Our Uniquely ‘Yellow’ Fever

Here’s the latest fund managers’ survey put out by BAML.

Pay close attention to each bullet point, especially the sub-elements of the last bullet point: 

"Allocation to equities is the lowest since the March 2009 bottom."

And if you think of each from a very contrarian point of view, it’s all good news friends:

And here’s yet another good sign, this time from the razor-sharp staff at the IMF revealing their latest projections.

Remember, when everyone is sure something is about to happen you can be sure it won’t:

There’s one thing you learn after 37 years of watching the reactions of crowds to disasters; they’re all tough deals and can feel like the end of the world while they’re happening, but they all finish - and we overcome, rebuild and get better, and usually even better than before. 

Old becomes new - we adapt - it is simply a reality of time. 

The other tough deal is that we will all need to begin to sense the difference between useful information and marketing opinions.  

Science and technology will be the hitmen squad that will bring this killer to its knees - not any of the talking heads on TV or any of their opinions.

So, What Should We Consider?

2020 is gone.  

Sure, it’s still here but we have to try and ignore almost everything that’s being reported in financial terms. 

No company, for the most part, will be able to provide logical viewpoints of the next few quarters.  

But that will turn out to be ok for the patient investor.

Some of the queries not being covered in breathless interviews every 12 seconds are as follows:

• What happens when there is a therapeutic? 
• What happens when ONE of the 350+ current FDA studies approved for a vaccine, succeeds?
• What happens when we find out that the consumer really is tired of sitting at home - and the pent-up demand is surprisingly strong?
• What happens to margins when tech floods into every company with Generation Y carrying the new baton for the next 30+ years?
• What happens when we reconsider - after all the dust has settled - that somehow the regular death counts for a number of killers has strangely plummeted as they’re attributed to Covid?  Think: Heart attacks, regular flu, pneumonia, cancers, et al. Check the stats. All of them have fallen off the charts.

I was once told by a Doctor client of mine that "A large majority of men will die with prostate cancer - but they won't die of prostate cancer."  

I bring that up just as a thought process that the markets will see through much faster than the headlines or crowd emotions and fear levels will.
 

Play a Game...

Bring one of your team members in and ask them to sit in a chair and relax.  

Ask them to take a deep breath and then look around the room for everything that is yellow.  

Tell them to study it closely.  

Then after a few moments of them looking for yellow items, tell them this:

“OK, now close your eyes, take another deep breath, relax and remember everything you just took note of.”

And after they’ve relaxed ask them to tell you everything in the room that was blue.

They won't be able to.

That’s the lesson we’re learning right now.

Everything is yellow because we’re instructed to look for everything that’s yellow.

Think about it a different way: Can you remember any of the terrifying news headline topics before there was COVID-19 (The Yellow Headline)?  

Can you remember any of the major things we fretted over and worried about just before this virus outbreak?

Yellow is only as vivid as we make it.