Gavin Baker+ Your Authors @GavinSBaker Husband, Becky Painter. CIO, Atreides Management. Former PM, Fidelity OTC fund. No investment advice, views all my own. gavin-s-baker.com/ May. 01, 2020 1 min read + Your Authors

1) Fascinating to compare the S&P 500 to the Citigroup Economic Surprise Index in 2008-2009 vs. 2020.

The market bottomed in 2009 three months *after* the CESI troughed.

If we have seen the bottom in 2020, it was at least a month *before* the still declining CESI troughed.

2) History never repeats, it only rhymes.

Perhaps my wise friend had it right several weeks ago when he said, "V bottoms are rare, but so are pandemics."

We shall see.

3) Initially thought that the timing of stimulus may have been relevant, but TARP passed October 3, 2008 and QE began in December 2008.

The fact that the stimulus in 2020 is overwhelmingly larger than 2008/2009 may have been the critical difference.

Ultimately unknowable.

4) This is a time of high uncertainty with no precedents - very unlike 2008/2009 when we could all read "This Time is Different", "The Panic of 1907", "The Forgotten Man", and "Lords of Finance" to get a longitudinal and cross sectional understanding of similar downturns.

5) As always, important to balance conviction with flexibility and stay open minded.


You can follow @GavinSBaker.



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