Inside the mind of investors - Nov 2022 - Edison Group
Tech is stumbling, the US$ is king and no one really knows what happens next. But everyone is craving stability.# Effective investor relations are reliant on having deep insight into what investors are thinking. So every month Edison brings you Inside the Mind of Investors.
With a strong economy through Q3, you might think US investor sentiment would have taken a long hard look at the dregs at the bottom of its half empty glass - but decided to descend no further.
And with the bull-bear spread rising more than 14.5% in a single week, your expectation would be right. But no investor is mistaking this for an honest-to-goodness rally in confidence.
The UN’s catastrophe warning was an unexpected reminder on climate - and the open question of how bad things might get before net zero. And in the shorter-term, where do you go when the FAANG’s bite goes soft? Meta’s metaverse is disappointing many while Amazon and Alphabet earning flagged. Meanwhile, much of the next wave of tech – such as generative AI with its outfits like Stability AI - are still raising venture rounds.
Across the way in Europe, investors are even less certain of what turn events will take next. The hot conflict shows no signs of abating, placing the relationship of the EU’s power couple - France and Germany - under increasing strain.
Amid all of this, many professional investors remain focused on one thing globally - selling stock as fund redemptions continue. With warnings of ‘rising market stress’, investors are selling stocks where liquidity is strong.
Which might not be the same as their preferred disposal strategy. Managing the downside is still very much the order of the day for many.
However, we also note more bullish voices emerging.
Fund managers with liberated cash and a five year horizon see many bargains. Edison’s own ‘IPO Apocalypse’ note and Consumer Watch quarterly ran screens which reveal oceans of value based on fundamentals.
And there can be no doubt that investors remain engaged. Our content output is being read, and watched, by record numbers. Many clients are enjoying more than 10,000 monthly investors digesting the content we create.
What will turn more of the sidelined bears into active bulls? The one word answer is ‘stability’. Whilst the change of government in the UK has gone a long way to build confidence, no developed nation has a firm-footed economy.
Not that investors need things to pick up to begin moving larger sums back into the market. What they need is greater certainty that the bottom of that half-empty glass is indeed now in sight.
Published by: Edison Group
Published 24 November, 2022