BROKERS’ NOTES: Buy Amazon, sell US regional banks

Bright Khumalo, portfolio manager: Vestact 

Buy: Amazon

I’m going to be brave and say let’s buy some Amazon. The Nasdaq is up 20% since its lows in January; Amazon has done marginally better, up 23% year to date. On a one-year basis it’s still down 3%, whereas other megacaps are up north of 50%. That makes it a great buying opportunity for long-term investors. It’s still a blue-chip company and the No 1  in cloud, but e-commerce has also bounced back. Now it’s at a nice spot because not a lot of exuberance is priced into the share. We’ve been super-bearish about e-commerce, but it’s proving us otherwise.

Sell: Regional banks in the US

What I wouldn’t be buying is any regional bank share in the US — think PacWest or Western Alliance. We’ve seen a few major collapses, such as  Silicon Valley Bank. If you hold equity, you’re not going to get anything just because you’ve been bought by JPMorgan (in the case of First Republic). In investing, it’s a great boon to avoid these falling knives, these landmines that wipe you out completely, because you survive to play again. Once your capital is zero, you can’t. And we don’t know how long this calamity might last — if you try to pick the bottom you might be picking the next target for the Fed to give to JPMorgan.