Time to buy McGrathmageddon?

Tuesday, 13 March 2018

Another profit downgrade yesterday:

Surely the kitchen sink has been thrown in now. Price action is also struggling to go lower despite more bad news:

I still expect things to get much worse over the long term as property prices fall and I wouldn’t buy MEA on the basis that its management is now deeply discredited as well. But I can at least now see a case for buying it with risk capital if you’re really stupid. With iron ore headed much lower all year, further RBA rate cuts are firming. That could trigger another short term property bid. Nobody has that priced yet and it will send MEA to the moon, at least in the short term.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.