Many analysts are forecasting a rapid decline in inflation. I just went shopping and a block of cheese that used to cost $8.50 about 2 months ago, went up to $10.50. But apparently, the price has now been locked in at $9.50 saving the shopper $1.00! Go figure? The price has been reduced, but the same block of cheese costs 12% more than 2 months ago. I do all of the shopping for the household and I can't stand listening to the analysts. They've got their heads fully wedged up their you-know-what. I could go on with the cost of everyday living...but no one wants to hear it.
Inflation isn't going away in a hurry and that will mean more interest rate rises. I wouldn't bet money on interest rates falling by years end either. For all we know, this is now the new normal and more likely a reversion to the mean.
I can envisage a lot of distressed loans on the horizon. Sure, we've all got jobs. But the job that I'm in hasn't seen any wage inflation. In effect, my wage has gone backwards. Apparently, according to the news, I need to be a Barista to demand $50+/ hr.
And with that, I see tough times ahead for CCP (ie: continued low PDL volumes for ANZ). But when the worms turns, I can also see that CCP will be well positioned to outperform. They've been here before and they know what they're doing. That's why I'm happy to buy up on market volatility.
Just my 1 cents worth (I would 've said 2 cents worth, but I'm factoring in interest rate rises and inflation).
Love volatility. Without it, we could never make discounted purchases of our favourite companies.
CCP Price at posting:
$20.25 Sentiment: Buy Disclosure: Held
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