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Hello,

I am not an experienced investor.

There is something I don't understand: It appears the current market decline is closely related to the Covid-19 outbreak. Apparently the markets are expected to start to recover/rebound in a month or two down the road (as I have heard); How is this possible if it takes 1 to 1 1/2 years to find a Covid-19 vaccine?? Will the markets not continue to decline/follow the same trend over that time period? I don't mean to sound pessimistic! But how will markets become any different in a month or two if the Coronavirus situation is exactly the same over the next 12 - 18 months? I don't see the correlation. Happy to hear (read) your explanations.

Thank you kindly!
 

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Hi,

The virus dies after 14 days apparently. So self isolation is proving a good way to eliminate it or reduce it's spread. China has done this and they have practically no new cases now. It took them ~ 1 month to accomplish this so we should expect the same.

Once this is accomplished, in 1-2 months, the stock market will bounce back anticipating our economy will now begin to recover.
 

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Not true. 14 days is the possible length of the incubation period between time of infection and actually showing symptoms. Someone's immune system could fight off the virus in a week like the cold or the flu, while someone else could land in hospital for a month thereafter with the sickness before recovering.

Few pundits should be speculating on the capital markets and the economy recovering in a few months. It is going to take some time for the first wave of infections to run their course. The end of May is likely the earliest lockdowns will be lifted in any significant way. That is the time when the rate of infections decreases to the point where the government can afford to let people get back to work and start economic recovery. Governments are actually planning for about the end of August before herd immunity will start to take over so that subsequent waves of infection will be less significant than the current wave.

COVID-19 will not be considered beat until either about 60% of the population has been infected and recovered, or a vaccine is developed and been deployed in mass vaccinations...whichever comes first. That is 12-18 month period being discussed.
 

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Cures have already been discovered. One is Chloroquine, a well known anti malaria drug. Others are being tested. Countries that were hit first like Korea and Italy already report a tapering off of new cases showing that the precautions are taking effect. It may be the crisis is over sooner than you expect. It will still take a long time to make good all the financial losses, lost wages, etc but a recovery may start soon.
 

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Cures have already been discovered. One is Chloroquine, a well known anti malaria drug.
I agree that it's possible to see signs of hope, although one may need to squint.
That said, calling chlorquine a "cure" is not correct. From the CNN article you linked:

Perhaps demonstrating why health officials are urging caution -- saying chloroquine requires further clinical study and might not be the panacea it's billed to be -- officials in Nigeria's Lagos state have reported three overdoses in the days since the drug entered the conversation surrounding the pandemic.
 

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Markets price in better or worse. We may get to a phase where no one can travel anywhere without rigorous testing and quarantining, but local life and work can go on, kind of like China now. Then we wait for a vaccine or for the virus to burn out one way or another. That situation is better than an out of control pandemic with everything shutting down.
 

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Not true. 14 days is the possible length of the incubation period between time of infection and actually showing symptoms. Someone's immune system could fight off the virus in a week like the cold or the flu, while someone else could land in hospital for a month thereafter with the sickness before recovering.

Few pundits should be speculating on the capital markets and the economy recovering in a few months. It is going to take some time for the first wave of infections to run their course. The end of May is likely the earliest lockdowns will be lifted in any significant way. That is the time when the rate of infections decreases to the point where the government can afford to let people get back to work and start economic recovery. Governments are actually planning for about the end of August before herd immunity will start to take over so that subsequent waves of infection will be less significant than the current wave.

COVID-19 will not be considered beat until either about 60% of the population has been infected and recovered, or a vaccine is developed and been deployed in mass vaccinations...whichever comes first. That is 12-18 month period being discussed.
Yes it is. That is what the Health ministers are recommending and most people are recovering after the 14 days. Most people will also only have flu like effects even if they are infected. The elderly w preexisting conditions are the only ones really vulnerable.

China is at 70% capacity already after ~ 1 month of lockdown. They beat the virus. S Korea getting there as well . Italy is also now showing a decline in new cases. The market looks out 6 months to a year at least. So in 2 more months once we have passed our peak and new cases /day are declining again you will start to see the market recover. The economy will take longer to recover but the market will have factored in its recovery
 

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Jimmy, even among working age adults around 15% suffer complications that may require medical intervention/hospitalization. This is not just a problem for the elderly. There are 18 year olds in the hospital, healthy 30 year olds dying.
 

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Well my wife is taking hydroxychloroquine and it so far seems to be preventing her turning into a zombie, my own treatment consists of a couple Gin & Tonics each nite...quinine is anti zombie juice as well.
 

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I agree that it's possible to see signs of hope, although one may need to squint.
That said, calling chlorquine a "cure" is not correct. From the CNN article you linked:
That is why we have doctors prescribe it in this country. The CNN article is on the negative side, other sources report better success. This is a medicine that has been in use since the 1930s and its side effects are well understood. Right now it is being tested against coronavirus with encouraging results. If it does not work out there are other medicines showing promise. My point is, the future is not all doom and gloom. It may be that the worst will be over sooner than we think.
 

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Jimmy, even among working age adults around 15% suffer complications that may require medical intervention/hospitalization. This is not just a problem for the elderly. There are 18 year olds in the hospital, healthy 30 year olds dying.
The only people I have heard in all the news coverage at risk are those w preexisting conditions or the elderly. Sorry but not hearing any of what you claim from the health ministers either. I'm tired of all the negative gloom too. There is enough hysteria and anxiety over this already.
 

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If I could commute the value of my DB pension plan I would do it today and invest the whole amount in Berkshire Hathaway shares.

I figure if the COVID virus continues for a long time, the whole economy including our pensions are going to be whooped anyways, or I will be pushing up the daisies, or a treatment or vaccine is discovered and the stock market comes roaring back. I particularly like BRK bescause of their huge cash hoard and all the private businesses they own. Even in bad times their private companies are spewing cash.

But alas.....it isn't allowed.
 

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Unfortunately, the confidence that the virus is only seriously affecting the elderly and those with health problems, is being questioned.

New data shows 40% of patients hospitalized in the US, were younger adults. These patients are seriously ill or they wouldn't be in the hospital.

The experts are trying to find out why it has changed. Some think the virus may be mutating into a different form.

 

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Looks like a huge day in the market today. Free money from the govt I guess? I just can't see this being the bottom. I know investors are optimists and always look forward, but I think, especially in the US, its a disaster forming. They're going to have well over a million infections.
 

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I suspect the markets will gyrate wildly for some time until at least there is some closure on the first wave of infections by perhaps end of April, or May..... and likely until Q2 quarterly results come out in ~August. I think there needs to be a general firming of GDP numbers and improving quarterly earnings reports to settle the markets and consolidate sentiment for a sustained recovery.

@Jimmy, we may be talking past each other. It can take 14 days for an infection to manifest itself into a sickness. That sickness may then simply be days, or weeks in a hospital. There are suggestions that a person may remain infectious up to ~2 weeks AFTER recovery (symptoms disappearing) What happens after you recover from coronavirus? 5 questions answered Obviously it likely depends on the depth of the illness in any particular individual.
 

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Discussion Starter #19
Wow, great responses here.

I am new to this and I am learning!

One thing about the markets for sure is they are unpredictable! (I guess that’s what makes them interesting ;-)

I’ve attended a couple webinars in the past couple days on portfolio management (mutual funds, ETFs, and others), and the message has been clear across the board: Stay the course! I’ve been resisting the urge to cash things in and mess around with things that I originally intended to ferment for another 20+ years. That being said, I may take some extra available cash and invest it in stocks (suggestions?!!) for long-term at the low prices (a small amount, or increments). They say if you intended to invest for the long term, then you leave it in for the long term! Not to get the nerves and emotions all involved... They say that’s when the trouble starts. It seems panic is part of what caused the crash and more panic will just make it worse, not better.

They are saying to keep on our regular monthly contributions if we can, too (dollar cost averaging).

I’m not claiming anything myself, this is just what I’ve been told (to take or leave as we see fit!)

That being said, those on the brink of retirement, from what I understood, might want to not cash in more than what they need to for the moment (and we still keep invested after retirement, and the current low prices have an upside right now going forward).

They’re saying things will smooth out/level out, and then progressively climb (over a 1.5 to 3 year period, even if no one can really say); they say to look at the charts from the 1987/2001/2008 crashes as an example/reference.

I have heard from one source that things will likely recover in a “U” shape (not a “V”).

Sorry if you know this already. I figure there may be others like me who are still learning! ;-) I’m just passing along what I’ve learned...

The message to me has been to Stay calm and carry on for our long-term investments (not to get nervous, shuffle things around out of fear and then sabotage our long-term plan), as a basic investing principle.

I’m not a big fan of CNN/CNBC, I find they tend to see the world through a negative lens. Media news and sites are paid to grip and engage people, and drama is what grips and engages people. Drama and horror keep people watching (kind of like a horror movie, this is what we pay to see!!)

The media are not scientists. They get their info from scientists and then they put their spin on it. Media news and sites are paid to keep people on the edge of their seats! They are MEDIA NEWS sources, primarily not scientists, mental well-being specialists, or financial specialists; their primary purpose is to get people reading.

One thing for sure is that it’s temporary (just as 2008, 2001, 1987, etc. were temporary), the markets go up and down (that’s what they’re paid to do! ;-)) A vaccine will eventually be released; we just don’t know if it will be in 12 months, 18 months or less...

I would say it’s a positive thing that the whole world is on the case! (also for treatments, and maybe preventatives too). It’s not just one small country working on a vaccine all alone... The whole developed world is at it.

Hope this can be helpful to some, passing along information I didn’t know a few days ago as a beginner.

All in all, the experts I have heard/read in the last 1-2 days (who themselves have lost large amounts in this short-term context) all have the same message (Keep calm and carry on!)
 
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