April was a funny month in the UK. Holidays were back, with a vengeance. Everybody seemed desperate to catch up on overdue skiing, Spanish sun, holiday home action. It was hard getting business done over Easter to a level I have not seen before.
But once Easter was over, boy was London back. The school run traffic is back to not-seen-since-pandemic levels (in fact arguably above – see chart below). Restaurants are hard to book. Theatres are busy. This is all on Tuesdays-Thursdays, note, not on Mondays (which are the new Sundays). And lurgy-ridden public transport is still emptier than pre-covid. The tube is used by workers, but cars are used by school mums. But all in all, a pleasant change is in the air.
Nobody has told the FX markets, with the USD up almost 5% against the GBP. In one month. And up even more against the Euro and the AUD. I don’t quite follow this – though it is obviously something to do with relative inflation expectations and the attitude to the Fed.
In the middle of this, the stock markets are taking a bath, and I am getting very wet.
Most notable for me is that I have lost over £100k just on my AMZN position alone, which finished April just under $2500/share (down from an all time peak of around $3800). Being overweight tech, even ‘blue chip’ tech, has not been a good place to be. And being leveraged at the same time has, literally, compounded the misery.
My portfolio contained, at the start of 2022, over $1m worth of just 4 ‘blue chip’ tech stocks. Which between them have shed over 20% on average in 2022 alone. This stuff is seriously harming my financial health.
We started March in the midst of a war in Europe (or, for my Russian readers, a ‘special military operation’). Scenarios such as a rapid Ukrainian defeat, or alternatively escalation to a nuclear confrontation were being discussed in the media.
We ended March with Ukraine very much still in the fight. In fact Russia has for now given up on taking the capital Kyiv. Nuclear confrontation feels less likely than it did a month ago. But, as with all wars, it’s going to last longer than we feared.
All of this is not at all good news for energy costs, supply chains, or the wider economy. It won’t be long before a major European/N American economy reports double digit inflation.
Given this context, it is no surprise that bond markets dipped significantly in March – dropping 3-4% across the board. But there is a welcome surprise of a resounding rise in equity markets in the month.
I have heard it alleged that Vladimir Putin is the richest man in the world. For that to be true, he would need to be worth around $200bn. That would be at least $199.9bn more than the lifelong KGB man/civil servant/politician has declared. Which is just one of the many mind-boggling things we have to contemplate about Russia at the moment.
Even at the start of February, the markets were under pressure – and my more-leveraged-than-usual portfolio has needed care and scrutiny. But I wasn’t considering the risk of a European nuclear war in any of my assessments.
My stance to the news and chaos has, perhaps paradoxically, been to tune out of the market. I believe my portfolio is pretty well positioned and I think that checking its daily movements in no way helps my mental health nor my portfolio risk management. So I’ve reduced the frequency of checking my live updated spreadsheet to barely once a week.