It might well be too early to declare rightness or wrongness, I...

It might well be too early to declare rightness or wrongness, I suspect. I bought some around $3.75, so could be feeling good. But I declined to buy a whole lot more, because I think there's a good chance of at least one more major dive before things stabilise for good. I will be watching and waiting.

Signs of peaks in case numbers are becoming visible in a few European countries (Spain, Germany, Italy at a pinch), and have already clearly occurred in NZ and Australia, to say nothing of China of course (if you can believe the data, but that's another story). However, the likes of Singapore and Japan are battling rising rates of infection, and notably those European countries that are enjoying falling rates of infection have achieved that with measures which are wholly unsustainable even on six-month time scales. "La santé n'a pas de prix", says Emanuel Macron. Well, that's the right spirit and all, but the costs (financial, human, etc) of lockdown must be paid. The state is incurring debt at a terrific rate which must be repaid from a tax base which is smaller by the hour, millions are finding themselves unemployed, in Italy the mafia is handing out food... Europe can take this sort of thing for a month or two or three. More than that, it just can't... Either we go back to work and millions (yeah, probably) die, or we stay in some flavour of lockdown and poverty starts to bite down hard on people who would never have imagined they could be so affected.

It may be that the spread of Covid-19 cannot be managed in Europe without heavy duty lockdowns. If evidence to support that possibility begins to surface, expect a renewed wave of selling. Austria and Spain are putting that to the test this week. Let's see what happens...

I remain of the view that many equity investments remain attractively valued, even in the very bleak scenarios I'm alluding to here. Companies adapt to their circumstances. I wouldn't perhaps hold an airline or a hotel operator at the moment because there are sure to be failures and the risk is obviously high in some sectors. However, solid businesses should make it through no matter how bad it gets, and in the long term, today's valuations are going to look very low indeed. I was happy buying FID at $3.75. I will be more happy if I can get some more for $2 later this year. Either way, I figure it will be $6 again in a few years, and is likely to pay some dividends along the way.

Stay safe everyone...