Introduction
A few months ago, I wrote an article titled "How Investors Could Have Easily Avoided Chicago Bridge & Iron's Sell-Off." My basic thesis was that if investors would have looked back far enough in history, they would have known that Chicago Bridge & Iron (NYSE:CBI) was a highly cyclical stock and that they could expect sell-offs of the stock up to 80% to happen on occasion. The most pointed critique of the article came from investors who were sitting on gigantic losses in their CBI stock. Several of them noted that my article didn't do them a whole lot of good now, and they wondered where the article had been a year earlier, before CBI's price had dropped.
Even though I claim no ability to predict the top of any cyclical stock, I have been trying my best in a recent series of articles to examine some of these rapidly rising industrial stocks from a different point of view - a point of view that examines how far they might fall, rather than simply examining how far they might continue to rise. So far, I have written about Caterpillar (NYSE:CAT), Boeing (NYSE:BA), Cummins (NYSE:CMI), John Deere (NYSE:DE), 3M (NYSE:MMM), Northrop Grumman (NOC), Emerson Electric (EMR), General Dynamics (GD), Eaton (ETN), and a stock that I recently sold myself after a 90% gain, BorgWarner (NYSE:BWA). Now let's examine United Technologies (UTX) to see what its historical cycles might be able to tell us about its next potential downcycle.
