As Lenin famously said: ‘There are decades when nothing happens; and there are weeks when decades happen.’ The last three weeks has certainly felt like that. As investors we like narratives, it makes the complicated nature of the investment world easier to digest.
Writing narratives in the last 15 days has been more akin to live blogging. The day before the US election, a ‘blue wave’ was coming with the Democrats winning both Congress and the Senate. ‘Buy value’ was the recommended course of action. Then the ‘blue wave’ did not appear as expected. ‘Gridlock in US politics, buy growth’ was the new narrative. Then a potential vaccine for Covid-19 was found. ‘We are going back to ‘normal’ buy value’ returned. As investors have run from one side of the metaphorical ship to the other, it has created huge volatility and sector rotation in markets, the scale of which has been unprecedented. We have had so many unprecedented events this year it is easy to begin to doubt what normal actually is.