Thursday, August 16, 2012

The rise and rise of Consumers

When everything else are not so safe, people go for the presumably the safest - consumer goods. We need to eat, we need to drink, we still need to have that puff. However, have you heard of in times of despair, its also time for opportunities. This is also times when institutions and retail together are looking for safe haven. Why? They themselves especially the institutions have to be safe - otherwise they may be out of job. Hence, in times of uncertainty, we might as well be travelling on the "Road Most People Travelled". Humans can't move away from that herd mentality.

Look at the four charts below for Carlsberg (supposed to be a sin stock - we would think Malaysia especially to be a shrinking beer drinking country?), BAT (cigarettes supposed to be a stock to be avoided as they have not much growth story anymore  - NOT quite TRUE), Nestle (a strong food brand - strongest in fact) and Dutch Lady (a strong regional dairy products brand). Hence, we are looking at four consumer goods with different profiles. But they have 1 similarity!

BAT Share Price

Dutch Lady Share Price

Carlsberg Share Price

Nestle
After looking through the 4 charts, can you spot the difference? I can't. Basically, the trend is an assumption of them doing very well. Yes, these companies are doing well, BUT not all of them deserves the word very. They consistently do well, that is all. Probably, that's the next best thing for now.

These are the stocks where it is supposed to provide us with the comfort as they have strong brand names. They provide some comfort but are we just looking for that comfiness? - especially when it has gone that high. Very quickly, over the last 2 years some of these stocks have gone from very cheap to expensive. How fast things have changed? Is it a herd thing? After all, we people move in herds.

Now, who dares to move out of that pack? Now is the best time to look for the next best thing after this. Question is, which one is it?

4 comments:

Daichi Bo said...

If you missed Dutch Lady and she is somebody's now, try to date her sister, Ms. Harrisons.

felicity said...

Haha, Harrisons is not too bad and not that expensive either

Newbie said...

Is this what you called bubble?

felicity said...

No, I do not think this is bubble, the housing market is US was a bubble. A bubble is when the market crash as in price from RM100 per stock can crash to almost worthless.
But the price I think is on high side.