I understand the stock market could and probably will crash again in the coming months.
Iāve made investments in what I perceive to be value stocks, those with a proven track record at a cut price and solid fundamentals/moat.
Am I right or being naive in that these stocks which are already bottomed or super low wonāt be affected so much. When the market crashes again itās going to be the bubbles (tech/pharma) that see th biggest hit and account for most of the lost points. I.e. Tesla, Amazon etc
Everybody may have different theories but no one really knowsā¦
I have a few āvalueā stocks such as Telecommunications (BT, Telefonica, etc) that I bought quite low, but if there is another crash they will probably also go lower.
No one knows if there will be a crash and which stocks it will affect more. It could affect less the āvalueā stocks that are quite low and āburstā the current āTech Bubbleā, however, it may also plummet value stocks even lower whilst having minor influence on the strong, āsocial distance friendlyā tech stocks such as Microsoft and Amazon.
Another ādipā or ācrashā is not even guaranteed, we will have to wait and see what happens. I personally think stocks market indices will go down, at least another 10% this year but itās impossible to know.
When a stock hits below 30, in my head I see huge signals going off on traders screens anywhere, so in a crash the first ones to bounce back are the ones who were hovering above that figure anyway.
As long as those value stocks are low volatile then in the long term you will come out better off. Unfortunately, no stock is immune from a recession, but those with low volatility tend to fall much less. Again no one knows the future, but youād have to have been hiding under a rock not to know what is happening around the world. All the signs are pointing to a recession, itās only a matter of when.
No doubt, we really shouldnāt be this high. Still some good stocks that are at fair prices though, so no reason to stop putting money in. There will always be opportunities
Very well written. The only thing youāve missed for UK is that the furlough scheme ends in October and then in January we will most likely have hard Brexit and all that will be a recipe for a giagantic s*it storm in the UK.
Also I donāt think there is a need to panic either, we just need to be smart about how we trade. There is always money to be made whether the market is going up or down. I wonāt lie though, if you are faint hearted now might be the best time to consider putting your cash into more secure instruments. Otherwise your health will suffer dearly
Iām going long on BT, RR, Shell, Lloyds, if you look at previous crashes and their current levels thereās good support there. I think AZ, Tesla, GSK, AMZ are all going to get slammed.
Oil isnāt going anywhere soon.
BT are leading the 5G infrastructure in UK and can fall on Openreach sale if needed.
RR have good risk/reward and they are government supported while also being well diversified, also talk of rolling out mini nuke stations which they lead in.
Lloyds are well prepared for this, they are in a better position than other European banks (stress tests). I know they are still paying bonuses to all staff and have just increased their pension.
I also think national express could be a good punt, first group are dead and NEX will lap it up.
RR will not be allowed to fail, itās in our national interest to keep a company that is extremely niche and leads in its field, especially as countries becomes more insular. They are well diversified and are leading micro nuclear plants as well going electric on their engines. Warren east was turning RR around and they were due to make their first profit this year, prior to Covid. With East at the helm and the streamlining of their business I think they will do well in a couple years.
Shell will pick up again. Oil is not going away. Industry will not change over night and Shell will adapt and buy itās way into renewables as it already is. A return of dividends to their previous levels will again increase price. We are creatures of habit, covid isnāt changing anything over night.
BT can not fail, they are too engrained into our national infrastructure. They have recently done deals with sky to make it easier to obtain their TV packages. When dividends come back so will the price. Furthermore, big insider trading suggests the board are confident and believe in the future at BT.
Lloyds ok, low interest rates and bad debt but this is a burden for all banks. But as I said British ones have faired better than their European counterparts on stress tests.
I get your point but I think brexit will change the dynamic, I really think it will be short term pain long term gain. I think the UK or England, whichever it isā¦will do well. I think as a nation we are very critical of ourselves but constantly admire others. Truth is we have some big companies, not all of them public and some of the best engineers and innovators in the world. I think there will be more spending domestically as supply chains shift, which btw is happening now and I can vouch for that. I also think the EU is going to fail, Italy will end up leaving and that will be that.
Investments should be made detached from emotion and patriotism. You should base your investment decisions on things that are tangible, real, measurable and not based in fantasy and rhetoric.
In the case of both BT and Rolls Royce a large part of your reason to buy is that they canāt fail (or wonāt be allowed to).
To my mind thatās not good enough. Even if we suppose thatās true (which I rather doubt in the case of RR) thereās a huge gap between ānot going bustā and doing remotely well. For my part, Iād like to hear a bit more about why you think these companies are going to actively do well rather than just not fail ā the latter is true of a lot of companies. IAG for example is unlikely to bust but I still view that as a bad buy atm.
Iām a bit more bullish on the FTSE than the duck is. But actions speak louder than words and I havenāt bought anything on it in quite a while.
The most recent things Iāve bought are Amazon, Aercap, Google, Intel, and a commodities ETF.
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