Here comes the September-slaughterhouse

In today’s Exponential Investor…

  • It’s a real condition
  • Five out of 100 sucks
  • Do one thing to prepare for what’s coming

Mondayitis.

It’s a real thing you know. How do I know it’s a real thing? I read it on the interwebs, that’s why.

According to Urban Dictionary,

Mondayitis” is a feeling of weariness, sadness, apathy and general distress that many individuals feel when starting the Monday morning work week. This feeling is usually enhanced after a large weekend.

I didn’t have a particularly “large” weekend. Nor was I generally feeling what I’d call a level of distress.

However, I will admit that I wasn’t looking forward to the start of the week yesterday.

My Mondayitis this week was due to immense and sheer frustration of incompetence from the life and death decisions being handed down by the government.

I don’t use the term “life and death” flippantly. The decisions that the government is currently milling over are going to be a determination of whether certain populations in the UK will live or die.

£2.3 billion and rising?

What escapes a lot of people is also the fact that some of these decisions won’t necessarily lead to immediate life and death outcomes. They will however relate to long-term life and death scenarios.

Now, I would say I’m fairly confident in assuming you and I are on the same page about something. That is, the loss of any life at any time is a great tragedy. The loss of a life before their time, significantly worse.

One thing I don’t pity the government for is that whatever it decides to do this week, people will die. They’ll die from things like cancer, accidents, pneumonia, heart attack and a whole bunch of other things that cause people to die.

Some will be explainable, some won’t be. Some people will die without any medical explanation.

Regardless of what the government decides, these people will die. Some, however, may be preventable depending on what the government decides this week.

Of course, we know that people will also die from Covid-19.

Regardless of what the government decides, these people will also die. Some though may also be preventable depending on what the government decides this week.

My point here is simple. By making certain decisions, the government is saying that one group of disease and illness is more important than others. It’s playing disease favourites.

Instead of isolating and restricting the most vulnerable it’s using a one-size-fits-all approach and it’s going to cause utter havoc once again.

Don’t for a second think that if Covid-19 takes priority that it will be “business as usual” for those needing treatment or emergency care for all the other illnesses and diseases that kill people.

In the 2019/20 year NHS Resolutions paid out a bit over £2.3 billion in clinical negligence payments. What do you think this figure rises to for the 2020/21 year? My guess is it will be a lot more.

This week is now setting up to become even more significant than early March. In fact, if things go the wrong way this week with what the government decides to do, we might be looking at a carbon copy repeat of what we saw in mid-late March.

Quite likely it gets even worse.

Taking aside the medical shambles that will wind out in the community – the UK markets, people’s investments, retirement pots, lifesavings will be right in the firing line. That economic and financial impact also has an impact on mortality rates.

Those are the statistics and repercussions that aren’t considered, but need to be.

Already on Monday we caught a glimpse of what a repeat of March-madness might look like. It could get worse, but we’re going to do our bloody best to help limit that impact on you.

We might be about to step into the September-slaughterhouse. If we can play our little role right, hopefully it just becomes a slightly sorry September, rather than utter decimation.

Five out of 100 is shocking

In mid-day trading Monday, how many of the FSTE 100 do you think were showing a gain for the day?

Just five of them. And with that, three of those six were up by less than 1%. Two of those were supermarkets, Morrisons and Tesco. One was Just Eat Takeaway, another Ocado.

Says something about the direction of things this week.

Everything else was 3%, 4%, 5% down and a mix of some that were stretching out to double-digit falls for the day.

All of this simply on the fact of the extreme uncertainty of what’s coming this week from the government.

At the flick of a switch it will strip away all civil liberties you have. The illusion of freedom has never been so thrust in your face as it is now.

Freedom, really freedom, doesn’t exist and what we’re seeing now is that play out in very clear and obvious ways.

Now this leaves all of us in a pretty messed-up boat together. We are in this, all of us, together. When the government imposes a curfew, we all have to live under those rules. Sure you can protest, complain, get wound up about it, disobey it, do whatever you want really.

But that won’t take away the fact of there being such rules until the government sees fit to remove them.

By all means if you disagree with whatever comes, then you should do what you can, within the law, to show your disdain.

Of course if the law bans disdain, then things will get a little more complicated.

Nonetheless, as I say, we all have to deal with what’s here, what’s coming and what might be around the corner together.

Now, I can’t cure Covid-19. I have a view on how things should progress. I have a view on how I would handle this situation. But I’m not your prime minister now am I?

What I can do is that regardless of how bad this week or next week gets, I will be here, with my co-editor Kit Winder, to help guide you through the financial ramifications of what spills out.

And judging by the Monday markets, it’s going to be a rough ride.

I see things playing out with extreme volatility and that’s going to deliver up some great long-term buying opportunities. For example, Roll- Royce Holdings (LSE:RR) is now trading at a price that it last traded at about 17 years ago.

Another 50% down from here and it will be the lowest it’s ever traded at since the late 80s. Now that’s not to say go out and buy Rolls-Royce. Clearly things may get a little worse before they get better.

But you’ve also got to try and reconcile the idea of what Rolls-Royce will be worth in say five years’ time or ten. Will we still be reeling from Covid-19 in 2025? 2030?

Or does the world recover from all this in a comparatively short space of time? Does the long-term picture of a company like that present a compelling buying opportunity?

That’s the kind of thought process that I’m going through with the market right now. And it is how we’re going to help guide you through the next few weeks and months.

There’s a lot we could bang on about with great amazing breakthrough technologies, and we will remind you that there’s great cause for optimism.

But also, right now, we’re again on the brink of market devastation here in the UK because of poor, dysfunctional government. That means we have to play the bouncer that we’re facing right now and then worry about the spinners coming on later.

Right now isn’t the time to panic. It’s not the time to get overly down about what the markets might deliver. It’s also not the time to try and be perfect with market timing.

Now is the time to have a robust, well thought out and reasoned investment plan. What are you trying to achieve in the next 12 months, two, five and ten years?

The answer to just those simple time frames will have a big sway in how you set up to play the markets right now. It will also help to narrow down the kinds of stock you should be looking at and adding to your portfolio.

Regards,

Sam Volkering
Editor, Exponential Investor

PS It’s very clear that if the government goes down the path of trying to use lockdowns as a way to get to “Covid-zero” we might be on a path to an utter hiding. However, it will again raise the significance and importance of a select group of biotech stocks that may literally be the key to saving the world. In fact “Covid-stocks”, according to one industry insider, might just be the single most lucrative play you can make to stave off complete financial decimation. More on that soon… 

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