Pandemic 2020

Are you getting tired of the news being nothing but Coronavirus 24/7? Me too! Schools closing, business meetings can

celled, church services called off, toilet paper disappearing from store shelves, cats and dogs living together, what’s the world coming to?

Last week this time nobody was thinking about working from home or the kids finishing out their school year in their bedrooms. The trucks were running and the grocery store shelves were fully stocked.

But here we are this week and we’ve become afraid to greet someone with a handshake or to give a grandkid a hug goodbye.

Fear has taken hold of our minds and we’re feeling a little helpless to do much. We old folks are starting to feel our mortality a little stronger. We don’t want to be around many people, especially if we heard them cough recently, like last week sometime. But we don’t want to be around other old people, either, because the old folk’s homes are where most of the deaths are occurring. So we stay at home and turn on a cable news channel and what do we see? Story after story about the Coronavirus, or COVID 19, or the Wuhan virus, or the China virus, and some in the media are even calling it the Trump virus.

They are tracking every person who dies from the virus, giving us their life story. They tell us that even though this 89 year old overweight victim had diabetes and COPD, with an underlying heart condition, you healthy 65 year old better watch out, because it’s coming for you next!

Back 50 years ago when we baby boomers were just growing into adulthood and feeling like we were invincible, did we ever think a flu virus coming out of China would have us hunkering down in our houses, afraid to venture out to a restaurant, or to a gathering with our friends? No, we were bulletproof. We’d just bought our new Mustang, or we were in college, and we had our whole glorious lives ahead of us. Now here we are, old, decrepit and about to be overtaken by a germ they say we won’t be able to shake. But is that the real story? I’ve done some research and this is what I am finding.

The Coronavirus IS powerful. As I write this I see that as of Monday morning, March 16th, there are 4040 cases of it in the US. 3897 of them are still considered active. There have been 70 deaths. That means that of the 143 cases where we have learned the outcome of the virus, almost half the people have died from it. While no one expects the death rate to remain that high of a percentage, I must admit that it’s pretty alarming.

Eleven years ago we dealt with the H1N1 (Swine) flu epidemic, in which in a one year period between April 12, 2009 and April 10, 2010, 60,800,000 people in the US came down with it. There were over 274,000 hospitalizations because of it, and 12,469 people died from it.

So the numbers for this new virus is infinitesimal (so far) compared to the Swine flu of 2009. However, back then only 1 in about 5,000 people who got this flu in America died from it. If the Coronavirus claims only 1 in 100, and 60,000,000 people get it, we’ll lose over 600,000 people to it, and we’ll have over 13,000,000 hospitalizations. No wonder all our health officials are running around like their hair is on fire.

Folks, this is a real threat to our health, and to our way of life. We need to be extra careful about keeping our hands germ-free and not getting too close to anyone. I want to keep my clients alive, so take this virus serious.

We know that with all the closings and reduced commerce, stock market earnings are going to tank. We do a lot of our valuations of the investments we use by determining their p/e ratio. Well, if the e (earnings) starts falling, the p (price) will not be far behind. Actually, investors anticipate when the earnings of a company will be falling, so they usually start selling well before the earnings have decreased. That’s why we are seeing a massive sell-off of stocks in the market right now.

That’s why our managed portfolios are sitting safely on the sidelines in cash. All the accounts we have are not able to be moved, so we are taking a hit in some of them. But even they are performing much better than they would if they were completely invested in the overall stock market. So hang in there with us.

I’ll write later about what we plan to do when the virus threat has gone by us, and the ships start sailing, jets start flying and trucks start rolling again. We’re not there yet, but we have a plan for when we do get there. I’ll share that with you a little later.

This is a tough time for people, and I don’t think it’ll be over for awhile. If you know someone who is worried about his 401-k shrinking to nothing, or his IRA going away, then tell them about how we are protecting your assets and how they might want us to do the same for them.