The Razor’s Edge #9: Correction City

Four different forces combined to create a big sell-off last week, and then a jagged but strong rebound this week. There's of course the spread of the coronavirus, COVID-19. There is the Democratic primary in the US and what it foretells for the Presidential election in November. There is the, ahem, healthy valuation of the stock market, poised at all-time highs before the 7-session sell-off. And there's the role of the Federal Reserve, both in setting interest rates and in providing liquidity to the markets. We try to break down what matters and what is transient here, while conceding that uncertainty is a big part of the overall outlook. Topics Covered 3:00 minute mark - How are you sizing the current market correction? Does this change your stance? 6:30 - Once you figure out your starting point how much does the virus matter? 11:00 - Is there a risk of market contagion? 20:00 - Was repo buying necessary? 21:30 - Has there been a fundamental change in the market such that it won't bounce back this time? 29:00 - NVDA as an example 31:45 - Have you made changes to your exposure? 40:00 - Does something like this week change people's perspectives? 47:00 - How do you evaluate a "drop" vs a recession? 1:00:00 - The election from a markets perspective... general politics.