## 2020; worst, median & best

January 3rd, 2020

Average quarterly

To understand 2020, let’s put it into the context of some other difficult years that we’ve had here in Indonesia. There have been three main times of trouble, first in the late 1990s into early 2000s, second was in 2008 & then 2020. To compare, we use an annual percent change calculated using an average of four quarterly percent changes.

Worst

First, here’s how 2020 is the worst. If we change the annual JCI movements into absolute changes by making them all positive, the late 1990s volatility meant the lowest was 5%. In 2008 the market moves up & down we’re both big, so the absolute average was double digits. 2020 we are at the lowest level of all three, 0%.

Median

Second, 2020 was the median. If we take the moving average of the actual positive & negatives, the late 1990s & early 2000s market returns turned negative. The lowest was -3% in 2002. In 2008 the average was low but still +2%. 2020s three year average return is the same for the actual (plus, minus) as for the absolute, 0%.

Best

But 2020 is also the best. In all the previous years when the market has been in trouble, the annual (quarterly average) returns have turned negative. 1997 was -9%, 2000 & 2001 were both negative -11% & -1%, 2008 was the worst of all, -15%! But 2020 alone is amazingly also 0% & that’s after being 0% in 2019 too.

2021

2020 was a great year to buy when the market was down. But in every other way, average returns, absolute average returns & actual returns, the market is at 0%. The message from this is 2021 stocks’ performance will depend on good things happening. That’s what we will be looking for & we’ll let you know when we see it.

Average quarterly

To understand 2020, let’s put it into the context of some other difficult years that we’ve had here in Indonesia. There have been three main times of trouble, first in the late 1990s into early 2000s, second was in 2008 & then 2020. To compare, we use an annual percent change calculated using an average of four quarterly percent changes.

Worst

First, here’s how 2020 is the worst. If we change the annual JCI movements into absolute changes by making them all positive, the late 1990s volatility meant the lowest was 5%. In 2008 the market moves up & down we’re both big, so the absolute average was double digits. 2020 we are at the lowest level of all three, 0%.

Median

Second, 2020 was the median. If we take the moving average of the actual positive & negatives, the late 1990s & early 2000s market returns turned negative. The lowest was -3% in 2002. In 2008 the average was low but still +2%. 2020s three year average return is the same for the actual (plus, minus) as for the absolute, 0%.

Best

But 2020 is also the best. In all the previous years when the market has been in trouble, the annual (quarterly average) returns have turned negative. 1997 was -9%, 2000 & 2001 were both negative -11% & -1%, 2008 was the worst of all, -15%! But 2020 alone is amazingly also 0% & that’s after being 0% in 2019 too.

2021

2020 was a great year to buy when the market was down. But in every other way, average returns, absolute average returns & actual returns, the market is at 0%. The message from this is 2021 stocks’ performance will depend on good things happening. That’s what we will be looking for & we’ll let you know when we see it.