Pande-Mania
So, we have a pandemic on our hands…
As of Approximately 10:30 MST this morning, March 11 2020, the World Health Organization categorized COVID-2019 as a pandemic due to the seemingly unabated spread around the globe
Source: https://experience.arcgis.com/experience/685d0ace521648f8a5beeeee1b9125cd
Are we making a mistake in comparing this virus outbreak and this particular market crash to other market crashes?
Is this is its own thing? And would we likely do good to remember that?
Yep!
Upon reflection and conversations over the last few weeks, dad and I have come to this conclusion: it doesn’t matter what happened (insert date or event here) it only matters what is happening now. The markets are crashing and there is an oil price war brewing between OPEC, Russia and the US. We know exactly why the markets have been crashing; hysteria over COVID-2019, but we have not discussed the economy to know if the markets are leading us to recession or not.
…in short, we do not believe they are but what we believe and what is reality may be different things.
While we are sitting here trying to get a handle on the concept of a virus spreading around the world, and why there is such hysteria over it, we are blind-sided by the plummet in the price of oil. Why won’t Russia agree with the Saudis about supply? Why isn’t the US doing anything about it? Why did the Saudis about-face and flood the markets? Will we benefit from an estimated $680,000,0000,0000 in global savings due to the oil price drop?
Who knows?
It would appear that the markets are becoming exhausted with the correction. We too can become desensitized to hysteria over short periods and could be nearing the end of the rapid volatility and hopefully will see another random sentiment swing and everyone will be back to buying stocks at good prices. If market history is anything to go off, people will tend to buy low when they come around to it.
You can count on that.
We think the most important thing to remember right now is to wash your hands and take simple precautions against infections. That is something you can control.
If this is different and we can’t compare it to the past, then we should do everything in our power to control what we can and forget the rest.
Here are great resources from Alberta Health from Health Canada from the World Health Organization
We can inform ourselves from proper resources; this is a form of control. We can control who and what we obtain information from. Control what you can control.
Everyone everywhere is suggesting stockpiling food, have at least a week of food in case of a health issue. We are lucky in Alberta to not have many actual emergencies requiring this sort of action, but it is never bad to have a good supply of canned and dry goods around the house in case of emergency. You can control this. Buying toilet paper in bulk probably shouldn’t be your main concern right now, however, ensuring clean water and food is in the house ought to be.
Control what you can control.
Keep your personal areas clean and wash your hands.
Usually controlling what is in your power to control is pretty easy, but it is good to be reminded of such things every now and again.
We maintain that now is a good time to be investing. The portfolio is ripe for easy pickings right now. This is something you can control. Control what you can. Again, if history is any guide, then now is a good moment to be looking at the markets as volatility indexes are in the prime zone for an end to correction. If you believe this is another 2008 recession scenario, then please do wait. We do not believe this is going to be an earth-shattering meltdown, and that march will be a turning point for the markets, much like we believed December of 2018 would be.
That called turned out pretty well; you can go ahead and confirm that from your December 31, 2019, statements if you like. (*winks & pats back)
We are lucky to have such a large (and growing) group of clients who are level headed and if I am being honest, more sophisticated than perhaps even we give credit for. We know these times can be tough to live through, but as you hear us say in our meetings often:
“Keep doing what you’re doing, you are doing the right things right.”
Stay in touch, stay informed and stay involved.
Kerry will be in touch soon to set up appointments and follow-ups.
Thank you,
Darris Cameron,
President & COO,
Financial Value Inc.