|
Over the years I have often mused that the real purpose of financial markets is to humble us whenever we might think we have some idea of what is going on. There have been plenty of instances in my career, but perhaps none more so than Friday of last week. My supposedly well reasoned letter was waiting for Thanksgiving to pass and to be sent out, but the new strain of the virus hit the news and in the minds of many turned the outlook for economies and markets totally upside down. I’m thankful for the opportunity to reassess, but it is not my intention to make a U-turn (yet).
By coincidence the Seinfeld rerun that night was the one where George knocks over kids and old ladies to escape an apartment filling with smoke. I couldn't help seeing the parallel with the reactions of investors and politicians to the latest news. It is better to overreact to the risk involved then to not react at all. I would hold out hope that the market moves of Friday reflect an appreciation of the situation and that with increased global immunity, increased vaccination rates and the ability to quickly provide new boosters the worst outcomes can be avoided. I have read what I can on this new iteration of the virus and can't understand the lion’s share of what I read, but what I can take away is that even the experts, while concerned, are hesitant to reach any definitive conclusions. What we know for sure after last week is that COVID has replaced inflation as the driving force in the near-term outlook for the world's economies and by extension for financial markets.
To read Jack's market insights, please click link below...
By The Way - November 2021
|
