Technicals | Mar 24 2020
My advice this week is to stop reading the news for a bit, stay off Facebook, try to avoid a lot of media. It's depressing. If you are depressed, emotional, overwhelmed, then you will not make the best choices. Think back to the GFC. We are lucky in that we all experienced a major event like this. It means we can hopefully remember what we did wrong, what worked, and we can learn from it. Most of us did not live through the Second World War, or the Great Depression. They don't seem as real and it is harder to learn from those experiences.
But we have the GFC to know that as bad as it was, out of it emerged plenty of winners. There are always winners in every tragedy, so from an investor's point of view, we need to be taking advantage of those winners when the time is right. Being overwhelmed by the media will not put you in the right frame of mind to do that. I am sure that many professionals who have been around for too long will be half considering an early retirement now because of all this drama. They won't have the stamina to rebuild. At least in our office over here we are still fairly young and fit and we have plenty of energy do the homework and make the most of what this market will throw at us, so bring it on I say.
What we are seeing is unprecedented and we may well never see an opportunity like this again. However, it won't be easy. In the next few months, we are going to see:
- Massive unemployment
- Huge debt levels
- Money printing
- Companies going under
- Zero interest rates
- A move away from reliance on China
- Further hostilities between the US and China
- A housing slowdown
- Big companies consolidating their power
The list goes on. If the previous bull market was the most hated of all time, it shows that there is always something to worry about. We can use our depressing list to get depressed, or we can use it to understand the new world that we live in. This means that we can make the best investment decisions possible. We can be a victim of this new world, or we can be a winner.
In this week's report, we have one of a few stocks which are at levels that may offer a good margin of safety around here: Macquarie Group ((MQG)).