U.S. stock market bears end, Goldman Sachs teaches you how to choose stocks

Financial news

Written by: Jingjing He

2020-03-27 07:41

The G20 announced that it will launch a US $ 5 trillion economic plan. The US $ 2 trillion rescue plan is expected to be passed in Congress. In addition, Fed Chairman Powell threatened that "Ammunition will not run out", leaving US stocks fearless of the number of unemployment benefits for leaders. It set a new all-time high and continued to rise sharply. The Dow rose for the third consecutive day, closing up 1351 points (6.38%); the benchmark index rose 6.24%; the Nasdaq rose 5.6%.

It is worth noting that the Dow hit its best consecutive three-day gain since October 1931, an increase of 20% from its low of three days ago, ending the shortest bear market in history. Among them, aircraft manufacturer Boeing bombed 13.7%, once again becoming the best performing Dow component. Oil stock Chevron rose 10.2%.

Goldman Sachs emphasized that the company has a strong balance sheet and will more effectively cope with the economic downturn. (Reuters)

Goldman Sachs teaches stock selection in volatile markets

The market went up and down, and investment bank Goldman Sachs advised investors to choose stocks with a margin of safety and demonstrated a number of criteria for stock selection: for example, the market value needs to be more than $ 10 billion, and there are strong assets The balance sheet and current price are no more than 20% lower than the low level at the time of the stock market crash in 2009.

Companies that meet these criteria at the same time have generally outperformed the market in this stock disaster. For example, game development companies EA and Take-Two Interactive have fallen 16% and 13% respectively this year, which is less than the S & P's 25% drop in the same period. .

Goldman Sachs chief US equity strategist David Kostin explained that when liquidity in the market decreases, the company with the strongest balance sheet will be more effective in resisting overruns due to the economic downturn and the stock price will be more resilient.

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Credit Suisse: The worst moments have passed

Credit Suisse, another Wall Street firm, expects that the worst moment for U.S. stocks has passed. It is confident that the economy will only fall sharply in the short term and will start to rebound later this year. They said that from the perspective of the next 6 to 12 months, the current value of U.S. stocks is "attractive", and investors can rarely really capture the bottom of the stock market. Re-entering the market is more favorable.

Credit Suisse said that investors need to "calculate very much" when entering the market, and suggested that they focus on investing in certain areas with advantages. The following is a list of stocks they have selected for each category:

+10

+9

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There are also investors who are more pessimistic about the market outlook. Peter Boockvar, chief investment officer of the Bleakley Advisory Group, said that the market has foreseen negative news about the epidemic and economic data in the coming months, and reflected that the US stocks have started to pick up in terms of prices. However, the outbreak could plague the U.S. economy and the stock market for a longer period of time, he warned.

Goldman Sachs Credit Suisse