The share prices on the ASX that we're being presented with are now a lot lower than they were a month ago.
The S&P/ASX 200 Index (ASX: XJO) alone is down 27.5% since 21 February 2020. Plenty of ASX shares are down more than that. Just look at various businesses that are reliant on global trade and global travel like Webjet Limited (ASX: WEB), Qantas Airways Limited (ASX: QAN). Indeed, if I were a portfolio manager I'd definitely be buying those today.
These travel businesses would need to go bust for them not to turn out as good market-beaters at the current prices, with a three year or more holding in mind. The human element of this outbreak is horrible. The travel banks and lockdowns are unprecedented in modern history. Bare shelves at Woolworths Group Ltd (ASX: WOW) and Coles Group Limited (ASX: COL).
But on the investment side of things, you just have to put the other things aside and focus on what shares you think are opportunities. 2020 could be one of those once-a-decade opportunities to buy shares at a much cheaper price.
What shares am I looking at?
I can't reveal the shares I have bought recently due to trading rules, but my recent focus has been listed investment companies (LICs) or trusts (LITs) that have been sold off heavier than their portfolio, so the discount to the net tangible assets (NTA) was too good to ignore.
However, there are now plenty of shares that are trading at much cheaper prices. There are some shares that have risky balance sheets. But there are others that I think could be so much cheaper and such good value that they're too good to ignore.
We may not pick the bottom, we may invest too soon. But remember, interest rates are now at record lows, which make share prices look even more attractive.
If I were starting a portfolio from scratch, I'd definitely buy (with at least three years in mind) Webjet, Qantas, Auckland International Airport Limited (ASX: AIA), A2 Milk Company Ltd (ASX: A2M), Altium Limited (ASX: ALU), MFF Capital Investments Ltd (ASX: MFF) and Australian Ethical Investment Limited (ASX: AEF).
I think the travel businesses are now too cheap to ignore. New Zealand has been quick to implement travel bans and that will place it in good stead to limit the spread and regain Chinese tourists sooner than most other countries, which is why I mentioned Auckland Airport.
The other shares I mentioned I think are well placed to survive, have great long-term futures and have been beaten up heavily.
Shares may drop even further, but we don't know how much or when, so I think it's probably a good idea to do some investing now and hold a bit of dry powder for later.
