After a volatile 2018, which ended in an aggressive global equity market sell off, it’s nice to turn a new leaf in 2019 and search for stocks that have the potential to generate us double-digit returns from current depressed prices.
The most interesting aspect of the December 2018 sell off was it became indiscriminate by stock and sector. Virtually nothing was immune to selling pressure in the last few weeks of 2018, a market phenomenon that’s often associated with a sentiment capitulation bottom.
As we have seen, markets have bounced solidly from those December lows, but I’d have to say you generally don’t get a true market bottom until the market itself “returns to the scene of the crime”. I believe we could see a retest of the December lows over the next few months and that would be a tremendous buying opportunity in high quality long duration companies that are rarely on sale.