So, week two of isolation and strangely a sense of normality is creeping in. It is amazing how quickly the human mind adapts. Of course, I am lucky in that I can work at home. So many cannot and live with the worry of where their next pay cheque will come from. That is real stress.
The work day starts with our daily 8 o’clock Rathbone Unit Trust Management (RUTM) executive committee (all department heads) video meeting via Zoom. Last week these were often held twice a day as we reorganised our business. Now that all of our staff are working remotely, the meetings are only held once a day and are much shorter.
At 9.30am we hold our first daily Rathbone Multi-Asset Portfolios (RMAPs) team meeting also via Zoom, our portal to the worlds of our dispersed colleagues. Interesting to note that our investment specialist Craig has worn rugby shirts three days in a row … Will finally shaved on Thursday after a week of looking like a low-rent Tom Hanks in Castaway. We review overnight events and agree on our priorities for the day. We allocate tasks, which helps provide the structure you need when working remotely. Our meeting is split into three parts:
- Administration – IT, operations and HR issues
- Investment – what are we doing today? Any changes to our views?
- Communications – review all the questions we are receiving from investors and ensure we address them in our messaging to all unitholders
We communicate all day via a WhatsApp group which is, shall I say, more liberal than our corporate email policy. We are also part of the RUTM bond research team’s WhatsApp group as we are interested in identifying any special situations in the credit markets thrown up by the current price dislocations.
At 4.30pm we hold our daily RMAPs wrap Zoom meeting to review the day and plan any overnight dealing in the US and Asia.
So basically we are fully functioning as if we were in the office. Yesterday, my Bloomberg keyboard arrived so now I have the complete set of systems at home with a 15-second commute (we also have another market data feed, FactSet, which works remotely so was never interrupted). What’s not to like?
We are also adapting to elevated and sustained volatility after a decade when it hasn’t really featured for any extended period of time. It will be interesting to see the dispersion of returns of funds in risk-rated sectors in the coming weeks. My next blog will look at this and what it might mean for the industry longer term.
Intra-day individual stock price movements have been incredible, even companies such as utilities which normally you would expect to be relatively stable. Wisconsin Energy was down almost 10% on 18 March and then rebounded 15% on the same day. Discover was up 70% week to date when I wrote this blog. Gilt yields more than halved in two trading days, from 0.53% on 5 March to 0.16% on 9 March. Not only that, but after those sharp falls the yield spiked back up above 1% before retreating back to the 0.34% of today. We have created a spreadsheet with entry price targets to ensure that when we add to falling stocks, we retain our discipline and only add at new lows. On the other hand we have had to trim some positions as they have moved up significantly relative to the market – Adobe and Amazon are prime examples. Prices move so fast it is often like pinning a tail on a goldfish.
I guess a positive is that being at home means fewer distractions and we are at our desks the whole time, which enables us to react to this increased volatility and take advantage of extreme price swings.
I am in awe of the technology that allows us to function as we have this week. If we get our strategy right over this period and we perform to our expectations in the recovery (when it comes) then we will of course feel a sense of satisfaction, but we will also feel a debt of gratitude to the tech and our IT colleagues that enabled us from behind the scenes.
Stay well everybody and I hope to talk to many of you via my next webcast on Wednesday, 1 April at 10am. Please sign up to join here.
