![\"Smart](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2026\/03\/0858cad9800e87da9beafe012658cb96.jpeg\")
Image source: Getty Images <\/p>\n Image source: Getty Images <\/p>\n
The stock market looks volatile right now. But a big decline in share prices could be a huge opportunity for long-term investors.<\/p>\n
Quality shares often trade at high multiples, which makes them risky. A stock market crash, though, could change all of that.<\/p>\n
A lot of the time in life, you get what you pay for. But that\u2019s because a lot of what you buy isn\u2019t through the stock market.<\/p>\n
Share prices move around more often and more dramatically than the price of cars, clothes, or coffees. And that means a couple of things.<\/p>\n
When prices get too high, investors can find themselves buying stocks for more than they\u2019re worth. That\u2019s a good situation for sellers.<\/p>\n
Equally, stock prices can fall below the intrinsic value of a company\u2019s shares. In that case, buyers can get outstanding value.<\/p>\n
As an example, shares in BP are up 35% so far this year. Yet I doubt that the business is 13% better now than it was at the start of January.<\/p>\n
Higher oil prices definitely help. But my strong suspicion is that the stock was either cheap in January, expensive now, or both.<\/p>\n
Most of the time, the stock market is pretty good at recognising quality companies. And this is usually reflected in higher valuations.<\/p>\n
That makes buying risky. High multiples mean returns depend on future growth and there\u2019s always a chance this doesn\u2019t materialise.<\/p>\n
A good example is Halma (LSE:HLMA). It\u2019s a high-quality business, but it\u2019s generally come with a matching price tag in recent years.<\/p>\n
The shares have largely traded at a free cash flow multiple above 30, implying a starting return below 3%. So returns have depended on growth.<\/p>\n
Halma hasn\u2019t had much problem with this \u2013 it\u2019s been an excellent acquirer of industrial safety businesses. But there\u2019s always a risk with this strategy.<\/p>\n
The danger is the chance of overpaying. And Halma has shown a willingness to pay higher multiples for what it sees as better businesses.<\/p>\n
That\u2019s worked well so far and this isn\u2019t just an accident. The firm has experience identifying, buying, and integrating acquisition targets.<\/p>\n
I think there\u2019s a good chance it can continue. But the current valuation means the odds aren\u2019t as far in my favour as I\u2019d like right now.<\/p>\n
A free cash flow multiple of 33 implies a 3.3% starting return. That\u2019s well below the 4.7% yield on offer from 10-year government bonds.<\/p>\n
A stock market crash could change that, however. In fact, if the bond prices rise while stocks fall, the equation might even reverse.<\/p>\n
Falling share prices are bad news for anyone looking to sell. But for long-term investors they can be an absolute gift.<\/p>\n","protected":false},"excerpt":{"rendered":"Image source: Getty Images The stock market looks volatile right now. But a big decline in share prices…\n","protected":false},"author":2,"featured_media":350945,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[114,85,46,5270,1011,4342],"class_list":{"0":"post-350944","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-business","9":"tag-il","10":"tag-israel","11":"tag-share-prices","12":"tag-stock-market","13":"tag-stock-prices"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/350944","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=350944"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/350944\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/350945"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=350944"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=350944"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=350944"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}