Livermore Partners‘ David Neuhauser discusses that he is expecting an ‘L-shaped’ economic recovery.
Dear Partners and Friends,
Just a quick note as we end Q2 and look to the second half in a year like no other...
COVID-19 is proving to be a game changing event for business, consumers, and the way we function in day to day life.
Even with all the unknown and hopes of a quick recovery, the outlook is unclear as far as what type of recovery we will see. Markets are pricing in a V-shaped recovery and the massively overpriced tech space is in an Internet like 1999 bubble.. So a very odd time for investors that are prudent and focused on value.
June was another positive month for the fund. Up approximately 4.5 percent MTD and now up 68 percent from our extreme March lows. We still are focused on value and yet weary of current market dynamics.
Our focus remains special situations and there are a number of new opportunities we are involved in which may offer strong investment returns. Hope to share more in the coming month or so.
In the meantime, below is a link to another recent podcast Livermore took part in. The first link is the full 32 minute interview and the second is the quick 2 minute recap. Feel free to have a listen.
David Neuhauser, Livermore Partners, on the 'L-Shaped' Economic Recovery
All my best and Happy 4th of July!
So the way you look at it is you have to still look at you know, markets is just like economies run in cycles. And if you look at the past decade, as we've known it's been predicated on low interest rates which is caused you know, by central banks that has caused obviously economic development and along with tax cuts and that's where we've seen the massive amounts of stimulus, which has fueled growth for a number of years. I do think there's two, you know, there's two things you have to look at.
One is the economy, as they say. And there's one that there's the markets. And from an economic standpoint, even with vaccine, which, you know, at a bull case, I would say you're talking about 12 months or 18 months from now, you're still going to look at sustainable higher levels of unemployment, you're still going to see a lot lower economic activity, you're still going to see no just less overall activity in the economy in terms of retail, in terms of travel and leisure, in terms of purchases.
When you include that all in to where we been to where we are today and where we're going. You have to look at it and say, you know, big picture, you know, we most likely have seen the best days behind us in the past, you know, 5 or 10 years and going forward. It's gonna be a rough road.