BG2008 Posted February 25, 2020 Posted February 25, 2020 people rightfully point out that comparisons of corona to prior viral events do not hold because the world is more connected etc (glass half empty), but by the same token, genome sequencing and vaccine development has made huge leaps and bounds (glass half full). Genome sequencing and vaccine development is better. I actually don't know how much. But the appropriate reaction to this virus is to quarantine 60mm ppl in China. Think about it for a moment. Regardless of the advancement in genome sequencing etc, if you shut down 60mm people, the economy screeches to a halt. And it trickles back to the US and the rest of the world.
Jurgis Posted February 25, 2020 Posted February 25, 2020 Bond yields have been tanking since the start of the outbreak. Yes, stocks have had two bad days. But are stock investors not way too optimistic about the potential impacts of this virus on the US economy? Is this a ‘buy the dip’ moment or will we see much lower stock prices in the near future? If we knew, we'd be rich. © Warren Buffett.
Viking Posted February 25, 2020 Posted February 25, 2020 Bond yields have been tanking since the start of the outbreak. Yes, stocks have had two bad days. But are stock investors not way too optimistic about the potential impacts of this virus on the US economy? Is this a ‘buy the dip’ moment or will we see much lower stock prices in the near future? If we knew, we'd be rich. © Warren Buffett. Jurgis, I think Buffett’s answer (do not try and time the market) is overly simplistic and not actionable for most investors. When we are in the midst of a bear market emotions get the best of most investors. I am simply trying to assess what the probabilities are that this out break starts to spread in the US to the point that it impacts the economy in a meaningful way. Two weeks ago my read was that the virus was not going to impact the US economy very much. Over the past 4 days my view has started to shift and it now appears the question is when the virus breaks out in the US (not if) and how bad it gets. Hopefully this thing just blows over. The next could of weeks are going to be very very interesting :-) Here in Canada we are being told to make preparations: stock up on prescriptions and perishable food. Canadians being told to prepare for a possible novel coronavirus pandemic - https://vancouversun.com/diseases-and-conditions/coronavirus/canadians-being-told-to-prepare-for-a-possible-novel-coronavirus-pandemic/wcm/f93197f0-8c56-4050-a50c-4de1f031c659 “Etches said people can take steps now, at home and at work, to prepare. Some of those steps include stocking up on needed prescriptions ahead of time so there is no need to do so during a possible pandemic. She also recommended people stock up on non-perishable food.”
Spekulatius Posted February 26, 2020 Posted February 26, 2020 I think we will see an avalanche of earnings warnings this quarter and next resulting from fallout from the corona virus.
Liberty Posted February 26, 2020 Posted February 26, 2020 I think we will see an avalanche of earnings warnings this quarter and next resulting from fallout from the corona virus. Definitely. And next year Q1 and Q2's earnings will look amazing in comparison... Market right now seems to be expecting these warnings, so we'll see what their magnitude is and how the market reacts.
omagh Posted February 26, 2020 Posted February 26, 2020 Bond yields have been tanking since the start of the outbreak. Yes, stocks have had two bad days. But are stock investors not way too optimistic about the potential impacts of this virus on the US economy? Is this a ‘buy the dip’ moment or will we see much lower stock prices in the near future? If we knew, we'd be rich. © Warren Buffett. Jurgis, I think Buffett’s answer (do not try and time the market) is overly simplistic and not actionable for most investors. When we are in the midst of a bear market emotions get the best of most investors. I am simply trying to assess what the probabilities are that this out break starts to spread in the US to the point that it impacts the economy in a meaningful way. Two weeks ago my read was that the virus was not going to impact the US economy very much. Over the past 4 days my view has started to shift and it now appears the question is when the virus breaks out in the US (not if) and how bad it gets. Hopefully this thing just blows over. The next could of weeks are going to be very very interesting :-) Here in Canada we are being told to make preparations: stock up on prescriptions and perishable food. Canadians being told to prepare for a possible novel coronavirus pandemic - https://vancouversun.com/diseases-and-conditions/coronavirus/canadians-being-told-to-prepare-for-a-possible-novel-coronavirus-pandemic/wcm/f93197f0-8c56-4050-a50c-4de1f031c659 “Etches said people can take steps now, at home and at work, to prepare. Some of those steps include stocking up on needed prescriptions ahead of time so there is no need to do so during a possible pandemic. She also recommended people stock up on non-perishable food.” So, looking at the data and the big picture, the pace of increase of new infections has declined. It's a novel flu, but the profile of people that are dying from the flu is traditional. It's a headline driven phenomenon with journalists amping and hyping the story. National health authorities put out warnings several times a year on various infectious diseases, but the public largely ignores these. This virus just has captured the public's imagination and it's become a plaything of salacious interests. As an investor, that's useful information. How are long-term business models being impacted? A quarter of earnings misses could very well happen, but I am looking for discounts on valuable businesses.
Gregmal Posted February 26, 2020 Posted February 26, 2020 I think we will see an avalanche of earnings warnings this quarter and next resulting from fallout from the corona virus. I can at the least, guarantee you we will see a lot of companies "blaming" it.
spartansaver Posted February 26, 2020 Author Posted February 26, 2020 Omagh, you say the pace is slowing (perhaps it is in China, but it's hard to trust their figures), yet the chart you are using is logarithmic and looks like it continues to rise at a pretty constant rate outside of China. I've been wondering how you end these quarantines... If China ends Wuhan quarantines and cases spike again, will they go back to a quarantine?
LC Posted February 26, 2020 Posted February 26, 2020 https://www.wsj.com/articles/cdc-warns-it-expects-coronavirus-to-spread-in-u-s-11582653829?mod=hp_lead_pos2 CDC Warns It Expects Coronavirus to Spread in U.S. Federal health authorities said Tuesday they now expect a wider spread of the coronavirus in the U.S. and are preparing for a potential pandemic, though they remain unsure about how severe the health threat could be. Nancy Messonnier, director of the National Center for Immunization and Respiratory Diseases at the Centers for Disease Control and Prevention, said Tuesday the agency expects a sustained transmission of the virus and called for businesses, schools and communities to brace themselves and plan for potential outbreaks. Given the 3-4 week incubation period it is probably already here in the US.
Viking Posted February 26, 2020 Posted February 26, 2020 I think we will see an avalanche of earnings warnings this quarter and next resulting from fallout from the corona virus. Definitely. And next year Q1 and Q2's earnings will look amazing in comparison... Market right now seems to be expecting these warnings, so we'll see what their magnitude is and how the market reacts. Liberty, pre-virus we had what looked to be close to a mild global manufacturing recession in 2H 2019. Germany and Japanese economies are not doing well. Europe looks weak. The watchout is if the virus causes consumer confidence to fall, particularly in the US (as they are driving the global engine at the moment). If the virus leads to a mild recession earnings in 2H 2020 then earnings next year might not look so good. I am not saying this is my base case. But the bond market is no longer flashing yellow they are on full stop red. And up until 2 days ago the stock market was at all time highs. Someone has it wrong (bond market or stock market). Should the virus outbreak get worse (spread to the US) my guess is the Fed will respond with anemergency cut. So even if things get worse stocks may do well :-)
Viking Posted February 26, 2020 Posted February 26, 2020 Omagh, you say the pace is slowing (perhaps it is in China, but it's hard to trust their figures), yet the chart you are using is logarithmic and looks like it continues to rise at a pretty constant rate outside of China. I've been wondering how you end these quarantines... If China ends Wuhan quarantines and cases spike again, will they go back to a quarantine? It looks to me like most countries are having a hard time accurately testing and reporting on the virus. That does not mean it is not growing in size. It simply means we do not know. Lets hope we do not get more surprises like Italy or Iran. A few more like these and the cat is likely out of the bag.
Spekulatius Posted February 26, 2020 Posted February 26, 2020 I think we will see an avalanche of earnings warnings this quarter and next resulting from fallout from the corona virus. Definitely. And next year Q1 and Q2's earnings will look amazing in comparison... Market right now seems to be expecting these warnings, so we'll see what their magnitude is and how the market reacts. Liberty, pre-virus we had what looked to be close to a mild global manufacturing recession in 2H 2019. Germany and Japanese economies are not doing well. Europe looks weak. The watchout is if the virus causes consumer confidence to fall, particularly in the US (as they are driving the global engine at the moment). If the virus leads to a mild recession earnings in 2H 2020 then earnings next year might not look so good. I am not saying this is my base case. But the bond market is no longer flashing yellow they are on full stop red. And up until 2 days ago the stock market was at all time highs. Someone has it wrong (bond market or stock market). Should the virus outbreak get worse (spread to the US) my guess is the Fed will respond with anemergency cut. So even if things get worse stocks may do well :-) I think the risk to the economy are real unfortunately. I hear already salespeople’s postponing travel and China will definitely take a hit and companies operating there as well. Germany is Slow too and has zero growth basically and travel in France is down 30-40%. It would be one thing, if the stock market were down like it was in late 2018, but so far, we have a mini reaction and are up 30%+ from these levels or down just 5% from the peak. On the other hand, some sectors and stocks really have become cheap now. Take your pick. I had some QQQ puts, which I sold of a bit too early this AM. I am going to reload, if the volatility comes down and SPY or QQQ puts are priced reasonable again.
John Hjorth Posted February 26, 2020 Posted February 26, 2020 I agree with Viking and Spekulatius, This is getting really bad and concerning. The best source I've found to look at data instead of reading headlines and other stuff all over the place is : Covid 2019 tracker. On the "About this site" tab is specifically mentioned the data basis [For everyone to make up their own mind about the reliability of the data basis].
elliott Posted February 26, 2020 Posted February 26, 2020 despite the drops of the last few days, I still find it difficult to find companies with wide moats and healthy balance sheets at cheap prices. will the opportunities arrive? are you being more lucky?
DTEJD1997 Posted February 26, 2020 Posted February 26, 2020 Hey all: San Francisco has declared a "state of emergency" over the Corona virus. Please see: www.businessinsider.com/san-francisco-state-of-emergency-coronavirus-covid19-outbreak-2020-2#the-outbreak-which-began-in-china-has-since-spread-in-asia-the-middle-east-and-europe-3 Kind of odd, as there are NO known Corona virus cases in the city. Also kind of odd, as this is coming from a city that can't all the human feces off it's streets. This is also from the city that has smartphone apps showing where all the piles of sh!t are. I am just wondering...if a city can't keep people from busting dumps everywhere, how in the world is it going to deal with Corona virus? An app maybe? Just think, they could combine the feces map with the Corona virus app.
netnet Posted February 26, 2020 Posted February 26, 2020 Hey all: San Francisco has declared a "state of emergency" over the Corona virus. Please see: www.businessinsider.com/san-francisco-state-of-emergency-coronavirus-covid19-outbreak-2020-2#the-outbreak-which-began-in-china-has-since-spread-in-asia-the-middle-east-and-europe-3 Kind of odd, as there are NO known Corona virus cases in the city. Also kind of odd, as this is coming from a city that can't all the human feces off it's streets. This is also from the city that has smartphone apps showing where all the piles of sh!t are. I am just wondering...if a city can't keep people from busting dumps everywhere, how in the world is it going to deal with Corona virus? An app maybe? Just think, they could combine the feces map with the Corona virus app. there is evidence that COVID-19 is present in fecal matter AND even maybe in aerosols associated with fecal matter--read farts and poorly vented sewage systems (possible vector on cruise ships BTW.) Also, I'm a bit concerned about Berkshire's Annual Meeting: Munger and Buffett are the prime age group for fatal infections, just saying
Liberty Posted February 27, 2020 Posted February 27, 2020 Thread: https://virologydownunder.com/so-you-think-youve-about-to-be-in-a-pandemic/
jobyts Posted February 27, 2020 Posted February 27, 2020 Chinese woman describes Wuhan virus patients being burned alive https://www.taiwannews.com.tw/en/news/3881683
Gregmal Posted February 27, 2020 Posted February 27, 2020 https://www.taiwannews.com.tw/en/news/3881683 We dont have that kind of dedication here, which is why it will be much worse in the US. The Chinese will just throw motherfuckers in the pits on the basis of national security and voila, 2 months later their already past peak and opening shops and factories back up, business as usual. Trump is too weak and not taking this seriously and as a result, this will likely linger much longer here. We may even start getting CNBC Markets In Turmoil specials again. We might even have to elect a Democrat since apparently they have the answer to this.
sleepydragon Posted February 27, 2020 Posted February 27, 2020 Chinese woman describes Wuhan virus patients being burned alive https://www.taiwannews.com.tw/en/news/3881683 Oh my god
Cardboard Posted February 27, 2020 Posted February 27, 2020 Just listened to Mr. Trump's press conference and this is totally under control: 15 people for God sake in the whole USA!!! Then how long to get a vaccine in this day and age? I have read that test on humans begin in 6 weeks and I would think that the Chinese will start right now if any of this above is even remotely true.
Gregmal Posted February 27, 2020 Posted February 27, 2020 The thing to be careful for here is that the media loves hysteria because it sells. They also hate Trump and realize that one of the only threats to Trump is killing the economy. Thus, a perfect storm of events that have a high likelihood of being dramatically portrayed and incredibly blown out of proportion. This is basically the flu. With the current ratio of 100 Dow points for every 2 new cases, the markets will be at 0 in no time. Just wait a few weeks and then everyone here can pull straws. We can have a fantasy football type draft on who gets to make $1 per share offers to buyout our favorite companies! I call dibs on Disney.
Cardboard Posted February 27, 2020 Posted February 27, 2020 Like I mentioned in a different thread, this would be the perfect weapon for Russia to get rid of pain in the ass Trump and replace with a so much more profitable candidate such as Bernie.
Castanza Posted February 27, 2020 Posted February 27, 2020 I believe someone pointed it out earlier in the thread. But Taiwan and China are pretty bitter enemies. It’s hard to find news coming from Taiwan about China credible. At the very least there is some motive to spread false info.
Gregmal Posted February 27, 2020 Posted February 27, 2020 There is a point where media can create reality. For instance I spoke with a few folks today and in respect to NYC, traffic is noticeably lower. A friend polled a few Chinatown restaurants and traffic on average was down 40%+. The "money guys" are kind of just sitting on their hands waiting to see how things enfold. This despite what? Like 5 real cases in NY? The media can use their dishonesty to be effective here.
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