In today’s Exponential Investor

  • Stripping confidence in humans
  • Crisis of information?
  • Stocks that beat the hysteria

I never thought we’d see a repeat of the “loo roll fiasco” from 2020.

I was wrong.

Do you remember when the pandemic kicked off in early 2020 (how could you forget!)?

Then all of a sudden there was mass hysteria. Not because of the pandemic. But due to the realisation that people might… run out of loo roll!

This led to mass panic and supermarket shelves were stripped bare of all loo roll.

There were even people physically fighting in super market aisles over the last nine pack of Andrex.

Absolute insanity that completely stripped my confidence in the average human.

But I let it slide because it was a weird, abnormal situation. I didn’t think I’d ever see a repeat of it.

Until this last week…

Geri can

A friend sent a wonderful meme around yesterday. It was a picture of the Geri Halliwell, from the Spice Girls.

The meme read,

Which Spice Girl can still get petrol?

Geri can.

This had me in stiches. A classic meme. But why was it so funny? Well as you know there seems to be a bit of mass hysteria and panic around the misinformation we’re going to run out of fuel.

Early-to-mid last week reports started circulating that BP was going to have to limit some of the deliveries of fuel to its stations. The issue was a lack of HGV drivers to deliver the fuel.

This quickly made the tabloids realise there were some great headlines to be snatched up.

Before you knew it, The Sun, The Mirror, The Daily Mail ran with it, and then the tabloids that pretend they’re not tabloids ran with it too, The Telegraph, Guardian… all the media began to report on the…

“Fuel CRISIS.”

There was, and is, no crisis. The only crisis is a crisis of misinformation.

Now, I’ll be the first to admit when I saw the early reports on this last week, I thought to myself, “Hmm, I wonder if I should get a jerry can off Amazon, and just grab 20 litres as a backup. If people lose their minds over this, it may well turn into hysteria.”

I even added two 20L jerry cans to my basket on Amazon.

I wavered over the actual purchase. Do I get them and fill up before the hysteria, or do I have faith in my fellow human that people will remain calm, rational and it will amount to nothing…?

Well if the loo roll fiasco eroded faith in the average human, the fuel fiasco of September 2021 completely wiped it out.

Three points make the problem

Fortuitously I filled up our cars early last week. Just because when the cars are empty you fill them up. That’s normal.

As all of the panic fuel buying kicked off later in the week and over the weekend, I didn’t realise how crazy it had actually got.

Then I had to pop to the shop to get some cat food and nappies. The local Sainsbury’s has a petrol station attached. It was closed.

“We have no more fuel.”

There were witches’ hats across the front, blocking off the station, with windows and doors locked up. The station was closed.

I then dropped my son at the nursery on Monday morning. Usually I drop him off and around the corner is a BP that has a M&S Food Hall attached – I often stop there to shop on my way home.

I will usually grab a coffee and croissant for the ride back home.

“No fuel.”

It was the same deal, with witches’ hats across the bowsers, and no one able to fill up.

Luckily the shop was still open and I could get a coffee. It would be a disaster for us all if the coffee shop was closed too.

Anyway as I was ordering my coffee, the poor girl on the register was on the phone clearly exacerbated with another angry person calling to ask if they had any fuel.

After she hung up to serve me, I asked, how bad it had been. With a tear in her eye, she said it’s been horrible all morning, non-stop people calling as though somehow it was her fault, that they had closed the pumps.

What is wrong with people?

There’s not a lack of fuel. There is a lack of rationality. And a lack of consideration for people whose job requires them to be on the road travelling to make appointments, in order to earn a living.

That’s why I decided against buying the jerry cans to store some emergency supplies.

I’ve got about a month’s worth of fuel in both cars already, don’t need more. I won’t go back till I need more, like normal.

Frankly I blame three things for this hysteria.

  1. People are not rational.
  2. The media plays into that lack of rationality amplifying people’s fears and worries.
  3. The perpetual fear cycle from the last 20 months has been so vicious that people now instantly expect the worst.

We’re not in a fuel crisis. We’re not in any crisis other than a crisis of information.

The thing is, now we’ve seen panic for loo rolls, panic for fuel… what comes next? And how can you play the market to beat this ongoing hysteria?

How to beat hysteria, using the market

Take for instance Halfords Group (LSE:HFD). Over the weekend the company reported a 1,656% increase in sales of jerry cans.

I would also expect that “fuel-saving” additives have also gone parabolic over the weekend too.

Halfords stock traded as low as 298.38 GBp on Friday. On Monday it traded up to 312.60 GBp. That’s a 4.76% swing, which I have no doubt is due to the panic over the weekend.

Also on Friday, Royal Dutch Shell (LSE:RDSB) traded as low as 1,511.40 GBp. By Tuesday it was up around 1,632 GBp. That’s an 8% swing higher.

BP Plc (LSE:BP) was much the same story. It traded as low as 315.30 GBp on Friday and as high as 339.25 GBp on Tuesday. That’s a 7.5% swing higher.

These things all seem obvious after the fact. But the seeds to this story were planted on Tuesday last week. There were ample trading days to move ahead of the story as it unfolded.

There will be more like this, more mass hysteria, more panic buying, more irrational human behaviour.

You can make smart moves in the market when you catch wind of the hysteria unfolding. In this context, we’re talking about small, smart, shrewd moves to capitalise on the world we live in and the irrational nature of it all.

Until next time…

Sam Volkering
Editor, Exponential Investor

PS In your edition of Exponential Investor on 24 September, some bullets were missing from the quote by Marc Andreessen. Our apologies for this error. It has now been corrected and you can find the updated article here.