At the end of the day, given how the Dow is moving - Thursday and Friday - it is obvious fear has hit the markets - it is going up and down like a yo yo. The discussions around whether this is like the flu is irrelevant when fear is in the market. I have never seen the flu:
1. Result in AFL games now to be played behind close doors, 2. Melbourne Formula 1 Grand Prix not going to happen, 3. Italy in effect closing teh border to 40% of its population, meaning they can't move in and put of the 'closed zone'. 4. Italian soccer, a religion, now been played behind closed doors. 5. Ice hockey games in Canada canceled 6. Non professional sports such as Saturday tennis comps through to social Sunday cricket games been cancelled 7. The list is endless
To correct some figures, the virus takes three weeks between contraction and death - if people are going to talk about mortality rates, just be mindful that you need to divide today's death rate by the number of infected parties 3 weeks ago and that gives you a death rate closer to 3% - 4%, and no wonder people are concerned and are enacting the above to bring the virus under control given the infection rate (and in particular its high death rate in the aged especially those with underlying medical conditions). Especially given the high profile cases of who has contracted it, from Hanks to Dutton (who I think is a dill anyway) to the Canadian PMs wife. A lot of arm chair doctors on HC btw in the various stock forums btw.
On Friday morning I bought a few shares in a few companies, but if you work on FA the market will self correct as confidence in the virus been controlled returns to market. So many posters claim to be LT investors on the various stock forums but seem to base comments on TA a lot of the times is my point. If there are delays in say EVs for example suspect it pushes things out by a few months in the short term, obviously on the assumption the virus will be contained, but as the scenario resolves you expect ramping in the next year or two so that EV forecasts are back on track, but a short term blip. Obviously if the 'fear in the virus lasts longer' it might take an extra year to self correct back to what people thought was the demand/supply scenarios pre virus. Concepts that the virus will lead to a depression won't IMO happen given word wide stimulus packages by governments and quantatative easing likely to be happening, and/or the view the virus will be worse that Spanish flu is misfounded (given spanish flu happened at a time before penicillin/various medicines cam einto beingetc etc)
I posted this in another thread, and still remains my views given fear is a harder concept to control, and some of the comments in the various stock forums at times look not sympathetic:
"This is a post I did a month ago in the economics section of HC - Post #: 42610749
Removing fear in the market and world economy is a different kettle of fish to statistics.
Ask Europeans, they think the probability of getting done over by a shark in Oz or a spider or a snake are much much much much much higher than been in a car accident. When it comes to fear, people have a different perspective on probability theory - world markets have been feared because of the spread outside China since my Jan post btw, i.e. look at Italy and it has shutdown virtually its soccer season last week and soccer is a religion in Italy- it will be sorted out but for traders/short termers tomorrow is a long way away, even if tomorrow is two weeks away.
Yes like SARs they will bring this under control, but removing fear is a different kettle of fish and that takes a little longer. Not an issue for explorers btw because it will have little impact on FA and timeline to mining, on the assumption it will be brought under control in the next few months, but until then markets will be volatile. It is teh way it is and the best thing they can do is work to the cure, as any death to the virus means a family has lost a member (and that is always sad).
