There are decades where nothing happens; and there are weeks where decades happen. – Vladimir Lenin
If you feel like the last few weeks have lasted forever, you’re not alone. Here are my thoughts going forward.
The administration’s reaction to the virus was nonexistent until the market slapped them upside the head. They finally appear to be taking the coronavirus seriously. Everyone else must follow suit if they haven’t already.
Right now, I’m watching for two things.
First, is an increase in mass testing for the coronavirus. That means an abrupt end to social media posts about people being turned away from the ER or doctor’s office because they don’t meet the “requirements” for testing. This has been a horrendous failure of the administration so far.
South Korea has shown the impact mass testing has on slowing the spread of the virus. They set up drive-thru facilities with next day results by phone. They’ve tested over 270,000 people so far, roughly 4,100 tests per million people (while the U.S. was at 26 tests per million people).
Source: https://www.worldometers.info/coronavirus/country/south-korea/
The U.S. (and the rest of the world) need to catch up…and fast. Thankfully, there’s a model on how to do it. It just needs to be implemented.
Right now, the lack of testing makes it impossible to know how far-reaching the virus has spread. Until then the number of confirmed infected will continue to compound.
Even at mass testing capacity, the numbers will appear to get worse at first. But if you look at the graph above, notice the peak and decline, before it tails off. Identifying those infected, insolating, and treating them is what slows and ends the spread of the disease (increased hospital capacity — beds, ventilators, medical supplies — is the next important step to avoid a surge in the fatality rate).
Second, is a simple, common-sense fiscal stimulus. Way too many people will be financially affected by this. If the government is telling people to stay home, and not work, then Congress needs to cut them a check to cover the next month, and each month after, for as long as this drags on.
We can’t have people worrying about rent and their next meal because they did what was asked of them in order to protect the populace. They need enough money to cover the basic necessities of food, rent/mortgage, and utilities. Whatever Congress comes up with, this must be part of it (mentioned yesterday, but nothing is official yet). It’s that simple.
Those two things won’t make everything immediately better. It will still be a struggle, but it should set the floor on the worst-case scenario. It also will leave the country better off once we get through this and the economy starts recovering. Which should inspire confidence for investors, markets…everyone.
Being cooped up won’t be fun in the short-term but it’s the best option for a bad situation. I suspect cabin fever will set-in quickly for many.
But imagine the impact of the population let loose on the economy once the all-clear is given. By canceling all extra-curricular activities, disposable income sits idle and growing (I get that not everyone has this luxury). They can make a big impact on the economy when this is done.
If this happens to describe you, consider putting some of that money to work now. Donate to your local food bank or if you have a favorite local restaurant, order to go or buy some gift cards to enjoy once this blows over because it will eventually. (Any restaurants or bars forced to close temporarily may be closed permanently if this drags on more than a few months. Restaurants are notoriously low-margin. They could use some support. Every little bit counts when it comes to surviving this ordeal. Additional stimulus from Congress to protect businesses, would go a long way in ensuring a quick economic recovery while saving jobs.)
Until then, grab a book, start a puzzle, learn something new, binge-watch that show you’ve been putting off, or go for a walk.
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A few other random thoughts:
- We’re literally putting Blaise Pascal’s quote to the test: “All of humanity’s problems stem from man’s inability to sit quietly in a room alone.”
- The NFL wins sports news with free agency starting this week and no other sports going on. They’ll probably win again with the draft next month too. It’s been a welcome distraction for the last few days.
- Of course, sports is always a nice distraction. If only leagues could find a way to safely play in empty stadiums…
- E-sports has a huge opportunity to fill that void since its the only “sport” that can be played remotely. Leagues/organizers should run competitions between the best teams around the world. It’d be a way to build a lifelong fan base. Adding a charity element to it would be great PR. Heck, play against pro-athletes.
- Ditto for bands/musicians.
- This is the perfect time for movie studios to test the profitability of bigger-budget movies using the direct to video streaming model.
- With K-12 and colleges forcing themselves to test mass remote learning right now, I bet education looks very different in ten years. There are teachers out there right now trying to figure out the best way to teach kids remotely. The lessons teachers learn from this experience will pay dividends down the road.
- Ditto for remote work. How many businesses will realize employees can get work done while not in the office? What if productivity improves significantly — like getting 5-days of work done in four days — because of no commute and more flexible schedules? What will the typical work-week look like in ten years? Do we see a 4-day work week in the future?
- We’re testing the limits of mass delivery services…global supply chains…distribution networks…business schools will be studying this period for years.
- Don’t be surprised if the unemployment rate doubles by month’s end. The surge in new claims this week looks ugly.
- When does Buffett write his “Buy America” op-ed like he did in 2008?
- The stock market is like coming across a car accident on the road every single day. I find it impossible to look away. 2008 was the same.
- Bargains exist in this market. Opportunity seekers waiting for the “right” time to buy will never find it. At some point, just do it. You’re practically guaranteed to be wrong in the short term, but likely right in the long term. It just takes courage.
- Expect a spike in births in the next 9-10 months, at least.
- Humans are highly resilient when it matters most. We’ll get through this…as we’ve gotten through every other horrible period in history.
- How’s the hoarded toilet paper supply holding up?
