As the news from China continues to worsen regarding the number of cases, and associated deaths, from the novel coronavirus, we have some takeaways for investors on a Saturday away from the volatility of the markets.
First of all, this is healthy, very healthy. I'm talking about the 600 point drop in the Dow yesterday. We needed this and once we stabilize, and consolidate, the market will move much higher under the new reality of a second Trump term and the wonderful consequences that will come from it for the American people.
Second, notice there have yet to be any deaths from the virus outside of China. This is because the virus is manageable, and the Chinese don't give a damn about their own people. They didn't tell them in time, and allowed the virus to flourish. As we have mentioned before, they also don't have enough supportive care, or care available at all, even though they are building new hospitals in a week to try and relieve demand for healthcare, or at least that is the narrative.
The West does have good care, hence the lack of deaths. If the U.S. had 'medicare for all', then we would have a much harder time handling this situation under socialized medicine. Of course, there will be deaths outside of China, just not in any significant number in our opinion, not in developed countries anyway. When this happens, it will be a good day to buy.
An analyst on CNN of all places (yes, I was forced to watch at the airport yesterday) provided some good insight. The run-of-the-mill flu has killed millions this year all over the world, and we have a vaccine, yet not everyone takes it. Coronavirus is just another form of this disease.
I suspect the origin of the virus is not from bat soup. There is much more to this, but that is for our national security folks to deal with and worry about, and find the cause. Zero Hedge has posted much, but since they are essentially anti-American, pro-Russian propaganda these days, it's hard to know what to believe.
Our sense is that this correction is a very good buying opportunity, before the Trump market train takes off again. GDP will take the inevitable hit but Wilbur Ross is essentially correct, this epidemic will push more manufacturing back to the United States.
But as always, consult your investment advisor before making any decisions for your own portfolio.
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