Coronavirus - Macro Investment Aspects Only

[dealtn]

The added title to the thread by a MOD was (macro investment aspects only)

You do know what this means do you?

Why are you saying what you want to see happen, and then talk of "...trading opportunities"?

[odysseus2000]

The only way I know how to game this kind of stuff is to gather as much information as possible and to then try and work out who will benefit, who will suffer etc.


Regards,

Oh I get it, you are a hedge fund manager asking people on the internet what to trade! I always wondered how such people formulated their strategy.

Ha Ha

Just gathering information and ideas as inputs into what are likely potential opportunities.

Meanwhile I run price scans seeing if what they tell me are consistent or different to what is being discussed here.

Are there better ways?

Regards,

[Bubblesofearth]

This is how I try and get a feel for what will go be done.

Regards,

So far responses have been extensions of conventional measures. Nothing we didn't see during the GFC for example, bigger in scale but same underlying principles. Primary amongst these is that money is being made available as loans of one form or another.

A step-change from this would be to print money debt-free. To work it would probably need G20 agreement and to be carried out simultaneously across the Globe. The way things are being dealt with at the moment will work as long as the crisis is relatively short-lived, maybe a few months. If it goes on much longer then the economic result will IMO be an unmanageable debt burden for individuals, businesses and governments. We will get large-scale insolvency, debt deflation and depression.

If Governments do take the extraordinary step of printing debt-free money then equities will recover quickly. Gold will jump and there will be a flight from cash and bonds. There will be some fear of inflation but the bigger fear will be the setting of a precedent and the resulting loss of confidence in fiat currency.

All policy decisions just now are about which option is seen as the lesser of a number of evils. The cessation of economic activity has no only positive solution except maybe for the environment.

BoE

[Dod101]

I am looking at things from a trading/investment perspective, trying to work out what the politicians will do and how I can make money out of their decision.

I have dropped in on this exchange a bit like the helicopter money you seem to like.

I have not quoted your entire post but you do not seem to see how crass you sound or maybe you don't care. Quote : 'How I can make money out of their decision'. Meanwhile there are people working very hard to try to keep some semblance of normal life going (including yours) and others working in medical services tending to the sick and dying, all who could no doubt do with more financial help and risking their own lives to do so. And you are seeking ways to make money out of it. Good on you!

Dod

[zico]

I am looking at things from a trading/investment perspective, trying to work out what the politicians will do and how I can make money out of their decision.

I have dropped in on this exchange a bit like the helicopter money you seem to like.

I have not quoted your entire post but you do not seem to see how crass you sound or maybe you don't care. Quote : 'How I can make money out of their decision'. Meanwhile there are people working very hard to try to keep some semblance of normal life going (including yours) and others working in medical services tending to the sick and dying, all who could no doubt do with more financial help and risking their own lives to do so. And you are seeking ways to make money out of it. Good on you!

Dod

This board does say "macro investment aspects only". I'd expect everyone here to be fully aware of what a huge tragedy the virus will be for probably millions of people, but that doesn't preclude trying to make the best investment decisions in a new and fast-changing environment. It would be different of course if people were trying to make money by shorting ventilator firms to put them out of business - but that's not the case.

From a market perspective, the 2pm UK government announcement of the latest deaths has been postponed without a reason being given. This could be innocuous, but it may be the figures are so bad the government doesn't want to publish them as they stand. (N.B. Even if there is a very high increase today, there's no reason to suppose the UK will do anything other than follow the curves for the other countries that have taken the same actions).

[dealtn]

I am looking at things from a trading/investment perspective, trying to work out what the politicians will do and how I can make money out of their decision.

This board does say "macro investment aspects only". I'd expect everyone here to be fully aware of what a huge tragedy the virus will be for probably millions of people, but that doesn't preclude trying to make the best investment decisions...

Investment decisions, to my mind are different to "trading" decisions. Not that I have a problem with traders. In fact they are great, create much needed liquidity, and often the opposing view to create a market. But this is an "Investors Board", and a "Macro" topic!

[dspp]

Moderator Message:
Fair point well made by dealtn. Stick to CV-19 macro/investment here please. If you want trading then try viewtopic.php?f=88&t=22633 as a starting point, or various other threads. regards, dspp

[odysseus2000]

Moderator Message:
Fair point well made by dealtn. Stick to CV-19 macro/investment here please. If you want trading then try viewtopic.php?f=88&t=22633 as a starting point, or various other threads. regards, dspp

So how does one invest in this environment?

If by invest you mean calculate price/earnings, Discounted Cash Flow, price/saless, how do you know what price to use. The vix closed at 57, massively elevated saying that big investors don’t have any confidence in price and are using a ton of derivatives to protect their positions.

What of earnings? This is always a weakness in investment as it relies on an analyst and in this environment, how can an analyst have a clue if any business it so survive, let alone give credible earnings estimates.

Because of these and other factors the investment world has moved on from the methodology of Ben Graham and has begun to create not mutual funds and other etf, but instruments that combine investments in common stock with derivatives, the so called Wealth Management products. Since derivatives are time limited the managers of these funds have to actively trade the market along side having some core investments which they protect with the traded derivative products. Some of these have done well in the current troubles. A neighbour was singing the praises of the one she has since it protected her capital and she has written confirmation of a coming large dividend.

The only way I can think of to do classic investment in this environment is to use £ cost averaging. Put in a set amount each month and ignore everything else, the sort of thing that PYAD called Strategic Ignorance. This has often worked well in the past if you have a long time frame and if not for you, for your heirs. This disadvantage is that if you need the money sooner than expected it might be a poor time to sell. However, if you are doing this strategic ignorance there is no point whatsoever having any interest in the markets, making message boards a thing to avoid.

Perhaps i have this all wrong and I am missing something and if so I would like to be corrected.

Meanwhile anyone who watched the Dominic Raab press conference, where he licked his fingers before turning over a page of the document he was reading, can perhaps explain to me how a jump in covid 19 cased by 50% in 3 days can be explained not as a large increase, but as a constant one since apparently on each of the 3 days the number of patients was the same. This might pass the analytical tests of a 14 year old, but it should not pass seasoned journalists.

Additionally can someone explain how it is right to hound folk with drones walking their dogs in the Peak District but ok for crowding on the London Underground?

Finally, how can front line medics be so crass as to complain that they don’t have ppe and risk infection to themselves and to infecting other patients:

https://twitter.com/TheBMA/status/12446 ... 96417?s=20

Regards,

[Itsallaguess]

The only way I can think of to do classic investment in this environment is to use £ cost averaging. Put in a set amount each month and ignore everything else, the sort of thing that PYAD called Strategic Ignorance. This has often worked well in the past if you have a long time frame and if not for you, for your heirs. This disadvantage is that if you need the money sooner than expected it might be a poor time to sell.

However, if you are doing this strategic ignorance there is no point whatsoever having any interest in the markets, making message boards a thing to avoid.

What about where people who are pound-cost-averaging (or something fairly similar to it..) might want to talk to each other and discuss how happy they are with their approach during these types of volatile markets, both current and historic...?

The flip-side of that would be a complete absence of such people, with all the noise then coming from those much more 'sophisticated types', who would perhaps then be able to convince everyone that such 'sophisticated approaches' were absolutely necessary...

Cheers,

Itsallaguess

[odysseus2000]

itsallaguess
What about where people who are pound-cost-averaging (or something fairly similar to it..) might want to talk to each other and discuss how happy they are with their approach during these types of volatile markets, both current and historic...?

I thought the rational behind £-cost-averaging was that it completely freed the investor from any market interest leaving them to do other more interesting stuff, happy in the knowledge that in the by and by they would have a nice wodge of readies waiting for them. Or is there more to this than buy and forget?

I rarely if ever see anyone post about it other than folk saying that over very many years it has worked for them and as I understand it there is nothing to discuss as it is just a feeding in of money on a regular basis with no consideration of market conditions.

Regards,

[Itsallaguess]

What about where people who are pound-cost-averaging (or something fairly similar to it..) might want to talk to each other and discuss how happy they are with their approach during these types of volatile markets, both current and historic...?

I thought the rational behind £-cost-averaging was that it completely freed the investor from any market interest leaving them to do other more interesting stuff, happy in the knowledge that in the by and by they would have a nice wodge of readies waiting for them. Or is there more to this than buy and forget?

I rarely if ever see anyone post about it other than folk saying that over very many years it has worked for them and as I understand it there is nothing to discuss as it is just a feeding in of money on a regular basis with no consideration of market conditions.

Well there's a few variants of it though. I tend not to carry out 'regular monthly contributions', and I'm happy to 'buy on the dips' as and when I see fit.

Over the years I think that's likely to deliver similarly 'simple and worthwhile results', I've found, so that's what I prefer to do rather than have something automatically set up each month.

With regards to asking why people might want to talk about either of those approaches, if it's so simple and effective, then I'm at a loss to think why people *wouldn't* want to offer their experience of the validity of those approaches, if that's what they've found...

Cheers,

Itsallaguess

[odysseus2000]

itsallaguess
With regards to asking why people might want to talk about either of those approaches, if it's so simple and effective, then I'm at a loss to think why people *wouldn't* want to offer their experience of the validity of those approaches, if that's what they've found...

So are you buying now, if so why and what and if not what would make you a buyer and what would you buy?

Regards,

[redsturgeon]

Moderator Message:
Interesting though it may be this conversation as drifted off' topic. Can you move it to a more appropriate board if you wish to continue please.

[dspp]

Latest slideset from COBR. The first slide, transport use, really does reinforce the point that there will be very severe economic consequences.

https://assets.publishing.service.gov.u ... 200330.pdf

regards, dspp

[redsturgeon]

I am still sitting on my hands! Tough though it is.

John

[odysseus2000]

Latest slideset from COBR. The first slide, transport use, really does reinforce the point that there will be very severe economic consequences.

https://assets.publishing.service.gov.u ... 200330.pdf

regards, dspp

On slide 3 what does this mean?

England hospital admissions COVID-19.
Hospital admissions for COVID-19 rose by over 20% on previous day in the North West and South East. (Confidence: a new categorisation has been added to an existing high quality administrative data set).

Normally in statistics one would use error bars to estimate unceratainty. Is that what this means and if so what are they?

Regards,

[odysseus2000]

If car usage is down as plotted does this mean that all the car dealerships will be experiencing substantial drops in turnover, feeding back to the makers who will have no sales for car production?

Additionally given that many cars are leased, what is to stop lease holders taking their cars back, cutting off lease income to the leasers?

Regards,

[redsturgeon]

If car usage is down as plotted does this mean that all the car dealerships will be experiencing substantial drops in turnover, feeding back to the makers who will have no sales for car production?

Additionally given that many cars are leased, what is to stop lease holders taking their cars back, cutting off lease income to the leasers?

Regards,

I'd imagine there will be a glut of new cars but haven't most car plants stopped producing now?

Regarding leases they run for a set time period, my end date is June 30th this year. There would be a penalty fee for early termination.

John

[odysseus2000]

Chinese coal consumption increasing back towards pre-c19 levels:

https://www.bloomberg.com/news/articles ... ce=twitter

This correlates with the latest Chinese PMI that was back to near pre-c19 levels.

Regards,

[odysseus2000]

redsturgeon
I'd imagine there will be a glut of new cars but haven't most car plants stopped producing now?

Regarding leases they run for a set time period, my end date is June 30th this year. There would be a penalty fee for early termination.

Not sure re-car production, thought Chinese factories now running.

How big are early car lease termination penalties?

Regards,