Is the market now cheap enough to bargain hunt?

[princeplanet]

.... and if so, where do you folks think the best bargains are? Are we at an entry point for some of the stocks hit hardest?

 

[sptrawler]

Just my opinion.

We aren't in a situation that will cause a massive correction in the ASX, unlike the GFC, where panic ensued.

But IMO, anything that isn't linked directly to essential exports, or essential consumer spending, will be hit.

You have to work out, which stocks, fit the mix.lol

 

[pavilion103]

I'd be cautious. I will be looking to buy at an opportune time but I can't see it being now. Too much uncertainty and no reason why there can't be much greater falls ahead.

 

[IFocus]

Just my opinion.

We aren't in a situation that will cause a massive correction in the ASX, unlike the GFC, where panic ensued.
l

You need a house of cards or a contagion that gathers pace, at the moment plenty of possibilities but still waiting for the real fear in the market.

 

[nulla nulla]

Just my opinion.

We aren't in a situation that will cause a massive correction in the ASX, unlike the GFC, where panic ensued.

But IMO, anything that isn't linked directly to essential exports, or essential consumer spending, will be hit.

You have to work out, which stocks, fit the mix.lol

Gearing levels appear to be weighing heavily on the energy and resource sectors at the moment. In some respects it is almost a replay of the GFC smack on the property sector, where the companies that had over extended themselves through high debt levels were subsequently sold down when the cheap money dried up and property prices plummeted. Pretty much all of them had to restructure and go back to the market to raise capital.

This time the cheap money hasn't dried up but commodity prices are dropping through oversupply, so the overextended energy/resource companies are now facing the prospect of difficulties servicing their debt. If it gets much worse then some of them are likely to try and raise capital.

I don't think we have seen the bottom yet, as the market sells down holdings in companies with high price earnings ratios and high gearing levels and the fear factor drags a few others down with them.

 

[princeplanet]

Gearing levels appear to be weighing heavily on the energy and resource sectors at the moment. In some respects it is almost a replay of the GFC smack on the property sector, where the companies that had over extended themselves through high debt levels were subsequently sold down when the cheap money dried up and property prices plummeted. Pretty much all of them had to restructure and go back to the market to raise capital.

This time the cheap money hasn't dried up but commodity prices are dropping through oversupply, so the overextended energy/resource companies are now facing the prospect of difficulties servicing their debt. If it gets much worse then some of them are likely to try and raise capital.

I don't think we have seen the bottom yet, as the market sells down holdings in companies with high price earnings ratios and high gearing levels and the fear factor drags a few others down with them.

Ok, but when you guys feel we're getting close to a bottom, which sectors or even specific stocks do you have your eye on?

 

[coolcup]

My personal view is that most of your total return will come from yield so I am still focused on only accumulating stocks with a secure yield and modest but highly transparent growth: things like infrastructure, REITs, staples, etc. At the right price of course! I think we are a way off from having any economic tailwinds that will help earnings growth.