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Where to invest in a post-lockdown world

29042020_Opportunities post COVID-19

Where to invest in a post-lockdown world

Now that governments are talking about re-opening the economy, investors can start thinking about the businesses that might provide the best returns as we emerge from economic hibernation. Here, I give a quick appraisal of the investment landscape, and identify the key attributes of businesses that I think will rebound the hardest.

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Roger is the Founder and Chief Investment Officer of Montgomery Investment Management. Roger brings more than two decades of investment and financial market experience, knowledge and relationships to bear in his role as Chief Investment Officer. 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.

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7 Comments

  1. REITs – If working from home increases or becomes rostered will this impact REITs?

  2. Hi Roger I listen to your podcast etc on regular basis.. but I cant see the rational behind your enthusiasm on business like Transurban and sydney airports given they carry so much debt
    How do you reconcile these quality companies that have such high levels of debt.. and are they likely to do a capital raising soon, if so shares will also be diluted.

    • Yes the debt question is the one that often arises when infrastructure entities are being discussed. The reliability of the cash flows and the ability to pull various levers (such as suspending dividends), combined with a high interest coverage ratio helps answer the question as to the level of debt being manageable.

  3. Stuart Almy
    :

    What are your thoughts on the travel sector long term? Think Flight Centre etc.

    • Hey Stuart,

      It is reasonable to assume that there will be a surge in travel as lockdowns are removed, and beyond that, when (if) a vaccine or effective treatment is developed. The question is really which companies can survive and what shape will they be in when demand returns. That’s it in a nutshell.

  4. Hi

    I have seen that bike shops are almost running out of stock, bikes are on pricy part 3-5k AUD. Same is at shops if I go to get some little trinket like the cable I notice ppl buying Xboxes, TVs and so on.

    I have not seen this side of human nature, could you please comment on what is chain reaction here. For example, everyone is so upbeat with optimism that I get government money and I can spend it all and by august its all done or dusted.

    OR

    A month or two from now on cahs has run out and then its, well, unpleasant?

    • The bike riding and bike servicing boom is one of the positives of the lockdowns – families spending time together. Record household debt already exists – what’s a little more? The result is probably a pull-forward of demand. Fewer bikes to be sold this coming Christmas.

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