There is no way of knowing just how far the S&P/ASX 200 (INDEXASX: XJO) will fall. Perhaps the sell-off, which has knocked 6% off the index in the past month, is nearly over…maybe it's just beginning!
The fact of the matter is no one has a crystal ball and knows for certain which way the market will head next.
One thing investors do know however is that in the long run the market grinds higher as generally economies should expand over time– despite the occasional setback in the form of recessions.
With that knowledge, smart investors are at liberty to take the view that:
Over the long run, if you buy when a stock is cheap, even if it gets cheaper (and more often than not it will) you'll do well.
If you're comfortable with that investment philosophy, you should be able to tune out to all the market noise and instead focus on identifying opportunities where the value is substantially above the quoted price.
The following three companies have all seen their share prices recently crash to new 52-week lows. Coca-Cola Amatil Ltd's (ASX: CCL) share price has dropped 29% in the last year, Fletcher Building Limited (Australia) (ASX: FBU) is down 8% in the past 12 months and JB Hi-Fi Limited (ASX: JBH) has sunk nearly 27% over the year.
Despite the lows and price falls, all three companies continue to have commanding positions in their respective industries.
Coca-Cola holds the rights to not just Coke bottling and distribution in Australia but also the rights for many other leading beverage brands.
Fletcher Building has a commanding position in building products, construction and distribution within the New Zealand market.
JB Hi-Fi has positioned itself as the "go-to" for many customers when purchasing electronics. The group is now looking to expand its brand through the new JB Hi-Fi HOME store offering.
