I started last weeks post with the line: “Well, it’s been quite a week, hasn’t it?” I’ve shown my naivety there; where do I go from here? Last week was barely an amuse bouche to this weeks lightly-spiced langoustine starter. Who knows what next weeks main course will bring.
To be honest, the way this is going it’s going to be a full-on Italian feast with pasta, fish and meat courses and it’s going to go on all night. Enough of the crappy food-based analogies…you get the point.
The COVID-19 Craziness
In the last week, I’ve been to Switzerland and back, been grounded by work indefinitely, acquired hand disinfectant, had to leave it on my parents front door and then call them from the car to tell them it was there, walked nonchalantly around Tesco while watching the locals go nuts and have lost a good portion of my personal wealth.
I am not alone. I am also not ignorant to the fact that I am fortunate to have a personal wealth to start with – don’t get excited, Bill Gates isn’t looking over his shoulder just yet.
The restrictions placed upon us in the last few days and the natural market forces are going to cause far more pain than the virus itself – I am no expert, but you don’t need to be to see that.
I was in Switzerland watching CNBC on the TV as the markets tumbled by huge numbers and inertia hit. I had no idea what to do. Do I stick? Do I twist? I remember watching the same thing happen in 2002/03 with 9/11 and the Gulf War and again in 2008/09 when the financial crisis hit, at that time, I stuck with the same strategy which was to hold and add on a monthly basis as I always have done. I don’t know if that was right or wrong.
Buy, sell, hold – Who knows?.
The commentators are saying this is massive; maybe it is, maybe it isn’t, but we live in an age of such ridiculous hyperbole where someone earns the title “Legend” just for coming back from the bar with crisps and distinctly average X-Factors performances can warrant a standing ovation. A STANDING OVATION for singing someone else’s song…and not as well as they could sing it! It’s difficult to know what to believe anymore.
But again, enough of my commentary on society in general: I did nothing. I should’ve sold some of the portfolio, held the cash for less than a week and then be buying around about yesterday, but hindsight is a wonderful thing.
Oh the things I would have invested in if I knew then what I know now. My pension and ISA are now both around 20% lower than they were at the beginning of March – a massive drop in a matter of days.
However, I will continue to add my monthly savings to my pension and my investment account as I have faith in the market. It has been through wars and pestilence, Labour governments and still it has been resilient.
There aren’t many aspects of the human condition in which I have faith, but our resilience is incredible, greater even than our stupidity.
I don’t think I need to add to much economic commentary to the Corona Virus as it is plain for all to see.
The fact that the Chancellor, not 6 days after his budget has come out with a raft of additional measures to try and keep as much of the country afloat as possible is testament to the depth of the shit we’re in.
Working out how to react
Additionally, I stand by the point I made last week: keep spending your money and if possible, spend a pound or two more than you usually would. If you have a job, you have a responsibility to spend it and NOT all on toilet roll and dry pasta. Spend it giving people work.
The Money Mountain is still working out how to react. This time last week Cheltenham races was on, the football season was still happening so Matched Betting opportunities were still there to keep the cash flowing. That all dried up by the end of last week and the risk of getting gubbed because we suddenly start betting on the Mongolian 3rd Division is quite high, so we’re avoiding that one.
Surveys are still on the go although they are now advertising for Skype of telephone interviews rather than groups. I had a telephone interview on Monday which brought in a few pounds for around 35mins work. Incidentally the chap who interviewed me was in isolation and recovering from the virus and was doing well, which is very reassuring for all, I am sure.
Chris is doing one week in the office, one week at home for the next few weeks while this thing resolves itself and as for Dave, well…yeah, I’m sure he’s fine.
Our intention is still to take £1000 and put it in the market, considering that the market was at 5960 on Wednesday 11 March and today is at 5294. We are buying at a much better position than we would have been. I anticipate further volatility but where we’ll end up by the end of March when we want to buy, who knows.
Peer-2-Peer lenders have been writing to their investors talking about their plans and how they are less volatile than the stock market and the like; which is great, but there will be losses here. There has to be, as people lose their jobs and cannot afford to repay their loans. What else are you going to do? You pay your rent or mortgage first, an unsecured personal loan can go whistle quite frankly when push comes to shove.
The only certainty is more uncertainty… and we’re in that together
I am fully aware that this is a rambling shambles of a post; I have deliberately left it that way despite proof-reading it and seeing opportunities for improvement, but it reflects my state of mind right now.
I hate uncertainty. “Shock! Horror!” I hear you gasp. “We all love it.” I know, I know. I’m not special. I still have a job and will likely have one for the foreseeable future just because of the nature of my work, but this is simply massive.
I hope that in a couple of months we’ll be in better shape, but I am not sure. I think this may go for longer. I think we are going to have to work out how to live with it.
I fear for peoples jobs and livelihoods. I am very concerned about my friends and family who work in areas of the economy which are solidly discretionary spend or are travel-based; I worry about my hairdresser with her two young boys; I worry about my partner who works with two other ladies at the weekend, dog training – these are exactly the kind of businesses which get hit hardest when things take a down turn.
Through my day job I am in contact with people all over the world and what I find reassuring is that they are all going about their business, which comes back to the resilience I was talking about earlier.
They are entrepreneurs who get up and make things happen no matter the circumstances; they see the possibilities in everything and boy do we need people like that right now!
I’ve got to finish with my favourite paragraph where I have to tell you that this is not investment advice. If you read this and think “these guys are the ones to follow,” then you frankly deserve everything you get! We’re not experts and we’re certainly not qualified, so please, speak to someone who is before you put your money into anything.
We’d love to hear from you, if only for the company as we’re all working from home right now, so please put your comments in the boxes below.
Lovely summary, Ben. I think that sums up the collective angst that has seemed to grow in the UK as the situation has deteriorated over the last few days. I’ve never known panic like this before.
I’ve been thinking about the steps I’m taking – a mix of short-term, medium term, practical and less tangible.
1. Get all my money out of betting websites. This morning I had over £1k in there and, with rumour going round that other matched betters are cashing out, this could well bring a liquidity crisis that leaves some of the high-and-dry.
2. Try to hold as much cash as I can. Who knows how bad this will get. If the worst happens, I’ll be needing that cash. And, if it all blows over, there will be some great opportunities for us to take advantage of.
3. Keep on top of my work-from-home game. My office is now shut for the next 2 weeks, and I suspect beyond that too. It’s tempting to just use the time to doss and do other things, but if this crisis precipitates job losses then I don’t want a slack couple of weeks / months to have given them any excuse to point the gun at me. (ironically, I’m writing this in work hours, so not exactly living up to it yet)
4. Use the time to refocus and develop. Deary me, that sounds so pretentious. But with the working from home situation I’m going to save a massive amount of commuting time which I’ll try to put to good use. I’m going to focus on a bit of SEO stuff for our business venture, and doing a bit of learning too – which I’ll cover in a future post.
5. Be responsible and look out for others where I can. It’s amazing how many people have turned into infectious disease specialists these last few days. Everyone seems to have a view on how the government should be handling this. I’m going to follow the advice, not take any unnecessary risks and certainly not going to visit my 96 year old gran. But with the isolation, I’ll have to force myself to check in on people from time to time. I might even have to surrender a roll of loo paper!
Hope everyone is also coping ok. I’d be interested to hear what others are focussing on.