"The cyclicality of a company is extremely important because, like it or not, **most investors and analysts tend to replicate the current environment into the future when analyzing a company**. This means that a company that usually has strong earnings, like Daimler, during economic expansion, could be defined as a terrible investment in a recession because analysts usually look at the temporary losses and replicate those in their models. Daimler’s stock price went below €20 during the 2009 financial crisis because analysts were focusing on the net loss of €2.6 billion in 2009 instead of focusing on the long-term strength of the company." ([Location 3977](https://readwise.io/to_kindle?action=open&asin=B07CNFFJ9J&location=3977)) --- **Tags** -- [[quotes]], [[cyclically-adjusted-price-to-earnings]], [[valuations]], [[long-term-thinking]], **Source** -- [[202506221723 - LN - Modern Value Investing]]