Buy: Jul 25, 2024 at ~€3.71
Sell: Mar 3, 2025 at ~€8.80
Horizon: I assumed up to 2 years, exited after 7 months.
ROI: +137%.
Why I Bought?
Thyssenkrupp was cheap, oversold, and hated in July 2024. The industrial sector was in the dumps, sentiment toward European cyclicals was terrible, and the company was surrounded by nothing but negative headlines – layoffs, strikes. I figured the bad news was already priced in, and the cycle had to turn eventually. The downside risk was limited, while the rebound potential was significant. Fundamentally, the company looked decent enough, and I knew the big players would start buying. The valuation was below its multi-year average.
Why I Sold?
The market shifted its sentiment quickly – sooner than I had expected. The stock rallied several dozen percent in just a few months. The entire move I was banking on (the change in perception) had already played out. After a ~100% gain, the further upside became less compelling, and the risk of a correction grew. I closed the entire position. I pocketed the dividend and sold. I felt that everything interesting had already happened with this German “corpse.”
Summary:
Enter in fear, exit on the rebound. It worked better than expected. I was aiming for 50%, maybe 70%. The timing this time was impeccable. The risk-to-reward ratio was insane. Hopefully, many more trades like this one.
