13TH March 2020

I have been keeping notes over the last few weeks and I have decided to post it for my records. This is my diary with my thoughts. I have biases like everyone, so if you don’t like what you read then that’s ok. I find it useful to keep this as a record so I can look back. I wish I had done this in the Tech blowup and the GFC. Thanks Morgan for giving me a nudge with your great writing. Nothing in here is advice.

The markets really took a beating overnight. The US was down around 10% and this was followed by the obligatory US enters first bear market in a decade with a 20% fall. Part of me is thankful that we do not have to listen to this stat again, “it has been x years so we have had a technical bear market”. Even though by my calc 2011 and 2018 intraday were 20% falls. But be careful what you wish for I guess.

The headlines also were bad today. Following on from Tom & Rita Hanks announcing they had Covid yesterday the news was the Canadian prime minister wife has contracted covid. When someone you know or someone tangible has it then this really hits people in the face. And people were whacked in the face. There is deep fear and panic growing. Looking at sentiment on Twitter and Whatsapp groups there is a certain element of despair. Sports events like the NBA and F1 certainly give people reason for pause.

Locally market rumours also swirl about potential funds in trouble. Without naming names those in Aust Fintwit would have worked out that some of the best performing fund managers last year with some of the highest self promotion profiles have seen some of their beloved stocks taken out behind the shed and given one. Time will be the judge whether there was alpha generated, my suspicion is a no.

Bitcoin was also a big headline as it dropped +40% plus. Welcome to the world of liquidity. It was supposed to be a store of value et al and an uncorrelated asset, but when people need cash correlation goes to 1. Welcome to the world of reality vs what you would like to happen.

The other thing that you are seeing is the human behaviour to benchmark themselves against others when things aren’t going their way. Reverse envy I guess. This is normal and I know a few of us are “seen” me included. People will try and make themselves feel better about their losses by shitting on some else in a worse spot. Bitcoin is a great hot take for this one. Expect more of this. And expect a lot of mooking and picking your tribe. I have no tribe here so I don’t care.

And then there are the people making money on the short side. You know who you are, and to be fair most of them are being quiet and respectful and keeping a low profile. I guess because they have done this before and no one wants to gloat at the expense of others or suffering. I’m guessing some regulator or trapped fund will complain to the relevant authority if things get worse and the spotlight will be on.

Then there are the authority thought leaders, some real others fake. In times of stress we see seek other opinions, we want to know what everyone is up to. The thoughts and exchanges I have seen today have been the highest, maybe this is a sign of peak something, I don’t know what but it will be worth revisiting. In my experience be wary of the authority figure, their interests always come before yours, so I prefer to do my own thinking.

As to me mentally I had been firing a few bullets early in the week and in hindsight would put myself in the complacent bracket. I have had a few great conversations with a number of investors over the last few weeks, some I agreed with others I didn’t. I value all your opinions and sorry if I offended anyone.

Today was tough mentally to pull the buy trigger on some more shares. I used a thimble today and plan on continuing to do so. In my experience the hardest trades often turn out to bear fruit and today it was hard to put some buy orders in. I did get filled on a few and time will tell if I have added companies that can survive whatever comes at us.

Also putting on some small orders in the US tonight. One of them is Match.com which I own already. The basic idea is that if we are all locked up for a period of time then everyone is going to be horny AF, and when things get better there will be some serious swiping. Who wants to meet people in a stinky germy bar, ughhh. I don’t want to be trite and playdown the severity of what we are going through but there you go.

Everyone’s focusing their attention on the news headlines and I expect them to continue getting worse. Flattening the curve is the theme as it should be.

It is interesting at the moment as we are being forced to do the marshmellow experiment in the economy. Waiting five minutes and shutting down the economy will be damn painful but the rewards will greater, we will all hopefully get 2 marshmellows in due course.

Let’s hope so, I am an optimist at heart. Pessimism sucks.

Ha as I finished writing this the Aussie market is up 2% after being down 8% in the morning. These really are interesting times.

 

There is a fantastic article written in 2002 by Joel Spolsky who talks about how strategic companies who have a moat or barrier on part of a value chain will try and commoditise other parts of the value chain they are in. By commoditising the other goods it will drive… Continue Reading Commoditise your complements: Nearmap, Eagleview and Aerometrex