Bear Market Shopping List

[Basil]

Interesting conviction list Shareguy, thanks for sharing.

TINA (there is no alternative)...to stocks is going to be a huge factor over the next few years as we traverse the bottom of the interest rate cycle.  In my opinion the OCR needs to come down a lot and stay down for a LONG time so bond yields will be very modest and even more modest going forward.  (I prefer defensive yield like GNE and REIT's like KPG and ARG as alternatives to corporate bonds and have large positions in those three)   

Classic portfolio theory suggests a 50-60% allocation to stocks, 30-40% bonds and 10% allocation to alternative asset class.  For me, I'd rather own the above three, (which make up just on 33% of my portfolio) as quasi bonds which at the prices I paid are yielding me an average gross return of just on 10%.  That's heaps better than buying a bunch of investment grade corporate bonds yielding about half that.  Additionally I think the REIT's are still at a very favorable part of the cycle with considerable upside over the next 2-3 years.

Thoughts on Craigs conviction portfolio.  They're certainly not value or GARP investors as almost all stocks on that list are epic fails in terms of my screening criteria, (explained in post #10 in this thread for those that haven't seen it https://stocktalk.co.nz/index.php?topic=367.0)
Couple of examples:-
FPH, you pare paying 58 times earnings for a company with a 5 year CAGR of only 5% (future growth is more than fully priced in)
EBO, you are paying 24 times earnings for a company that has not grown earnings in the last 5 years, (they have a lot of work ahead of them to regain market darling status)

Stocks on Craigs list that screen as exceptional value using my GARP criteria include:-
SUM, you're paying no growth metrics for a company that's growing EPS at a 5 year CAGR of 15%...when the real estate market finally bottoms, this is the one to buy in that sector in my opinion.  RYM and OCA are epic fails in every respect by comparison to SUM and fully deserving to be in the dog box.
TWR - Looks dirt cheap any way you measure it, (holding a decent sized allocation and very recently added some more).

Other recent additions to my portfolio.
TRA - topped up more this week.  Have also articulated why in that thread.
HLG - added quite a lot more since the FY25 forecast update, truly compelling metrics. 

M&A - See MCK thread.   While nothing is certain, I think there's a very good chance this time next year that company will no longer be listed on the NZX. 
None of the other stocks mentioned on Craigs list fit my value screening process.   Happy to stay less diversified than they are.

[Waltzing]

well so much for the list then... pre COVID stocks...pre recession..

Recently the commentators over the weekend have basically said its the end of the UN and the world order...

Empire is back and one wonders if that means the WTO is gone as well....

Is it the end of stock markets and the return of GOLD?
   

[entrep]

@Basil not sure if you saw the timestamp, but the original posts in this thread were from 2022

[Basil]

@Basil not sure if you saw the timestamp, but the original posts in this thread were from 2022

Yes.  You may have noticed a bit of a theme with my investing.  Solid companies with resilient earnings and growth with companies with a long proven history of growth in EPS, but only at a very reasonable price.  That's a function of my age and risk profile mate.  I'll be eligible for superannuation next year.  Younger investors may feel more comfortable taking more risk with growth and technology stocks.

[Shareguy]

Thanks all for your contributions we have some shopping to do. The only real shopping I enjoy.

[Basil]

The only real shopping I enjoy.

Me too and that's because investing in quality companies is the gift you give your future self and loved ones.