The Full English Accompaniment – Dumping Shit

This week the Swedish city of Lund dumped a tonne of chicken manure in one of it’s parks at night to deter visitors to an annual celebration (1). Chicken shit wasn’t the only thing being dumped. Lots of UK bloggers are selling off, and so is the Sage of Omaha.

I try to avoid commentating on transient market flux, but right now I find myself drawn in. What the hell is going on?

Well the talk has been of whether we’ll see a V-shaped or L-shaped recovery from the March sell-off. If you read the headlines you’ll see that the stock market has been going great guns (2):

FT

As TI at Monevator identifies in this weeks Weekend Reading it’s mostly a US market thing; and specifically the S&P500 (3). The FTSE100 is looking very L-shaped. The FTSE100 is heavy in oil and service stocks, which are taking an absolute battering. The S&P500 is tech led, companies who couldn’t ask for a better demand boost. We saw a small sell-off at the end of last week after earnings reports, but not as much as was expected (4).

If you hold a world index tracker like myself, due to sheer capitalisation size, you probably hold a decent portion of the S&P500. Like many bloggers below you might have seen a net worth jump. Tech values have gone up on expected earnings, the market appears convinced that we’ll all be back to work soon, and it’s banking on the ‘Fed put’; that cheap government lending will bolster and boost the market (5, 6).

Meanwhile, on the ground, people are being laid off and things don’t look all that rosy. Retailers with shut shops are having online sales to clear stock, a problem compounded as discount shops like TKMaxx can’t help them clear inventory (7). Manufacturers like Rolls-Royce are cutting jobs (8). Some bloggers like Playing with Fire have been made redundant (9). Others like Fire Lifestyle have lost significant portions of their turnover (10).

Poor darlings who over-extended themselves to buy property to then let on AirBnB, inflating the housing market in the process, are suddenly exposed to a lack of income (11).

The market as a whole feels quite self-contradicting, in my opinion. Tech is going to be doing well in this environment, along with all the rest of those companies raking it in with our lifestyle alterations. Meanwhile huge swathes of the economy are seeing cataclysmic change. Buffett has dumped all his US airline stock (12). He’s also said the range of outcomes from this is massive.

Me, I’m with Ermine (13). I think we have a long way to go yet. I’m still buying – I’m not a big enough man to bet against time in the market by timing the market. Tech offers plenty of potential returns, and I’m sure there are some value investor nuggets out there. I just see the stories coming out of people losing their jobs, companies shutting, and IMF predictions of global recessions and eyebrows are raised (14).

We live in interesting times.

Have a great week,

The Shrink

News:

Opinion:

References:

  1. https://www.theguardian.com/world/2020/apr/29/swedish-city-lund-dump-tonne-chicken-manure-park-deter-visitors-coronavirus-lockdown
  2. https://www.ft.com/content/88e57ec9-42d4-455d-a045-293a6a54837d
  3. https://monevator.com/weekend-reading-under-infected-over-optimistic/
  4. https://seekingalpha.com/article/4340089-big-cap-techs-report-all-in-one-week-and-what-means-for-sell-off-scenario
  5. https://www.thisismoney.co.uk/money/markets/article-8277961/How-come-global-stock-markets-best-month-years.html
  6. https://seekingalpha.com/article/4342416-what-hell-is-stock-market
  7. https://www.businessinsider.com/tj-maxx-ross-shutting-down-makes-inventory-problem-worse-2020-4?r=US&IR=T
  8. https://www.bbc.co.uk/news/uk-england-derbyshire-52514444
  9. https://playingwithfire.uk/well-it-finally-happened/
  10. https://firelifestyle.co.uk/2020/04/18/work-is-getting-tough-recession-looming-small-business-pressure/
  11. https://www.wsj.com/articles/a-bargain-with-the-devilbill-comes-due-for-overextended-airbnb-hosts-11588083336
  12. https://www.theguardian.com/world/2020/may/03/warren-buffett-dumps-us-airline-stocks-saying-world-has-changed-after-covid-19
  13. https://simplelivingsomerset.wordpress.com/2020/05/01/musings-on-misadventure-and-market-madness/
  14. https://www.weforum.org/agenda/2020/04/imf-economy-coronavirus-covid-19-recession/
  15. https://www.thisismoney.co.uk/money/saving/article-8266703/Now-banks-target-LOYAL-savers-rate-cuts.html
  16. https://www.theguardian.com/business/2020/apr/30/covid-19-crisis-demand-fossil-fuels-iea-renewable-electricity
  17. https://www.bbc.co.uk/news/business-52483455
  18. https://www.bbc.co.uk/news/business-52483359
  19. https://www.telegraph.co.uk/business/2020/05/02/tesla-applies-uk-electricity-provider-licence/
  20. https://averagemoneymanagement.wordpress.com/2020/05/01/my-alternative-investments/
  21. https://lifeafterthedailygrind.com/how-identity-theft-happens-and-how-to-stop-it/
  22. http://diyinvestoruk.blogspot.com/2020/04/gresham-house-energy-storage-2019.html
  23. https://www.itinvestor.co.uk/2020/05/combining-fundsmith-equity-and-lindsell-train-global-equity/
  24. https://theescapeartist.me/2020/04/29/light-at-the-end-of-the-tunnel/
  25. https://playingwithfire.uk/april-2020-savings-update/
  26. https://thesquirreler.com/2020/04/26/april-2020-net-worth-update/
  27. https://earlyretirementinuk.blogspot.com/2020/05/end-of-month-report-1st-of-may.html
  28. https://www.moneyforthemoderngirl.org/the-british-woman-who-became-financially-independent-in-her-mid-30s-in-london/
  29. https://www.firemusings.org/invest-in-the-bottoming-market-or-pay-the-mortgage-off/
  30. https://gentlemansfamilyfinances.wordpress.com/2020/04/27/the-lowdown-on-the-lockdown/
  31. http://bankeronfire.com/an-introduction-to-investing-in-bonds
  32. https://drfire.co.uk/lockdown-reflections/
  33. https://igniting-fire.com/2020/04/30/tshe-time-for-a-solar-battery/
  34. https://thesavingninja.com/savings-report-22-i-failed-at-market-timing/
  35. https://www.muchmorewithless.co.uk/aldi-food-parcel-review/
  36. https://firelifestyle.co.uk/2020/05/01/april-2020-financial-update/
  37. http://fiukmoney.co.uk/april-20-net-worth-and-monthly-update-20-534439-32858/
  38. http://quietlysaving.co.uk/2020/05/02/april-2020-plus-other-updates/
  39. https://adotium.co.uk/2020/05/02/april-2020-report/
  40. https://awaytoless.com/monthly-spending-april-2020/
  41. https://pathtolife2.com/2020/05/01/financial-independence-update-april-2020/
  42. https://zerotofreedom.org/investors-on-what-they-wish-they-knew-before-starting/
  43. https://southwalesfi.co.uk/2020/05/02/how-to-invest-avoiding-fossil-fuel-companies/
  44. https://monevator.com/do-us-treasury-bonds-protect-uk-investors-better-than-gilts/

2 thoughts on “The Full English Accompaniment – Dumping Shit

  1. A good balanced piece FIRE shrink, I flip between optimistic and less optimistic, while we can more of less definitely say that if we are investing in the world for the long haul – it / we will be OK, but I do think it will be a long and deep recession. Many people are facing challenges but the main tragedy and travesty is we have one of the highest death tolls (per million) in the world. But there are things to be thankful for on an individual basis and a very interesting time.

    Liked by 1 person

  2. I’m a mostly optimistic person so that’s my outlook and like you, I continue to buy. I am however realistic enough to believe that we’re nowhere near being out of the woods yet and that there’s worse to come for the next couple of years at least.

    Liked by 1 person

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