Some great insights from Chris Lees @JOHCMUK
There's no historical precedent for investors to follow this time, because this is the 1st ever recession caused by govs telling citizens to stay at home &/or to keep to social distancing rules.
So the sequencing, magnitude& duration>
>of this recession& recovery will all be very different to anything that's ever happened before
We are now 70% bullish & 30% bearish, with a clear portfolio tilt towards resilient stocks with good bal sheets
If the bullish scenario does continue then it will probably become the>>
>>fastest or biggest equity bull market in our lifetime due to the unprecedented& combined fiscal/monetary response.
However, if the bearish scenario unfolds, it will probably become the biggest equity bear market in our lifetime given today’s high valuations and debt levels
Slightly less eloquently, I just gave my views to Arnold Gay at @ChannelNewsAsia
Markets are now finely balanced between the downward pull of really weak economic data & the rocket fuel propulsion of fiscal stimuli
At this fulcrum, they're highly sensitive to good& bad news flow>
>whether that flow is Sino-Indian or other geopol, Sino-US trade tensions, the trigger happy Kim family, Poland invading the Czech Republic, NASA contacting aliens, US cities virtually closed by protests, bankrupt companies trying to issue stock or the ebb & flow of COVID-19>>
>>The key remains (as even the IMF have noticed) the divergence between economic& capital market conditions

Arnold quoted GMO's Jeremy Grantham "Get out of stocks because people are buying bankrupt companies & issuing stock to pay off creditors" & asked if Asia is different
>>>
>>>My view is not so much different, just much less extreme- Asian economies so far are recovering better & Asian markets less reliant on stimuli- a diluted version of US/the west
For portfolios, my advice remains to stay on the fence
Call the recovery/collapse right & you'll>>>>
>>>>be seen as a hero, call it wrong and you'll be almost wiped out & from here, there's no way anyone can know so stay as neutral as possible

Arnold then said "You've been very vocal about Powell & The Fed, how are they doing now?"

I think everyone can guess my answer!
Summary
I'm still sitting on my fence– finely balanced between dreadful fundamental economic drivers & supportive fiscal & monetary conditions- a violent tug of war with further 40% falls & 50% rallies equally possible

Right now, it feels like we’re due a bust more than a boom>
>but noone can call that
Protection is now decent value again– 25+ treasury strips look like great insurance
I prefer ChinTech (esp on any weakness) to UStech especially with AAPL at a new record high although SinTech(eg $SE)outperformed AAPL, MSFT, FANGs etc for the last year>>
>>
But in general, portfolios should be balanced enough for whether the next move is 50% up or 40% down

Strap in tight, the one thing for sure is that the ride will be bumpy!!
You can follow @PaulGambles2.
Tip: mention @twtextapp on a Twitter thread with the keyword “unroll” to get a link to it.

Latest Threads Unrolled: