“UK stocks are now trading at their biggest discount to International equities in 40 years”
Everyone wants the same thing from an equity investment: the kind of long term sustainable earnings growth that finally turns into long-term income (see page 28 for a single fund manager’s ideas on this). The problem is that if everyone wants the exact same thing, that item is seldom affordable. But every now and then the markets throw us a bone in the kind of a set of perfectly fine stocks moving economical.
UK stocks are now trading in their biggest discount to global equities in 40 decades. That is partially to do with the makeup of the market (many banks) but possibly more to do with the disappearance of global investors fed up with the confusions of Brexit. So the general expectation is that if a bargain seems, the market might grow. Otherwise, it won’t. Leaving aside that there is no longer anything as no deal (lots of side deals have already been created ) we wonder if this is really so. Perhaps what matters over the last conclusion is just that one is created – that these years of uncertainty come to a conclusion (or at least are perceived as having come to a conclusion ).
Exchange like certainty (in most cases) so no deal, once we know, the UK market might well grow no matter.
But what happens, there are UK stocks that you should most likely be looking at anyhow. Not all will survive. But those who do could be very interesting indeed. If post-lockdown there are fewer holiday companies than previously, lack of
Competition is likely to create the ones remaining not only survivors, although winners. The same goes for hospitality companies, cinemas, airlines and possibly even retailers. Which are which?
Note that both Max and Cris are considering the oil majors. I’m too. Some traders refuse to maintain them for ecological factors. This can be a mistake. They are cheap and will throw away money for many decades. If they remain this cheap for more, that might change. There’s an awful lot of private money on the market that cares less about these things than you think you do – and can remove them out of public markets. Do not allow a sense of do-goodery to prevent you from looking at miners either.
As James McKeigue points out, you can not have a green fresh deal (or an electrical automobile market boom) without a good few very big copper mines.
On the topic of preventing investments for ethical reasons. China may not be your own political cup of java (for good reason). But it’s the only major worldwide economy likely to end this season with a greater GDP than it began it with. It is also rather more than the low cost products exporter too many still consider it as. Think technology powerhouse. You can not ignore this market – but you can invest in it by means of a fund manager who specializes in the behavior of individual companies rather than governments.