Wow! Another week that brings both good and bad news. Starting with some of the bad:
Now, focusing on the good:
What have we accomplished this week? As mentioned, most of us are working from home. I have two teenagers and a college student so… I am happy to be at the office. Also, and more importantly, with the massive news flow, we continue to keep your best interest in mind. With the indices like the Dow Jones at times having year-to-date negative returns of over 30% this year, we have focused on managing volatility. As Bobby mentioned last week, we continue to hold both above average levels of Gold and cash thus minimizing these negative returns. That said, we have continued to act on buying opportunities this week. We focused on the technology sector. Low growth, low inflation, and low interest rates will continue to favor growth stocks as we come out the other side of this.
What will the next week or two bring? For all of us, it means more time with either ourselves or family at home. Last night I watched a VHS tape with my college student that I had made when I was his age. Tip of the day – destroy that tape if you have one at home – Brutal! In terms of the market, we see the euphoria of this fiscal stimulus being replaced with the reality that the economy is going to take a significant hit. This will result in more volatility with a chance of re-testing this year’s lows. However, Goldman Sachs still predicts after testing lows this year the S&P will finish at or above 3,000 or 14% + above Thursdays close. So, as we see further drawdowns in equity prices, we will likely continue adding to high conviction ideas.
So, in summary, we continue to look for opportunities that will help you meet your long term goals. Also, while it will take time for our lives to return back to normal, we will get there! In the interim, be safe and if you decide to watch an old VHS tape, wait until the kids go to bed.
Sincerely,
James Ronn
CEO