2020 2nd Quarter Review

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Executive Summary

Uncertainty is the new normal

After the panic sell-offs of the last quarter, many markets have rallied, encouraged by government response and decisive central bank interventions. However, this rebound has been essentially focused on a handful of big names and in the technology sector. Despite these and the Nasdaq reaching new highs, the general mood remains one of fundamental uncertainty, which translates into high volatility and less certainty.

For diversified investors, the net result is that the recent market upswing did not feel like a recovery.

Key Takeaway

The indeterminate timeline of a full economic recovery should make investors nervous. Obviously, everything hinges on the development and sufficient distribution of effective vaccines or cures. In the meantime, as some countries gingerly reopen, the normal patterns of activity are fundamentally disrupted. Jobs were lost, consumer spending is down and, with global demand on mute, exports and private sector investments are expected to diminish.

The silver lining is that there were many more great stocks selling at good prices than before the pandemic. We were ready and have made some valuable acquisitions that fit our strategy. In the current environment, our rigorous stock-picking analysis is all the more crucial. And if our exacting criteria sometimes force us to miss out on part of the exciting highs, they protect our portfolios from many nasty bumps and potholes on the road to recovery.


Science on Covid-19 is constantly evolving, and the short, medium and long-term impacts of the disease around the world, on the economy and on our lives, are still largely unknown. In this environment where uncertainty has become the new normal, discipline and discernment remain more important than ever, both in life and investing. At Exponent, we work on weathering the recession, protecting your capital and helping you profit no matter what the future brings.

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