The Sun Shall Rise Again
Because of all the craziness out there I’m pushing back the stock section of this week’s update to tomorrow. In the meantime, I wanted to share a couple of thoughts.
First, the market has been going through a once-in-a-lifetime (we hope) crash, spurred by the trifecta of a health crisis, oil crisis and fear of a financial crisis. Good times!
Suffice to say, most stocks carry significant risk right now in the near-term.
On the upside, the Fed, government and Treasury appear to be ready to backstop and/or rescue just about everything under the sun to try and prevent a crisis of confidence in the financial markets.
Also, evidence out of China and South Korea shows that social distancing and isolation does work (no surprise). But mass testing and adherence to the practices are key since asymptomatic people (those that appear totally fine but still carry the virus) can still spread it.
We’re also hearing that a drug that’s been around for a while for treating malaria has been shown effective with COVID-19. A label expansion isn’t on the books yet but seems a forgone conclusion.
Still, it’s hard to know what’s true hope and what’s false hope right now. All I can say is that yesterday had the feeling of a capitulation day given the stress on money market funds and insane selling of everything.
Today, the sun is out, and stocks seem a lot more attractive. What will tomorrow bring?
No matter what, it’s going to be a rocky road for a while here and we’ll need to keep our heads on straight. Some stocks that seem priced for bankruptcy are sure to surge when their industries are bailed out. And some that seem fine are sure to tumble on speculation that they’re much more harmed than expected.
As always, we’ll try to find the middle ground and navigate through all this with a keen eye on stocks that will crush the market over the long term.
I’ll be back in touch tomorrow with thoughts on our current stocks. In the meantime, enjoy hanging out at home.