Viking

This is my favourite post of the last couple of days. I find it is always instructive to understand what is actually happening in the real world. I am trying to understand what is going on today at the hospitals in New York and Washington State. In New York it looks like they are at the edge of the apocalypse. It absolutely amazes me the incredible personal sacrifices health care workers in the hot zones (US and around the world) are making right now. They are putting their lives at risk (not to mention the long term emotional and psychological damage that is being done). Can you imagine what this hospital would look like in another week or two if social distancing measures were not put into place when they were? Holy shit. It looks like it will get much worse in New York before it gets better. Who wants to be a health care worker right now? They are kind of like soldiers being sent off to war except they are about to run out of ammo... And the generals are not aligned on strategy. And little is known about the enemy. They are the heroes in this battle. They need our support (and this includes the policy response).

Canadian media (and federal and provincial governments ) is also in on the plot (to undermine Trump’s presidency) because they are saying the same thing. Europe too. It finally makes sense. Trump has finally figured it out... and everyone in the globe is in on it :-)

Great news! Congratulations :-) Hope mom and baby are doing well.

Interesting article. If the authors are right, it's a game-changer. What's the push-back to this? What are they missing? We all hope there is a way to combat the virus without having to resort to some sort of lock down. The more aggressive the testing (and contact tracing), the softer the lock down. Information and facts informs what you do. Both Canada and the US have not been testing aggressively enough and therefore have limited information so some sort of lock down is the only solution in the near term. My issue with the study is they are simply making a blind guess, which forms the basis of their analysis: “ An epidemic seed on Jan. 1 implies that by March 9 about six million people in the U.S. would have been infected. ” And then they say: “ Given the enormous consequences of decisions around Covid-19 response, getting clear data to guide decisions now is critical.”

Fair enough. What's your take on the Democrat's reluctance to support the stimulus bill? What do you expect of them? The Democrats fully supported passing a stimulus bill. As do all Republicans and the President. I think the bill that is finally passed will be much better for the American people than the one proposed by Senate Republicans on Sunday night. It is $2 trillion and the extra 48 hours looks like time well spent. The Senate, House and President all have roles to play in this drama. As do Republicans and Democrats.

Of course Trump will make that choice! - he is the evil Donald Trump and is a mass murderer. He should have been impeached long ago. While the economy gets destroyed - you guys with good jobs could give 2 shits about Joe/Mary Sixpack that lost jobs and live paycheck to paycheck. Like Trump, they are just greedy money grubbers! Screw 'em. So, yeah - NO debate needed on Trump attempting to save the economy - you guys got it all figured out! You guys are a joke! Everyone sees what happened in Wuhan, Iran and Northern Italy. In these regions it has been a humanitarian disaster for 'Joe/Mary Sixpack' and everyone else involved. It is because people on this board care about 'Joe and Mary' that they expect a lot from their elected leaders. In times like these it is normal to scrutinize what they say and do.

Part of the problem is when regions get to community spread they stop testing (or they are not able). So the reported numbers by region are highly misleading and difficult to compare. I will begin to feel much better about the whole situation once testing is available and executed like in South Korea, Taiwan, Singapore etc. Until then we continue to fly blind. We are moving in the right direction; the question is how bad does it get in the near term as we try and get it figured out. Do we get Northern Italy breakout in other cities?

One would think that a priority of the Leader would be to get the country unified in its approach to dealing with the virus. KISS - keep it simple stupid. I do agree that different regions in the US are at different stages in dealing with the health crisis. The differences are currently of a timing nature (the virus is pretty much the same the world over). Washington State is further along, followed by New York City. The data is pretty straight forward in how the virus is spreading nationally. So i can understand how each region would have a different approach to deal with the outbreak. The real problem with talking about the post-virus world at this very early stage is it will likely cause most average Americans to mentally skip the current reality and ignore what needs to be done today. If we are a few weeks away from the post-virus world who gives a shit about what needs to be done today? Business as usual. By all means discuss the post-virus world with experts behind the scene. But keep it out of the public eye for now. Win the war first before you start planning the victory parade with the public. Imagine the war effort in the UK if two months into the Battle of Britain if Winston Churchill told the public that they should start thinking and planning for getting back to their normal pre-war life. The enormous sacrifices needed to win the war would not have happened. But what if at the beginning of the war Churchill deemed the economic sacrifices of the war effort to be too great? And the psychological effects of the war too great for the people to bear. The UK would have lost WWII. Actually, Chamberlain tried that in the mid 1930’s and they found appeasement did not work out all that well against an enemy like the 3rd Reich. It was a talented, motivated, relentless and vicious adversary. Fortunately the virus is a much lesser enemy. Why Trump's call to restart the economy in April is being derided as 'totally nuts' - https://finance.yahoo.com/news/why-trump-to-restart-the-economy-in-april-is-being-derided-as-totally-nuts-190129407.html

Of course his first priority is himself. He's a narcissistic personality disorder and likely a sociopath. He doesn't care about reopening for "the economy" in general, he knows this current path doesn't lead him to get re-elected, and it's really bad for his hotels and resorts and his debt payments, and if he's out of power it's dangerous that he'll be investigated without pardon power, so he's ready to gamble it all and put all his chips on 15 black and spin the wheel in the hope that this other approach may be better for his election and businesses. He's been incredibly lucky all his life, born to wealth, getting away with all kinds of stuff, becoming president.. He's just gambling with lots of lives and the US healthcare system in the balance that his luck will hold. And he didn't know back then. He's not intellectually capable to have understood the implications when it was still theoretical, and he's surrounded by yes-men and he fires or drives away anyone who's independent-minded pretty quickly. Listen to him talk about any of this and it's just a bunch of word-salad "it's great, going tremendous, big effort"... No real understanding. Even now as people are dying and hospitals are being quickly turned into disaster zones, he's not listening to the people who know what they're talking about, he's driving away Fauci and contradicting his task force on TV and picking petty fights with desperate governors who need federal help. He's likely never even spoke to anyone on the front lines of this and shows zero empathy for anyone dealing with this, only worry for himself veiled in language about "the economy" (which was how he always said he measured his presidency, always talking about stock market records, etc). “word salad” . Had a very good hearty laugh after reading that description of Trump speaking. That will help when i listen to him in the future :-) Thank you Liberty

The successful counties all have a number of things in common: robust, aggressive testing process in place. Information is communicated via their cell phone (personal freedom is secondary). Their populations are also educated and supportive of containment measures. Most everyone wears masks when they are out. Until we are able to do all these things we will need to keep everyone in lock down (very blunt instrument). Much should change in the next 8 weeks. Smart people should be able to figure this out. The sooner the better. I am least optimistic on the timing front; politicians and elected officials are often not the best and the brightest (and i say that will all due respect). FDA has now approved the routine nasal swab for COVID testing. Removes another bottleneck. Expect testing to be widespread and easily available. 45-60 minutes turnaround time for inside the hospital, a day or at the most two for drive through testing. https://www.fda.gov/emergency-preparedness-and-response/mcm-issues/coronavirus-disease-2019-covid-19 CMS did a nationwide conference call with physicians today (Seema Verma and Deborah Birx were on it) - what is notable is how quickly this administration is removing roadblocks to Telehealth, and to COVID testing. FDA has also set up numerous clinical trials for treatment and prophylaxis, so that we find out what works and what doesn't. While the planning phase was an obvious botch up, it's been more than a decade since anyone in administration has been even bothered to talk with or listen to physicians in this country. On the downside, if we open too soon, while the economy may or may not improve quicker (don't know enough to comment), what is certain is COVID clusters will show up in hospitals uninvited and be a healthcare transmitted infection (plenty of precedent with MERS-CoV in Middle East). I shudder to think of the safety of our healthcare workforce in the coming months. What's not clear from the decision makers isn't "what we will do", rather "how we will decide". I'd think the data about daily cases and deaths will drive this decision, as well as lessons learned from European countries a few days ahead of the US. Doc, i do see some green shoots starting to come up. The news on the testing front is very encouraging. So much still to learn. Fortunately, lots of very smart people are highly motivated and working overtime on finding solutions. And yes, “how we will decide” will be very important in the coming weeks.

Back to 100% cash. Sold everything i bought yesterday for a 6.5% average gain in 24 hours. I am lucky as all of my investments are in accounts where gains are tax free (I pay taxes when i withdraw the funds). This greatly simplifies the investment decision (to not have to think about taxes). This volatility is crazy. Soon (next 7-14 days) we will start to see the health and economic damage in North America. Could be ugly. Happy to sit in the weeds and see what Mr Market serves up moving forward...

The successful counties all have a number of things in common: robust, aggressive testing process in place. Information is communicated via their cell phone (personal freedom is secondary). Their populations are also educated and supportive of containment measures. Most everyone wears masks when they are out. Until we are able to do all these things we will need to keep everyone in lock down (very blunt instrument). Much should change in the next 8 weeks. Smart people should be able to figure this out. The sooner the better. I am least optimistic on the timing front; politicians and elected officials are often not the best and the brightest (and i say that will all due respect).

So he's basically aiming for doing worse than Italy... https://www.cnbc.com/2020/03/23/coronavirus-trump-says-businesses-could-reopen-soon-while-fighting-covid.html Let's hope this thing just happens to be highly seasonal and his dumb luck holds one more time. Ok, as has been stated Trump is clearly wanting to get the economy moving in the next week or two. What exactly this means is up in the air. The question of the day was something like “will this message not submarine your social distancing message”. The answer was something like “no, this message will motivate people to do a good job over the next week with social distancing so they can get back to normal shortly thereafter”. I bought a bunch of stock today thinking buy and hold. If Trump ignores the advice of his medical experts and opens up the economy my guess is we may see a relief rally in stocks. And i will likely sell everything again and sit in cash. My guess is the virus will reemerge in clusters in many more parts of the country, we will then go back to lock down, and the stock market will plunge yet again. Trump really is doing the best he can. I believe that. And it scares the hell out of me.

Bought a bunch of stuff this morning. Now 35% invested and 65% cash. - 11% Berkshire (gives exposure to Apple, US financials, insurance, utilities) - 4% google, microsoft, facebook - 2% fortis gas (TSE) - 1% Bell (TSE), Verizon, at&t, nike, disney, starbucks, General dynamics, abbvie, suncor - 0.5% west fraser timber (TSE), rogers sugar (TSE) Will buy more on weakness...

Look at it with a wider perspective maybe you are right. Maybe I just listened too much doomsaying :-) I am in Spain. 13 million people working in the private sector vs 14 million people comprising retirees receiving a rent from the government + unemployed receiving some type of subsidy + public administration employees (data as of december 2018, but its been like that for a few years). For how long can that situation be sustained? https://www.libremercado.com/2018-12-19/insostenible-13-millones-de-trabajadores-del-sector-privado-mantienen-a-otros-14-que-dependen-del-publico-1276630056/ (in spanish) Elliot, what you are describing is a situation for you, not a problem. There is a big difference. You need to reframe and come at the variables you can do something about, of which there are many. Sorry to get teachy preachy. You might find the following useful (a framework to think about the future, which lots of great mental models) Designing Your Life - Bill Burnett - Ted Talk -

Agreed. If you are young you are likely going to get the buying opportunity of a lifetime to buy stocks, just like in 2008. Also, if you live in Canada and you wanted to buy real estate you will likely get your chance in the next 12-18 months, especially if the recession is severe. The key is to reframe the situation amd look at it through a new lense (not the old one).

I think indexing/eTF investing has been pretty popular the last 10 years. The big selling will hit everything. Yes, quality will sell off less but it will still go lower on weakness.

US cases have just ballooned to almost 40,000. An increase if 15,000 in less than 24 hours. Wow! Yes, we are seeing ‘pent up’ cases. This is alsp providing some clarity as to just how large and wide spread the outbreak really is. Containment is clearly no longer a viable strategy. Full lock down coming to the entire US in the next week or two. Exploding case numbers and limited medical supplies is not a good combination. Mnuchin said this morning lockdown will likely last 10-12 weeks. Family of 4 will get a one time payment of $3,000. That should cover it. In terms of how long this is going to least and the economic damage it is going to inflict all estimates so far have proven to have been wildly optimistic. Mnuchin says Trump administration, Congress nearing agreement on financial rescue package - https://www.washingtonpost.com/

Liberty, thanks very much for posting the links to many informative articles. Please keep them coming :-) How will we know when we’re through this? The world is not going to begin to look normal until three things have happened. One, we figure out whether the distribution of this virus looks like an iceberg, which is one-seventh above the water, or a pyramid, where we see everything. If we're only seeing right now one-seventh of the actual disease because we're not testing enough, and we're just blind to it, then we're in a world of hurt. Two, we have a treatment that works, a vaccine or antiviral. And three, maybe most important, we begin to see large numbers of people—in particular nurses, home health care providers, doctors, policemen, firemen, and teachers who have had the disease—are immune, and we have tested them to know that they are not infectious any longer. And we have a system that identifies them, either a concert wristband or a card with their photograph and some kind of a stamp on it. Then we can be comfortable sending our children back to school, because we know the teacher is not infectious. And instead of saying "No, you can't visit anybody in nursing home," we have a group of people who are certified that they work with elderly and vulnerable people, and nurses who can go back into the hospitals and dentists who can open your mouth and look in your mouth and not be giving you the virus. When those three things happen, that's when normalcy will return.

This is a tough call. If they agree to cuts and Russia is on board, I think oil pumps up a bit. But the demand side of the equation. It's anyone's guess at this point. I'm still thinking WTI tanks below $20, and Brent goes to about $20. At that point, I'm starting to buy the majors and some midstreams. 10% of the portfolio goes into this. Is the news article essentially saying the US is going to join OPEC? Wow. Amazing how fast the world can change.

But does anyone on this board seriously think any Western society is able to remain in lockdown for more than a month before the entire support base under such measures will quickly fall away? No sports, no entertainment, no parties, nothing to look forward to... and people growing bored and getting immune to the corona news really fast. I get how in theory it could take many months to kill the virus, and how in theory it's a good exercise to think how disastrous this would be to the economy, but this isn't a theoretical society, but a real one that consists of actual people. With mortality rates that low even before mass testing will take it down much lower, people will revolt. In a month we should have better treatment, much better testing etc, but even if we don't and the virus is even bigger than it is now, I'm 100% convinced life will resume for the young, as you won't be able to hold them down anymore. And we'll just live with the virus until a vaccine pops up. Our response is to 'flatten the curve'. The result of this blunt approach is it takes longer to get through the crisis. How much longer? No one knows :-) People will do what they have to do. People have consistently been grossly underestimating the virus for 8 weeks. My guess is this is still the case on March 20.

All the initial economic estimates for China were way too optimistic; virus caused much larger economic contraction than expected. And the re-start has also been slower to materialize. The challenge in the West is we are taking a very different approach to managing the virus than China, South Korea, Taiwan and Singapore. Our approach is the blunt ‘flatten the curve’ (social distancing followed by lock down) but without all the other measures implemented in the asian countries. I am starting to think that our blunt strategy is going to need to be in place for longer (2-3 months). Recession is coming. If this lasts months then likely a severe recession. If it stretches into 12-18 months then what is worse than a severe recession?

I am still cautious. The virus has not hit the US yet. We are likely 7-10 days away from starting to understand the damage the virus will inflict (from a health perspective). What we do not know is if parts of the US experiences a humanitarian disaster like what Italy is currently going through. We also have not seen the reality of unprecedented numbers of people getting laid off and the suffering that is going to cause. We have seen some severe economic damage. But we are in the very early stage and much more carnage is coming. I think there is a good chance the virus is going to be with us longer than people think, the lockdown is going to be longer than people think, the health and economic impact is going to be more severe than people think. There is too much we still do not know. so i am happy to remain defensive until i know more :-) PS: its kind of like we are on the beach, the water went out, we know a tsunami is coming, we run in to our hut on the beach for safety and crawl under the table and wait. The problem: we have no idea how big the wave is that is coming and how far inland it will go. Sometimes the smart thing is to get to high ground and wait for the wave to come in before returning to the beach. Most investors are not running for higher ground (cash) but instead are in their hut huddled under their table hoping the coming tsunami is not ‘the big one’ (holding equities or buying the dip).

Yep. Did anyone ever expect to see FFH with a 4% dividend yield? SJ At $290 USD this is late 2007 prices! Did the last 12-13 years really happen? Honestly, some days it feels like Back to the Future. Professor, fire up the DeLoreon because some bad investments and poor liquidity are coming back to roost... SJ Great analogy.

I'm confused. I don't think risk/reward is that great right now but the market may disagree with me and vote this is the bottom. The market may fall a further 50% and I start buying after 20% of that 50%, thus still taking very large losses and being wrong. I have opinions in life but I also know that my opinions are not facts. That I can't think of a reason for stocks to rally does not mean they are incapable of rallying, it means my imagination is too limited. I agree. To much we do not know. Another factor for me is the President; based on his past actions my guess is he will continue to be toxic to a successful resolution to the situation. This just makes me more cautious.