When overlaying the data series of disastrous events, analysts then make the two fit, an exercise that usually needs some bold tweaks on either or both scales, especially if you want to make it look more alarming. The usual headline then states something like: ‘the Great Financial Crisis was a walk in the park compared to what is ahead right now’.

Predicting the unpredictable

Of course, investors are incredibly tired of major disasters. After two years of a global pandemic and now a war in Ukraine, predicting the most unfavourable possible outcomes has become a popular sport. Last week, I saw some curve-fitters take the Brexit vote as a blueprint for the French elections. According to the betting odds, the swings in probabilities to one of the extreme candidates fit (or were made to fit) the pattern of the ‘leave’ outcome at the time. Well, we have our doubts that there is an appetite for uncharted change in France after what has been going on abroad. And the bond markets seem to agree with us (see ‘Number of the week’).

Conclusion

But here we are: this is the exact point about the outliers mentioned above. So we keep treating this in a diligent manner with two articles dedicated to the ‘ifs’ and ‘whens’ of the French presidential election. Meanwhile, ‘boring’ is the new ‘bling bling’ when it comes to buying stocks, as investors keep flocking into the solid quality names (i.e. ‘boring’ in a good sense). We will certainly not discourage anyone from doing so, as many of the names were neglected before and are attractively valued.

Please note that due to the spring holiday season, the next edition of the Research Weekly will be out on 25 April 2022.

Number of the week

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