If world markets take it on the chin in the coming weeks I would consider it an intermediate-term buying opportunity – for some sectors. If Europe, in particular, is hit hard enough to provide great opportunities, we’ll be at least selective buyers. If we can buy cheaply enough, I’m OK holding even if we didn’t get the lows. We buy in a range of value; we aren’t trying to get the exact low!
One possibility many are considering is the Global X FTSE Greece ETF (GREK). Let them. Me? I won’t touch it. Yes, it closed cheap on Thursday and is likely to open even cheaper on Monday. And it sells at a 3% discount to its NAV. But it’s the composition of the fund that makes it uninteresting to me. Rather than being comprised of Greek consumer staples, infrastructure, shipping, food companies etc., firms that are needed by the Greek people whether they are in the EZ or not, 22% of the ETF is in one stock: Coca-Cola HBC (CCHGY) — which is a Swiss company now, no longer Greek. I can buy 22% of GREK just by buying one Swiss stock. Another 25% is in Greek banks, which may or may not remain solvent, and nearly 10% more is in a lottery and sports betting firm in Greece. Maybe if it goes to a deeper discount and the banks look like they’ll make it… Otherwise, no way.
Ironically, the Greek fiasco will most likely weaken the Euro yet again. A weaker Euro means European companies like Daimler, VW, Unilever, Roche, Coca Cola HBC, and others that exports to other nations, will be selling at a favorable exchange rate and are likely to, at least temporarily, be able to under-cut their competition in the US, Asia and elsewhere.
Which means opportunity. We already own 1000 shares of Allianz SE (AZSEY), the giant Germany-based insurance and financial services giant that is, among other things, the parent of PIMCO, which all by itself has $1.6 trillion in assets under management.
