Could We Have Seen The S&P's Historic Rebound Coming?

By the Thursday morning, after two propulsive rallies in a row, at least I wasn’t too dismissive:

And I have to give a shout-out to the single best call on that Tuesday morning, from my friend and former colleague James Mackintosh, now of the Wall Street Journal. This is how he began his piece:

The true contrarian only buys when it makes him feel physically sick to press the buy key. At the moment I not only feel sick at the idea but want to disinfect the keyboard before using it. Does that mean it’s time to buy?

Amid the great confusion, it wasn’t that difficult to see that a major low was nearby and that it might be time to start accumulating; it was very hard to discern that it was time to pour everything you had into the market to take advantage of the greatest yearlong rally ever. And in one thing I was flat wrong. I said that the final low “cannot come until the virus is under control.” In the event, the virus still isn’t under control and yet the market has almost doubled. While the worst scenarios that seemed possible a year ago haven’t happened, the pandemic has caused far more death, and economic disruption, than most would have predicted at the time.

It is still extraordinary that the pandemic has been so terrible and yet so much wealth has been created. That is the power of the liquidity that has gushed into the market over the past 12 months. It would be great to know what, with the benefit of hindsight, we will all be saying about this in a few more years.

Survival Tips
A propos of nothing, I stumbled across this video while writing this. It’s an hour-long documentary that tells the story of the making of Do They Know It’s Christmas?, the charity song released in 1984 that became the biggest-selling single ever in the U.K. to that date, and made the reputation of Bob Geldof. I turned 18 in 1984, and the whole episode felt like a big deal at the time. I have found watching to be the rough video-streaming equivalent of being given hot fudge sundae in an intravenous drip for an hour. 

I appreciate you might have needed to be there. But to all those of you who weren’t teenagers in England in 1984, I hope it’s fun.

John Authers is a senior editor for markets. Before Bloomberg, he spent 29 years with the Financial Times, where he was head of the Lex Column and chief markets commentator. He is the author of The Fearful Rise of Markets and other books.