Market Update March 12th, 2020

These are dangerous times, when my biggest worry is a panicking client selling out of the market at these levels and permanently harming themselves. None of this makes much sense, but It certainly isn’t the first time. It is always something different, and the level and duration of the fear is always a little different, but when the market move is so extreme that it makes absolutely no sense to me, I know an explosive recovery isn’t far away.  

Those of you who have been with me through the 2000 and 2008 market selloffs, and those who were investors like me on  Black Monday (October 19, 1987) when the Dow dropped 22.6% in a single day, all know that what we’ve seen over the last week was definitely a taste.  And you all know that at your pinnacle climax of fear, you must do the exact opposite of what every fiber of your being is telling you to do.

“People get smarter but they don’t get wiser. They don’t get more emotionally stable. All of the conditions for extreme overvaluation or undervaluation absolutely exist, the way they did 50 years ago. You can teach all you want to the people, you can tell them to read Ben Graham’s books, you can send them to graduate school…but when they’re scared they’re scared. - Warren Buffett

I recommend following the web site www.worldometers.info/coronavirus to stay updated on the Coronavirus update. I have tracked their “active cases” for the last month. That is the total reported confirmed cases worldwide, updated daily. Active cases = total infected, minus recovered, minus deaths. This represents the total known number of people that are currently infections on any given day. You can also drill down and get all kinds of specific details by country.

The total peaked about three weeks ago at 59,000, then gradually fell all the way to 39,000 as more people were recovering in China than new cases were being diagnosed around the globe. Of course the the virus was just hitting the U.S., Europe and other countries where adequate testing hasn’t been available, so I have been expecting these numbers to explode upward. It did gradually climb every day this week, and today total active cases sits at 66,646. Below I’ve attached some of the graphs. You can see the where the declining Chinese and South Korean cases were pushing the total downward until now the numbers being diagnosed here and in Europe are turning the total figure back up at a healthy pace again. It will be interesting to watch how fast that number spikes up.

Here are the global numbers today:

Yes the daily new cases globally are on the rise now that we finally have more testing and diagnosis.

Below are the statistics on the U.S.:

Growth of active cases today look scary, but reported active cases are still only 1,645. This will no doubt shoot higher soon. 

But what about where containment efforts have gotten traction like in China today?: Active cases have declined from a peak of 58,000, to 14,771 today.              

And what about South Korea which was the next to get hit hard? Starting to level off and rate of new cases is declining.

Will Coronavirus continue to spread wildly in the U.S. and other countries outside of China and South Korea? Will the doom and gloom predictions of massive U.S. and global outbreak come true?

Or will new infections peak in a few weeks and start to roll over as they appear to be doing in China and South Korea?  I think everyone should keep an eye on these figures (you can even download the app).  At least it gives us credible data at our fingertips to compare to what we’re hearing in the press and on social media.

Darren