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Our Thoughts On Last Week

Our Thoughts On Last Week

April 13, 2020

Last week we started with a classic “Hill Street Blues” line; “Be careful out there!” This week’s TV reference is from NCIS:


Jethro Gibbs: “Get a BOLO out!”

Timothy McGee: “Already on it, boss!”


BOLO: Be On the Look Out. Over the past week we have seen a textbook tug of war between buyers and sellers in the capital markets, both equities and fixed income. Today, we have another big Federal Reserve push to add liquidity to the bond market and the economy. It looks like OPEC+ may have agreed on oil production cutbacks. Also, new unemployment claims this week came in at a historically large level. With all that today, the market opened up and held most gains through the close.


The market (using the S&P 500 here) is poised at a level that could well be an important pivot point. Several technical indicators are at levels that movement, either up or down, could signal a change in the market’s tenor. We are “on the lookout” for what that can mean for our portfolios. In the past 2 weeks we have had 4 major economic reports that have been ugly (to put it mildly), 3 weekly new unemployment claims reports, and the March Unemployment report. On each of the days of those reports, the market has been up. We are taking this as a positive sign. We sometimes see that the market has “priced in” certain events, meaning that the news was anticipated. That appears to be case with employment figures. Next week companies begin to report earnings. The reports are expected to be bad. Perhaps, that news is priced in. It appears that it might be. We will see.


Our contingency plans include:

  • What if these levels hold and the market goes higher?
  • What if the market continues its “seesaw” action and moves up and down in a range?
  • What if the market fails to hold these levels and moves back to earlier lows?
  • What if the market drops through recent low levels?


The answer to these possibilities may be somewhat different for each client and portfolio. We are happy to discuss these contingencies with you, as always, phone or email contact is welcomed.


Here are four “Virus Signals” we are watching. It appears that these four things would be meaningful data points needed to signal a return to a more normalized pattern of activity (these can be state or locality specific):

  1. Hospitals in a state must be able to safely treat all patients without resorting to crisis standards of care
  2. At least all who have symptoms must be able to be tested
  3. The state is able to conduct monitoring of confirmed cases and contacts
  4. There must be a sustained reduction in new cases for at least 2 weeks


This would represent a meaningful baseline measure of the efficacy of treatment.


In a nutshell, we feel that we are positioned to respond to whatever the market presents us.


I read this earlier this week and thought that our clients might find it somewhat useful. It is from an author who writes at “Barking Up the Wrong Tree,” Eric Barker.

 “This is how to be resilient:

  • Positive self-talk: When you talk to you make sure you are nice to you.
  • Physical fitness: Stress your body a little bit every day and it will handle the big stresses to come that much better.
  • Make it a game: Obstacles in life make us want to quit. Meanwhile games drive us to keep playing until we win. So, make life a game.
  • Humor: If a laugh a day got Joe Asher through Ranger School, it'll get you through quarantine.

And the last one was Embracing Meaning via community. Let's start there. You might think people who survive disasters do it by putting themselves first... And you'd be wrong. When Laurence Gonzales compiled the research on those who get through life threatening situations what he found was the exact opposite. Those who help others were more likely to survive. Via Deep Survival: Who Lives, Who Dies, and Why:

Helping someone else is the best way to ensure your own survival. It takes you out of yourself. It helps you to rise above your fears. Now you’re a rescuer, not a victim. And seeing how your leadership and skill buoy others up gives you more focus and energy to persevere. The cycle reinforces itself: You buoy them up, and their response buoys you up. Many people who survive alone report that they were doing it for someone else (a wife, boyfriend, mother, son) back home.”


Here's link the post if you want to read the whole thing:

As always, we appreciate your trust. We are constantly trying to do the best we can for you. If you have questions, or simply want to connect, please let us know.

Thank you, and stay safe!