Dead cat flounce. Hindsight billionaire prophesies edition.

8th May '20 by mojomogoz

21 comments 1815 reads

Hello

WARNING: Don't take any reassurance from what I say/think...our unusual situation means markets could drop fast any time....this may be a new great depression. I think otherwise and at the moment I believe (guess!) the odds are we finish near or above end of 2019 level. I know! Sounds madly dissonant...read on...

I've been quiet during the crisis as it intensified as wanted to retreat into my own zen-bs rather than that of others and wasn't enjoying all the anxious prophesying out there. I mean I often felt like an idiot so didn't need some wise ass telling me I'm an idiot on top. A problem that is particularly acute on Twitter....where there's an awful lot of really really wise people calling it perfectly....

TBH I'm naturally tinged bearish due to tendency to scepticism but I am also naturally a bit contrary and disagreeable too...so when everyone gets bearish that can bug me just as much as when everyone's bullish! I know, what a pain I am. I do find myself awkward to deal with at times.

Coming into 2020 I thought US market was very richly priced and probably considerably overvalued. I thought UK, Europe and Japan were relatively cheap. I don't really believe in anything as quaint as fair value...TBC when anyone of us talks about fair value we're bullshitting. What hubris to think we'd know...if such a measure existed then we wouldn't spend 99% of our time more than +/-10% from it. Capiche?!

I held about 12% cash when the S.H.T.F. ....I sold out of a few things pretty quickly (some Argentine and Brazilian stuff particularly) and then some oil stuff that I had bought before the Saudi-Russian thermonuclear standoff. I might go back to the oil and did speculate small amounts in some E&P at the recent bottoms but withdrew from that (with small profit) on the basis it wasn't time to take a bigger position and can see risk-return at better scale elsewhere. Going into this I held some stuff that many of you (I'm assuming a quality growth and momentum bias) would have labelled dull or crap. Dull and crap got hammered too so much for me trying to bob when market weaves. Doh! (NB in 2000-3 and 2007-9 bear markets I made money...the recent sell off was a harder gig than those IMO)

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mojomogoz

9th May '20

Thanks Tim

I added a few new bits above partly prompted by you and partly an offline conversation from some else. When unloading subconscious its hard to pull out all the pieces so the prompts were useful

My mind is an untamed mess at the best of times so elliptical always....I literally have very little in the way of boundaries between stuff so I just smash them together...can be good, can be problematic. To me everything is a feeling and shades of incoherence. There are no certainties.

Now, I think I'm more optimistic than you are ;) I somewhat agree with your points but I can't extrapolate them to your concrete final conclusion...

"So some things won't go back to normal: commercial property, travel and lesiure - especially that built around commuting. Lot less car ownership, lot more bikes, much more localisation and a lot less general socialisation. Those businesses in those sectors that survive will boom on the other side of this - but picking 'em is a crap shoot, it's gambling not investing."

I suspect travel and leisure will bounce back quite hard...."experiences" will remain the thing and we like them physical rather than virtual. Take a crowd of sub 40 ish people and I reckon socialisation is going to boom like f. Govts will struggle to hold that back once we start to open up....their job will be to find ways to cope with the extra bit of illness that comes. I'm not gay but at Edinburgh Univ in the late 80s I spend a lot of time in the big gay scene up there. HIV was a super bogeyman that really worried people....but boy did they go out and party hard. IMO that "gay plague" was even scarier...and the heterosexual community was also fearful of it too.

Car ownership likely to stay where is or go up as our chosen mode of transport etc

But we will have accelerated change. The biggest winners will be the unexpected. To illustrate the point -> I bet a basket of Barclays (LON:BARC) , Lloyds Banking (LON:LLOY) and Royal Bank of Scotland (LON:RBS) outperforms a median basket of internet businesses. The internet businesses may be 'higher quality' and more attuned to exact modern needs....but no one expects anything from old finance and that is where the surprise is. Plus existing dinosaurs with deep pockets will gobble up many of the more dynamic internet businesses. A prolonged period of change, adaptation, new stuff etc plus an inflationary tailwind makes for rich pickings for well capitalised banks. I can imagine that govt policy will also do what it can to encourage the banks to support investment etc.

Its easy to tell me what's wrong with the banks....but just like the rest of us they've got a new future too.

I do think we would have entertained a protracted war of haves versus have nots if we'd had a GFC2 on its own (i've added a section to note above on that) but we may have been bailed out by the 'war' bringing us together a bit more.

But like I said, I agree somewhat with points you make...but investing is about the price and the element of surprise so I feel your position is sort of 'short volatility'....and I'm a tail sort of guy :) (Which I don't recommend as its uncomfortable and I do annoy myself with it!)

Ciao

timarr

I suspect travel and leisure will bounce back quite hard...."experiences" will remain the thing and we like them physical rather than virtual. Take a crowd of sub 40 ish people and I reckon socialisation is going to boom like f.

I don't disagree - the issue is about how long it takes, what damage is done in the meantime and the way that this rolls out. Take the bar / venue industry - the longer the lockdown goes on then the greater the struggle to survive, some won't. And if we have social distancing implemented for, say, a year, then people will develop their own spaces to do this. The survivors will be very successful - but how do you pick the winners from the losers?

Timing will be everything. The longer social distancing measures stay in place then the more businesses will fail and the more people will find substitutes. Find a vaccine tomorrow and we get a rapid reversion to the old normal. If it's a year away or more then you're looking at changes in behaviour and new sorts of businesses arising to take advantage of the changed situation. Everyone extrapolates today indefinitely into the future but that's not the way capitalism works, this is Schumpeter writ large and writ fast.

Banks are interesting - there's very little tail risk, they're backed by the full weight and power of the Central Banks who will not let them fail. But the downside of that is that they are quasi-government controlled - they won't be allowed to earn excess returns. But as a mean reversion play then yes, it's a timing thing.

As for IT - well, that's my gig. It took 30 years after the introduction of electricty to reap the productivity benefits because you had to re-engineer business practices and re-architect business premises and wait for the old steam-driven management to die out. The gains made by electricity companies in those 30 years were dwarfed by the returns made by the companies that figured out how to use it most effectively afterwards. Maybe Musk is the new Ford ...

... but the category error is to assume tech is a different sector from everything else. It's not, it is everything else. Take cars - the big manufacturers are already pivoting to a pay-to-drive model based on SaaS. The concept of car ownership is dying, why have an expensive piece of metal cluttering up the front of your house so you can use it for a few hours a week when you can drive what you want when you want and have a nice garden instead and save money?

This is everywhere. Boohoo (LON:BOO) is a better proposition than Next (LON:NXT) and the latter can no longer afford to buy the former, how did that happen? Valuations of the things people understand are already changing to reflect the new reality, but there's much, much more to come.

When the virus is past and people are able to do all the things they always do - drink, eat, shop, socialise, travel - the way they do those things may be very different. The longer the traditional venues for those types of things are shut down then the smaller the chance that any individual business will survive and the more likely that substitutes will arise.

This is not about short-term volatility - although there'll be plenty of that, especially if we hit the BoE's predicted 10% unemployment level - it's a long term secular trend. Given that I can't justify taking on tail risk in individual consumer facing stocks. Operating off a basket of travel, retail and leisure stocks, a la Templeton in 1940, that's more like it.

But as ever opinion is cheap. The only real question is what we hold in our portfolios ...

timarr

Blahpinion is cheap! Ignore mine!....i quite normally feel quite wrong and wish I could be wiser and more sensible....just like all those quality growth guys on twitter and in here etc ;)

{Give me more red thumbs for the above comment....I love them as it means I know I got you...but be brave and get stuck into me on here, everyone will enjoy the entertainment ;) ....I'm not having a go at anyone in particular (particularly Tim...I don't even know if that is your style as I don't follow stuff in here closely) but just pointing out how powerful and beguiling the quality growth momentum mantra has become....trends usually come to an end...we can never usually see why but they do...yet the trap is they are most beguiling just before their death. Near everyone whether they are macro bear or bull suggests owning quality today. I don't know where we go from here but I think this time, unlike 2008, we will see a decent amount of political, social and economic change following the bug and much of it not really about the bug}

Caveats given, for years I've made money investing. Sometimes better than others and in 2 out of 2 extended UK/US bears to date have made money bobbing and weaving. I've experienced many phases and fashions here in the UK since I became involved professionally in markets (from 1996, note with more of a macro background so i'd say I'm less experienced stock picking than many people on here) and I've read a lot about the past to find and feel different times. I've also researched and worked in many foreign markets - developed and developing. The spectrum of what is possible is huge.

Certainty of vision and outcome is something I never have. And I am very willing and able to change my mind 180....I could do it in coming days or weeks....I often write something like the above to galvanise a loose bunch of half-assed opinions into a more concrete commitment partly as I find it helps me change my mind...by telling people it prevents me from being able to fool myself about where I'm being stupid. So, today I would be the first caution people from taking my (slightly bearish) rosy outlook as the killer prediction.

On to meat:

I'm sceptical that we run with extended social distancing that shuts down economy. The politics of this IMO is the government wants us to effectively ask to take the risk and be seen to be pulled into it by us. IMO that's sometime over the summer....why not have pubs open if large groups are going to get together to party and drink outdoors? (It will happen. No chance u30s ain't doing that).

Maybe Europe will come up with some general European travel permission and everyone goes off to Spain last minute. Maybe not, then expect some mad overcrowding in out coastal towns. They wont be able to stop it. Our policing is so different from bit of Europe too. Once fear drops back a bit we wont be able to hold back the tide politically.

On your car view....yes I can see that is possible too. In Berlin the BMW driven car share app works beautifully...but Berlin is a big spacious city and there's loads of space to trial that now. Harder in UK...would take planning and some painful choices. Its probable that in 10 years time we still have high levels of car ownership and car sharing too. If anything the bug is going to make people keener on their cars. Trains, buses and planes will feel more dangerous for a while.

My professional background is finance so maybe I'm biased/blinded. I do have an electronic engineering degree...but I'm no expert (specialisms in applied neural networks and cryptography sound good though). However, I'm always sceptical that themes play out so obviously. So whilst I 100% agree with your point about technology kind of relentlessly rolls into our lives I tend to think it is never very obvious. All the rush to find the killer working from home tech company makes me think of past booms - rail, car, internet, etc. Back in 1999 when I was trying to persuade clients not to sack PDFM (big deep value fund manager that became part of UBS eventually) one of my lines was that the internet would have only truly arrived when M&S bought one of the companies ;) (That never came true but you get the vibe)

I don't have an useable view Boohoo (LON:BOO) vs Next (LON:NXT) -> can't create an angle for myself in either. If you made me choose one for the next 10 yrs it would be Next. There is so much assumed success priced into Boohoo that it's a little frightening. That jugganaught may keep rolling but it wouldn't take much pressure or slip to knock it off course. There's a decent chance that Next can buy it cheap if it wants to in future. Whereas Next has faced and will face pressures....so far it has thrived and adapted.

I'd compare Amazon with Boo. Both very impressive businesses but neither really makes enough money in any sort of soberly assessed way to justify their share price. At max I'd say Amazon is worth $400bn. The extra $700bn on top is a bit hubristic ($11bn e at $1.1tr p!)...but the narrative is hot. Boo could be worth its current price if it becomes a big global player and fattens its margin...but I'm not sure how its cheap and cheerful turns into quality sustained margin at scale. Feels to me like they will be discounting and spending a lot on marketing to continue to lure relatively frivolous spend.

Anyway, thanks for your views....you may have a better hold than I on the future....I really don't know

Ciao

10th May '20

PS Tim, your points are good and my response above was not intended as a bah-humbug open it all up response and buy any old consumption return to normality advice. Consumer facing businesses are going to have significant headwinds and some will go under (and many small non listed ones for sure). My point is intended to be more about expectations and surprise and risk-reward. In that regard I do believe that the increment will be surprise rather than disappointment on way out of lockdown. Politicians in the west are going to go slow though to save themselves and they will almost want to be demanded to open up more by their populations rather than them ‘imposing’ lack of fear on them. A complex dance.

The 3 stocks i mention in my main piece are not recommendations. All could justifiably be labelled crappy. IMO they are names that for differing reasons have a disproportionate pay off to more normality than we thought at bottoms (bought more of each around bottoms...a tricky skill in normal times but easier imo during great panics). All quite specific.

Immotion (LON:IMMO) is particularly risky. I started with a small position at about 7p (something like a 15-20% of full position). I buy little bits of speculative stocks at times where I feel the news and reality is better than what is priced. I had quite an in-depth meeting with CEO and CFO and liked what they were doing and their understanding of how to maximise business potential. At under 2p I bought myself a lot of the way back to starter £ position. I feel they’ve given themselves a very good shot at survival (experience! Got moves) with a product that if we have some normalisation has a lot potential and interest. IMO venues like aquariums and other edutainment (ugh!) venues could do surprisingly good business with young families over this summer. Very risky though. Accepting some obvs ruin risk

Politicians in the west are going to go slow though to save themselves and they will almost want to be demanded to open up more by their populations rather than them ‘imposing’ lack of fear on them. A complex dance.

Well, I try and avoid any business reliant on guessing what politicians will do, too many confounding factors. Overall I'd observe that many investors, especially those from a financial background, are going through a period of denial. The idea that politicians might prioritise something other than the economy seems to have come as a profound shock and the reflex is to assume normalisation will somehow be a priority.

It may be, but democratically elected governments tend not to survive if they let their citizens die and this particular government has a lot of making up to do in that regard. Their defence is to use their scientific advisors as human shields - but you can't do that and then ignore them, so when Chris Witty indicates that social distancing will be with us until after next winter's flu season we should perhaps take note.

Wise managements are preparing accordingly - the, until now, entirely self-financed J D Wetherspoon (LON:JDW) this week raised funds to prepare for a long hard winter. They predict a June reopening and very slow business thereafter. Tim Martin isn't everyone's pint of best but he wouldn't be letting himself be diluted if he didn't think it necessary.

No one really knows what's going to happen here. Lots of people talk like they know, but they're just blowing smoke. In the end all we can do is weight probabilities, adjust as new information arrives and operate accordingly. So, the same as ever, really.

11th May '20

I’m 100% with no one really knows. That awareness underlies everything I’ve written above.

However, I must say I read most of your responses as you do know what others don’t. You are very smart so I assume your points are intended as extrapolations into the future as you well know that the past is not prologue (for anyone who doesn’t know this I recommend the most important book re investment that is not about investment -> Karl Popper’s The Poverty of Historicism -> it’s quite short but dense).

I disagree with the certainty of your meta narrative. You may well pick stocks well regardless.

Related to my original piece this article is good and obvs fits with vibe of my post

https://medium.com/@dan_60967/devils-advocate-the-bull-case-338718cf177c

jwebster

I'm more bull than bear if such a distinction is even useful!

Looking at the US Treasury yield curve I see 1yr 0.15 5yr 0.33 10yr 0.69 30yr 1.39. These rates imply no growth no inflation. For ever. Then we have QE pouring in but no credit growth from expansion of commercial lending. Businesses are not borrowing to invest. Aging populations in the West have surplus savings and are greedy for yield, let alone their pension funds who have to deliver the promised retirement dreams but on a 1.39% bond rate? Someone's not telling the truth. Quick, call the hedge fund. Let them do the crazy investing rebadged as 'absolute returns fund'.

In the face of that any company that can generate growth will be shot to the moon. Plug a discount factor of 1.39 into a firm with decent earnings growth and the share price goes orbital. So buying tech monopolies can work beyond sense, I own MSFT GOOGL MA. The market is looking at them as bond substitutes now. Looking at BABA on the dip, their cloud 'story' is still only at chapter 3. I'm not wedded to these story stocks though, I'd divorce if they fell.

UK has a couple of growth stocks I hold GAW as my largest.

But value traps around as well. If deflation is on the cards RIO's yield of 7% is a trap. So the FTSE100 is a mine field of booby traps.

Uk banks. Stocko tells me LLOY has a (now historical) dividend yield of 9.59% Sure that Danish pension fund is running their slide rule over that. That's nearly 7x on treasuries. But the risk committee points out the flattened yield curve has killed their spread. Even more hated is the UK non-bank lenders and quasi-financials. PFG has a 'historical' yield of 15%. ARW 13% (I own). ARW is lovely to hate, a leveraged debt collector, owns consumer debt from Italy no less, and a broker released a fairly lazy read-across on their balance sheet condemning valuations. If these firms don't go bust, eventually they will run out of sellers, become forgotten about and then go up.

Precisions metals all in but I'm buying silver miners only because the Gold-Silver ratio has reached extraordinary levels. A moon shot here but could take a while to play out, in the short run could easily sell off in a big risk-on month. Worth holding a few but really have no idea how it will play out, other than mean reversion and 'something' going wrong with fiat.

The virus is a murk. On the one side it does create a different recession than before, as there isn't a structural economic issue to correct (like a sub-prime mortgage bubble), which normally takes time, so this 'should' be quicker. Thus I find charts comparing this drop to previous not helpful. On the other side, I do wonder how countries will open borders, as 'good' countries with low infections rates are vulnerable to outbreaks whereas others with high infection rates have some immunity now and perhaps quicker to open. No-one knows, so govts will just try stuff and feel their way through. A vaccine is a game changer, although one was never developed for SARS and MERS, but more effort this time.

Still, I think the big news here, in the long run, is not the virus but the Treasury yields on the floor. An ocean of savings (in the West) and more retirees. All points to a blow-off top coming in growth stocks but ex-growth may just wilt under deflation. For now I'm holding growth leaders and some stock picking in the rubble for fun.

Jack Brumby

I like the title...

Sounds like you have managed to hustle your way quite well through an eventful Q2, so congrats on the strong relative performance! I hope it continues

I will take a look at 1pm (LON:OPM) at some point as there must be a strong SME demand for loans. That's assuming I haven't got the wrong end of the stick re. what OPM actually does.

I am minded to agree in terms of not getting too bearish. We're all still in the dark here and my feeling is that things tend to never be “as good” or “as bad” as people make out... Usually it’s a spectrum of possibilities and the reality ends up being closer to the middle. Not that I have any great insight into what's happening right now

To your point on Q/V/M in the comments though - it is precisely because of the above (not knowing) that I'm looking for Quality (ie. financially robust and profitable) and Momentum (using that as a preliminary signal from the market that might be a company with a structural growth opp). I tend to use factors as a screening tool to identify candidates. From there, it is the individual company I invest in, after thinking about its prospects and valuation.

I agree that these kinds of conditions can lead to changes in market leadership - perhaps that means a change in factor or style leadership... but it might also just mean that the type of companies that qualify for existing winning factors change?

We'll see. Either way as colourful and provoking as ever!

I disagree with the certainty of your meta narrative. You may well pick stocks well regardless.

Search this entire thread for the phrases characteristic of certainty: "I think" or "I believe". At the time of writing there are 14 of them and not one of them comes from me ... natural language is tricky to use and tricky to interpret and we tend to read in certainty where it doesn't exist.

And, of course, I've read Popper: http://www.psyfitec.com/2015/0...

;-)

12th May '20

jwebster

I agree with many points. Areas of disagreement:

I think deflation is near impossible. In fiat systems there is no need to be sunk by your debt and we have learned that our money is quite fantastical...and credit/debt is the essence of money. Here's an anonymous quote:

"“My friend, debt is the very essence of fiat. As debt defaults, fiat is destroyed. This is where all these deflationists get their direction, not seeing that hyperinflation is the process of saving debt at all costs, even buying it outright for cash. Deflation is impossible in today’s dollar terms because policy will allow the printing of cash, if necessary, to cover every last bit of debt and dumping it on your front lawn! (smile) Worthless dollars of course, but no deflation in dollar terms! (bigger smile)”

I think big tech, many other tech and "quality growth" businesses really are super businesses....I do have some of these things some of the time but I feel that the risk-reward can be quite peaky. Take Amazon....super business....$1.1tr and $11bn PAT (with a nice bit of tax avoidance footwork that will be pressed on...as an aside this is a great analysis -> https://www.cfr.org/blog/five-points-about-us-trade-over-last-thirty-years -> this stuff is moving to the heart of argument in US). I can't believe that its really worth more than $400bn ish and it'll probably get there...I'm not clever enough to know why and when but history tells me its run its luck and enthusiasm quite hard and investor love for it is maxing out. Its probably got quite a high capex ongoing....it really a sort of modern utility and we've had booms in the past (1920s) where utilities where sexy....and then got shot.

More generally, I don't see how we have a recovery in US without the rest of the market pacing the super valued FANG-ish collective. And if we are in a depression then there's a lot of multiple, profit and accounting chicanery to ring out of big tech....with a bit of trust busting thrown in. All equity is a short volatility situation and I don't like my short vol leveraged ;)

If get inflation (we will or we will fail...western govts have jumped the shark in what they will do) then many other businesses will have an advantage relative to quality growth in terms of the leverage thro their earnings (check history). Banks will be a great pass through vehicle to make profits

Hello Jack

Thanks for comments. I want to be 100% clear that I think 1pm (LON:OPM) is a high risk situation and I didn't mention it above as a stock tip but as part of broad points trying to convey (I think the risk profile is too much for most people). TBH all three I mention (1pm, AA (LON:AA.) and Immotion (LON:IMMO) ) are my worst investments...my biggest mistakes based on price history. On both 1pm and AA i'm down approx 30% on cost, IMMO less as had small position at 7p that more meaningfully topped up 2p and below area).

I took quite a conscious decision during the sell off after appraising what I felt was going on from a macro perspective to not first seek out new territory but look at what I already knew or had and assess the risks and the potential for mispricing there. I understand why people chased after franchise that win/survive the apocalypse but I think its not the optimal strategy. Take cos that are winners in providing wfh tech....right time right place....valuations and expectations chased up....I don't like the extrapolation going on. Its like the coming of railroads, car, electricity, etc on fast forward. It assumes that a profound, sudden and permanent shift occurs in human behaviour etc due to bug...I buy that its a change...but I then wonder whether the buyers will have too much power, the suppliers get in rich capital spending cycle, capital is called, top line ain't as great. This is not a forecast by me but a risk-return probability assessment.

(As an aside on wfh....if you're in 20s to early 40s don't let them pack you off home....you will ruin your progression chances....it will make progression even more of a cabal of close knit people important enough to need to go into the office)

I agree with arguments for QVM and I'm conscious how I disagree with it in application. I always want to be aware of trends and their shift. I seek to be early into some trends. This can be simplified as capital cycle investing. If I get it right and I'm a bit lucky I will become a QVM runner...I think this is occurring with gold miners (being in it a micro story with a view on how macro risks are priced too). I think I will get the same in general financials (I have been a new buyer of banks on the lows - a basket at then moment of Royal Bank of Scotland (LON:RBS) , Lloyds Banking (LON:LLOY) , Barclays (LON:BARC) and US Bancorp). Uranium is also a capital cycle thing but I'm less sure I'll get more than a repricing.

Here's a note I wrote on 1pm: https://www.stockopedia.com/content/1pm-bad-or-late-lunch-453778/

I think its a well run specialist finance business that has been easy to hate (as finance has been generally). Despite issuing equity to buy businesses they have not been capital flagrant IMO and have been reasonably disciplined. I like the mgt and do feel inclined to trust (this seems to be a point other disagree...I feel they are let down by the price most). That said, I do think that mid 2019 they decided they wouldn't be making this summer's LTIP and decided that it was time to be conservative, reduce lending risk and growth and make some extra investments....ahead of striking new LTIP. Sadly I first bought at 40p (quite slowly and incrementally over time as it touched that price...felt clever about that, but...). Then late last year in the mid to high 20s and finally during the viral apocalypse at <15p. I could be very wrong....but I see a business that is likely to manage thro this crisis. I don't think they will need equity for it but could be wrong. My greatest fear is that cabal of big holders decide they would be better private....however, I think they want a listing as their long term strategy of acquiring cheap mom and pop (well shark and son maybe as its finance) is a good one.

Maybe I'm blinded by some relevant sector knowledge. I founded and set up a sub prime consumer credit business several years ago (very much a tech lead business by the way) and dealt with credit reference agencies, regulators and other services in the area. I believe that 1pm have a sort of system arbitrage whereby their customers are priced as sub prime but they are higher quality than that but are small businesses that fall outside of the data driven credit processes done by banks (and this is partly why I think PCF (LON:PCF) are risky...plus their rate of growth).

I use screens but quite chaotically and inconsistently. I usually start with observing what I believe to be incoherence. I find it hard to commit risk to a situation that is driven by factor screening....but I do see the value of factor screening. However, despite being acutely aware of the success of momentum factors I do not think they can fit with how I take risk. I like there not to be too much of a crowd.

Out of time (haven't checked back and hopefully above is coherent)...got to prepare for Pampa Energia quarterly call....held before and multi bagged on it (peak 25x....but only sold half holding at the point, doh!...and sold the tail end for much more modest amount post Macri election loss...an error by me). Now Argentina is a basket case ;)

Ciao

PS I would add that I've been lucky to get back to near start for the year. Keep flirting with breaking through but not quite. I'm both lucky and nervous....but I do seek to take risks that are decorrelated and tbh I've done better in other panics than the COVID one...it was so brutal.

Going forward, I can make money if this things bears back up but its highly dependent on how my gold miner and uranium position holds up (both made money for...uranium as i was on a lighter position and took the sell off as opp to jump in to a basket from only 2 names to 9).

I am very sceptical of those people that trumpet that they have picked their way through this....unless you are deep contrarian value then I think those people would be best recognising their luck and not shouting hubristically....Twitter's got quite a few of them. My hunch is markets will teach them a lesson...its the way it works....market always find a way to test you, catch you and make you feel doubtful.

I feel nervous, exposed and full of doubt....but got to step forward ;)

PPS if you want to hear from 1pm (LON:OPM) mgt direct then they are hosting a call at 4.30 Wed 13 May on this platform

https://www.investormeetcompany.com/

Got to register and then put in cos you are interest in and 1pm will appear

We have moved from unknown unknown to known unknown and so price accordingly....the next pandemic will just be a dip to buy...

https://lt3000.blogspot.com/2020/05/coronavirus-update-from-unknown-unknown.html

Could be just ex post justification for a searing fall then come back that's so hard to intellectually and emotionally process ;) ....and the doom plunge lies before us as the the 2nd wave rips through us

13th May '20

"Could be just ex post justification for a searing fall then come back that's so hard to intellectually and emotionally process ;) ....and the doom plunge lies before us as the the 2nd wave rips through us"

Yes, Lyall Taylor as you posted, tells us the dip is over, move along :)

Interesting, Keith Ashworth-Lord, of the popular Buffettology Fund, lamented he didn't buy the dip and wishes another will come. So perhaps it won't because so much money wills it.

And yet, we have big money Buffett, equally lamenting. Why didn't desperate companies call me asking for 100 billion loan at 8% with preference shares attached ? His dip didn't even leave the station, the Fed teleported that train three stops ahead. Further, he tells us Don't Bet Against America. Fair enough, the US capital system is the eighth wonder of the world, but why not buy then - too expensive? And what about buybacks, he used to say his stock was undervalued below 120% of book given hidden intrinsic value and he's there already but didn't take the ask.

Then Druckenmiller wades in saying the Fed money has all been wasted, it's just glowing green juice for zombie companies who will collapse eventually. Best to trade long-short market neutral is his advice.

So the pundits are nicely spread - boom time, cash at the ready, don't know and next crash coming.

I suspect all come true. The real pain trade would be a small dip first, then FOMO buying from the cash hold-outs, another peak, then it corrects.

"I think deflation is near impossible. In fiat systems there is no need to be sunk by your debt "

For sure, a bit of inflation would ease the debt bubble. But, I can't square off the supply-side's ability to keep producing stuff so cheaply and seemingly limitless. Also those 30yr yield curves are low... very low...

On balance of probabilities, the upwards reflation of the Gold price to the money supply is more likely. Although I personally prefer silver, only because it's realitively cheaper.

I get the silver angle....but I'm not actually a believer in the gold money argument. I think gold will price higher still from here as its a reflection of big macro uncertainties around debt and currency and will also remain a sort of possibility in the ongoing game of will we move away from dollar hegemony. Places like Russia and China have taken these steps (russian reserves and Chinese yuan denominated commodity futures to facilitate yuan based trade...which if you end up with more non global yuan than you can spend on Chinese goods they will convert to gold for you offshore in HK/Singapore). So I stay on the main game....and take my speculations in crappy small cap non miner stocks ;)

22nd May '20

Hello stockopeeps. How's everyone doing? I hope not too grinchy, bewildered or stressed by our ongoing discombobulation...my compassion even stretches to my sworn enemies in the sinister red thumb gang.

Anyway, I thought about writing a follow to the above original post with some new thoughts but I'm lazy. However, I did tweet this out and so sharing it as my story update:

https://twitter.com/mojomogoz/status/1263794190766551040?s=20

I still feel bullish, I feel its wrong and dirty particularly for a contrary bear hugging fellow like me but I can't shake off the view that bullish is what I should be (and by that I specifically mean long risk...as I do think some US mega caps, sexy tech and med stocks and Nasdaq have high chance of come down)....and that all market narratives are pointing to that if one judges them without prejudice.

Love you
xxx

7th Jun '20

Hiya stock-o-peeps.

Who's got the skinny for us on where markets and certain types of stocks go next?

How many are fomosapiens, how many ohnosapiens and how many are bears?

I thought this summed things up nicely:

https://twitter.com/litcapital/status/1268987718098391041?s=20

Dead cat flounce. Hindsight billionaire prophesies edition.

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Mojomogoz

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