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Some great insights from Chris Lees @JOHCMUK
There& #39;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>
There& #39;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& #39;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>>
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
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& #39;re highly sensitive to good& bad news flow>
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& #39;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& #39;s Jeremy Grantham "Get out of stocks because people are buying bankrupt companies & issuing stock to pay off creditors" & asked if Asia is different
>>>
Arnold quoted GMO& #39;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& #39;ll>>>>
For portfolios, my advice remains to stay on the fence
Call the recovery/collapse right & you& #39;ll>>>>
>>>>be seen as a hero, call it wrong and you& #39;ll be almost wiped out & from here, there& #39;s no way anyone can know so stay as neutral as possible
Arnold then said "You& #39;ve been very vocal about Powell & The Fed, how are they doing now?"
I think everyone can guess my answer!
Arnold then said "You& #39;ve been very vocal about Powell & The Fed, how are they doing now?"
I think everyone can guess my answer!
Summary
I& #39;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>
I& #39;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>>
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!!
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!!
