It is often said that "there are plenty of opportunities" in the equity market or that "it doesn't matter when you miss an opportunity, because there'll be another one along in a minute". Indeed that is observably true because, in line with the old proverb that "it's an ill wind that blows nobody any good", there will always be some company somewhere benefitting from whatever turn of events has occurred.
Indeed, it is usually so often true that people get quite blasé about it - and they simply assume that the market is replete with good opportunities all the time. But is that true?
Some people will know that at one time I was a transport planner......but you probably won't know that 30 years ago I did some of the earliest pioneering work in trying to mathematically quantify the timekeeping qualities of London's buses. The big problem/joke at the time was that the buses frequently turned up in bunches (3 or 4 at a time), followed by a long gap.....and then followed by another bunch. There were a host of behavioural and mathematical reasons for this and, these days, the vast majority of such bunching has become a thing of the past. Indeed it has become true that "there will be another one along in 10 minutes", because considerable effort and technology is now applied to keeping bus headways as constant as possible and in line with the advertised timetable. In fact we have become quite used to it, just as we have with the regular appearance of opportunities for stock market investments.
But what if the stock market (or the bus network) were to lose the factors that keep fresh boarding opportunities appearing at regular intervals? What if the markets (or the bus network) suddenly became more random, unpredictable and uncertain? And what if we face an unexpected dearth of opportunities for jumping aboard and going "somewhere nice"?
I wonder whether we might be on the cusp of such changes for the markets.
It seems to me that low interest rates, limited lending, consumer squeezes and growth concerns are all beginning to take their toll on equity markets - and the result is that we have more randomness, with hopes being raised and swiftly dashed for both individual stocks and the markets as a whole.......and share prices (broadly speaking) just wandering around and going nowhere in particular.
Certainly I am finding it difficult to find outstanding investment opportunities that can be added to my portfolio, despite the availability of a large proportion of cash in recent months. And this is starting to become a concern for me as I can see the cash pile growing a great deal more in the near future (due to my expectations over my holding in SOCO International (LON:SIA) ). By "investment" I don't just mean a quick trading punt - I mean the sort of stocks that can deliver long term outperformance over a decade.
Yes there will be no shortage of 10-20% gains to be had from short-term anomalies.....but that is IMO "trading" rather than "investment" - and the private punter is at a disadvantage to the street. And then there is the problem of spotting them and sorting out the good from the bad. It isn't a game I want to play - there are other things to do with my time.
So, where are the solid LTBH opportunities? Sectorally I remain well-disposed towards the oil and gas sector....and I also have some banks on my list of possibles. But in general I would say that valuations aren't attractive, with many of the better-known stocks trading at levels that discount a great deal of future good news. And further down the food chain a number of minnows with strong and well-publicised stories also seem to have run ahead of events (or, in a few cases, completely lost touch with reality).
I'm not wholly averse to other sectors - and indeed have just "missed the bus" whilst away on holiday with one of my (US) watchlist stocks that has risen 50% in the last few weeks - but I'd be interested to know where people see the longer-term investment opportunities against a backdrop of global uncertainty and persistent constraints on growth and demand. Don't be shy ;-)