I live in Finland. In the last few days I have stocked N95 masks, food, and life essentials. My wife started working at home, and this is the last day my daughter goes to daycare. The plan is to keep minimum contact with the outside world until there are no new cases for 14 days.
At the same time, I have sold everything except for Fiducian. My position is so large and if I dump it, it would take days and hammer the stock. At this valuation, it does not make much sense. Of course, FID is very sensitive to market movements. Anyway, I am ready for a major correction and also learned a lesson about liquidity in a crisis.
The real problem is the US. Officials are obviously lying and the number of diagnosed people does not make sense. Think about it. US has probably the closest tie with China. How come there are less than 100 cases? Like the H1N1, US officials put their heads in the sand and hope the shit storm dissipate soon, only this time it will not. This virus is the most scary thing we had so far. It morphs and adapts, and sooner or later we all gonna catch it. The trick is to get it either early, before the medical resources are exhausted; or get it very late, when vaccines or effective treatment are available.
US is the most important country in the current financial system and the most fragile country to this kind of disease. I will give my reasons below.
1. US does not have a public health care system. All the hospitals are private. In crisis, expect those to shut down since it is never profitable to treat the virus.
2. There is a large income gap between doctors and medical staff. Doctors get high salary and kickers from pharma companies. Most nurses and other staff are being paid at 30-50k. How can you expect them to perform during a crisis?
3. Everyone can have a gun. Imagine those in the slums would do if they have no treatments. BTW, there is no treatment at all at the moment.
4. Army is composed of basically mercenaries. Everyone is paid to be a soldier. This does not work in a crisis.
5. A major outbreak will slow the economy. US companies bought huge amount of stock in the last few years and their balance sheet is not soild. Expect a liquidity crisis and chain reaction from defaults.
6. If US does not handle this well, this could be the turn of the bull market and I think rate cut will not save it this time. Think about it. Medicines kill germs, money does not.
7. US does not even have the capacity to produce masks and other medical equipments anymore. They only design and let others do the dirty work. Expect extreme shortage when the crisis hits.
I hope you guys are prepared when the shit hits the fan. One thing I learned from 08-9 is that do not act too early. There will be enough time to pick up the pieces when the storm settles. There is a decent odd that Trump will not win the election because of the virus, but you know he is kind of guy who can label everything as his 'win'. Narcissism at its best!
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