Looking back a couple of years ago...

I can barely remember what I ate for breakfast this morning these days....(it was a large bowl of Flahavan's porridge now that I come to think about it)

I can barely remember what I ate for breakfast these days but I was recently reminded that in May 2020, having been largely on the right side of market moves in the first 4 months of the year, we published our expectations for the remaining 8 months………… We later re-used these in our mid year review which was recently re-published on https://www.researchgate.net/publication/347273576_So_What_Happens_Now_2020_Halfway_Outlook_Presentation_Slides

What’s most pleasing is that we got the narrative about as right as was possible to do.
We didn’t do too badly on the overall direction either……

(although we did underestimate the scale of both the upside and downside moves, but we pointed out at the time that this was likely to be the case as we were second-guessing the reactions of policymakers)

Some extracts from our thinking at the time-

Our advisory portfolios finished 2020 with an average gain of 16.93%, one losing month (loss less than -1%), and Sharpe Ratio and IR above our historical mean. I had remembered that part but I was slightly surprised to see that we’d already started the discussions on inflation and on unwinding stimulus. Interestingly we’d forecasted that the US debt plus the Fed balance sheet would exceed $35 trillion by year end (which I think was roundly dismissed at the time). It turns out that we were spot on ($35.01 trillion).

Sometimes, we can learn a lot about looking forwards by looking back…..

For a full copy of our June 2020 mid year review/preview, please visit https://www.researchgate.net/publication/347273576_So_What_Happens_Now_2020_Halfway_Outlook_Presentation_Slides

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About the Author:
Paul Gambles is licensed by the SEC as both a Securities Fundamental Investment Analyst and an Investment Planner. 

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