Musings about Life and Investments

  It has been a fantastic rally from 23 March onwards. It was partly liquidity driven, partly led by MAGAF or Microsoft, Amazon, Apple, Google, Facebook, and also speculative, disruptive companies like Tesla, Square, Illumina. The stocks that triumphed were either highly disruptive to existing industries, e.g. Amazon killing small time groceries, Lemonade killing insurance companies, Tesla killing GM, or stay-at-home stocks that you will always use even at home (Google, Facebook, Microsoft).   In the east, Tencent, 700 HK, BABA 9988 hk, and Meituan 3690 HK were top winners. They are also versions of the MAGAF stocks.   These companies are growing at between 30 – 50% per year in revenue, so it is NO surprise and perhaps justified for them to have 30 – 60x PE. They are growth companies, with very little debt, high profit margins. Their economic moat is often VERY wide. Either via:   Network effect. If you leave FACEBOOK and join something else, where else are you going to get updates of

  https://le-grove.co.uk/2020/08/15/arsenal-ditch-disgraceful-leadership-of-raul-sanhelli-now-what-long-read/#more-27867 Above is an interesting article. I've always suspected that not only does Arsenal's owners not care so much, but we have some "issues" in the leadership.  https://www.dailymail.co.uk/sport/football/article-8630469/Arsenal-head-football-Raul-Sanllehi-LEAVES-club.html The article above hints of corruption at the top. If Raul had a hand in giving Unai Emery the role, I will be damned. 1.5 season of waste for Arsenal.  We have the 3rd or 4th highest wage bill in Premiership but end up 8th in the league. We have a higher wage bill than Liverpool, league champions.  I am more positive for season 2020 - 21 as it will be the first FULL season that Arteta will be in charge of Arsenal. Based on the stats below, Arsenal will be challenging for the Champions League place. We will be at least 6th or 5th even if we miss out on UCL and end up in Europa.  https://w

 Look at the trend of infections and deaths. It is declining. We have winter months coming so I would not be overly hopeful at this point. But I am hopeful. Therapeutic treatments are improving. Vaccine is on the way. We may still end up with 1 to 2 million deaths, but the worst appears to be over for now.  Many talked about "stay-at-home" stocks, tech stocks rallying. The rally could be over when there are signs of tapering down of the pandemic. When we can see the end of this disaster, the old economy stocks will finally recover.  I'm looking at the following stocks, adding more positions to: 1. 3M 2. Lockheed Martin.  3. Booking Holdings (travel booking stock that will eventually come good).  4. Facebook (old economy but fair value adjusted up to USD350). 5. Boeing (finally make good as travel business returns).  6. Schlumberger (oil and gas will recover due to travel business returns).

 I recently watched an interview with Bill Gates. He said that a vaccine will almost certainly be found by the end of 2021. Meanwhile, Therapeutics will decrease death rates.  I've observed something even more uncanny. Infection rates have actually fallen n the last 7 days worldwide!   It means that the pandemic may have peaked. If we have visibility of the end of the pandemic, be it end 2020 or 2021, the "old economy" stocks should rally.  Tech may actually correct sharply when the world realises the death tally will be between 1 to 2 million, not a nightmare scenario of a second lockdown.  Stay tuned as I elaborate more.