Any views on local bank stocks during this Covid-19 situtation?

"I am comfortable with it falling less than 10% after the purchase" - ** **This coronavirus virus is an omega-level black swan. Volatility gonna be heightened over a downward trend the next few months at the very least as the World overall is still trying to grasp and contained the virus, with heavy supply disruption & demand destruction. If your heart can only withstand just a mere -10% drop in value, this current choppy markets is not for you.

Of cos, as the good old Buffet adage goes, buy wonderful companies at a fair price. Well newsflash, even wonderful companies cannot survive extended periods without positive cashflows. Even an olympian level athlete, cant survive long without oxygen. And positive cash-flow is the oxygen for most/if not all companies (esp highly leveraged ones).

When there's massive uncertainty on e 3 inputs used for any type of valuation growth rate, risk rate, current earnings for this year all at the same time, how does one with a certain confidence interval can conduct any discounted cash flow analysis. As such, other traditional metrics to value stocks such as price/earnings, price/book can be cast out of the window until normalcy return to market sentiment

That said, our local banks are well-capitalized, and should survive & thrive 10 years down the road. But just because DBS can survived, its not a guranteed that price can rebound immediately/ quickly to previous pre-virus levels. Long term annualized return of a stock is a function of "entry price & time" Until, we see a peaked case of virus worldwide, should one decide to invest in DBS or any "good companies" out there, just rmb to rationed out your war-chest & netflix​​​

Hi anon, what a timely question. I'm just doing an article on the banks' valuations so do keep a lookout for it on Seedly Reads!

My view is that the local banks are well-capitalised and would be able to weather through the storm.

As you might already know, we shouldn't buy companies just because they are cheap. The business comes first before the valuation. All the best!​​​