Globe says opportunities to be found in market crash or correction
The Globe and Mail reports in its Saturday, October 18, edition that crashes and
corrections aren't the end of the world. The Globe's David Driscoll writes that
instead, they're opportunities to buy on price weaknesses. If you want to know
what to buy after a crash, consider how well low debt companies did in the
decade after the 1987 crash, writes Mr Driscoll. A survey of all the companies on
the TSE that existed in 1987 uncovered 13 stocks which, since 1987, have
returned a compound annual rate of 31.6 per cent, almost triple the TSE 35
index's 10.7 per cent annual return. None of the 13 has more than 50 per cent
debt to equity. If you don't own them already, you should find room in your
portfolio for them, says Mr Driscoll. The 13 companies are: Precision Drilling;
CGI Group; Maax; Exco Technologies; Shaw Industries; Cinram International;
LGS Group; SNC-Lavalin; Newalta; Gennum; Unican Security; Uni-Select; and
Metro-Richelieu. If you follow proper portfolio management, market corrections
and crashes shouldn't wipe out your investment capital, says Mr Driscoll.
(c) Copyright 1997 Canjex Publishing Ltd. canada-stockwatch.com |
