Like most long-term investors I’ve been trying to see through the fog of war to figure out how I should be positioning my portfolio for the coming years. Frankly it’s not easy, these are unprecedented times and like everyone else I’m affected by the tragic events around us. Staying level-headed isn’t always easy even while staying safe at home.

Anyway, I thought a thread about the investment themes we might be following and ways of playing them would be interesting. In particular, assuming that we are looking at a recession, I mainly want to be invested in capital light businesses – companies that need to invest inflationary cash in depreciating assets will be running just to stand still.

In such uncertain times, it’s important to continually update beliefs and forecasts. Stocks here that I mention and hold I won’t hesitate to sell if new information becomes apparent. Only a fool commits themselves permanently at the best of times – and these times are not those.

Volatility

Uncertainty triggers volatility and there are a few companies that make money from this directly. The main beneficiaries are the spreadbetters. I held Ig Group (LON:IGG) and Cmc Markets (LON:CMCX) coming into the crisis and have topped up since. The other obvious investment here is Plus500 (LON:PLUS) – which has done fantastically well but which I avoid due to the Israeli connections. The management there are very good at timing purchases and sales.

The obvious question is whether these companies are making windfall profits which will fall away. The answer is – obviously – yes, but I don’t think that matters. They’re a valuable hedge against uncertainty and picking up stock when it’s cheap – as we’ve seen recently due to regulatory issues – is a smart move. The question now would be whether we’ve seen the majority of the immediate benefit?

The other stock in this area I’ve bought is Tp Icap (LON:TCAP) who ought to sail through these times without too much trouble, although they’re not as highly geared for volatility as the others.

Cybersecurity

The rapid rise in homeworking has forced lots of organisations into allowing home working. Those of us that can do it are the lucky ones. The issue, however, and this will grow, is that this opens up companies to cyberattack. Simple plays on this involving firewalls and VPNs…

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