As expected, it’s been another volatile week and it seems like more of the same for the months ahead. The main “spanner” is that inflation concerns are rising and with that will come the eventual pressure to increase interest rates. This is still the single largest driver of sharemarkets and higher share prices requires that the companies must deliver higher earnings to justify them returning to previous highs again. This takes time and patience which we have lots of because of not being rushed into buying just because we are cashed up but waiting for fairer values. Although we did tread carefully, we are genenerally behind on our entry costs (despite the initial gains) but we still have more cash waiting for better bargains which can still swing things back when the current fears disappear and optimism returns. Interestingly, there are companies that I was interested in buying which are still higher than the lows in March 2021 (eg. BLD, FMG, WES, and GM:USA which we could not buy because the accounts were not opened quickly).
In the meantime, problems with Covid-19 in India and other places are likely to be a theme for this year until vaccines are finally able to lower the number of people badly affected (i.e. deaths). This week’s Federal Budget did not have any surprises and local markets largely ignored this.
It’s now likely that 2022 could be when travel restrictions are finally reduced and home quaratines are likely until returned travellers are tested and cleared. Maybe the Federal government will manage things by then and only require say a 3 day period for testing and then release travellers that are cleared? However, they would need help from the States if many tested positive and needed care.
Here’s the latest market values and orders. Doesn’t look good now and could get worse but the silver lining will be that we can then buy more shares at lower prices which one day will produce a significant rebound. Remembering that we have seen markets do this before and that nobody generally knows where the bottom is until its already recoverd and moving up again.
Regarding Bitcoin and others, it’s just typical that we didn’t get it at the low point but there has been many similar things happen in the past, and it time new highs were reached, after the bears (sellers) finally have taken profits or cut their losses. Going forward, Etherium still seems to be the more likely winner but with thousands of others struggling to find their place in the “new world”, it’s impossible to know what any of them will be valued at by the end of this year alone? Whilst Elon Musk and the new generation continue to “buy into” these, the trends still strong – although why Dogecoin has done better is truly a mystery that defies any logic or reason?
