Newsletter 06/19/2020
I am learning to wait until later in the week to write the newsletter because whatever I write on Monday’s draft might be out of date by the time you receive it. Head spinning is the best way to describe how I feel. It can be exhausting. Yet there is an element of fascination in how the human spirit responds to stress. So much happening all at once. So many opportunities to get better in the midst of seeming chaos.
In The Markets
Retail sales had a historic jump in activity albeit from a very low level and the bulk of these purchases were made online. At the same time the Federal Reserve Chairman Powell tells Congress that more fiscal help is needed. Small businesses, especially minority and women owned businesses, are suffering disproportionately. Stock market response on Monday and Tuesday to this seemingly contradictory news was to march higher. But this is only Wednesday.
Mid week, Jeremy Grantham, a long time market savvy money manager reiterated on CNBC how this is the most overvalued he has seen the stock market in his career using past market fallouts such as dot.bomb, financial meltdown, and earlier bear markets as comparison. He’s been around long enough to have witnessed all of them along his career. This is not the first time his firm has stated this view.
SAS Outlook
Visibility going forward is still very fuzzy. Opportunity for change is at its height. What to do next? First, we are not selling and second we are being patient. Third, where appropriate we are buying fixed income/credit.
So much of the value of assets is determined by feelings and not facts. From a historical stock market metric and value perspective, Jeremy Grantham is correct. But then why did the market sell off in March and rebound so quickly in April until this week? (Wednesday June 17)?
We have reviewed the reasons: massive fiscal and monetary intervention! Public health optimism or willfully ignoring the pandemic by politicians. Everyone is being affected by the state of our world today. Mask or no mask, we are all in this together.
We value our role as financial and life advisors to help all of you navigate your way through. The light at the end of the tunnel is there to be found. It is important to look for it every day and find a piece of light by the end of each day.
We will pass the test by taking one step at a time towards bending the moral arc towards justice. The balance between patience (waiting for a better opportunity to purchase stocks) and a call to action is a challenge. Let’s see what tomorrow brings. The only guarantee is change.
Your SAS Advisors
