The stock market is acting like a bunch of bored teenagers. At present, we have a number of “Adults in the Room” who are arguing that a crisis will come upon us soon from the effects of COVID-19.
Q2 2020 hedge fund letters, conferences and more
My view is that the more the market is exposed to a concept, the less it reacts to it. Yes, in the initial phase, that is not true — briefly, the more we hear about new concepts, the more impact they have.
But that dies out, and as some Millennials might say : NEXT!
I am surprised at the resilience of equity and corporate bond markets amid the panic surrounding COVID-19. That said, this is similar to how I think the markets should behave. The markets should focus on long-term profitability, not on current period profits.
It is better to think how the expectations of wealthy people and their institutional servants are changing, than to think about the “news” that gets reported each day. The former affects prices; the latter is noise. Focus on the permanent. Ignore the temporary.
Article by The Aleph Blog
