Rudi’s View: Make Today’s Crisis Your Opportunity

Rudi's View | 10:00 AM

Don't get mad, or frustrated, get even. Turn this crisis in an opportunity to upgrade your portfolio and strategy.

By Rudi Filapek-Vandyck, Editor

Make Today's Crisis Your Opportunity

Last week, I was reminded by FNArena team member Mark Woodruff about Roman Emperor Marcus Aurelius' sage advice:

"You have power over your mind, not outside events. Realise this, and you will find strength."

Easier said than done, of course, with the war in the Middle East enforcing maximum uncertainty for the world economy and financial markets.

I am by nature not a gambler, but I am willing to bet most investors are coping by not looking at their equity holdings.

The share market can be a brutal place, sometimes.

At the same time, every crisis, big or small, long or short, creates opportunity for those who can stay level-headed, and this year's challenging context should be no different.

The fact more than 66% of all ratings for individual ASX-listed companies from the seven local stockbrokerages monitored daily by FNArena is Buy-equivalent rated -- more than during the GFC Bear Market in 2008, leaving only 26.6% for Neutral/Holds and 7.5% for Sell ratings, might as well be seen as one big indicator of that.

Sure, forecasts might have to come down, which also impacts on valuations and price targets, but so many household names are already trading at significant gaps to analysts' assessments, this makes it virtually impossible not to see significant opportunities emerging, unless the world is truly on the precipice of another GFC-alike thunderstorm, for which there is no valid indication to date.

In fact, while financial markets are losing their patience with the notoriously mercurial and unreliable US President, there remains a genuine possibility hostilities might cease sooner than anyone is expecting, which would ceteris paribus (all else equal) also limit the damage done to oil supplies and the global economy.

But, yes, the other scenario looks just as valid right now in that Israel and this US administration might well be prepared to endure greater sacrifices in order to achieve indisputable victory.

And even under the first scenario outcome, there's no reliable guessing just how low share prices might still go.

The opportunity for investors remains the same, though. Whether one is sitting on a pile of cash or still fully exposed to day to day share market shenanigans, the ultimate goal should be to bend this serious challenge to our own benefit, as much as we can.