Imperium Capital Publication

Global Matters Weekly – 8 February 2021

To the moon – YOLO

by Lorenzo La Posta, CFA

Tuesday 26th January, it’s early morning here in the UK and still night in the US when Aurelio, a friend of mine, texts me.

Aurelio: “Dude, what is going on with Game Stop? Last week some people on Reddit said they were gonna shoot GME (ticker for Game Stop) to the moon, to $1000 per share! So, I bought a few at $45 on Friday…”

I had not heard anything about Game Stop, so I start by checking the share price: it closed at $77 yesterday, +285% in the past two weeks! Ok, something’s off. I spend a few minutes on r\ wallstreetbets to get a grasp of what apparently is suddenly becoming a coordinated action in one of the largest online communities. I see people yelling stuff like “Let’s get GME to the moon!”, “We own you, hedge funds!”, “HOLD TILL $1000 – AT LEAST” and loads of “YOLO” (i.e. you only live once). Some people are even posting screenshots of their six digit $-gains made over just a few days. I can get back to Aurelio now. He’s no investment expert, yet he’s smart enough to understand what’s going on.

Market Snapshot

  • Global equities rose +4.2% last week
  • Concern mounts after limited trials show the Oxford/AstraZeneca vaccine doesn’t protect against mild/moderate illness from the South African mutation
  • Brent crude oil rose +6.2% to $59.3 a barrel
  • Gold fell -1.8% to $1847.1 per ounce

Global Matters Weekly – 1 February 2021

Emerging Opportunities

by Stephen Nguyen, CFA
2020 witnessed some of the toughest challenges – be it social, economic or political – that most of us have ever experienced. Around this time 12 months ago, the Covid-19 pandemic was gathering momentum, particularly in Asia before it spread further afield, and soon enough the world went into lockdown. As we slowly emerge from the shadow of the pandemic thanks to vaccine breakthroughs, mobility and global economic growth should gradually increase. Emerging markets (EM), led by the Asian powerhouses (primarily China, South Korea and Taiwan), are likely to lead the recovery helped both by them being the engine of global growth but also having managed the pandemic better than peers. Emerging markets outperformed global developed equities in 2020 for the first time in three years: could this be a sign of things to come?

Market Snapshot

  • Global equities fell -3.4% last week
  • The IMF revised their global growth forecast for 2021 from 5.2% to 5.5%
  • Brent crude rose 0.8% last week to $55.9 a barrel
  • Gold fell -0.4% to $1847.65 per ounce