This month’s circular will be longer than usual (10 pages) and to ensure it remains practical and easy to navigate, the following summary points are provided to help frame the dimensions of the issues being discussed:
• Defining what is the Corona Crunch and why it can already be identified as an event-driven crisis and not a structural or cyclical downturn or recession.
• Acknowledging what are the authoritative sources, given this is a medical-led crisis.
• Dispelling some of the elementary confusion between the medical-led crisis and temporary impairments witnessed across financial market asset classes and geographies.
• Appreciating that history does not repeat itself but often rhymes, taking pause to compare the concatenation of events between the comparable April 2007, Credit Crunch and the subsequently enlarged Global Financial Crisis, or GFC (which was also an event-driven crisis) and today’s incipient Corona Crunch of March 2020, and likely to be broadened, Great Corona Crisis of 2020 until 2022 (or beyond).
• Seeing the forest for the trees and ascertaining what actually transpired in China and then globally, drawing on information from datasets we can validate, trust and frankly, believe.
• Through this prism of vulnerabilities, known foreseeable risks and negative residues, spotlight solutions, choices and sign-posts Australian-based global investors can model the world and their future investment deliberations upon.
• Unpack how and why Australian Standfirst’s customised Standard & Poor’s benchmark, blunted the impact and ultimately retained its defensive and conservative rigour compared to the market during the fastest retracement (crash) ever, surpassing 1987 (which is the reference point for stock market crash comparisons).
• Conclude with lessons Family Offices’ learnt during the last event-driven crisis (GFC) and how they mitigated hangover effects, market vicissitudes and hard realities then and now.