As the CORONAVIRUS led to lockdown and stock markets fell we were buyers of equities. We based this not on optimistic expectations of recovery but on our being able to diagnose panic in markets. One of the most profitable times to be buying is when people are selling irrespective of price.
In the last 50 days the US stock market has undergone the largest rally in its history, returning nearly 40%. The NASDAQ, where most of the technology companies are listed, has not just recovered, it is trading at an all-time high.

You will note that the lockdown is not ended and indeed additional troubles have been added to the list of things to worry about. The reason for the rise in stock-markets is not because of fundamentals, it is liquidity. The Federal Reserve dropped interest rates and flooded markets with money. There is an old investing adage: “don’t fight the Fed” and in this instance it has been right to allow the effortless streams of money to raise portfolio valuations. But one must be careful that our senses are not dulled by this. We have reduced our equity exposure to secure these profits and to deepen our reserves of cash. One day people will again look at fundamentals and we are not so sure they will look at them with the same blasé optimism as markets would, on the face of them, be predicting.