and construction companies, steel companies and automobile manufacturers and distributors cannot buck the trend. The most they can hope to achieve is that at the top of the next cycle, they will be ahead of their previous peak, and at the bottom be better placed than last time around.

Hair-raising stuff, but there is plenty of money ...

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