BFC3540 – How to Conquer Q&A

Oh boy. We’re going to make these investment debates really messy >:)

As we might have learnt, it is not about your portfolio weighting or performance, but how you deal with Q&A. The teams that are most engaged with questions and reply with the best answers will reign supreme.

So here are a lost of questions (sorry not answers) to make a menace of your stock debates.

A2 Milk 

For those that have a long position:

  • A2 is like the golden child that’s just delivered a disappointing result. It’s showing no signs of turnaround in terms of its share price. Why bother with a long position when things are so unpredictable?
  • Stocks are meant to have a positive correlation with the general market – A2 did not move with the market this week. What is wrong?
  • All investors know that A2 will do amazing in ANZ and China. But what about the other regions – does that concern you? The US business reported good revenue growth but a $44m loss.

For those that have a short position:

  • A2 is the golden child. Every company will experience failures, but A2 ultimately has an amazing product, market dominance in ANZ and growing market share in China. What more could you ask for? Why short given its strong fundamentals?
  • Bellamy’s just got offered a takeover offer at a 50% premium to its share price. The analogy here is – your neighbor just sold their house for an amazing deal. But your house is better in every way possible. Why short under these circumstances?

Treasury Wines 

For those that have a long position:

  • TWE is heavily reliant on Chinese consumers – what is your outlook on that?
  • Alcohol consumption in Australia is near 50-year lows (https://www.theshout.com.au/news/total-alcohol-consumption-remains-at-50-year-lows/). Is this not dangerous for TWE’s business?
  • TWE share price looks like it has a very strong correlation with the general market. There has just been some issues with the US-China trade war over the weekend. Is this not a big risk to go long?

For those that have a short position:

  • TWE share price has moved strongly with the market and has a lot of momentum – why short against this?
  • TWE delivered an outstanding FY19 full year report – what weakness in this report made you want to short?
  • The Aussie dollar is at historic lows which is good for TWE’s business. The dollar continues to go lower – is this not a risk for your short?

Goodman Group and GPT Group 

For those that have a long position:

  • What is your opinion of US-treasury yields and how they influence the share price
  • Do you know what drives changes in US-treasury yields?
  • Why long GPT when Goodman Group has better value-add property? For example, property in areas that are of high demand for e-commerce, data centers etc.

For those that have a short position:

  • Does the property market affect these holdings?

NAB and AMP 

For those that have a long position:

  • Our unemployment figures were disappointing and perhaps showing weakness in the general economy. Financials are most vulnerable to such weakness. Why are you long?
  • Whats the current interest rate?

For those that have a short position:

  • The banks share price have a lot of momentum, why short against it?
  • The housing market has stabilized and more interest rate cuts should buoy the market. Why did you choose short instead?