Russian Variant

When the bushfires of January 2020 tore along the east coast of Australia like a fireball, we rallied hard.

Concerts full of people made pacts to never let it happen again, while others made pledges to save every burnt koala with lots of love, leaves, and clean water.

And then COVID appeared.

And within days, everyone had forgotten the fires and the charred koalas.

COVID was a curse and a blessing.

When our lives were tipped upside down it left us confused, frustrated, and decision-fatigued.

But then the blessings started to arrive.

It catalyzed breakthroughs we never thought were possible, such as vaccines at warp speed. It also forced us to appreciate connections we assumed would always be there.

And now we have Russia, the new variant. And just like the bushfires, COVID is no longer front and centre of our minds.

Like COVID again, Russia is occupying our minds like a big game of chess laced with terror…if this, then that.

Everyone’s trying to work out the next move.

The problem is, analysing the hell out of something based on your own perceptions can give you a biased outcome.

Worst of all, you begin looking for things that are not there. True terror.

You can see it in the markets. Buyers and sellers are trying to work out the machinations of Russia, Ukraine, China, America, and Europe and what it means for asset prices.

But it doesn’t need to be that complicated.

If an asset is overpriced, it will always be vulnerable to events like Russia and get shaken down.

Water always finds its own level.

And if an asset is not trading at nosebleed levels, it will be ok.

Since I began my career, I reckon I’ve pretty much seen (and felt!) it all…

There was the Asian currency crisis in ’97, the dot.com bust in 2000 when the NASDAQ dropped 84%, 9/11, the global financial crisis (GFC) in 2008, the pandemic and now Russia.

There are two things in particular I’ve learnt from these events:
1. There will always be something to worry about, and
2. As soon as we get used to something, we move on.

Note – getting used to something like 9/11 or Russia doesn’t mean we accept it, we just get used to it.

And that’s why, as much as we despise the atrocities of Moscow’s madness and the possible knock-on effects, we’ll eventually move on.

And when will that be?

As soon as the next variant appears that threatens us more than the last, such as inflation and interest rates.

Seems hard to believe doesn’t it?

Just ask the koalas.

Have a great weekend!

Adam