The pace of my output has slowed considerably in recent months. This is partly just a case of losing a bit of momentum as work and life events get in the way and partly because the Covid-related disruption has changed my routine. I haven’t had my two hours of commuting each day to spend jotting down my investing thoughts and haven’t yet found the discipline to consistently set aside other time. That said I’ve got quite a few half-baked blog posts on the go and hope to be able to share them soon. Anyway, here’s a brief update on my latest thoughts on what’s happening in the markets and my latest trades…Continue reading
Back in March I thought that the prospect of my portfolio reaching new highs again within three months was outside the realms of possibility. This resilience in the face of a very severe economic contraction likely has something to do with expansionary government policies, in particular the huge injections of liquidity into financial markets by central banks. But has this really ‘solved’ the issue?
The Coronavirus rally continues, though has perhaps started to show signs of slowing down over the past few weeks. I’m still feeling bearish overall but my perspective on how the stock market might behave is slowly becoming more nuanced.
I’m about as bearish as I’ve been on the medium term prospects for the stock market. Like many others, I feel that the stock market isn’t fully reflecting the risks to the economy from the lock-down measures currently implemented around the world. It is already evident that the magnitude of the economic shock is unprecedented. And that’s even if we manage to lift the lock-down measures soon. It seems unlikely that we will to do so fully given the high probability of the dreaded ‘second wave’. In the meantime the economy will continue to suffer. Why then does the stock market seem to be defying gravity at the moment?
I have now fully recovered from Covid-19, assuming that is what I have had over the past week. The main symptoms were severe fatigue and shortness of breath. This was debilitating enough to excuse me from doing any work or household chores but almost imperceptible if I remained completely immobile, say reading Twitter or watching Netflix in bed. My lungs felt like they took a pounding but have recovered quickly. So all in all not the worst virus I’ve had the pleasure of hosting by any means. I’m thankful to be getting off relatively lightly.
Given the extraordinary times, I’ve updated again below with my latest thoughts on the economic outlook and what this means for my game plan. I’ve also updated on my purchases from last week.
Last week was one to remember! After a big fall on Monday led to comparisons with the October 1987 crash, we had another massive fall on Thursday after markets were unimpressed by Trump’s response of restricting flights from Europe. The result is that we’ve now had the fastest ever market crash by some margin – just 20 days to fall 20% from the highs. Exciting stuff, but a little harrowing if you are fully invested as I am. Continue reading
Well the market has certainly woken up to possible risks from the Coronavirus contagion since my last post! We now seem to be in the midst of a full-blown market panic, with the market yoyoing up and down (well mostly down) several percent every day, as investors overreact to news about the virus, its effect on businesses and the government’s response. To top that we now also have to contend with news of a collapse in oil prices, which have fallen almost 30% over the weekend following the break down of OPEC agreements.
All my gains from what had previously been shaping up to be a good year have been eroded and my portfolio is now squarely in the red. Continue reading
I’m sick of viruses. I’ve had more than my fair share over the past few weeks. The beginning of my honeymoon was blighted by Rhinovirus – just a humble cold, though a nasty sore throat coupled with incessant air conditioning resulted in sensation of a shard of glass lodged in the back of my throat for several days. For the end of the honeymoon, I was graced by the altogether more unpleasant presence of Norovirus in some dodgy seafood and am still recovering from the after effects. Unsatisfied with ravaging my physical health, the viruses have decided to go for my portfolio as well, with the outbreak of the Coronavirus epidemic in China halfway through my trip. (Other than that we had a magical time, thanks!) Continue reading
The stock market seems to be brimming with optimism at the moment. After the assassination of Iranian bad dude Qasem Soleimani led to an extremely short-lived panic on Monday (which only seemed to affect the US market after hours), the markets are buoyant now that further escalation is looking less likely. At the moment I’d guess that we’re probably in for another good year with the likely re-election of Trump and a likely improvement in global economic growth in the horizon.
The UK general election has finally arrived and it’s little surprise that the Conservatives have won convincingly. Regardless of your political leaning this is good news for shares and is welcome relief from a December that has been pretty grim until now. Trump’s trade war shenanigans have been keeping investors on their toes over the pond. The medium term outlook is looking positive and I’ve got my fingers crossed for a Santa Rally.