Share Indices in July 20

July 20, yet again, turned out to be ‘A Tale of Two Economies’. Tech – particularly BIG TECH - has continued to soar. NASDAQ was up 6.4% in July making it a massive 18.5% INCREASE YTD. Conversely, the FTSE100 - which now has only two tech constituents and is a kind of proxy for the ‘rest of the economy’ -  dived another 4.4% in July making it an equally massive 21.8% DECREASE YTD.

The UK FTSE IT Index was up 6.7% in July but is still down 7.5% YTD. The FTSE SCS Index  - which most closely tracks the UK publically quoted software and IT Services companies that we track at TMV – was also up 5.6% in July but down 10.1% YTD.

Outlook

COVID-19 is the first pandemic I have witnessed. I don’t have any previous formbook to consult. We do know that the UK – and probably the world – is looking into the abyss of the deepest recession of my lifetime (Even I wasn’t around in the 1930s!) I ought to be suffering along with the rest. But the Holway Share Portfolio is going great guns – up over 35% YTD – as I am many invested in either Big Tech or companies like Computacenter and Kainos that have been having ‘a very good C-19’. On top of that our own TechMarketView LLP has just finished a surprisingly good quarter with double-digit growth. We too seem to have what our customers – old and new – seem to value in these strange times. Of course, it helped that we’d all been WFH since inception in 2009 – so disruption to working practices was minimal.

I suspect – fear - the future will be one of great polarisation with the good doing very, very well and the bad (or just the mediocre) not managing to survive. Problem is that even if you are doing well but all about you are suffering, ultimately you will suffer too. Everyone is part of an extended family where some members will require support. In a wider world, taxes will have to go up to repay debt and those that are doing well are bound to have to pay more. At the extreme, we could see a return of civil unrest – even riots on the streets – if sections of society are badly hit and see themselves as badly treated. A polarised society is no good to anyone. At the end of the day, all strata of society must have some level of success or society itself will breakdown.

For an extended and detailed review of Share performance in July see HotViews Extra - available to all paying subscribers including HotView Premium.

Posted by: Richard Holway at 18:26

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