Markets are unpredictable so anything can happen.
Having got that out of the way my sense is that most likely US Stock market for next year could be flat. The reason being that recent run up in stock market has stretched the market multiple and almost all stocks are trading at Fair Value or Above Fair Value.
Lot of news including US-China Trade Stalemate (or what’s termed as Phase 1 deal) is baked in. It is likely that interest rates will remain in this 1.5% to 2% for US 10 year range for the foreseeable future.
I still think the best path forward is to stay invested and incrementally invest savings over the year at a steady rate with caution and not taking too much risk. Value of a stock can fall 10-20% in a year but over 5 years and 10 years time-frame good companies will compound value. A downturn in near term may even enhance long term value for companies that are opportunistic in their investments and those than can do accretive share buybacks.
In Tech AMZN looks favorable to AAPL on a relative value basis. GOOGL and FB are fairly valued assuming strong growth over next 5 years materializes and regulatory risks remain in check.
On a sector basis Energy is cheaper and can perform better in 2020 assuming Oil demand remains stable and supply remains at current levels. Banking is another sector where multiple expansion is possible.
In consumer staples sectors MO is still a good pick with possible multiple expansion to 14 P/E and $59 stock price. In consumer discretionary EXPE is a good pick with $140-$160 Fair Value assuming a reversion to 20 times multiple and no entry by GOOGL, FB, AMZN into Travel Bookijng sector.
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