I think panic/desperate selling is a good sign to start buying....

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discursive

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13/03/20

10:49

Post #: 43469716
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Originally posted by discursive: ↑

when I said XAO could test 4900, I expected this to happen over a 2-3 month period NOT 3 weeks.
This is a MAJOR concern, why? about 12 months ago I presented a really great piece of research that demonstrated how the ASX XAO could fall into a recession and touch back to 3800 points. Needless to say it wasn’t well received but it had some very valid reasoning.
It wasn’t all doom and gloom, I had high hopes for the ASX100 to fair much better, however I believe the real hurt will be from highly geared business outside the top 100. Vulnerable companies will collapse allowing a consolidation of business for high quality stocks to flourish. Those companies with huge debt and tight margins I believe are about to enter uncharted water with insufficient fuel to make it home.
The stages that will ensue;
1 - Pandemic announced
2 - Close borders/shut down trade
3 - Reporting period/write downs/CR’s/downgrades
4 - Defaults & Collapses
5 - Resurgence
Governments are smart and will be ready to inject billions into this, so timing the bottom will be a challenge, but I think a really well thought out strategy will play out well.

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I think panic/desperate selling is a good sign to start buying. If history is kind most bear markets start off doing the biggest drops upfront, with slower/sluggish losses over an extend period. As the market runs through the consolidation period opportunities emerge.
I’ve slowly started to accumulate, yet cautiously remain heavy in cash. I’ll look to slowly purchase on any 10% drops such as today.
This is complete madness, but I’m absolutely certain about one thing - I want to be the one buying when everyone is selling.
Value/opportunist investors, get ready to fill your boots!
2 Upvote

0 Great analysis

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