April 2020 Investment Report

May 14, 2020
Investment Updates

While there are plenty of bearish commentaries and warnings about the significant effects of this pandemic being ahead of us,share prices are telling us there is a good degree of optimism about how this ends. But for what it is worth the high profile commentators over the age of 60(Buffett, Gates, Zell, Howard Marks) are all still quite cautious at a time when:

-         the S&P500 and the NASDAQ are both now up over the last twelve months;

-         the Australian market is only -10% lower than a year ago;

-         the Australian market is at same level it was in Dec 2018, when the only real problem confronting the market was slightly higher interest rates.

Things are actually different now. We face the very real prospect that unemployment stays high as Australian businesses do not have the confidence to keep all their full time employees once JobKeeper ends. Surely businesses, badly scarred by recent events, will hold back to some degree on almost all categories of their expenses and capital requirements in the coming six to twelve months having managed to get through this period.  There is also around $150bn of mortgages on repayment deferrals as well as around $48bn of business loans.

See attached for the full report.

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