My weekend away has not had the most relaxing of starts!
I suggest we stay calm and keep things in perspective.
Volumes and liquidity within markets had been thin before the Thanksgiving holiday in the US so were especially thin yesterday and probably today too. This will have exacerbated the sell-off in markets.
There are still a lot of unknowns re the new COVID variant. There may or may not be 30 mutations instead of 2, it may or may not spread more quickly and it may or may not cause more severe illness. Very few cases have been confirmed, the majority of which are in South Africa, where the vaccination rate is extremely low at 24%.
Whatever happens it is obvious from the prior two lockdowns that the world wants to get back working again ASAP and this time we have the added benefit of the oral treatments from Pfizer and others rolling out.
Furthermore, we have seen pockets of speculation in both equities and fixed interest and if this serves to deflate such in the former it will be beneficial in the long run.
As we have seen in April 2020, November 2020 and February this year recoveries can be ferocious and the best part easily missed.
Therefore, we are drawing up a list of what we want to add to and researching specific ideas as we speak. Below the surface, the market has been concerned about Covid and Stagflation developments for several months and there are many compelling opportunities to take advantage of.
Said opportunities are widespread, one doesn’t need to buy airlines or leveraged pubs from here to make money.
To not bet on a rebound would be to bet the world is less prepared and determined now than it was in March 2020, November 2020 or during the most recent downturn. That is not a bet I would like to make.