Blain’s Morning Porridge, submitted by Bill Blain of Shard Capital
This is probably the last Big Week for markets this decade! The game through to Dec 31st will be to avoid compromising this year’s surprisingly substantial gains, and focusing on how to play the pitch when markets surge again in January.
There are two entirely predictable schools of thought for next year:
A) There is still too much money sloshing round financial assets, and compliant central banks that will continue to pump in yet more too much money to avoid anything that looks wobbly that might destabilise the too much money financial asset economy. If you buy this scenario, the strategy is buy, buy and buy some more… B) Or, some “no-see-um” idiosyncratic event or global slowdown is going to destabilize the whole market driven caboodle. Prices will come crashing down, the bubbles will burst – bond yields will rise, zombie defaults will be unstoppable, illiquidity will leave investors no choice but hit distressed bids, while equity markets will rattle like dried peas in a hollow gourd. In this scenario, the strategy will be to wait, then buy, buy and buy some more. The only question is when to risk holding returnless cash…
Personally, I’m going with something a bit different. I’m still writing my year end strategy note, but it will argue the 2020s are going to be all about sustainable investment.
The defining strategy of the 2010-2019 market was riding the monetary policy mistakes which pumped money into financial assets – it was a brilliant game for those who