ATM - A2 Milk Corporation Limited

**Mista_Trix** · 05-03-2021, 10:43 AM

Some of that is the sharesies crowds doing. I've got a friend who just bought in because 'theres a whole bunch of people on facebook buying in, this things going up, rocket, rocket'. I asked what his entry signal was or what his exit strategy would be, 'I just feel like now the right time, I can double or tripple my money when it goes back to its highs'.

This is the crowd that only know of things returning to their highs once they've hit the bottom. This thing will keep bouncing all the way down because of this crowd.

**Gregnz** · 05-03-2021, 10:52 AM

Originally Posted by Mista_Trix

Some of that is the sharesies crowds doing. I've got a friend who just bought in because 'theres a whole bunch of people on facebook buying in, this things going up, rocket, rocket'. I asked what his entry signal was or what his exit strategy would be, 'I just feel like now the right time, I can double or tripple my money when it goes back to its highs'.

This is the crowd that only know of things returning to their highs once they've hit the bottom. This thing will keep bouncing all the way down because of this crowd.

The Sharesies crowd have very little influence, A2 is driven from the ASX where the real volume is. You can tell instantly when Sharesies members are buying, after all they often buy 1 or sell 1 share.

**Cadalac123** · 05-03-2021, 10:52 AM

Originally Posted by Mista_Trix

Some of that is the sharesies crowds doing. I've got a friend who just bought in because 'theres a whole bunch of people on facebook buying in, this things going up, rocket, rocket'. I asked what his entry signal was or what his exit strategy would be, 'I just feel like now the right time, I can double or tripple my money when it goes back to its highs'.

This is the crowd that only know of things returning to their highs once they've hit the bottom. This thing will keep bouncing all the way down because of this crowd.

The way humans interact with the stock market during their initial interactions with is really fascinating. I can understand though as I was equally as bad when I first started and also lost a lot of money.

The issue is this ingrained idea in people’s heads when they first come into the market that if a product being sold is good it means the share price is going to keep going up indefinitely. It doesn’t help companies like Tesla uptrended in the way that it did.

I avoid talking about stocks with anyone in real life now. I once talked to someone who had 1 week of investing experience and he asked me how I invest and I told him I do thorough fundamental analysis and TA to position size and gauge my entry and exit and actually assess an appropriate risk to trade - appreciating the stock market isn’t just about ownership of a company but also about accepting market volatility.

He told me I was gambling and I should just believe in the company I want to invest in and put money in and not to look at my investment for years. One would have thought ignoring price action and obvious signs to exit would have meant you were specifically trying not to just gamble lol

**Mista_Trix** · 05-03-2021, 11:04 AM

Originally Posted by Gregnz

The Sharesies crowd have very little influence, A2 is driven from the ASX where the real volume is. You can tell instantly when Sharesies members are buying, after all they often buy 1 or sell 1 share.

Keep in mind the Sharesies crowd is also filled with people in their 30s and 40s who feel asset rich from the increases in their house and are pushing all their spare money into shares because they made 100% on some punts last year. When you talk to them about platforms they dont even understand theres more than just sharesies to invest through.

It's not just 18 year olds throwing $50 here and there.

**Balance** · 05-03-2021, 11:15 AM

Originally Posted by Ruby

Excerpts from NZ Herald today;

"...While a2 Milk has taken a battering, fund managers, noting the company's enviable earnings record, lack of debt and its $774 million cash mountain, have in no way written the company off..."

"..."It is still an amazing brand," said Mark Brown, chief investment officer at Devon Funds, who noted the company's very strong balance sheet...."

"...At the same time, China is aware that it can't be totally self-sufficient because it does not have the land, water or climate.And it costs more to feed and milk a Chinese cow than it does a New Zealand, Australian or Irish cow," Mahon said...."

"...In the 11 coastal provinces where most of China's 400 million middle class citizens reside, customers seek out imported infant formula on the basis that its food safely is more reliable..."

"..."They have diversified and they have done well particularly in the offline channel in China, but the business is obviously still exposed to daigou..."

"...the central theme is that the daigou traders just want to get back into business.
"They want to get going again, but while borders are closed it remains difficult for them.
"There are many different types of daigou - some are quite large and sophisticated..."

Very very selective excerpts by Ruby from the same NZH article which compares ATM unfavourably with Fonterra fortunes in recent times :

https://www.nzherald.co.nz/business/...PJL3BORQQLJKQ/

paywalled

" ..... doubts persist about its reliance on the unofficial trade in infant formula from New Zealand and Australia into China by individuals and larger entities."

" ..... That reliance has been brought into sharper focus by Covid-19 border closures."

" ..... However the [unofficial, or daigou] channel to market is fragile, as people have reported."

" ..... Some of it that [downgrade] may be Covid. Some of it may be a national preference for local brands, but the daigou channel is not a reliable channel to market."

" ..... was cool on a2 Milk's move to get into manufacturing in its own right by taking a controlling interest in Mataura Valley Milk. I am less enamoured from a return on investment perspective."

" .....while a2 Milk has a big chunk of the Australia fresh milk market, it is still largely dependent on infant formula sales into China - one product into one market. It's a risky proposition."

" .....At the same time there is the trend towards China becoming more self-reliant in dairy and in infant formula."

" .... But a phenomenon related to Covid saw supply interrupted early last year, which saw more consumers turn to local brands, accompanied by an aggressive marketing campaign by the local infant formula companies."

" ..... There are these exceptional periods that have altered supply and consumer demand."

Etc Etc

Pays to read the whole article to get a balanced perspective on what's the market out there is really thinking.

**Ruby** · 05-03-2021, 11:21 AM

Originally Posted by Balance

Very very selective excerpts by Ruby from the same NZH article which compares ATM with Fonterra :

https://www.nzherald.co.nz/business/...PJL3BORQQLJKQ/

paywalled

" ..... doubts persist about its reliance on the unofficial trade in infant formula from New Zealand and Australia into China by individuals and larger entities."

"That reliance has been brought into sharper focus by Covid-19 border closures."

"However the [unofficial, or daigou] channel to market is fragile, as people have reported."

"Some of it that [downgrade] may be Covid. Some of it may be a national preference for local brands, but the daigou channel is not a reliable channel to market."

" ..... was cool on a2 Milk's move to get into manufacturing in its own right by taking a controlling interest in Mataura Valley Milk. I am less enamoured from a return on investment perspective."

" .....while a2 Milk has a big chunk of the Australia fresh milk market, it is still largely dependent on infant formula sales into China - one product into one market. It's a risky proposition."

" ....At the same time there is the trend towards China becoming more self-reliant in dairy and in infant formula."

" ...."But a phenomenon related to Covid saw supply interrupted early last year, which saw more consumers turn to local brands, accompanied by an aggressive marketing campaign by the local infant formula companies," Mahon said.

"There are these exceptional periods that have altered supply and consumer demand."

Etc Etc

Pays to read the whole article to get a balanced perspective on what's the market out there is really thinking.