Can you expand on your thoughts towards banks please?

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Question asked 18/02/2023

Can you expand on your thoughts towards banks please?

Hi Guys, You bought NAB in December and switched from CBA to ANZ last week to increase your exposure to the sector, but this morning (Thursday) you comment that the banks are in for a tough time for some months. A good call on selling CBA, but can you please comment. With banks and resources in for a tough time, what would you buy for Q1 2023? Cheers, Cameron

Answer

Hi Cameron,

Lots of moving parts in that question, firstly the banks:

Just to clarify, when we switched from CBA to ANZ we moved equal positions – we did not increase our bank weightings.
In our Flagship Growth Portfolio we currently hold our favored 3 banks on the ASX with 5% in each, ANZ, Macquarie and NAB but as we said this week, we are still underweight the overall Banking Sector. When/if we see a period of decent weakness in the sector, we are likely to add to ANZ & NAB.
Secondly, in regard to the resources we are only hoping for a degree of weakness in line with our view that the $US will bounce over the coming weeks/months, so far, the US Dollar has indeed rallied but the resource stocks we are targeting have been resilient to-date but in today’s volatile & uncertain times sentiment can change quickly.
In terms of what to buy for Q1 of 2023 we have to be careful not to suffer some “FOMO” after watching the likes of Orora (ORA) and G.U.D. (GUD) enjoy some strong moves this week, two companies we have been bullish on in February. We will simply be adopting our usual stock by stock evaluation – watch out for alerts.

NB FOMO is the acronym for Fear of Missing Out.

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Commonwealth Bank (CBA)

LAST UPDATED 16/02/2023 15:07

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