Yes, underperformance needs to be arrested as that is driving all the negativity and some fund withdrawal.So the question is whether MFG has the means to do it and the correct strategy. Definitely underperformance of 26% which is down to 14% in November 21, won’t happen again. The high inflation and back to normal economical cycle with Covid or without is taking place right now. Even with high virus cases, stimulus will be withdrawn world wide as the damage from high inflation will be greater to bear to the average citizen. In my opinion this is where MFG has a better chance than the stocks. The consumer, utilities, financial services stocks in the portfolio will be able to better maintain the profit margins they enjoy currently and there for profit reduction will be less than most of other companies. Most of these brands names are 50 to 100 year old companies which has gone through many cycles. The other stocks in the portfolio like FAANG, MSFT,SAP have similar powers in the market place in addition to keep growing like MSFT, Amazon,Google. This transition from stimulus driven economy to normal is taking place very slowly, but will accelerate as the year goes by. I am expecting 14% underperformance to gradually reduce like how it has come down from 27%. I think that is the number we should keep an eye to arrest this talk about funds being withdrawn. Faster it can happen better. I am guessing December 21 to be 12% or so, it is pretty difficult to calculate without all the data. Until this happens all these calculations of value of MFG is going to be useless without future growth penned in.
MFG Price at posting:
$21.24 Sentiment: Buy Disclosure: Held
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