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Bargains during lockdown, what's on your shopping list ?
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.
Ecclesiastes 11:2: Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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Member
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
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Originally Posted by 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
Toilet paper will be on most lists.
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Originally Posted by fungus pudding
Toilet paper will be on most lists.
Been there done that already
Ecclesiastes 11:2: Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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Member
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!
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Originally Posted by hogie
Cash is king!
Depends how much they print. How do I place an order in with the RB?
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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.
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Originally Posted by 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.
Well said but Percy hasn't morphed into a Beagle
Ecclesiastes 11:2: Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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Originally Posted by traineeinvestor
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.
You're right, and I think even once restrictions lift in the future, climate change initiatives are also likely to re-shape our tourism sector for decades to come.
The hospitality sector bounced back once lockdowns eased, but once borders open slightly, a permanent level 2 is likely to result causing a large swathe of those businesses fail.
Probably not worth the risk at the moment.
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