February 28, 2020 by Jack Anderson
That's it. The market are closed. The end of a week not like the others. A week to remember. The reason? This week marked by the fastest ever stock market collapse in History. The cause? A flu. The rationale? Fear. But let's go back, shall we?
The new decade began with Australia on fire. Then Donald Trump killed Iranian General Qasem Soleimani, leading to a commercial flight being tragically shot down by mistake by the Iranian military. Definitely not a great way to start the year. But what the world didn't know is that the new crisis would not come from any tweet of Donald Trump, but from China. And that the impact would be devastating and on a global scale. A virus that suddenly transformed life into a movie.
First detected in Wuhan City, Hubei Province, the Chinese Coronavirus is now spreading. Like any virus, it spreads fast. Since the world has never been so interconnected, it spreads even faster. People drive cars, fly in planes, travel in trains, and soon enough, the entire world realized that it wasn't just a Chinese problem anymore.
Now having its own name, the COVID-19 virus has become the number one talking subject. At the office cafeteria. With friends. At family dinners. Many people seem to say this is nothing and not being scared, but those same people still want to buy protective masks and are rushing to buy supplies in the fear and/or exciting hopes of a survival mode style to come. What's better than The Walking Dead? Living it.
Ironically, even Tom Cruise had to stop the shooting of the next Mission: Impossible movie. If Ethan Hunt himself cannot stop a worldwide virus, then who can? Probably not the State. On one hand, governments are trying to take proactive measures to slow down the contamination of the general population. But is it really possible to slow down the inevitable?
Meanwhile, the virus is not only spreading from individuals, but on social media as well. Some complete fake news are being spread, such as fennel or cocaine could help prevent from having the virus or even curing it.
And obviously, Mr. Market, the conceptual imaginary person from Benjamin Graham's 1949 book The Intelligent Investor, is in a complete meltdown and depression mode and sold all his stocks. The financial market is beyond red and the short-term impact is worse than when Lehmann Brothers declared bankruptcy, in September 2008. The stock market never saw such a fast decline.
In that scenario, a professional and mature investor has only one thing to do. Buy. As the famous investor once said, "Be fearful when others are greed. Be greedy when others are fearful." Others are beyond fearful. Buy.
In the words of Franklin D. Roosevelt, "The only thing we have to fear is fear itself."
on 2020-02-29 08:00:45 ET
i really appreciate the mature way to view this crisis. people are freakin' out but there is no reason to panic whatsoever, people comon