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Congratulations to our client Gary Beach who has run his second marathon within 3 weeks, having completed the London Marathon on Sunday 27th April and the Brighton Marathon on Sunday 6th April.
It is still possible to show support for Gary’s efforts and for Clear Minds by following this link:
https://www.justgiving.com/campaign/clear-mindslondonmarathon2025
 Tariffs and the outlook for markets
The first quarter of 2025 proved to be very turbulent for markets as the fallout from the new Trump administrations tariffs caused great uncertainty and alarm worldwide. The S&P 500 considered by many to be the most representative index for the US fell by more than 10% from its heights and most other regions suffered falls albeit not to the same degree. Markets have remained very volatile since the announcement with investors looking for clarity.
Short term more volatility is likely, but it is important to bear in mind that the fundamentals have not changed so a clear head and calm demeanour would serve investors well. Many experts believe that tariffs are being used as leverage to negotiate other deals and reports suggest that 70 countries called the US within days of the tariff announcement. Whilst uncertainty causes panic and markets to fall it always brings opportunities and it is always important to look at the bigger picture.
Valuations of US large cap stocks were already at near record highs prior to the tariff announcement and a correction may have been due anyway. This illustrates the need for diversification so that you will be well positioned whatever happens which is why this is a key component of our investment approach.
Please see the graph below which illustrates that despite numerous periods of uncertainty and panic over the last 30 years stock markets have generally trended sharply upwards overall:
Conclusion
- The best overall returns are achieved by staying invested and not trying to time the market. Trying to time the market is nearly impossible, so don’t try to do it just stay invested and you will be rewarded in the long term.
- Market corrections are normal and unavoidable so don’t panic when they happen.
- A well-diversified portfolio invested according to your attitude to risk will help ensure the best long term outcomes and help you achieve your goals.
Source: S&P Smith & Pinching.
Darren Fuller – Senior Paraplanner.
Trade finds a way
We have recently seen the anniversary of a key COVID-era moment.
No, not the first lockdown … instead, the Ever Given getting stuck in the Suez Canal.
Source: Panamanian Marine Authority
This illustrates how fragile the global trade system was. One ship, in the wrong place (very wrong place), and everything stopped.
Four years on, though, it might be worth reconsidering that word “fragile” – or at least the time frame over which it applies.
In 2021, the number of transits through the Suez Canal essentially stopped until the Ever Given was freed – in the week it was stuck, only 11 ships passed through the canal, vs a normal week of around 90-100.
Add that to the chaos of COVID closing ports across the world, and the price of a shipping container went up from $1,500 to over $10,000.
Source: Bloomberg/7IM
Companies were forced to come up with back-up plans, with new shipping routes and fuel strategies and goods distribution capacity.
In 2023 about 30% of all the world’s container goods passed through the Suez Canal. And then, armed attacks in the Red Sea began, reducing traffic by about 80%. Companies like Maersk just don’t use the Canal anymore – it’s too risky.
And the resilience built during Ever Given’s debacle hasn’t been forgotten. Rerouting happened instantly. Other ports increased capacity. Trade continued and container prices today are only slightly above where they were in 2023 ($2,000 per container, rather than $1,700).
It’s something worth remembering when headlines are screaming about trade disruption from Trump and tariffs.
Someone will always find a way to get what’s needed to where it needs to be, as cheaply as possible!
Source: x.com @EricDKoch
The global trade system is VERY hard to block. No matter how big your boat, or how tough your tariffs.
Skyscrapers of the sea
Following on from the previous article, there is another recently disrupted ocean-going industry – cruise ships.
The obvious chart to show is the impact of COVID on cruise passengers, and correspondingly, the share price of Royal Caribbean:
Source: 7IM/FactSet/CLIA
We are well aware that the healthy challenge to any chart insinuating a relationship between two events: “correlation isn’t causation!”, but in this case… it’s probably ok to draw that there’s something going on!
Global lockdowns really did have an impact on the number of people cruising (fair play to the 4.8 million people who went cruising in 2021!), and that hit the shares – down 85% at one point.
If you were an executive at Royal Caribbean in 2021, you were sweating. Because as the world stopped sailing, you’d just started building the largest cruise ship in the world, at a cost of $2 billion…
Source: The Icon of the Seas, Royal Caribbean
The Icon of the Seas made its maiden voyage on 27 January 2024 (sent on its way by Lionel Messi, bizarrely). It has space for 7,600 passengers and 2,350 crew across 20 decks! That is huge!
And in terms of “world’s biggest” competitions, the action is all in cruise ships…
- In 1894, the world’s tallest (habitable) building was the Philadelphia City Hall at 167m. 130 years later, the world’s tallest building is five times larger – the Burj Khalifa at 828m.
- In 1894, the world’s largest cruise ship was Cunard’s RMS Lucania at 12,950 gross register tons. The Icon of the Seas is nearly TWENTY times larger at 248,663 GRT**.
If the same pace of development in skyscrapers happened as in ships, the Burj would be more than 3 kilometres high!
Royal Caribbean kept their calm in 2021. They rode out the short-term volatility in their market, stuck to their strategy and kept building something for the long term… shareholders who stuck with them have been handsomely rewarded. Sound familiar?
Congratulations, not only to Gary, but to Charlotte and Andrew who also ran the Brighton Marathon for Clear Minds. Andrew finished in 4hrs 40, Charlotte in 4hrs 50 and Gary 5Hrs 5. Between them they raised £1261.45 for the charity.
It is still possible to donate to show your support these runners and the charity by following one of these links:
Charlotte & Gary
https://www.justgiving.com/campaign/clear-mindsbrightonmarathon2025
Andrew
https://www.justgiving.com/campaign/clear-mindsbrightonmarathon2025-2
All money raised goes directly toward counselling for those in long term therapy who find themselves in financial difficulties. |
