Year-end thoughts and positioning for 2021

2020 was a year of the “unprecedented”. Pandemic, Unemployment, market volatility, multi-baggers, income disparity, geopolitics etc. I am glad this year is coming to an end and wishing for a better and rather boring 2021.

In terms of trading and investing, what worked?
– Almost anything related to Healthcare, Software, Innovation, Chemicals in the 1st 9 months of 2020.
– Then came reflation and economic growth related flows in the last two months propelling banks and energy among other sectors. It’s exciting to note that these few months could be a potential turning point against a multi-year downtrend in the energy sector.

Going forward, which sectors are investors focusing on implicitly from recent flows and overall strength? I have done this analysis based on
1) where the stocks within each industry are relative to the overall market (i.e. their relative strength) and
2) to themselves (compared with 50 day volume weighted avg price).

Below is a table showing this for 5 major countries I follow: Japan, HK, China, India, US.

Note: Shaded sectors show an overlap across 2 timeframes in the same country.

One can amend or incline their portfolios in the market’s direction or choose to be a contrarian. Neither is wrong, I prefer the former.

Feel free to reach out for a discussion on companies in the listed sectors.

Happy holidays!