Thanks Alex/Jerome, great article. If the ship hits icebergs 4-6 it will be titanic-like; lifeboats in shortage (active managers), people laying in beds below while the water rises (superfunds and passive investors) but also many just swimming directionless in the freezing cold (individual investors). Gold is stagnating...why? everyone still thinks they are going to be the shark that capitalises on this 1 in a 100y "opportunity". 4-6 will bring on the real gold rush? $2800 in 2-3 months.
As an amateur investor with my personal wealth at stake, I am pleased I was only 50% invested mainly due to my gut telling me that we were already on the handcart to hell. I have already become very tempted by the prices of a number of stocks, but this article by Jerome has reined in my enthusiasm and convinced me to wait . I think I need to see a worldwide reduction in the number of Covid19 cases as well as a confirmed medical solution and millions heading back to a paid work environment and spending again. Maybe then I'll invest my limited $$ Rob Chandler 22/03/20
A great article and I have worried for some time about the valuation of unlisted assets in superfunds. This alone made me move to conservative options. But the tone of the article is a little bit smug imho.
I've been 85% in Cash & Fixed Interest since 2016. Why that long? Because the market has been over-leveraged that long (longer, actually) and I'd much rather have got my +0-4% yearly in the interim 4 years, than being exposed to perhaps 40%+ losses coming up right now. As I get back in at the bottom (or at least, a long way from the top), Jerome's take on the whole economy matches my thoughts exactly. I'm thinking a 15-20% allocation through my employer Super fund - does the Lucerne Alternative Investments Fund allow that kind of entry, and if so, through which industry Super Fund?
Well presented Alex and Jerome I think the signals were well and truly there that something was amiss in early Jan this year and the market wasn't the place to be for the retail investor. I think the ultimate point of clarification was the placement of a single 4million USD bet for rising volatility (VIX )on 9 Jan by a hedge fund Manager. Going forward with the US fed administering copious amounts of medication to buy time there will be a consequence to this later on . Certainly the 8 points raised in the 'Iceberg" are valid, however there will be other 'knock ons' that are yet to be identified by the markets .Whilst there will be some amazing opportunities for investors a little further down the track there will be a lot of people left in a world of hurt as a consequence of this insidious disease. Hopefully a solution will be identified sooner rather than later.
The horse has bolted, the article reiterates the bleeding obvious., telling noth8ng we don’t already know, unfortunately
Great article that should spur debate on our future course. At the end of the turmoil a well thought out discussion on what is value / valuable is needed. Endlessly skyrocketing residential property is politically popular, but useless if not detrimental to society. Low interest rates are a big factor which propped up lots if unproductive asset classes resulting is faux wealth. Time to deleverage and bring back creative destruction
Thanks for making the time to make comments on this article. Jon, if desired, you can contact me or Anthony Murphy, CEO of Lucerne Investment Partners for further details about LAIF. The coronavirus infection is frightening and threatening to both our health and our economy, and not just to the elderly or those with pre-existing health conditions. There is hence absolutely nothing for anyone to feel smug or complacent about given where we are today; that would be utter foolishness. I am certainly not feeling that way, and have tried to warn others to stop being so complacent about this issue, which has only deteriorated with time.
As an amateur investor, my gut feel is to wait till at least the global infection rate starts to plateau at a minimum before I start to dip my toe in again.
I'm thinking a good point to buy back in will be when the market is down 89%
Another good time to buy back in might be when amateur investors (like me) are not reading livewire anymore.
Great article Alex. Jerome sounds like a prophet in these times of great medical and financial chaos/upheaval.