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:

Dow plunges 1,800 points in worst day since March as coronavirus, economic worries grip market

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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.




 

 

 

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About the Author

Malvin Spooner is a veteran money manager, former CEO of award-winning investment fund management boutique he founded. He authored A Maverick Investor's Guidebook which blends his experience touring across the heartland in the United States with valuable investing tips and stories. He has been quoted and published for many years in business journals, newspapers and has been featured on many television programs over his career. An avid motorcycle enthusiast, and known across Canada as a part-time musician performing rock ‘n’ roll for charity, Mal is known for his candour and non-traditional (‘maverick’) thinking when discussing financial markets. His previous book published by Insomniac Press — Resources Rock: How to Invest in the Next Global Boom in Natural Resources which he authored with Pamela Clark — predicted the resources boom back in early 2004.

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