IN SEARCH OF THE “V”
It sounds great when an economist states they expect a “V” shaped recovery, maybe a “U” in the worst case. A sharp fall, but everything back to normal before long. With hindsight this is what the Global Financial Crisis (“GFC”) looked like, and the best thing to do after the market crash was to buy when central banks brought out serious QE. The post-GFC world has been conditioned to always buy the dips, as the powerful instruments of central banks printing money in a low inflation environment has resulted in every fall in equities resulting in more upside for new buyers. At Rezco, we do not view the current situation as a chance to buy the dip, rather, real economic implications of social distancing and shutting down whole industries still need to be digested by a market that is far too used to “V” shaped recoveries. We remain in search of great opportunities for our clients but will not base our view on a hope for things normalising quickly – we need to look at the facts unemotionally.
Read the full article here: In Search of the “V”