I’ve worked through 2008, and 2011 and if it taught me anything it is that you buy (selectively and deliberately) at times like this.
I was sent the following earlier
“It is also worth noting Public Health England’s week 10 influenza report – since week 40 2019 there have been:
– 4794 hospital admissions
– 1722 intensive care admissions
– 92 confirmed deaths
All from normal flu”
Remember markets are long-term discounting mechanisms.
Given the scale and scope of the economic shutdowns that have taken place, global recession is now inevitable and could be severe but how much of that is not priced in already?
One could even argue the growth has simply been deferred for a few quarters.
People like to make comparisons to previous experiences though and there’s been some talk of an imminent debt crisis. However, that they should progress beyond some obvious sectoral vulnerabilities (oil, airlines) seems unlikely.
We are in the middle of a behavioural and financial panic. When investors are capitulating – you buy.
In 5 years time buying I expect to look back on this and be laughin’
It is also worth noting that the 100 had recovered back to this level in Q3 09 post-GFC. That’s my view.
Please note: This note should not be treated as personal advice or a recommendation to buy or sell any investment. It was written for your interest and to help you make your own decisions. If you’re not sure whether an investment is right for you, please seek advice.
Obviously, this is a crude analogy without modeling for how fast cases will multiple (how fast the bucket will fill up) geometrically.
There are also many assumptions not yet factored in too, such as how immune you will be to a second infection, once you’ve already been infected.