I haven’t published for some time now. Why bother? The economy was tanking, and the market was rallying. Made no sense to someone who’s been managing money for 30+ years, so better to say nothing. However today’s headlines are providing a brief respite:
I must admit the rally was a bit embarrassing. A number of my special situations (in one of my accounts) have been doing okay, such as West Fraser Timer, Methanex and Suncor but I’ve been waiting for the other shoe to drop in the market to put some money to work. I couldn’t understand what was motivating all those retail investors chasing stocks they recognize (Amazon, Tesla, and Facebook etc.). If it makes no sense, I learned long ago not to follow the herd of idiots. Admittedly, I started to believe I’m the one who’s the idiot.
After a day like today, I feel better. A strategist I respect who initially predicted a ‘double-bottom’ finally caved the other day, and joined the consensus in believing in a V-shaped recovery. It’s uncanny how these things occur. If he’d waited a couple of days, he could have stuck to his original forecast and today might look like a genius.
What should be happening, is the market tanking while the economy begins to recover – as occurred in most cycles I’ve experienced first-hand. In my other account, I’ve been sitting on cash since before the pandemic; waiting patiently for an entry point (based on good old fashioned fundamental analysis) that I feel comfortable with. The last one worthy of note was 2009. Hopefully, my opportunity will present itself in the coming months.
