Ann: Update on Hamish Douglass & David George commencement date, page-102

Overall bear market atm (US down > 20%) but not yet 50% generally, so not an overall crash yet. Canaries in the coal mine, crypto, BNPL, tech, spec stocks (incl. MFG), some building/construction have already crashed. Cu and margin debt are 1/2 way between recent high and previous low, global recession risk is known and likely or already upon us, BUT lots of cash on sidelines ready to buy bargains (so most have seen this coming).

(I think) This market has a chance of being flat for at least another 6 months before gradually recovering or dropping further. Recovery could happen if things gradually improve and interest rates don't bite too hard. This is historically unlikely. The the more likely outcome is for a flat or falling market and if there is a recession and people start drawing down and debt unwinds a further 20% overall drop from here could easily occur.

So cash at 3% p.a. plus in the interim while we find out what is happening is not such a bad thing. If market goes down 20% and probability of this occurring is say 50% and inflation is say 7.5% then 3% return on cash means you are ~ 4.5% worse off rather than ~10% worse off on that part of your portfolio. Only way to get ahead if we have high inflation and a bear market is to become active in the market and pick winners more often than losers and keep taking profits after runs into overbought territory.

If MFG does recover, it will not be until well after the market recovers, I'm guessing 2023 at the earliest. In the mean time I am hoping the div holds up to a reasonable level. I won't put much more towards MFG but sub $10 would be tempting again if I think they are still in with a shot.