Like Melua and Jonkey has been saying, this is a once in a...

Like Melua and Jonkey has been saying, this is a once in a lifetime opportunity for us to make our fortunes.

The sharemarket has been taken over by lunatics, and there has been indiscriminate selling of stocks to ridiculous levels. Some of it is justified, for other stocks beyond reason, and some just totally unwarranted.

The lowly geared defensive stocks have held up remarkably well, as they are seen as safe havens, as the market has been polarised to extreme levels. Look at WOW, MTS, FGL, SKI, SPN, LNN, CCL, IAG. If you had a look at how their stock prices have moved over the last year, you wouldn't even know there was a stock market correction let alone a crash that we are experiencing right now.

Then there are the cyclicals and the highly geared. BBI is a highly geared company but with defensive assets (largely). If they could reduce some of their gearing the market would treat them more like SKI, SPN, and DUE. The asset sales should go a long way to address this. They need to sell some assets soon to address their debt levels, just as MCG and MIG need to do as well.

When (not if) the market turns and sees some normalisation in credit markets those beaten up stocks that are still in reasonable health (many of the poorer quality ones will disappear) will rebound strongly, while those safe havens become the laggards as they become the source of funding to buy back the beaten up stocks.

So, if you conclude that BBI is unjustifiably beaten and that it is likely to survive, it is very possible that BBI can rebound strongly back to at least a decent proportion of its prior price. It is still risky, but the price action is overdone in my opinion. They have to meet some short term hurdles which can only really be met by another asset sale at a decent price, and this has been explained in previous posts. I gain comfort in the uniqueness and defensiveness of most their assets that are monopolistic like (mostly).

This market has thrown up once in a lifetime opportunities for the brave and astute investors to make their fortunes.

I have chosen BBI as one of these opportunities. I hope I am right.