20% Correction which shares would be on your shopping list?

[Sgt Pepper]

If(when) there is a significant correction in the sharemarket which shares would you accumulate. Mine would be
AIA
Contact
Infratil

[huxley]

S&P 500 etf

[percy]

HBL,TNR and EVO.

[LAC]

MEL, SCL and SEK

[bohemian]

Amzn, coh.ax., csl.ax, syd.ax, pot.nz, fph.nz.

[iceman]

Hbl, sek, sum

[777]

Well the majority of investors will not have any cash for a buy up and they will be reluctant to sell anything they have to facilitate any purchases.

[trader_jackson]

assuming I have the cash, HBL, AFT, FPH, FXL (asx) for starters

[tim23]

GMT FSF and PGG

[IAK]

Fph, Ebo, Tme

[Bobdn]

Chorus just dropped 15% over the last month so I bought more. That was a serious correction I thought.

[Valuegrowth]

It depends on the time and situation. If I see it is going to have bear market I will wait until market settle and can pick gradually after doing some study. If I don’t see coming bear market in the near future I will try to buy some attractive ones.

There was heavy sell-off at the beginning of this year as well. So far all types of selling and volatility created some great opportunities. If the markets drop by more than 20% some thinks they have entered a bear market. Probably we should see some sort of correction in 2017/18 as this market had one of the longest bull markets in the world. Still cannot stop that, thanks to Central Banks and some other factors. When are we going to see end of easy money policy? Not in the near future.

There were stocks dropped more than 30% in many markets even during this major bull market without any fundamentals reasons. Now they are back to where they were and some broke their 52 weeks high as well. Good example is some American Chicken stocks had sell-off and one by one they are breaking their 52 weeks high. Similarly there were sell-off in tech and financial stocks. Later, they rebounded strongly. How about XERO? It dropped from $40 to below $14 and now it is trading around $20. Likewise, there will be stocks which can rebound strongly if they fall by 20% as long as we see strong fundamentals and major uptrend.

[Vaygor1]

In no particular order, POT, RYM, AIA, MFT

[macduffy]

I agree with MARKETWINNER that buying would depend on the market circumstances at the time. That aside, I would be interested in adding to AIA and RYM and in buying CSL (ASX).

[Hoop]

I also agree with MARKETWINNER that buying would depend on the market circumstances at the time.
20% drop is either a very serious bull market correction or the beginning of a perhaps a mild bear market cycle or worse.

If the NZX is still in a bull market cycle then 20% is the bottom..
How to know bull or bear?..It's not easy but there are some technical cyclic reversal signs, there is also one FA rule of thumb as above
1..Assume a bear market cycle has begun if the economy is still booming after a long period of time...
2..Assume a continuing bull market cycle if the share market has been going up while economy had been and still suffering a loss of growth phase..
Sounds paradoxical ?....only paradoxical if an investor is media taught and deduces using media logic.
The chart below is basic stock market theory in practice the stocks sectors can differ due to other one off forces but the Red stockmarket cycle always forward looking so it is a leading indicator for the green economic cycle..

Notice how the share market cycle tops out and reverses into a bear cycle well before the economy tops out..
There is another rule of thumb ..the sharemarket reverses to a bull market cycle 66% of the way through a recession..

See how easy it is for investors to mistime their buys and sells..virtually opposite ..they enter late (cautious) they use buy and hold strategy near the top when they should be using a "rowing strategy"..They give most of their gains back to the market by selling out along way down from the top ...After the cycle bottoms out they should be buying and holding (using a "sailing strategy") but they are too defensive and are dooming and glooming about the economic recession..
https://d.stockcharts.com/img/articles/2012/01/6a0105370026df970c0168e523f90c970c-800wi

Sounds simple huh..but most investors use forward analysis/thinking and fall into this trap "the economy is strong therefore a 20% drop is a must buy opportunity caused by the naysayers and sheeples panicking"

So buy AIA at 20% discount..$7.20 x 80% = $5.76..great!! I got them at a cheap price..what were those sellers thinking..mugs!!
ooops it's a bear cycle do I sell?..no I make a loss so I'll hold
Hmmm bought in at $5.76
bear falls to -40% = $4.32 sell? hell no, I'll hold, I haven't lost that much, the bear is nearly over and I'll quickly get it back + more when the market regains its senses
bear falls to -60% = $2.88 ...How can all my hard earned capital be half when I bought in when the market was already down 20%..can't suffer this any longer...panic!! sell!!!(Stage 3 Bear market cycle..capitulation phase)..

Most investors who haven't experienced a bear market cycle find it hard to perceive the % figures...
Their perception is for example -25% Bear market..meh!! -40% bear market ..not much worse than -25% -60% Bear market... not much worse than -40% and so on.............but in realty a -40% bear is twice as bad as -25% bear and a -60% bear is nearly 2.5 times as bad as a -40% bear...so a -60% bear is nearly 5 times as bad as a -25% bear.......


http://i1.wp.com/www.ritholtz.com/blog/wp-content/uploads/2011/01/gains-needed-to-recover-loss.png?resize=515%2C300

So back to the thread question..Would I accumulate say ie AIA after a 20% correction?....NEVER because my TA discipline would've kick me out of AIA well before -20%......Would I buy?...depends..if my TA discipline says yes I buy.....NOTE: I would have switched investment strategies as a precaution against possible future "sucker" rallies, so I would be using a Bear Market Investing Strategy, (a "rowing strategy").. no harm done in switching strategies if it turns out to be a very severe bull market correction

[Hoop]

Bits from From Marketwatch (a year ago) (http://www.marketwatch.com/story/22-things-you-should-know-about-bear-markets-2015-08-05)

7. Also like earthquakes, bear markets don't last forever. Those 25 bear markets lasted, on average, for 10 months.

8. Also like earthquakes, bear markets can be relatively mild or quite harsh. The average bear-market loss was 35%. The smallest loss was 21% in 1949; the worst was a drop of 62% from November 1931 to June 1932.

9. Many of today's investors have lived through two fairly nasty bears: a decline of 58% from 2000 to 2002 and a 57% plunge from 2007 to 2009.

[traineeinvestor]

Another it depends answer - it depends on where I think we are in the economic cycle, what I expect interest rates to do, what I expect the NZD to do, whether we still have a sensible government or lunatic fringe has taken over, how much cash I have available etc etc etc

If I felt that a 20% decline was symptomatic of deteriorating fundamentals, then there are several shares that I would consider adding to the portfolio (or buying more of): AIA, POT, WBC, MFT, FBU, EBO, RYM being high on the list.

Of course, saying the market is down 20% is like saying the average share price is down 20% (yes, I know index composition means that is not exactly true), which means that some shares will be down more than 20% and some down less - which is obviously a highly relevant consideration.

Lastly, from a personal perspective, now would be an excellent time for a bit of panic selling to occur. I've been letting my dividends pile up in the bank a/c for a while and recently sold a large position in Chorus @ around 4.20 and am struggling to find a good home for the money.

[Valuegrowth]

Thank you all for sharing their experience,ideas and stocks that they have. This will help us to pick quality stocks in one of the growing stock markets in the world while minimizing risk. My friends are trend, great value and future cash flows.

I believe it is time to avoid extremely overvalued assets and pay attention to stocks which are trading great discount to the market. It is true despite higher P/E ratio bull markets can last longer. Traders still create demand for high P/E stocks. However, at some point we should see coming bear market. It is very difficult to forecast. For example how many analysts and industry analysts did forecast bearish outlook for housing market for last number of years. Still house prices are rising and we don’t see any crash. However we should see real picture of assets market in New Zealand and Australia by 2018/19. I will be very cautious at that time.

[stevevai1983]

Rym fph ：）