I just wanted to drop a quick note about what we’re seeing in our portfolio; other than that the high-level action is mostly in line with the broad market (i.e., across the board weak).
This is a tricky situation as it really comes down to this new variant and what the vaccine effectiveness against it is. There just doesn’t appear to be much of a bid for so many stocks so they all keep sliding (except for AAPL - only partially joking). We just need to get some credible report on the variant situation.
The tough part with a lot of attractive names is that we could see a big rally (or fall), depending on what we learn. With a lot of growthy stocks down 20% to 30% off highs (some more, some less) we are in a range where we “usually” start thinking about deals. That’s likely why the market was up over 1% early this morning.
While the situation around inflation and interest rates is certainly another risk out there, Omicron – which is a bit of a wild card to say the least – is the first hurdle.
I’m a little hesitant to cut too many positions until we know more. Admittedly, that could prove to be a mistake. But since there’s so little stock-specific news driving names right now it’s nearly impossible to carve out those names that are clear sells, other than simply going by % down or something like that, which isn’t my preferred strategy.
Again, should we get the all-clear (or something close) on Omicron, I think most of our stocks will rally. At least until investor focus shifts back to inflation and interest rates.
Bottom line – this is a situation we’re watching closely. We’ll continue to be in touch as things develop. At this precise moment we’re not making any major changes in our portfolio.