My usual targets are high quality companies that are aligned with shareholders, because these can be compounding investments. This is the best kind of long term portfolio to build but right now I feel like there could be some pretty exceptional investment opportunities out there that justify a widening of the remit...

There is a long way to go in this lockdown, with a great deal of uncertainty remaining even though we are seeing early signs of peaking curves. The stock markets have rallied, but there is still plenty to play for. The Government must balance the length of the lockdown against its economic impact.

Amid the daily news flow of dividend cuts, equity placings, and administrations, it is possible to pick a profitable path. This lockdown isn’t happening in a vacuum. Companies are pulling out all the stops to survive and I feel that the majority of those that were good operators before the lockdown will remain good operators after the lockdown.

The downside risks to investors in this market are clear, however: the really big opportunities right now carry with them the risk of permanent capital loss. So pick wisely and understand your risk exposure. The shares I look at below pretty much all carry the risk of permanent loss of capital… But if they pull through they could be extremely lucrative investments.

Last week Restaurant Group’s shares jumped by more than 40% in a single day. Revolution’s shares are up 20% today. When all is said and done and we look back with the benefit of hindsight, the big winners will have come from the areas most at risk. I think it is worth covering these opportunities.

How long does a lockdown last? And how long is a piece of string?

Wuhan is tentatively coming back to life, with a lockdown period of 76 days. Italy’s lockdown began on 09 March, meaning it has been in effect for a month so far. France’s lockdown began on 17 March. The UK’s started on 23 March.


Bear, base and best cases

Assuming a ten-week lockdown seems like a pretty reasonable base case if we take Wuhan as the precedent.

Given the body language and rhetoric of various experts, I do not think the best case will be significantly better. We will be in lockdown for at least another month…

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