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For a contrarian value investor like us, a lot of good things happened last quarter. It all started with China. Shanghai Composite, after the June sell-off, dropped another fourth or so. We aired our concerns regarding the Greek exit and Chinese slowdown in our last letter. It turned out that China was a far bigger problem than Greece. This is not entirely surprising given that Chinese economy is now responsible for about half of world’s GDP growth. However, the extent of slowdown, the Chinese government’s reaction to it and the resultant fall-out took the markets by a huge surprise. Then came the US Fed’s do-nothing decision, which just added to everyone’s confusion. The US market, worried sick at this point, promptly dropped to make the quarter one of the worst since the global financial crisis.
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Notes & LettersA collection of our thoughts, views, and excerpts from our investor letters. Archives
July 2020
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