If you have been following this thread closely, you would have heard me coining these three statements: 1) Assumptions are Fluid , Not Static
2) Be Ahead of the Curve
3) Doing Nothing is Doing Something
Today we saw European countries (cant remember which one) banning dividends if the companies are getting bailed out, and Geoff Wilson could even imagine the possibility that franking credits could be a sacrificial lamb to pay for the Government's stimulus packages. UK Reit funds have begun to impose a freeze or form of restriction on fund redemptions as they do not have the cash to pay out while they can't see property assets that fetch no rental.
All the above are effects arising from the current virus crisis - just because something has not happened, you can't imagine it won't hence Assumptions are Fluid , not Static. And hence we need to be anticipatory to imagine what could go wrong from here (e.g gold producers can't benefit from higher gold prices if they can't maintain their production levels, REIT companies could go under stress due to moratorium on rental payments etc etc) being Anticipatory is Being Ahead of the Curve. And if we do not do anything to prepare for what is to come and do nothing, well Doing Nothing is Doing Something because by default, the negative effects will come to bite us as we do not move out of harm's way.
Today's ASX move is again counter-trend to regional markets - our 3.6% upside on the XJO is counter to Nikkei's 3.6% down , HSI 1.7% down and Kospi's 1.2% down and more importantly the 600 pts down on the Dow futures. Exceptionally stable and non-fearful is what I can describe the ASX today but at the same time apathetic to the higher probability of downside ahead.
Here is what I am prepared to predict on what's coming on the horizon:
1) S&P500 reaching 2000 within this month or a bit further out
2) The target in (1) triggered by continued acceleration in US COVID cases and virtually 100^% US in shutdown mode and the larger falls we will soon see on FAAANG stocks that thus far been largely immuned. The fall in Nasdaq would remove all hope that there is such thing as a safe haven
3) An up to 20% fall in CSL as COVID consumes Texas and CSL plasma collection centres largely out of Texas (feeding on cheap Mexican blood lol) are forced to shutdown. The CSL fall will remove all notions of a safe haven stock.
4) A poster child corporate default (possibly Softbank or Ford) coming soon
And as I reminded all before the market crash, there were times you had the luxury of having the opportunity to get out of the market while being on top (well I pointed out then before my 10% market correction for Feb, which turned out to be the Big Kahuna event I expected and cautioned here since Feb 18) , and now there is a second chance (for those lucky to have bought a week ago thinking it was for posterity)....but the door is likely to close soon.
