Quantum Wealth Summary

 

  • The market bloodbath of March 2020, following Covid-19’s spread, created rare opportunity.
  • From March 2020 to January 2021, market indexes recovered 55%.
  • Certain stocks and industries did even better.
  • Today, we see another round of drawdown based on inflation, higher interest rates, and fear of recession.
  • In this report, we look at 2 logistics stocks — one in property, one in fulfilment — that could be ready for growth with income.
  • As a bonus: we also reveal our Weekly Top 5 Quantum Trends. These are the most impactful global opportunities that we are currently watching this week.

 

 

I was travelling back through Singapore’s Changi Airport when the risk of a deadly new coronavirus first came to my attention.

It was January 2020.

Most of the shop assistants at the airport were wearing masks. Not unusual in Asia if someone is sick. But definitely unusual when so many are wearing them.

We were quite ill when we arrived home.

Did we catch the first wave of Covid-19?

I will never know.

This pandemic did not become a global emergency seriously threatening financial markets until late February to early March 2020.

As countries were thrust into nationwide lockdowns by their governments, markets started to plunge.

  • Between 4-11 March, the S&P 500 dropped 12%, signalling a bear market.
  • On 12 March, the S&P 500 plunged 9.5%, the steepest one-day fall since 1987.
  • From a record closing high on 19 February of 3,386, the S&P 500 fell 26% just over 3 weeks later to 2,480.

It is what happened next where fortunes were made:

  • From its low of 2,480 in March 2020, the S&P 500 recovered and reached a new record of 3,849 by January 2021.
  • In other words, from buying the average position in the index in March 2020, there was 55% upside by January 2021.
  • Of course, certain recovery-ready stocks did even better than that.

 

S&P 500 Index, January 2020 to July 2022. Source: Statista

 

Back in March 2020, we invested. But not enough.

We saw portfolios go from $1 million to $2 million between March 2020 and 2022, combining high recovery returns and the addition of cash and margin.

With the benefit of hindsight, we could have done more.

But, in our defence, we did not foresee one powerful force: the extent to which governments would ‘print’ money, barrelling cash into assets like stocks and housing.

Further, the state directly funded businesses in the form of wage subsidies and targeted industry support.

Our investments in one childcare property REIT in Australasia took off following federal support of that sector during Covid-19 lockdowns.

Perhaps we should have seen it coming?

Back during the GFC, the playbook was written. Back then, governments and central banks regretted they had not pushed out the monetary and fiscal rescue boat far and fast enough.

The March 2020 market crash provided the opportunity to do so.

Today, we face a new conundrum: the financial rescue from Covid-19 has caused inflationary pressure around the world. Interest rates are being hiked up fast. And the markets face new headwinds.

 

What I learned from the GFC and the March 2020 crash

 

Well, a few things:

  • Buy quality assets at sharp prices when they come available.
  • Stick to your convictions.
  • Invest in the industry trends you’re seeing.
  • Strong cash flow and dividend income helps a lot.
  • Fundamental value and earnings growth are key.

One area where today’s market conditions are revealing value is in the logistics, warehousing, and e-commerce space.

Today, I want to report on 2 companies that could be sitting at value.

Could these present opportunity for future growth and income?

 

 

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