This was quite a week in financial markets, so I wanted to add some color to Tim’s message from earlier in the week. Though we continue to have limited information on the Coronavirus, there no doubt will be an impact on business activity, consumer behavior, and investor psychology. Economic and market effects aside, we truly hope that containment and detection efforts continue to strengthen so more lives are not affected. Based on short-term market sentiment, over the last two weeks, the stock market went from being extremely complacent to pessimistic. On a short-term basis the market is very oversold. That does not mean it can’t get more oversold, but a short-term bounce could be likely. Our actions will be driven by what the data tells us, not by emotion. We will continue to sell or trim companies that exhibit high valuations, declining price momentum, and underwhelming fundamentals. We are also ready to purchase companies that offer the opposite and this recent sell off will help to provide some opportunities. As always, risk management is high on our priority list, but we must remain open to taking advantage of opportunities that present themselves.
Enjoy the weekend and let us know if you have any questions or concerns.
Patrick & The Cairn Team