http://www.smh.com.au/business/mark...lloff-says-goldman-sachs-20171019-gz44un.html Betting against Australian stocks with weak momentum has been one of the most consistently profitable methods to benefit from a market downturn, according to analysis from Goldman Sachs. Recent meetings the bank held with investors showed unusually high interest in positioning themselves for a pull-back in share prices, according to Goldman strategists including Matthew Ross in Melbourne. Their analysis, which spans market selloffs over 25 years, favours betting against companies that were poor performers in the three and 12 months leading up to the market's slide. Those firms are often facing funding problems at the inflection point for the broader market turn, the analysis shows. Australia is already one of the laggards among global sharemarkets this year, with a rise of just 4 per cent compared with about 16 per cent for a global stock benchmark. Poorly performing financial, real estate and telecom stocks have all weighed on the ASX, where traders are positioning for the possibility of higher interest rates late next year. Among other reasons for the caution, Goldman noted earnings momentum is getting weaker. One important difference between the current market and historical market drops over the last 25 years is the unprecedented action of central banks in recent years, according to Ross and his colleagues. This means that Goldman's strategy to buy stocks it categorises as "low risk" during sell-offs -- a trade that's worked in the past -- may not be successful this time around. That's partly because valuations on this group of equities is already about 22 per cent higher than that of the broader market, which much higher than the multiple seen during prior peaks. Goldman still found a few "low risk" stocks that should outperform the broader market if rate hikes send shares tumbling. The analysts singled out the following stocks, which they said feature lower valuation premiums, some degree of profit-forecasting predictability and an absence of high levels of debt: healthcare company Sonic Healthcare retailer JB Hi-Fi paint maker DuluxGroup Power giant AGL Energy Petrol stations owner Caltex Australia Bloomberg
Meanwhile, prop desk is loading. *wink wink* I actually know a few on GS desks, not very much human trading these days. Biggest balls of the whole bunch(PD's.) Not the smartest though. Take a look over at St.Swithins and you'll see everything you need.
JB Hifi is in their safe list??? shit... I would assume otherwise with Amazon finally coming to town...
JBH = PE 15.5, DIV 4.95%, nothing spectacular re retail sector, but if market continues to plod up, where the JBH share price is sitting now, it should make some ground imo. Amazon is some way to go I believe before it affects Aussie market in any meaningful way. Like Harvey Norman, shops which these days I hardly visit, but young uns might still like brousing thru. Personally, retail sector has never turned me on, but GS is prolly right, JBH prolly a few % there to make in the short term so long as China market don't go belly up. China is our Archilles Heel in Oz imo.
JBH is all about market share though... so, when Amazon hits it will affect it quite heavily. Harvey Norman also sells bigger items like furniture... JBH is all small stuff... I think they will be more affected by Amazon than HN. I don't really follow individual stocks though.. so maybe I should take a deeper look. China is definitely a driver... they are shifting to quality goods from Oz... funny how we import crap from China and then export quality