Media Updates, page-5137

Great read @h00ts,

There is one glaring error in the article which I would like to quote.

"If the market is on the move, it will take everything with it, and a quality stock will not protect you, in fact, it will hurt you more. Quality stocks tend to trade on higher PEs, and they hollow out more quickly in a sell-off. There is no defense in a falling market. Cash is king."

The rest of the article was pretty good but the claim that holding onto a quality stocks during a market rout is going to cost you is plainly incorrect. Anyone who went to cash holding A2M, CSL and others like RMD in Jan would of missed out on some sizable gains. For the educated investors who know the stocks they are invested in and their products would of been able to foresee that this pandemic would of likely not effected their sales. During most financial calamities the hardest hit stocks are the ones that sales are affected by the event that triggered the drop. You cant put companies with Non discretionary products in the same box as other companies that market essential products and services like A2M.

You cant make a blanket claim that all stocks are dragged down in such a event as clearly this was not the case for the three stocks I listed with a select few others that also remained unaffected. I really liked the claim that you are never going to get a stock that is paying out most of their profits as a dividend (i.e all the banks bar MQG and Telstra) into a ten bagger. Stocks like A2M that have ROC over 15/20% over time have handsomely rewarded their loyal shareholders many bags over thank you very much.

I think for most stocks it was buying time in March but its playing with fire to sell stocks like A2M during this particular event hoping to buy back in at a substantial discount. It worked out well to sell some A2M and buy into big dividend paying bluechips that were going at 10 years lows during March.

With A2M already announcing sales on track with another bumper profit report as good as a near certainty and the likely possibility of a announcement of a successful bid for Mataura Valley. Who would take the risk by remaining on the sidelines with a report due any day that could shoot he SP up in a straight line like it has in the past. Out of all the potential bidders for Mataura Valley not only would A2M have the deepest pockets but with them churning out premium priced A2 IF from that possible purchase they would be the in the best position to turn the biggest profit from any other competitor who would try to make a go of it with another me too A2/A1 product without a point of difference in a sea of other products in the market place.

If A2M Co want it then they could outbid anyone else by the simple fact they have so much COH and out of all the other suitors they would be able to extract more profit margins from the purchase so they could outbid others who cant churn out such a in demand premium priced IF / fresh milk exclusive A2 only proposition product.