I was asked the other day how, in one sentence, I would describe what’s taken place in markets, and the economy more broadly, since then. Rather than a sentence, I used one word – “pandemonium”. There is a serious point here, though, as not only have the last few years had pretty much everything you could imagine, there are also plenty of learnings that one can take from the pandemonium that’s played out.
Now, clearly, we can’t go line-by-line though everything that’s happened over that time period. So much has taken place that my fingers would be ground to the bone typing it all out, and the note would run to the length of a PhD thesis. Nobody needs either of those.
The best place to turn to, then, is a chart. The S&P trading at 2,200, the VIX north of 80, 10-year yields pinned at 0.5%, and near-15% US unemployment all now feel like a long, long time ago.
All this is, of course, very interesting, particularly for market historians. However, it is all very backward-looking. What is most important is to identify the key takeaways from the tumult of the last few years, and the lessons that one can learn, which can be applied to the present day.
Several spring to mind.