In my 23 years of being involved with stock markets for a job, I’m not sure I’ve witnessed them fall so much, so quickly. These are troubling times. The coronavirus may be seen as a temporary event but that does not mean it cannot do a lot of damage to company profits, cash flows and share prices whilst it lasts. The lockdowns that are now increasing across Europe and probably soon in the United States will see a big reduction in economic activity and probably lead to a world recession.
I have no doubt that if the current state of affairs continues there will be a lot of damage to the economy. Companies will go bust as cash flow dries up; people will lose their jobs and people’s behaviour will change - perhaps forever.
Amongst all this doom and gloom there are rays of light. Shares are getting cheaper and there are some decent businesses that are beginning to look cheap for those who can see better times ahead.
I know it’s not easy when you see the value of investments getting battered every day as it seems to be at the moment. Yet, this is a great time to build a watch list of companies to buy when you feel the time, and the price, is right.
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