Bargains during lockdown, what's on your shopping list ?

[Beagle]

So...what to many has felt like the inevitable has finally happened and we have community transmission of the Delta variant.

Go hard and go early, means we are in a level 4 hard lockdown in the Auckland and Coromandel regions, initially for 7 days and for the rest of the country, initially 3 days.

Some business support is said to be forthcoming, I haven't heard the detail yet.

Already we saw some effect on NZX shares today.

Questions presenting.

1. Can we beat the Delta variant back to buy us more time for more widespread vaccinations ?

2. Are these initial lockdown's likely to be extended ?

3. Should I be buying, selling or simply playing possum in the headlights ?

4. If I am buying or selling what is vulnerable to further pullback and why and what should I be looking to buy and when ?

Let the debate begin...please keep it civil and constructive, I know these are emotive times but can we try and do what Cindy always says and be kind to one another ?

Two very early initial thoughts to kick off this debate.

I am on record as saying KPG is directly in the firing line of another Covid outbreak, so I see potential for further meaningful downside there and I may target a reentry significantly below today's closing price, if it gets to a level I find attractive in due course.

Stating the obvious but I think this Delta variant will be much harder to beat than earlier variants so the possibility of an extended national lockdown is probably pretty high.

[Playa]

Great questions Beagle, perhaps too early to be rushing out buying just yet, but if history is anything to go by then the aged care sector had some great specials last time, perhaps a top up of some OCA in a few days time

[fungus pudding]

Great questions Beagle, perhaps too early to be rushing out buying just yet, but if history is anything to go by then the aged care sector had some great specials last time, perhaps a top up of some OCA in a few days time

Toilet paper will be on most lists.

[Beagle]

Toilet paper will be on most lists.

Been there done that already

[traineeinvestor]

Without wishing to be any more difficult than usual, any buying or selling requires a view to be taken on the first two questions in Percy's list: whether and how far delta and any other variants spread through New Zealand and whether the government continues to pursue the elimination strategy (or, alternatively, for how long). Quite frankly, I'm surprised it has taken this long but that's a separate discussion.

At the moment, my instinct is to do nothing with my own NZ portfolio (which comprises of companies I either held through the 2020 covid slump or purchased when the market was down/recovering) unless/until I believe that lockdowns are likely to be prolonged and/or ongoing.

The two sectors I would avoid unless prices drop by a lot are (and maybe even then) are (i) tourism and (ii) retail focused property. In the case of the former, my view is that there is zero chance of a Trans-Tasman bubble being resurrected now that Australia (except WA) has shifted from an "elimination" to "living with covid" strategy which, combined with a halt on domestic travel of uncertain duration, does not bode well for Air NZ and AIA. Percy has already mentioned KPG was far as the latter is concerned.

On the buy side, I'm happy to sit on the sidelines and see if any bargains emerge.

[hogie]

Cash is king!

A bit of a shakeup is imminent ... Mr Orr. may have an excuse to reconsider his rates announcement tomorrow, or will he?
I think the NZX may be in for a painful time of volatility at least for the next little while!

[Zaphod]

Cash is king!

Depends how much they print. How do I place an order in with the RB?

[value_investor]

I'm not sure if its best to wait until we have more information about case numbers before jumping in to buy stocks tomorrow. With the delta, we could easily see a long drawn out lockdown or a short 1 week in and out. Still early to say.

With that being said, I'm definitely looking at KPG trading at a discount of NTA and could come closer to $1.00. I'd back the truck up for it at that price. I don't see the retirement villages being affected to hard by this lockdown unless delta hits the villages. I'd be into OCA if that's the case, already feel as though they are trading lower than they should and would look at this one closer. I believe OCA is a bit earlier than its peers but its got a bigger run up than a SUM or RYM. I also hold a lot of OCA so it would have to come down a bit for me to jump back into it.

HLG is another one I could see on my radar if it keeps falling. I like it as a dividend play in the early $6 range if it comes to fruition. Having read their last report, and the rise and rise of online shopping. Lockdowns are still a huge factor to a retail business but we've seen this doesn't grind the business to a complete halt.

Not sure where we are headed in the medium term this time however, I have more gun powder this time around. There hasn't been many bargains lately. I've been buying KPG on its way up and now on its way down to it becoming so prominent in my portfolio to the point its overweighted. It just represents good value to me at the current prices. Other stocks would have to be much more discounted for me to even think about getting into them at this point.

[Beagle]

Without wishing to be any more difficult than usual, any buying or selling requires a view to be taken on the first two questions in Percy's list: whether and how far delta and any other variants spread through New Zealand and whether the government continues to pursue the elimination strategy (or, alternatively, for how long). Quite frankly, I'm surprised it has taken this long but that's a separate discussion.

At the moment, my instinct is to do nothing with my own NZ portfolio (which comprises of companies I either held through the 2020 covid slump or purchased when the market was down/recovering) unless/until I believe that lockdowns are likely to be prolonged and/or ongoing.

The two sectors I would avoid unless prices drop by a lot are (and maybe even then) are (i) tourism and (ii) retail focused property. In the case of the former, my view is that there is zero chance of a Trans-Tasman bubble being resurrected now that Australia (except WA) has shifted from an "elimination" to "living with covid" strategy which, combined with a halt on domestic travel of uncertain duration, does not bode well for Air NZ and AIA. Percy has already mentioned KPG was far as the latter is concerned.

On the buy side, I'm happy to sit on the sidelines and see if any bargains emerge.

Well said but Percy hasn't morphed into a Beagle

[LaserEyeKiwi]

Collapse of the NZD in past few hours has provided a nice boost to the value of our overseas holdings, might consider moving a little into some bargain prices on NZ retail names. Very pleased to see the rapid and heavy level 4 lockdown, which ensures this is going to be a relatively short in duration event (28 days - 2 transmission cycles - seems like a worst case scenario).