"Stock" and "flow" are incredibly important concepts often discounted by markets or stocks in trumoil.
Like the US and China, China may have the current surpluses (flow) for the last 20 years, the country appears to own everything. But this superficial observation fails to recognise the the US has the accumulated asset wealth (stock) of extraordinary breadth over the 70 years before that, both pre and post WW2.
The financial health of an "average" millenial compared to an "average" boomer, is a no contest. The millenial has the income (and debt) but the boomer holds the assets.
In the same manner, MFG is facing an earnings drought that has disproportionately impacted its current share price. Based on its 2022 financial accounts, it also has a war chest of cash and equivalents, built over 10 years it can deploy over the next year or two to acquire whatever form of income producing assets it wishes, at the bargain prices that 2023 will offer us all. This has the potential (and just the "potential" ) to underpin a recovery in future income.
I like that optionality that I can get roughly for free, buying and holding MFG for a few years.
I am currently shaping some buy/sell strategies over the next week or two as global markets (over)react to the FED having been asleep for the last few months. The Vix moved nicely to new levels indicating a possible wash out of equities is imminent. The FED does not need to pivot to put this at ease, they just need to stop inflicting greater pain. I expect that to be a near certainty come the November FOMC meeting and markets should react by with celebration. Wrongly of course.
Fragile markets are currently balancing fear and hope, each will have a run until 2023 snuffs out one of them.
GLTASH
MFG Price at posting:
$11.45 Sentiment: Buy Disclosure: Held
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