6 ms·

I don't play the stock market (I invest monthly and hold), but doesn't all this kind of make you want to buy? Eventually everyone will get Coronavirus and 0.2%

I don't play the stock market (I invest monthly and hold), but doesn't all this kind of make you want to buy? Eventually everyone will get Coronavirus and 0.2% of us will be dead. Then it will be back to making things again.

TAForObvReasons 7y ago
A certain CNBC correspondent suggested as much: > But maybe we’d be just better off if we gave it to everybody, and then in a month it would be over because the mortality rate of this probably isn’t going to be any different if we did it that way than the long-term picture, but the difference is we’re wreaking havoc on global and domestic economies https://www.marketwatch.com/story/cnbcs-rick-santelli-suggests-giving-everyone-coronavirus-to-spare-the-economy-2020-03-05 https://www.marketwatch.com/story/cnbcs-rick-santelli-sugges...
- rogerkirkness 7y ago
  Unfortunately the current rates are based on people (mostly) having access to forced respiration devices. 1/5 people who get Covid require external oxygen...
- mygo 7y ago
  This is absolutely false and yet another reason why journalists shouldn’t play epidemiology. Mitigating the rate of spread leads to less deaths overall. If everyone got it at the same time, there wouldn’t be enough healthcare system capacity to handle it. This isn’t a new concept, it’s well-known within epidemiology. Cities with early interventions in the 1918 flu epidemic had 50% lower peak death rates. If everyone got it at once, many more people would die than if the same number of people got it over a longer period of time. The following is my speculation, but if we woke up tomorrow and everyone suddenly had the coronavirus, then the economy would be in much bigger trouble than it would be with a slower rate of infection.
Analemma_ 7y ago
The issue, at least in the United States, is that corporate debt is sky-high right now: [0]. If the recovery doesn't happen soon enough before those businesses default on their bonds, the bondholders lose a bunch of money and then we might be looking at a liquidity crisis. [0]: https://www.wsj.com/articles/corporate-debt-fully-joins-the-market-turbulence-11583507055 https://www.wsj.com/articles/corporate-debt-fully-joins-the-...
- cletus 7y ago
  High rates of corporate debt are misleading. We've had a decade of essentially zero or near-zero interest rates. We've also had companies that generate profits on an almost unprecedented scale be able to (legally) transfer IP offshore and essentially engage in IP licensing as a form of transfer pricing (which is otherwise illegal). So you have a bunch of people who would rather borrow money at near-zero rates than repatriate profits that they'd then have to pay taxes on. This is just deferring tax debt indefinitely. Worst case scenario for the tech companies at least is that they need to repatriate some of their mountains of cash (and possibly downsize to reduce costs). I don't know what fraction of corporate debt this covers but given the size of the tech companies now, I'd be surprised if it wasn't a significant chunk.
Matheus28 7y ago
We're down only 12% from an all time high. It's only been a couple of days since the market reacted to Coronavirus. It's possible that if you buy now, you'll soon lose another 20% or more. At the same time, trying to time the bottom is a gamble. Dollar cost averaging might be the best & simplest choice for a conservative investor. (disclaimer: I have $280 SPY puts expiring in April, and tomorrow is probably gonna be a great day, personally)
- o-__-o 7y ago
  > $280 SPY puts ayeee 2500 SPX puts here, brethren
JMTQp8lwXL 7y ago
Buying and holding is "playing". It's the belief that markets fundamentally go up long term, which is a healthy and reasonable assumption, for if nobody could ever get a positive return, the rationale for the existence of markets ceases to exist.
- segmondy 7y ago
  But that logic is flawed, see Japanese market. NIKKEI 225 Index, Was 34k in 1990, still 20+k and hasn't recovered after 30 years. There's nothing preventing that from happening to the US market.
  - JMTQp8lwXL 7y ago
    People don't usually invest their entire life assets at a singular point in time. Share purchases are made per paycheck (e.g., 401k) over a working career. In practice, no retail investor experienced what you described.

TAForObvReasons 7y ago

A certain CNBC correspondent suggested as much: > But maybe we’d be just better off if we gave it to everybody, and then in a month it would be over because the mortality rate of this probably isn’t going to be any different if we did it that way than the long-term picture, but the difference is we’re wreaking havoc on global and domestic economies https://www.marketwatch.com/story/cnbcs-rick-santelli-suggests-giving-everyone-coronavirus-to-spare-the-economy-2020-03-05 https://www.marketwatch.com/story/cnbcs-rick-santelli-sugges...

rogerkirkness 7y ago
Unfortunately the current rates are based on people (mostly) having access to forced respiration devices. 1/5 people who get Covid require external oxygen...
mygo 7y ago
This is absolutely false and yet another reason why journalists shouldn’t play epidemiology. Mitigating the rate of spread leads to less deaths overall. If everyone got it at the same time, there wouldn’t be enough healthcare system capacity to handle it. This isn’t a new concept, it’s well-known within epidemiology. Cities with early interventions in the 1918 flu epidemic had 50% lower peak death rates. If everyone got it at once, many more people would die than if the same number of people got it over a longer period of time. The following is my speculation, but if we woke up tomorrow and everyone suddenly had the coronavirus, then the economy would be in much bigger trouble than it would be with a slower rate of infection.

Analemma_ 7y ago

The issue, at least in the United States, is that corporate debt is sky-high right now: [0]. If the recovery doesn't happen soon enough before those businesses default on their bonds, the bondholders lose a bunch of money and then we might be looking at a liquidity crisis. [0]: https://www.wsj.com/articles/corporate-debt-fully-joins-the-market-turbulence-11583507055 https://www.wsj.com/articles/corporate-debt-fully-joins-the-...

cletus 7y ago
High rates of corporate debt are misleading. We've had a decade of essentially zero or near-zero interest rates. We've also had companies that generate profits on an almost unprecedented scale be able to (legally) transfer IP offshore and essentially engage in IP licensing as a form of transfer pricing (which is otherwise illegal). So you have a bunch of people who would rather borrow money at near-zero rates than repatriate profits that they'd then have to pay taxes on. This is just deferring tax debt indefinitely. Worst case scenario for the tech companies at least is that they need to repatriate some of their mountains of cash (and possibly downsize to reduce costs). I don't know what fraction of corporate debt this covers but given the size of the tech companies now, I'd be surprised if it wasn't a significant chunk.

Matheus28 7y ago

We're down only 12% from an all time high. It's only been a couple of days since the market reacted to Coronavirus. It's possible that if you buy now, you'll soon lose another 20% or more. At the same time, trying to time the bottom is a gamble. Dollar cost averaging might be the best & simplest choice for a conservative investor. (disclaimer: I have $280 SPY puts expiring in April, and tomorrow is probably gonna be a great day, personally)

o-__-o 7y ago
> $280 SPY puts ayeee 2500 SPX puts here, brethren

JMTQp8lwXL 7y ago

Buying and holding is "playing". It's the belief that markets fundamentally go up long term, which is a healthy and reasonable assumption, for if nobody could ever get a positive return, the rationale for the existence of markets ceases to exist.

segmondy 7y ago
But that logic is flawed, see Japanese market. NIKKEI 225 Index, Was 34k in 1990, still 20+k and hasn't recovered after 30 years. There's nothing preventing that from happening to the US market.
- JMTQp8lwXL 7y ago
  People don't usually invest their entire life assets at a singular point in time. Share purchases are made per paycheck (e.g., 401k) over a working career. In practice, no retail investor experienced what you described.