Betting On 3i Stock A Year Ago Pays Off In Spades
EWM Interactive | Apr 09, 2021 07:36AM ET
The first time we wrote about 3i (LON:III) was in late-October 2019. The stock was hovering around 1100 pence a share following a 1000% gain in the past ten years. Needless to say, few thought a major decline was even possible. Fortunately, Elliott Wave analysis helped us see the bulls cannot be trusted. Five months later, by March 2020, 3i stock had erased four years’ worth of gains.
And while markets worldwide were crashing at an unprecedented pace, 3i stock’s chart was actually flashing a buy signal. The sharp COVID-19 selloff completed the 5-3 Elliott Wave cycle in progress since the bottom in 2009. This, in turn, meant the preceding uptrend was supposed to resume.
Actually, 3i exceeded 1200 as early as January 2021. As of this writing, the stock trades near 1240, up 134% from its March 2020 low and 71% since we turned bullish on it.
Now, with central banks taking the term “easy money” to a whole new level, how high can 3i stock go is anyone’s guess. Rock bottom interest rates and record liquidity are generally a blessing for private equity companies like 3i Group.
On the other hand, the fact that it plunged 92% between 2000 and 2009 shows that when liquidity dries up, 3i stock suffers more than most other companies. Investors thinking about joining the bulls now must make sure they have a deep understanding of the company and the industry. In our opinion, the easy money has already been made.
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