Why it’s so hard to be an investor right now

Why it’s so hard to be an investor right now

Most companies are finding it nearly impossible to accurately assess the long-term impact of the COVID-19 crisis on their business. Consequently, market analysts are having an equally tough time, and their opinions can be alarmingly divergent. Recent analyst commentary on consumer goods retailer, JB Hi-Fi, is a case in point.

Many analysts and investors believe the bounce in economic activity from lockdowns is deserving of higher multiples being applied to stocks, while others believe that economic conditions in Australia were poor in 2019 (retail recession, collapse in residential construction activity, bushfires and floods) and the enthusiasm about a recovery must be tempered by the realisation that muted economic activity is what businesses will return to.

There is truth in both positions and the divergent views can be seen in the responses by analysts to individual company updates.

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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.