Central banks will extend facilities to banks which will provide them cheap credit providing it is lent out. I do agree with you that this will probably just go towards asset purchases rather than actual SMEs.
Just a clarification; QE is monetary stimulus and not fiscal stimulus.
Right now, whatās becoming extremely clear is that the real economy needs immediate life support and in practise this means both, though arguably QE might not be the best type of monetary stimulus as first response, as this isnāt rooted in a financial crisis.
A secondary, but perhaps more important side effect is that meaningful support to the real economy should in theory boost confidence. Unfortunately, Christine Largardeās poor messaging didnāt help as at this stage this is about āwhatever it takesā and the real economy and financial system need to hear and see this.
4 Likes
"Itās just a dip. Keep buying"
Oh beloved hindsight !
Just a ādipā huh? The biggest market crash since the great Depression?
ā¦this is gonna be one you tell yer grandkids - āāohh i was there during the 2020 crash ā¦you couldnāt buy bread, water or toilet paper in the shops ā¦āā
2 Likes
Thatās a lot of money. The virus hasnāt peaked yet. Is it too early?
S&P 500 ( SPY ) is down 9.74% in early trading. The circuit breakers will probably kick in when the market opens today.
1 Like
Still just a dip. Just slightly deeper than expected. 
Any thoughts on shell and the likes? Typically donāt invest in oil companies so donāt really understand them, but with such a massive drop it may be worth considering?
Educate me! 
1 Like
Great video by the YouTuber MattMoney, definitely worth a watch as even though heās a YouTuber he works in the oil sectorā¦itās actually BP he works for as another YouTuber let the cat out the bag 
For what itās worth in his latest video he bought more of Royal Dutch Shell, said heās going to release another video soon going into more detail why he decided to 
1 Like
So Oil ā¦ basically fuels the worldās economy.
Will do for the next 20 years at least.
Despite governments āpledgingā to go green, Jo Bloggās tractor in Somerset and Mrs Plymptons old Skoda in Wirral still need ā¦(wait for it) Petrol/Diesel.
As do billions worldwide.
Therefore, thereās a market.
Shell is a mature company - growth is slowing, but it makes massive amounts of money, and therefore pays healthy dividends.
Despite being cheap now, Shell hasnāt cut itās dividend since 2011.
Itās a constituent of the FTSE 100 - (i.e, one of the largest companies on the FTSE) and one of the largest companies in the world. If youāre not investing in this, who will you invest in?
Oil is subject to the OPEC cartel (aka Saudi Arabia) which can flood the market with cheap oil, depressing oil prices and squeezing out competitors. This is what you are seeing right now, and this makes smaller oil producing companies more expensive, but Shell has massive resserves and is very defensive to the whims of OPEC. (lesser companies like Tullow and Standard Oil may suffer).
So, amongst ExxonMobil, SaudiAramco, Petronas, Chevron, China National Petroleum - Shell still kickās Ass !
If any oil company is going out of business, itās certainly not likely to be Shell.
So - buy if you like.
more here:
3 Likes
@saf I would say not too early. I work in EM debt and a lot of the African markets I cover will benefit from being ahead of the curve in trying to blunt the impact that the economic pullback will bring, especially in countries with infrastructure, confidence and other structural challenges.
If sovereigns are downgraded due to stress it will have spillover in which weāll likely see credit lines being reduced or withdrawn, compounding BoP problems further. Everyone will want to avoid this.
The good news is the IMF have mechanisms in place and are well versed in crisis response. The bad news is, itās the IMF.
3 Likes
I purcchased VUSA on Friday and sold it, took loss.
But a lot of Countires in Africa are linked to China in terms of trade, infrastructure and economic development.
Do you not seeing this current climate having an effect ?
Donāt see those long-ass Maersk shipping containers shifting anytime soon.
ā¦why would you do that ?
1 Like
Shell is currently sitting on a PE of just over 5 at the minute!!
So if you can get in now and grab that yield, barring any dividend cuts and them staying around for the next 20/30 years, you could be looking at bagging yourself 15 to 20 years of just sheer profit!!
Still a lot of risk but very much plenty of upside!
3 Likes
Iām just fickle.
1 Like
ā¦compared to BP with a P/E of 17
BP valued more than Shell ???
(what is going on!)
1 Like
Interesting. Adding them to my list for a bit more research - sounds promising though.
I was avoiding the energy sector altogether going into the new ISA season but I may have just convinced myself to add more 3 weeks to do more research, and also see how all this plays out.
On a side note, this is a great time to support each other, offer advice, keep each other on track btw. Money isnāt of course the be all and end all but there could really be a great opportunity to create a serious amount of wealth here, which can buy you the most important things which is time and freedom to spend it with whoever you wish
8 Likes
I had Rank Groupā¦ why on earth did I have Rank Group?
2 Likes