NZSX50 - Good News!

[Beagle]

https://www.cnbc.com/world/?region=world

I see the trade deal as very good news for global growth. As I see it this is a real "risk on" environment.
NZX50 is said to be on a forward PE of 29 already and after gaining ~ 30% in 2019 I am not sure how much gas is in the tank for a big 2020 but I like the prospects for the American market, (forward PE is 19 for S&P 500), and the Australian market in particular which should see very good growth from a resurgent demand for base metals and minerals, (forward PE about 18).

I hold significant positions in Marlin (MLN) and Barramundi (BRM) to enjoy what is hopefully an exceptional year for the American and Australian markets.
I think this environment is also very good for financials, (sizeable holding in HGH) retirement stocks, my preferred ones are MET and SUM and growth stocks on reasonable PE's.
Bonds are a very bad place to be in 2020 in my opinion.

[winner69]

Beagle - Jardens have NZX50 on a forward PE of 33


The median stock is on a 19x PE with 6% earnings growth which is pretty good compared to market being on a 33x PE with 0% growth,

Thought you’d be interested

[blackcap]

Beagle - Jardens have NZX50 on a forward PE of 33


The median stock is on a 19x PE with 6% earnings growth which is pretty good compared to market being on a 33x PE with 0% growth,

Thought you’d be interested

How is that forward PE calculated though? Is it weighted by capitalisation? If so the PE of our power stocks will have a huge bearing so the NZ PE may not be as terrible as it actually looks. If its not weighted, well then the NZX has a problem Houston.

[Beagle]

Thanks Winner. Could well be. Its been a while since that 29 figure was bandied about and the market has been rampant.
I think it is market weighted Blackcap and you're quite right that stocks trading on cash flow yield like the gentailiers distorts the picture.
Winners median PE forward PE of 19 and growth of 6% look quite reasonable to me for where 10 year Govt stock is.
I think some of the retirement stocks could see quite a significant rerating in 2020 as we return to a rising Auckland housing market. Median PE of 19 for instance applied to the likes of MET, SUM and OCA, (ARV already about there and RYM well north of that), could see substantial price appreciation in 2020.
As I see it, anything that's got a well proven track record of growth and is under a PE of 19, is basically "game on".

[percy]

[QUOTE=Phaedrus;259002]It will take a 53% rise from current levels for the NZSX50 to regain its 2007 peaks. I am pleased to be able to report that this will happen at 2.15 pm on 19/12/2011.

Naturally, such a confident assertion rests on a couple of minor assumptions :-
(1) The bottom of the Bear market was reached on 3/3/09.
(2) The subsequent recovery will be at the usual 20% per annum.




The above is the first post on this thread.
It was posted on 4/6/2009 when the NZ50 index was 2,809.82
............................Today the NZ50 is 11,482.29.
1 year ago [21/12/2018] it was ......... 8,686.19
2 years ago [24/12/2017 it was.............8,398.08
5 years ago [21/12/2014 it was.............5547.42............note index has doubled since.
10 years ago[6/12/2009] it was ............3127.98

[winner69]

[QUOTE=percy;783160]

It will take a 53% rise from current levels for the NZSX50 to regain its 2007 peaks. I am pleased to be able to report that this will happen at 2.15 pm on 19/12/2011.

Naturally, such a confident assertion rests on a couple of minor assumptions :-
(1) The bottom of the Bear market was reached on 3/3/09.
(2) The subsequent recovery will be at the usual 20% per annum.




The above is the first post on this thread.
It was posted on 4/6/2009 when the NZ50 index was 2,809.82
............................Today the NZ50 is 11,482.29.
1 year ago [21/12/2018] it was ......... 8,686.19
2 years ago [24/12/2017 it was.............8,398.08
5 years ago [21/12/2014 it was.............5547.42............note index has doubled since.
10 years ago[6/12/2009] it was ............3127.98

Amazing eh percy ...great times to be invested

And this time last year many were saying 2019 was going to be a bad year for the NZX ...crash or big correction I recall ....and we have just had the most successful year ever (according to man on radio)

And it will much of the same in 2020 I reckon

[percy]

[QUOTE=winner69;783162]

Amazing eh percy ...great times to be invested

And this time last year many were saying 2019 was going to be a bad year for the NZX ...crash or big correction I recall ....and we have just had the most successful year ever (according to man on radio)

And it will much of the same in 2020 I reckon

Yes amazing.
Yet over the last 5 or 6 years a number of posters have had a case of bad nerves and gone to cash..?
NZ is in good shape,low interest rates set to continue,and most companies are focussed with strong balance sheets, paying increasing dividends..
2020.Any sensible portfolio should continue to do well.

[BlackPeter]

... Bonds are a very bad place to be in 2020 in my opinion.

Horses for courses. While I agree that a 100% bond strategy might not be the most profitable in 2020 - I do hold a certain percentage of my portfolio in bonds (currently roughly 20%) - and actually, they did gain in 2019 (around 4% interest + 5 to 6% capital appreciation) and so far I don't see a reason for this trend not to continue in 2020 (with interest rates staying low and another round of QE looming).

Look at bonds as an insurance policy. Sure - the gains are typically not that outrageous as with (successful) shares, but when the next black swan event happens (and honestly, who can guarantee that it does not), than I expect my bonds to help me to bridge the time until share prices recover plus they will provide at least some dry powder to allow me to buy more shares when these bottom out.

[Beagle]

Fair enough BP, I understand your perspective and I can see you understand that bond prices can give capital appreciation, but they can also give you capital losses when interest rates increase and quite frankly I think that's highly likely in 2020.

[percy]

[QUOTE=percy;783160]

It will take a 53% rise from current levels for the NZSX50 to regain its 2007 peaks. I am pleased to be able to report that this will happen at 2.15 pm on 19/12/2011.

Naturally, such a confident assertion rests on a couple of minor assumptions :-
(1) The bottom of the Bear market was reached on 3/3/09.
(2) The subsequent recovery will be at the usual 20% per annum.




The above is the first post on this thread.
It was posted on 4/6/2009 when the NZ50 index was 2,809.82
............................Today the NZ50 is 11,482.29.
1 year ago [21/12/2018] it was ......... 8,686.19
2 years ago [24/12/2017 it was.............8,398.08
5 years ago [21/12/2014 it was.............5547.42............note index has doubled since.
10 years ago[6/12/2009] it was ............3127.98

Not exact,but the index going from 2,809.82 to 11,482.29 is near enough to 15% compound per year..