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27 Sept 2016 (AFR) – Credit Suisse tips the stocks to avoid when the market melts down – As the ‘bondcano’ continues towards eruption

(27 September 2016, AFR, p26, by Philip Baker)

‘Just like every other sharemarket on the planet the Australian equity market has been a winner from falling bond yields over the past eight years. But ever since the bond market has shown signs of blowing up over the past month or so there’s been plenty of investors getting worried that it might spark another savage sell-off in the sharemarket.’

‘Credit Suisse strategist Hasan Tevfik has referred to the short, sharp spike up in yields as a “bondcano” and warns that if the “bond market continues to erupt, and yields push higher still, we suggest investors tread with caution around those stocks at the very top of the bondcano”. The stocks he’s put on notice here all have three common characteristics. They look expensive on some valuation measures, such as a price earnings ratio, they have a truck load of debt, and pay dividends with a very high payout ratio.’  <snipped…>

‘He lists stocks such as…’

Read more at AFR.com (might need AFR login access, or try: AFR.com/trial)

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Brainy's Share Market Toolbox. Read the honest truth about the sharemarket. Develop or fine tune your investing/trading strategies using share price charts (technical analysis), or learn about the investment strategies of others. Melbourne (Australia) based - supporting share market investors and traders to build wealth through smarter investing using my Share Market Toolbox arsenal of weapons to tackle the market.

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