Stocks to watch if the market over-corrects
As Australian property prices correct, it will also drag down the value of a number of allied businesses, such as whitegoods retailers. If the market over-corrects – as it so often does – some good buying opportunities should emerge. Let’s have a look at a few businesses for your watchlist.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
Gordon
:
Hi Roger & Team,
Another article worthy of reflection, thanks.
I can’t help but wonder how much of the caution is overdone due to it being fuelled by our media.
Almost every time I access news of late & for some time now, there been an article on the house price decline in Sydney & Melbourne. People still need to get on with their lives. Housing decisions are ones that shouldn’t be put on hold for extended periods . But when the media breeds fear…
Best wishes,
Gordon L
Roger Montgomery
:
The points we make in the column are actually occurring. Rising rates are negative for asset valuations so are slowing rates of growth. When these events follow a period of exuberance, a resetting of expectations will be reflected in lower returns, or they’ll have to be reflected in lower prices.
Paul
:
Results of Labors call for the Banking Royal Commission are starting to take effect in a tightening of credit thus a downturn in the market . I also think that the policies of capital gains tax, franking credits, negative gearing changes could end the long-run of 25 years without a recession.
Regards Paul
Roger Montgomery
:
Thanks for sharing Paul.
Bill
:
Simon,
From recent personal experience, I have had my car on carsales.com for over two months now, with lots of page views, two semi serious buyers and low offers.. I have used them in the past and generally sold very quickly- I think people are very cautious with their money atm.
I also recently purchased a new apartment during August. No bidders then and yesturday i saw nobody come into inspection. Last year there was considerable interest. Whats changed – well personally again getting a loan was harder than in the past for us but we got it after extensive DD by banks. However we did negotiate a great price and for extras as developer was accommodating..
I think their is overall cautiousness in buying activity across the board from a mix of reasons. Reading the paper, watching the news it is evident their is a mood change and people are cautious.
Cheers,
Bill
Roger Montgomery
:
Thanks for sharing your experiences from the coalface Bill.
simon
:
another good article RM – you mentioned correlation between a housing slowdown and car sales.
Does this connundrum help or hinder CAR.ASX carsales.com?
I believe it would help CAR as struggling consumers (or even falling consumer confidence) would see them become more interested buying/ trading in 2nd hand cars at better prices than car yards offer through carsales rather than buying brand new ones in times of recession or in economic downturns