June Market Update – Week 4

June 23, 2020

Market appears to be in a sideways trend. Bouncing around the 6000 points support level.

The US market corrected on 11th of June (a dip of 5.5% Nasdaq and almost 7% dow jones) The Australian market tends to follow the US often so we might see the same. Worst case some sectors and stocks will be panic sold. Best case, some selling to take profits and stop losses being hit.

In either case, we expect a lot of investors to see reds in their portfolio today.

Our thinking is, corrections are healthy. They allow the market to return to true value and offer buying opportunities.

With each company in our folio, the strategy to manage things regardless of what is happening in the market is to answer the 5 questions below:

  1. Has anything changed for the companies specifically?
  2. Any negative announcements for any of our holdings?
  3. Has the management changed?
  4. Are the reasons why we bought the stock for the long term still valid?
  5. Would we buy more of this stock now for the long term?

If the answers to the above are yes, we hold, we increase our stop losses or remove them.

Our approach with our entire portfolio will be the same. 


A loss is not locked in unless you sell.

Further to the above, if we see any of our holdings drop to a value which we feel is a discount and under their true value, we will actually buy more.

That is our plan, formulated in advance. We execute and avoid reacting with emotion. Our research and hard work have made us successful. We have repeated this year after year and it is the same strategy that led to us doubling our investment in the last correction.

As always, any updates to our portfolio and watchlist will be shared as close to realtime, on the same day, whenever possible.

We are working hard on getting our new articles and videos out soon. Stay tuned.

In addition to in-depth company research and macro-economic trends, we also keep an eye out for CEO and Director comments. Here’s a snapshot of some relevant comments made recently both locally and overseas that reflect on the sentiment and market conditions.

Food and Beverage

“We’re seeing cafes increasing now and other channels. There’s some more confidence out there”

Rolando Schirato, Managing Director, Vittoria Coffee

“History has proven many times over that during a recession…people are much more careful about where they spend their dollars and that just means more meals at home versus away from home” 

Steven Spinner, CEO, United Natural Foods [US listed international food wholesaler]


“The shift to remote work has driven a surge in demand for digital documents, with use of web-based PDF services, up nearly 40% quarter-over-quarter”

Shantanu Narayen, CEO, Adobe Inc

“We’ve all had the internet for years…but now because we’ve all been locked in, people are doing things online they haven’t had to do before”

Michael Kelly, CEO, Fineos Corp Holdings PLC [ASX listed insurance software provider]

Energy & Resources

“Although demand will recover in time, some refineries around the world will no doubt close as a result of the more permanent demand impacts and challenging economic outlooks in their respective markets, the question for us is whether Australian refineries should again fall victim to this rationalisation”

Scott Wyatt, CEO, Viva Energy Australia


“It’s important that Australia maintains manufacturing capability and provides a level of self-sufficiency for the country. In some sectors lower-priced gas is a key component of that. And in a country that has such a significant natural resource, we should be able to capitalise on that” 

Scott Wyatt, CEO, Viva Energy Australia

Aviation, Travel & Leisure

“Quite a lot of [airplane deliveries] will be deferred. We have already notified both Boeing and Airbus that we will not be taking any airplanes this year or next year. All the other aircraft that we have on order that were supposed to be delivered to us within the next two or three years, will now be pushed back to as long as nearly eight to 10 years”

Akbar al-Baker, CEO, Qatar Airways

“The market’s going to be smaller, we’re going to be a lot smaller than we have been”

Graham Turner, CEO, Flight Centre Travel Group Ltd

Health & Wellbeing

“[The fitness industry] will never look the same as it did pre COVID-19. The phased reopening will test the fitness industry as costs are turned back on and members are phased back into gyms and fitness studios. More people than ever will be willing to invest in personal trainers”

Steve Pettit, CEO, Australian Institute of Fitness

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