Portfolio Analysis - Bear Market Case Study

This is the first class in a series on Value Investing Buffett style. The Bear Market Portfolio Analysis is a very important first class to do because like all of my other classes I will build on what we discuss here.

We will not be doing a deep analysis or valuation on any 1 company in this class, this is more of a high-level portfolio analysis and how to think about the current environment and your portfolio. We will also dive into a variety of companies to point out key levers and considerations we should focus on.

More specifically, we will discuss the following:

• We will do a broad market (JSE & JJSE) overview and go over dozens of companies at a very high level, across multiple industries, to get a sense for how COVID19 will affect them.
• We will look at a few scenarios of sample investor profiles and talk through the considerations of each to help you learn how to think about what’s happening with your portfolio.
• How do you adapt your portfolio for a Bear Market vs a Bull Market?
• Because prices are down, does that mean there are a lot of great deals? No. There certainly are deals, but there are increased risks.
• How do we parse the risks to find the deals?
• What should we be paying attention to as a result of COVID19?
• We will go through 6 companies in a detailed way (in various industries) and discuss considerations and how to think about how each one will fare in COVID19 and what we should be paying attention to.
• The market over the next few months (up to 18 months) will likely be very volatile. What should we be paying attention to and how should we manage our emotions?

Buffett is notorious for hoarding cash until disaster strikes and then makes major purchases during market pullbacks, but how do we know what good value is? As he says "Price is what you pay, Value is what you get". We need to make sure we are getting good value. That’s what the series will help us think through and figure out.