The Long Term Investor

NOW TOMORROW......compliments of the coronavirus we are now anticipating a down opening, perhaps as much as -400 on the Dow as of now. Who knows what the REAL open will be like. I have seen evenings when the futures were down big and it did not happen at the open and I have seen the open reflect the evening before very closely. WHO KNOWS. What I do know is that the LEMMINGS are running hard at the moment. NO DOUBT the AI and Algorithm trading will be burning up the markets tomorrow. Probably NOT for the better. I dont see a lot of "little" investors starting to panic yet, but we might be close. When the PANIC comes it will be explosive and stocks will suffer. The media and others are RAMPING UP the fear and panic. We are just starting to see classic human behavior that has the potential to snowball and shake a lot of people out of the markets.

I have NO plan......ZERO....to sell anything or change anything. On an investing level, I STILL do NOT see this virus as a world wide threat. I believe it will significantly spread.....BUT...with a death rate of 1.5% to 2%, mostly impacting the weak, infirm, and very elderly, I dont see it as a critical issue. I also know that we will probably have a vaccine within about 3-6 months if needed. I believe more people.....WAY, WAY, MORE....... will die from the flu this year than the coronavirus. BUT....we are a CRAZY species. AND.....the level and ability of scientific thinking in the world is deteriorating rapidly in my opinion.

SO....I will sit and watch as an interested observer. BUT....I will continue to be fully invested for the long term as usual.

 

OK.......OBVIOUSLY as a long term investor I dont care about non-business related stuff that drives the market on days like today. I watch with bemusement BUT have absolutely no plan or interest in doing anything. Today is a nice DROP, yes. BUT......with the Dow near 30,000 we are at the point where a 2.7% drop is a lot of points and with human psychology is perceived as larger than it really is, simply because it is a big number. Days and weeks like this are why I am a LONG TERM INVESTOR. I dont care to be whipsawed by daily, weekly, monthly, etc, short term events that kill performance.

To be CLEAR......No plans to do anything. NO plans to buy or sell anything. NO plans to change anything. NO.....I really dont care. I have set up my financial life to the point that days like today and I suspect the rest of the week, are NOT relevant to what I do or how I do it......in my life or in investing. I continue to be fully invested for the long term as usual.

For those that are feeling twinges of fear or panic.......take this as an opportunity to mentally review your investment mix versus your risk tolerance. If you pass that review.......than.....if you are NOT a trader, sit back and simply observe the events going on around you with dispassionate, clinical, evaluation. HOPEFULLY our AMERICAN businesses will take this time as an opportunity to reevaluate their commitments to and use of CHINA as part of their business plan.

BE CAREFUL......the media is going to be FULL of breathless, gasping, panic and fear mongering.

 

HERE is a relevant article to the very short term events we are living through right now. NEEDLESS to say.....I agree completely

Warren Buffett warns coronavirus will affect business, but he 'certainly won’t be selling' stocks

https://finance.yahoo.com/news/warren-buffett-coronavirus-net-buyer-stocks-120743935.html

(BOLD is my opinion or what I consider important content)

Regarding the coronavirus specifically, Buffett made clear that he is “not a specialist.” And he warned that “a very significant percentage of our businesses one way are affected.”

However, he reiterated that investors should be more focused on the long-term, not the short-term.

"If you're buying a business, and that's what stocks are... you're gonna own it for 10 or 20 years,” he said. “The real question is: ‘Has the 10-year or 20-year outlook for American businesses changed in the last 24 hours or 48 hours?’"

‘Anything can happen to stock prices tomorrow’"

"Our perhaps jaundiced view is that the pundits who opine on these subjects reveal, by that very behavior, far more about themselves than they reveal about the future,” he wrote. “What we can say is that if something close to current rates should prevail over the coming decades and if corporate tax rates also remain near the low level businesses now enjoy, it is almost certain that equities will over time perform far better than long-term, fixed-rate debt instruments.”

That said, he also reminds folks that market routs happen.

"Anything can happen to stock prices tomorrow,” he said. “Occasionally, there will be major drops in the market, perhaps of 50% magnitude or even greater.”

Sell-offs are buying opportunities"

Later in his CNBC appearance, Buffett noted that ~3% market sell-offs like what we’re seeing today are almost countless in history.

And they ultimately turned out to be opportunities.

“I can’t think of one [3% sell-off] you shouldn’t have bought on,” he said. “How can it be bad news unless you have to sell?”

“We certainly won’t be selling.”

MY COMMENT

AMEN.

 

"Are you sure this wouldn't be a good time to panic?"

OMG.....you are right. I am selling everything. I am putting my house on the market. It is the end of the world. I am selling all stocks, house, art..................everything. I am even selling the dogs. WAIT.....I better keep the dogs for protection against the ZOMBIE hoards. I have the private jet all fueled up and will be in the bug-out bunker in New Zealand in a matter of hours. IT IS THE END OF THE WORLD..........

 

ONE LAST comment for today. A very well written little article below:

As the Big Stories Churn
Headlines jump from story to story. Reacting to the latest could be an investing mistake.

https://www.fisherinvestments.com/en-us/marketminder/as-the-big-stories-churn

(BOLD is my opinion or is what I consider important content)

We aren’t even two months into 2020, yet many pundits believe the Wuhan coronavirus will make the global expansion gravely ill. Some have already started slashing market forecasts for the year. Frequent MarketMinder readers likely already know we think fears over the virus’s market impact are overdone. But to us, they are part of a longer-running pattern prevalent throughout this bull market. As soon as one huge story fades, another pops up—like a less-fun game of Whac-A-Mole. Here is a look back at some of the fleeting frenzies that came and went over the past 11 years. In our view, the collection tells a simple tale: Investors are better off tuning out the noise rather than reacting to The Next Big Story.

We don’t have to go back far to see this Big Story headline churn. US-Iran tensions dominated headlines at 2020’s start, sparking World War III warnings. Those fears virtually vanished by mid-January, just in time for coverage to flip to the coronavirus. Similarly, while global equities enjoyed their best year in a decade in 2019, the year featured plenty of Big Stories—some scary-ish, others supposedly monumental for investors.

Remember when the US yield curve flattened—and then inverted—last summer, prompting recession forecasts that didn’t come to fruition? When the yield curve “un-inverted” in early October, far fewer trumpeted the news. Earlier in 2019, Vermont Senator and Democratic presidential candidate Bernie Sanders introduced Medicare for All legislation—gobbling up news coverage. A few other Democratic candidates backed it, too. Health Care stocks reacted negatively to fears of quasi-nationalization in the short term, plunging almost -5% in three days. But that hype passed. Health Care ended the year strong, trailing only Technology in Q4. You could say the same of value stocks’ brief burst of outperformance in September. Headlines were sure it was a huge rotation after years of value lagging. It came and went in a month’s time.

Headlines didn’t hype only scary stories. They also heralded allegedly paradigm-shifting developments. One huge social media company—backed by a number of prominent financial services and payment providers—unveiled plans to release a cryptocurrency named for an astrological sign that isn’t Gemini and rhymes with shmeebra. Some predicted this foray would make digital currencies mainstream, with regulators reportedly worried of potential fallout. Congresspeople got worried and asked incomprehensible questions. Since that announcement, the hype has evaporated and many partners have quietly dropped their support.

You can find myriad examples of Big Stories that were supposed to either impact stock returns or represent a landmark market shift. Instead of altering the investing landscape, they simply fell out of the news cycle as headlines churned onto something else.

Go back to the bull’s beginning. In late 2009, many feared Dubai World’s debt issues threatened the Emirate’s finances and could spark a financial crisis redux—spooking investors worldwide.[ii] Those worries, which likely reflected the recent pain of the last bear, blew over fast.

In 2010, high-frequency trading (HFT) starred in fears over May’s “Flash Crash.” Despite stocks’ near-instantaneous recovery, many called HFT a new market risk. A decade later, with HFT existing throughout, the bull continues—occasional sharp short-term swings notwithstanding. Later that year, US municipal debt grabbed eyeballs after an analyst predicted a tsunami of defaults on 60 Minutes. That wave never made land.

Towards the end of 2012, an expiring US payroll tax holiday led to predictions of consumer spending stumbling, knocking economic growth. Yet early-2013 data confirmed the negative impact was vastly overstated, and folks moved on.

In 2013, several stories churned through the news. In March, Cyprus bank failures seemed like a big domino in the eurozone’s sovereign debt crisis—they weren’t. Two months later, an EU-China trade tussle over solar panels inspired visions of a damaging trade war that didn’t come to pass. Detroit filed for Chapter 9 bankruptcy in mid-July, resurrecting muni debt fears. But Detroit’s problems were local—not the beginning of a national tidal wave.

In 2014, some pundits called the Foreign Account Tax Compliance Act (FATCA) a regulatory risk for markets—an overstated worry, since banks had time to adjust and FATCA lacked broad market impact. High Biotech industry valuations conjured “bubble” worries and even got the Fed’s attention that summer. The industry suffered for a spell, but the broader market fallout was minimal. After Biotech valuation worries faded, HFT returned to the fore—with a new book rekindling concern over allegedly nefarious practices.

In 2015, Puerto Rico’s municipal debt grabbed the spotlight as another alleged trouble spot. Headlines proclaimed the island “America’s Greece.” Yet even after Puerto Rico’s first-ever default, a cataclysmic disaster didn’t ripple through domestic debt markets.

In 2016, subprime auto loans had a moment when delinquency rates hit a two-decade high. After rekindling some 2008 memories, the alleged problems never left the lot. Later in the year, the Chinese yuan joined the IMF’s reserve currency basket. This followed years of niche fears that the yuan’s inclusion could displace the dollar as the world’s reserve currency, rendering US debt unaffordable in the process. That concern repeated in 2017 due to speculation about non-existent government-backed digital currencies like “Fedcoin” or “IMFcoin." All these worries vastly overrated reserve currencies’ importance, but they cycled through headlines anyway.

Also in 2017, tracing President Trump’s tweets was all the rage, with analysts diagramming sentences left and right. But markets reflected little impact and didn’t much fret all the spilled covfefe. Three major hurricanes struck US shores, triggering fears of economic fallout. Like coronavirus today, these were human tragedies, but they didn’t stop stocks.

In 2018, the US withdrew from the Iran nuclear deal, prompting geopolitical and Energy sector concerns. After some harsh political rhetoric, the story receded. The Supreme Court’s decision to legalize sports betting made it seem like the gambling industry was the next big investment opportunity. That has yet to come up a winner.

The common thread for all these Big Stories: They generate a lot of noise, which isn’t actionable for investors.[iii] Headlines constantly hype these stories as a sign today is new, different, unique—and often scary. Yet the constant churn—some stories fading, others appearing—shows reacting to widely watched headlines is folly. Many of these supposedly huge developments drove no material market reaction. Others may have caused a blip here and there. But trading on any of them could easily have been a costly error for investors needing long-term growth. Keep that in mind when coronavirus fades and some other huge, eyeball-grabbing thing takes its place.

MY COMMENT

Yes, few people remember all or even a few of the above. In the long term scheme of things they are irrelevant.....EXCEPT......as a continuing lesson in human behavior and a warning to investors to NOT get caught in the short term media DRAMA.

 

WELL.....Sunshinegal......when I saw your name I wondered if you were an old friend from a previous board. Than I saw your post and you are. Yes....in spite of all my precautions you have found me.

ACTUALLY happy to see you here. Feel welcome to post any time on any investing topic. Feel free to invite anyone else from the old boards to check out this investing site. LOTS of good discussion for traders and investors on this board.

If you look back a page or two you will find my current PORTFOLIO MODEL and explanation of the model.

 

I dont believe we are done with this little virus issue in terms of the markets. I dont believe that this little virus issue will have long term impact or even more than a few months impact. The fact that we are up today does not mean anything to me one way or the other. We will see a VERY ERATTIC market for the next few weeks minimum. BUY or SELL at your own risk......this is short term stuff and it is simply guess work whether or not you will do well short to medium term. AS USUAL I do believe this event will be nothing more than a tiny mark on a chart long term and will be UNRECOGNIZABLE as any sort of dramatic event. I DO agree with the following articles. Of course, there are hundreds, perhaps thousands of articles PUMPING the FEAR, PANIC, and DOOM&GLOOM side of this minor event.

Coronavirus fear sickens stock market, spreads need to diversify manufacturing

https://www.usatoday.com/story/opin...-manufacturing-editorials-debates/4861229002/

(BOLD is my opinion or what I consider important content)

Fears that the COVID-19 virus might be worse than anticipated prompted a major sell-off in stocks Monday. The Dow Jones Industrial Average shed 3.6%, or 1,031.61 points, its third thousand-point drop in its history.

Other indexes were down by similar amounts. With the market value of all U.S. stocks estimated at over $30 trillion, a loss like this means that roughly $1 trillion in equity disappeared. Poof!

If previous outbreaks are any indication, there could be more losses, at least in the short term. The severe acute respiratory syndrome and the Zika virus were blamed for driving markets down by 13%, while the Middle East respiratory syndrome, bird flu and Ebola outbreaks had resulted in losses in the 6-7% range. In all these cases, markets rebounded.

Outbreaks are the new normal
No one knows what the stock market will do over time. But we do know that these kind of outbreaks look like the new normal, and that they generally impact certain parts of the world more than others.

For this reason, businesses ought to ask themselves whether it makes sense to be so reliant on one country for their manufacturing and supply chain needs.

When individuals invest their savings, they are counseled to be highly diversified among stocks, bonds, real estate and other assets. That same logic should apply to multinational corporations when they decide where to invest in manufacturing capacity.

In recent years, many have flooded into China, thanks to its seemingly bottomless labor pool and light regulations. Now, many of these corporations must surely be regretting their absence of diversification.

For the sake of America's health
According to the American Chamber of Commerce in Shanghai, nearly 4 out of 5 U.S. companies with operations in China now lack the staff to run at full capacity.

For companies that sell auto parts or cellphones, pressed steel or whatever, the loss of manufacturing capacity in China could be a big deal. For makers of medicines, the reliance on China could become critical. According to some estimates, 80% of the active ingredients in American medicines are made in China.

This concentration had already set off alarm bells among both national security experts and U.S. health officials. In recent years, multiple medications made in whole or in part in China have had to be recalled due to contamination during the manufacturing process.

Now the new coronavirus should be cause for even more concern. In fact, it could be the final straw that forces manufacturers to become less reliant on a single nation.

AND

Thoughts on a Rocky Monday
Monday’s volatility isn’t a call to action, in our view.

https://www.fisherinvestments.com/en-us/marketminder/thoughts-on-a-rocky-monday

AND

Why coronavirus will only be a bump in the road for the world economy

https://nypost.com/2020/02/24/why-coronavirus-will-only-be-a-bump-in-the-road-for-the-world-economy/

MY COMMENT

The first hour of market action is over and the initial positive bump up that you would expect by buyers looking for bargain entry prices in particular stocks is over. We are now negative, as I anticipated we would be. The POSITIVE to this little event is the fact that perhaps it will open a few eyes when it comes to doing business in and/or relying on CHINA as a manufacturing or business partner. It is about time that corporate America WOKE UP.........NO, I am not talking about being "WOKE".......another example of corporate IDIOCY, pissing off half your customer base......I am talking about waking up to the HUGE NEGATIVES of doing business with, and tying your business, to the worlds most brutal dictatorship, the worlds greatest fraudulent economy, the worlds most untrustworthy partner, etc, etc.

I was talking to a few people last night and they were excited to BUY after the drop yesterday. I told them I would not be in a big hurry, that there will probably be further drop over the remainder of the week and perhaps a bit longer. Many companies have yet to jump on the bandwagon of warning about the impact of the virus on earnings. I REALLY dont think we will see a very big impact.......BUT.......corporate America will jump on this warning bandwagon like the LEMMINGS they are. Some will see it as an opportunity to lock in a nice little earnings EXCUSE that will protect bad management for 1-3 quarters. In any event, lets keep things in perspective:

"There have been more than 10,000 deaths from flu in the United States so far just this flu season."

 

FILE this one under the category of......It could be worse, or, be careful who you wish you were:

https://www.foxbusiness.com/markets/jeff-bezos-fortune-billionaires-market-drop
Jeff Bezos, other billionaires lose $30B in Monday market drop

In one day's worth of trading, Jeff Bezos, currently deemed the richest person in the world, saw his net worth dwindle $4.8 billion.

CEO of French luxury conglomerate LVMH, Bernard Arnault, saw his fortune fall the same amount, pushing his net worth to around $100 billion.

Amancio Ortega, founder and former chairman of Inditex fashion group, known for fashion chain Zara, also saw his fortune take quite the hit losing roughly $3.9 billion.

Mark Zuckerberg, felt the impact. When Facebook's stock fell roughly 4.42 percent during Monday's trading, his net worth took a $3.4 billion hit.

Bill Gates, once the richest man in the world before being dethroned by Bezos, saw a $1.5 billion decrease in his fortune.

MY COMMENT

It is ALL relative.

 

I BELIEVE that the statistics below are generally accurate. I would guess that the death rate from Corona will be much lower in the developed countries than the sub-developed world. Perhaps about 1-2%. AND the majority of those impacted will be the very elderly, frail, or preexisting-sickness people. I believe the article below is generally accurate and not too sensational. In my......LAY OPINION....I dont see this virus as a particularly deadly threat to the world.

How does the new coronavirus compare with the flu?

https://www.livescience.com/new-coronavirus-compare-with-flu.html

(BOLD is my opinion or what I consider important content)

"Editor's note: This article was updated Feb. 19 with the latest information on COVID-19.

The new coronavirus outbreak has made headlines in recent weeks, but there's another viral epidemic hitting countries around the world: flu season. But how do these viruses compare, and which one is really more worrisome?

So far, the new coronavirus, dubbed COVID-19, has led to more than 75,000 illnesses and 2,000 deaths, primarily in mainland China. But that's nothing compared with the flu, also called influenza. In the U.S. alone, the flu has already caused an estimated 26 million illnesses, 250,000 hospitalizations and 14,000 deaths this season, according to the Centers for Disease Control and Prevention (CDC).

That said, scientists have studied seasonal flu for decades. So, despite the danger of it, we know a lot about flu viruses and what to expect each season. In contrast, very little is known about COVID-19 because it's so new. This means COVID-19 is something of a wild card in terms of how far it will spread and how many deaths it will cause.

"Despite the morbidity and mortality with influenza, there's a certainty … of seasonal flu," Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said in a White House press conference on Jan. 31. "I can tell you all, guaranteed, that as we get into March and April, the flu cases are going to go down. You could predict pretty accurately what the range of the mortality is and the hospitalizations [will be]," Fauci said. "The issue now with [COVID-19] is that there's a lot of unknowns."

Scientists are racing to find out more about COVID-19, and our understanding of the virus that causes it and the threat it poses may change as new information becomes available. Based on what we know so far, here's how it compares with the flu.

Symptoms and severity
Both seasonal flu viruses (which include influenza A and influenza B viruses) and COVID-19 are contagious viruses that cause respiratory illness.

Typical flu symptoms include fever, cough, sore throat, muscle aches, headaches, runny or stuffy nose, fatigue and, sometimes, vomiting and diarrhea, according to the CDC. Flu symptoms often come on suddenly. Most people who get the flu will recover in less than two weeks. But in some people, the flu causes complications, including pneumonia. So far this flu season, about 1% of people in the United States have developed symptoms severe enough to be hospitalized, which is similar to the rate last season, according to data from the CDC.

With COVID-19, doctors are still trying to understand the full picture of disease symptoms and severity. In a small study of about 100 people with the virus, published Jan. 30 in the journal The Lancet, the most common symptoms were fever, cough and shortness of breath. Only about 5% of patients in that study reported sore throat and runny nose, and only 1-2% reported diarrhea, nausea and vomiting.

In a more recent study, considered the largest on COVID-19 cases to date, researchers from the Chinese Center for Disease Control and Protection, analyzed 44,672 confirmed cases in China between Dec. 31, 09 and Feb. 11, 2020. Of those cases, 80.9% (or 36,160 cases) were considered mild, 13.8% (6,168 cases) severe and 4.7% (2,087) critical. "Critical cases were those that exhibited respiratory failure, septic shock, and/or multiple organ dysfunction/failure," the researchers wrote in the paper published in China CDC Weekly.

It's important to note that, because respiratory viruses cause similar symptoms, it can be difficult to distinguish different respiratory viruses based on symptoms alone, according to WHO.

Death rate
So far this flu season, about 0.05% of people who caught the flu have died from the virus in the U.S., according to CDC data.

The death rate for COVID-19 appears to be higher than that of the flu.

In the study published Feb. 18 in the China CDC Weekly, researchers found a death rate from COVID-19 to be around 2.3% in mainland China. That's much higher than the death rate linked to flu, which is typically around 0.1% in the U.S., according to The New York Times.

Even so, the death rate for COVID-19 varied by location and an individual’s age, among other factors. For instance, in Hubei Province, the epicenter of the outbreak, the death rate reached 2.9%; in other provinces of China, that rate was just 0.4%. In addition, older adults have been hit the hardest. The death rate soars to 14.8% in those 80 and older; among those ages 70 to 79, the COVID-19 death rate in China seems to be about 8%; it’s 3.6% for those ages 60 to 69; 1.3% for 50 to 59; 0.4% for the age group 40 to 49; and just 0.2% for people ages 10 to 39. Nobody 9 and under has died of this coronavirus to date.

Virus transmission
The measure scientists use to determine how easily a virus spreads is known as the "basic reproduction number," or R0 (pronounced R-nought). This is an estimate of the average number of people who catch the virus from a single infected person, Live science previously reported. The flu has an R0 value of about 1.3, according to The New York Times.

Researchers are still working to determine the R0 for COVID-19. A study published Jan. 29 in the New England Journal of Medicine (NEJM) estimated an R0 value for the new coronavirus to be 2.2, meaning each infected person has been spreading the virus to an average of 2.2 people.

It's important to note that R0 is not necessarily a constant number. Estimates can vary by location, depending on such factors as how often people come into contact with each other and the efforts taken to reduce viral spread, Live Science previously reported.

Risk of infection
The CDC estimates that, on average, about 8% of the U.S. population gets sick with the flu each season.

There are currently 29 cases of COVID-19 in the U.S. Still, newly emerged viruses like this one are always of public health concern, according to the CDC. It's unclear how the situation with this virus in the U.S. will unfold, the agency said. Some people, such as health care workers, are at increased risk for exposure to COVID-19. But for the general American public, the immediate health risk from the virus is low at this time.

Pandemics
It's important to note that seasonal flu, which causes outbreaks every year, should not be confused with pandemic flu, or a global outbreak of a new flu virus that is very different from the strains that typically circulate. This happened in 2009 with the swine flu pandemic, which is estimated to have killed between 151,000 and 575,000 people worldwide, according to the CDC. There is no flu pandemic happening currently.

The COVID-19 outbreak has not yet been declared a pandemic, as the majority of cases have occurred in China. But on Jan. 30, the WHO declared the COVID-19 outbreak a "public health emergency of international concern." The declaration was primarily due to concern that the virus could spread to countries with weaker health systems.

Prevention

Unlike seasonal flu, for which there is a vaccine to protect against infection, there is no vaccine for COVID-19. But researchers at the U.S. National Institutes of Health are in the early stages of developing one. Officials plan to launch a phase 1 clinical trial of a potential vaccine for COVID-19 within the next three months.

In general, the CDC recommends the following to prevent the spread of respiratory viruses, which include both coronaviruses and flu viruses: Wash your hands often with soap and water for at least 20 seconds; avoid touching your eyes, nose and mouth with unwashed hands; avoid close contact with people who are sick; stay home when you are sick; and clean and disinfect frequently touched objects and surfaces."

MY COMMENT

This event is way overblown at the present. However, there is a SMALL potential that it will become a global issue. At this point it reminds me of the ZIKA scare. I am actually already TIRED of the coverage, fear mongering, and reaction of the markets. It is for the most part IRRATIONAL, but that is the NORM for the markets and any sort of short term event like this virus. The REAL story will come when a modern country like the USA, Canada, etc, etc, has a sufficient number of cases to see how the virus really reacts in a country with a MODERN health system, sanitation, etc, etc. I suspect that the death rate in a country like the USA will be much lower in general. Some populations, like recent Illegal Aliens, those in poverty, etc, etc, will OBVIOUSLY skew the statistics. At this point when it comes to investing or the markets.....FACTS dont matter. Like the virus, the markets are currently INFECTED by panic, fear, and doom. It will just have to run its course. I continue to be fully invested for the long term as usual.

HERE is the latest info which includes:
"3:52 pm: US health officials say human trials on coronavirus vaccine to start in 6 weeks
Human trials testing a potential vaccine for the COVID-19 coronavirus are expected to begin in six weeks, U.S. health officials announced Tuesday. “We are on time at least and maybe even a little bit better,” Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, an agency within the Department of Health and Human Services, told reporters at a press conference. “Hopefully, no further glitches.” The White House reportedly asked Congress on Monday for $1.25 billion in additional funding to bolster its coronavirus response, including money to develop a vaccine and therapeutics to treat the virus. The National Institutes of Health has been working with biotech company Moderna to develop a vaccine using the current strain of the coronavirus."

https://www.cnbc.com/2020/02/25/coronavirus-latest-updates.html

 

As to what COUNTS in this forum:

DOW year to date (-5.11%)
SP500 year to date (-3.17%)

USING the old time machine that I have stashed in the basement......the current drop has taken us back to the level of the DOW on October 30, 2019. So I and others have lost the last FOUR MONTHS of gains. That is it. Nothing more, nothing less. We are not ANYWHERE CLOSE to correction territory (a drop of 10% or more) at this point. We may get there.......who knows. REALLY as a LONG TERM investor.....who cares, actually.

 

HERE is one of the BEST articles I have seen that mixes the human, investing, scientific, and business aspects of this little would-be correction that we are experiencing:

Stay Invested, It's Not Time to Fear the Coronavirus

https://www.realclearmarkets.com/ar..._not_time_to_fear_the_coronavirus_485247.html

(BOLD is my opinion or what I consider important content)

"Monday, fear over the Coronavirus finally gripped investors, as both the Dow Jones Industrial Average and the S&P 500 index fell over 3% - the largest daily declines in two years. These drops wiped out all the gains for the year.

Frankly, it's amazing to us that the market had been so resilient! Maybe it's because recent history with stocks and viruses is that markets overreact leading to significant buying opportunities along the way. Over a 38-day trading period during the height of the SARS virus back in 2003, the S&P 500 index fell by 12.8%. During the Zika virus, which occurred at the end of 2015 and into 2016 the market fell by 12.9%. There are other examples, but they all passed, and the market recovered and hit new highs.

Will this happen again? Our view is that it is highly probable.

We aren't trying to be immunologists, and that may make our points moot, but there aren't that many immunologists in the world and the World Health Organization says this is not yet a true pandemic. We're just economists, but looking at the data, and having perspective is always important.

This whole thing is a human tragedy and we would never take human life and suffering lightly. And looking at data can make people appear cold, when in reality all they are trying to do is understand the situation. There are currently 80,088 confirmed cases and 2,699 deaths from the coronavirus COVID-19 outbreak as of Monday. This is a big number and is still growing, but the pace of growth looks to be slowing.

Much of the pessimism surrounding the virus focuses on the Chinese under-counting the number of infected to save face. However, it's important to note that a shortage of specialized test kits has caused health officials in many countries to rely on observable symptoms for diagnoses, and because coronavirus mimics the flu and pneumonia in its early stages, it's also possible that authorities may be over-counting as well.

Instead of looking at it from a total confirmed case perspective, we think the number of total active cases provides a better look into what is happening. This measure takes total confirmed cases and subtracts deaths and recoveries. This gives the total amount of people who have the potential to spread the virus further.

According to Worldometer, which aggregates statistics from health agencies across the world, total active cases peaked about a week ago at 58,747 and have since been declining. Even with all the new cases we are seeing in South Korea, Italy and Iran (where data is suspect). There have been 30,597 cases with an outcome (2,699 deaths and 27,898 recovered). In other words, the total active cases now stand at 49,923, a drop of 15% from the peak on February 17th.

One death is too many, but to put that number into a little bit of perspective, according to the World Health Organization, in the United States alone for the 2019-2020 season, there have been at least 15 million flu illnesses, 140,000 hospitalizations and 8,200 deaths. Imagine if everyone with an internet connection followed the spread of this annual flu, case by case, hour by hour.

It's true that the death rate from Coronavirus appears to be around 2% in China, which is much higher than the death rate from the normal flu, but like the flu increases with age. However, outside of China the death rate is far less than inside China, roughly 1%. And, there is already a drug that will combat COVID-19 moving toward first phase clinical trials. It took three months for this to happen in 2020, versus 20 months for SARS back in 2002/03 - a testament to advances in drug technology.

From a macro-economic point of view, the real question is how will this impact the US economy over the coming year. In short, our view has not changed. The US we believe is relatively insulated, with a fantastic health system. The US started the year with solid economic data and so far, nothing has changed. In fact, with all the data we already have on hand, we are expecting around 2% growth in Q1. Most of the impact to the US from the corona virus will come in Q2.

Capital goods exports to China along with imports from China are sure to be depressed given the struggles to reopen factories abroad. Most Chinese factories are still only operating at about 50-60% of capacity. Shipping giant Maersk has already said it has cancelled more than 50 trips to and from Asia. With China being home to seven of the world's busiest container ports there is bound to be some impact. Inventories in the US will be depleted more rapidly, but once the virus subsides, expect faster accumulation of inventories in the second half of the year.

Revenues and earnings from companies that are highly exposed to China will definitely be affected. China being shut down for a month will have a global impact. But lower earnings in the first half of the year should be made up by a strong rebound in the second half of the year with payback from lost months. Demand remains strong and there has been no visible impact yet on the job market as shown by initial unemployment claims. Supply disruption is the issue. We suggest looking through any earnings weakness as we expect it to be transitory.

One small nugget of good news is that many companies had already been shifting supply chains from China due to the Trump Tariffs. If they weren't considering it before they will be now as they realize the importance of diversification. Expect this trend to accelerate moving forward.

The US consumer is on solid footing and will continue to be one of the key drivers to US economic growth in the year to come. We believe, just like all the other viruses we have seen over the past decades that have dissipated, the Coronavirus will be no different. Some have suggested that the 1918 Spanish Flu, which killed hundreds of thousands in the US could happen again. No one knows, but 2020, is not 1918. Technology and news move much faster and the US rebounded from the Spanish Flu when all was a said and done. We suspect that any drop in earnings or economic activity will be short lived, and more than made up for in the year to come. Don't panic, stay invested."

MY COMMENT

AMEN......dont panic, stay invested. NOTHING has changed in terms of the economic and business fundamentals when it comes to AMERICAN companies beyond the short term. I REFUSE to mix LONG TERM INVESTING with SHORT TERM events.