- 11th May 2020
- Posted by: Dean Hall
- Category: Newsletters
A short update this time around given we are seeing very much of the same and a continuation of social distancing for the foreseeable future.
A very famous investor once said the above quote which I have used for this title and it’s one that brought a smile to my face.
The quote was from Warren Buffet, if you have never heard of him, take a moment and Google him. Reported to be worth 73.5 billion US dollars.
This quote is very apt for today’s corporate world I feel. Many corporations are built upon sand and we can see that given a lack of cash flow for a very short period can see these businesses fail.
What we have seen in this corporate world over the last 10 years is aggressive growth which has been based upon borrowing and not good management. This route of growth for a business leads them down a path of no return, hence the companies we are now seeing failing.
In recent times we have also seen a great deal of share buy backs from large companies, thus reducing the supply, driving the share price up.
The classic supply and demand back front and centre as I have covered with regard oil in my past updates.
This process of “buy back” moving forward will not be seen in such large levels seeing as they will not have surplus cash to allow this to happen and create in effect a false demand.
My research and focus right now is toward these corporate debt levels and the effects on the investment market as a whole.
Markets have rallied by some way and April looked to be a very positive month overall. Some good news to report, which I am sure is very welcomed.
This was really pleasing to see and proves that holding our nerve and sitting still was the right outcome. At times taking no action is the right action.
We are not out of the woods just yet as the opening of the month has shown, the markets will react to news, good and bad.
We remain focused on our approach and we continue to review, monitor and engage with providers to ensure they are meeting their own targets.
The vaccine appears to move potentially closer and with the new roadmap announced this starts to release us all back into the wild, be it very gradually.
I wasn’t expecting too many changes here really for May and with a second bank holiday this month any movements now will be past that date.
The UK markets expected the same outcome with a positive jump early this morning.
Details of last night’s announcement will be released today so only then we will know all the nuts and bolts of this.
Please stay safe and as you know by now, I am just at the end of the phone for a chat, be that about your planning or just a social catch up.
One very last thing, of which I am glad to report. Niamh has now got her first teeth poking through.
There have been some sleepless nights and moaning buts that’s mainly been from me!