Although the Ukraine-Russia crisis could have the potential to act as salt in the wounds of a fragile market, investors must focus on the long term, rather than potential damage that they could endure over the next few weeks or months.
Many perma bears will sound pretty smart these days. But let’s face it, a handful of them have been proven wrong for many years now. Indeed, markets could continue their descent to new 2022 lows. It’s hard to catch a falling knife with all the panic out there. But it’s times like these where investors need to steady their emotions.
Don’t panic: Focus on the long term and stay cool
Panic is never a good idea, even if something horrific that was out of your radar last month rears its ugly head. Indeed, the Ukraine-Russia crisis was like a left hook to the body that few of us saw coming. It’s been painful, but we must stay resilient.
The real question on the minds of investors now is whether the Fed will have to back down, potentially sacrificing a bit of its credibility. I think it’s still full steam ahead with rate hikes. They seem unavoidable, given how much inflation is out there these days. That said, perhaps they don’t need to be as committed to a more hawkish schedule. It’s exogenous shocks like the Ukraine-Russia crisis that the Fed knows can happen. They’re unpredictable and can have a devastating impact on the world economy. That’s why a vague Fed is a credible Fed, in my humble opinion.
With all the negativity in headlines of late, it’s nice to look to some of the value plays in the market right now. Growth has been pummeled. Odds are, there could be more pain in the cards, as 2022 unfolds. As for value, though, I think there are bargains emerging, as most others look to bail on this market over the swelling list of problems threatening the stock market.
Restaurant Brands International: An intriguing contrarian value stock
It’s hard to be a buyer of anything these days. But sometimes, you just need to take a deep breath and look out to the next 10, 20, or even 30 years. Consider a company that’s less likely to be punished by higher rates and the Ukraine-Russia crisis. A name like Restaurant Brands International (TSX: QSR)(NYSE: QSR) has been negatively impacted by the COVID crisis.
With Omicron cases nosediving, the reopening trade hasn’t looked this great in quite a while. While COVID risks are still very much on the table (nobody knows when we’ll go endemic), I think overall pessimism and mounting headwinds over the near term are clouding the long-term value proposition of a profitable earnings growth company like QSR. Indeed, a continued reopening from COVID is a catalyst that could allow QSR stock to rally as markets sag lower. For now, expect broader market panic and fear to drag it lower, anyway. Short-term pain for long-term gain is what QSR stock is about, as some are starting to hear the bears roar.
