Probably stupid to tweet this, and I do so with suitable humility knowing full well I could be totally wrong (no one really knows), but this really does feel like the bottom (for markets; not the economy/corona spread). 1/n
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Could do, but as ive noted you also have record low bond yields, more QE and a lot of cash on sidelines. Stocks will continue to fall while people are scared, but when confidence stabilises/returns, the above will matter a lot to where valuations settle out.
What if there’s a shortage of liquidity. Many industries have no revenue. They need to generate cash. Selling equities is one way to do that? Don’t know how significant a portion of the market that is. I’ve advised my small business friends to generate cash ASAP if they got debt.
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Since the GFC, most large corporates manage their finances such that they have ample liquidity at least 12 months out, including committed bank lines/revolvers. A lot of funding is long term also these dahs given permissible debt markets in recent years. So wouldnt overest risk.
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The banks can’t pull the lines? They can on us micro caps.
@orrdavid - 2 more replies
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