Coronavirus- Risk (Health, Economic, Market)

[Tim]

Well, not really invest.
•But someone is going to make some serious coin.
•And someone is going to lose some serious coin.
So much uncertainty, the ability to cause fear and completely shut down a factory, a city, a region, a country, and all aspects of life.

Traders are already hopping on this. Could coronavirus spark ripple effects that have a black swan impact on the market?
Consider this, forget trade wars . What about potentially shutting down China for a month? Would US farmers or Apple or Walmart be impacted? Now add Chicago maybe? Real economic damage is possible if this health risk gets going.
Closest thing I could think of is germ warfare getting out of control. This week may be rocky.

No idea how assess the risk: health, economic, and market. But then again, news cycles are short term. 5 cases in the US isn’t even a ripple. There certainly seems to be huge efforts to keep it from being 5,000 pretty quickly.

Please realize that there is doubt about the accuracy of China reported numbers, some serious underreporting.
Beyond my brain. Long term, it’s a non event.
Curious the take of physicians.

[Hatton]

I have been following this in the WSJ. Interestingly the epicenter is in a Chinese city of Wuhan with a population of 11 million. I had never heard of this city prior to this outbreak. Something like 5 million from this area are believed to be traveling around China for the Lunar New Year holiday. On the positive side the fatality rate is much lower than SARS or MERS. As more data becomes available it will be interesting to see if just older or compromised people have died. I have not seen any stats on the patients who have died. If young and healthy are dying then yes a massive problem. My understanding is there may already be a vaccine so perhaps a short-lived problem.

[ENT Doc]

I honestly don't understand why this virus is necessarily "worse" than the common cold, which spreads like wildfire and kills dozens annually (typically those compromised anyway). Can someone point to hard data showing this virus is worse? Honestly curious and haven't seen the breakdown of those dying either.

[Tim]

The markets moved on Fri and “appear” to be taking another big step down. Someone is trading this big time in the futures.
I saw the vaccine progress, but I also saw things suggesting it is much more widespread over China and severe than reported. In Hong Kong protesters attacked a newly built isolation facility. One twitter feed (nurse) claimed like 40,000 cases in China, not the 1500. Ain’t gonna be IPhones !
With the symptoms being similar to a cold or flu evidently problems. Has killed infants. This impacts the lungs.
My guess, less dangerous than the flu.
Dr Oz on Fox.

[JBME]

the fact that the market is reacting so negatively clearly suggests to me how ridiculous it is to time the market. Don't do anything-stay off the news. Remember when the market tanked for a long period of time during mad cow disease? Or during the ebola outbreak? Or during SARS? oh wait.....

Coronavirus will be out of the news by the end of the year at the latest. Maybe even by the summer. The markets are reacting to the news and nothing more.

[Tim]

When they shut down the Forbidden City, Disney World, prohibit travel, the state Department starts charting jets to evacuate ALL stranded US citizens and state Department employees:
I tend to lean to it’s more severe than a cold. Inbound tourism shut down as well. Evidently a huge number of pop up isolation facilities for quarantine and treatment. Consider these rumors.

The interesting piece is a disruption of China’s export/import for 3-6 months will have major ripple economic impacts. Temporary yes, but much more significant than tariffs on 2020.
I am not suggesting to trade it. Some are.

[CordMcNally]

I honestly don't understand why this virus is necessarily "worse" than the common cold, which spreads like wildfire and kills dozens annually (typically those compromised anyway). Can someone point to hard data showing this virus is worse? Honestly curious and haven't seen the breakdown of those dying either.

It doesn’t make any sense to me either. There’s a 100% chance China isn’t releasing real numbers. Nonetheless, I suspect the true number of cases is exponentially higher but very mild.

[EntrepreneurMD]

I don't know about that. Looks to me if it goes at least a few more days it may be a buying opportunity, or an opportunity to shift from weaker long term positions to stronger positions. Healthcare will probably outperform other sectors during the scare, especially vaccine manufacturers in the short term.

[CordMcNally]

My prediction is that the new Chinese hospital they are building in 10 days (or whatever short period of time it is) will kill more people when it collapses than the actual virus this year.

[Tim]

My prediction is that the new Chinese hospital they are building in 10 days (or whatever short period of time it is) will kill more people when it collapses than the actual virus this year.

Well ... you pretty good at predicting,
• Is J&J a buy? They have two week lead in developing a vaccine. China will mandate vaccinations in converting from anti-vaxxers to vaccine compliant. Could be a huge market.
• Is SCI a buy or is there a Chinese equivalent? Funeral business is heavily fixed cost. If business is spiking, they make great margins.

I think the better question is whether the issue is Wuhan coronavirus or morphs into Coronavirus.
What’s your prediction? Contained or spread?

[CordMcNally]

Well ... you pretty good at predicting,
• Is J&J a buy? They have two week lead in developing a vaccine. China will mandate vaccinations in converting from anti-vaxxers to vaccine compliant. Could be a huge market.
• Is SCI a buy or is there a Chinese equivalent? Funeral business is heavily fixed cost. If business is spiking, they make great margins.

I think the better question is whether the issue is Wuhan coronavirus or morphs into Coronavirus.
What’s your prediction? Contained or spread?

I predict I will get coronavirus this weekend...except mine will have a lime in it.

[legobikes]

Coronavirus will be out of the news by the end of the year at the latest. Maybe even by the summer.

Earlier than that.

[hightower]

Hmm, I’m kind of surprised by the responses here but I guess I shouldn’t be. What’s scary about this virus is that it has all the makings of a virus that could be really really bad. Potentially originating in the animal world and starting in China where it’s clear they’ve covered up the real details of what’s happened so far means it could already be quickly spreading around the world and we wouldn’t really know it yet (remember many of these viruses are most contagious before you develop symptoms). Coronaviruses are typically more deadly than the flu from what I’ve been reading. It’s all about containment of course which here in the US is quite good...if we know it’s coming.
For those of you older guys/gals who have lived through enough pandemic scares to be unimpressed by this one, dont be so certain that “the big one” can’t happen. I’m not saying this particular virus is the one we should be scared of, but a worldwide pandemic killing hundreds of thousands or even millions is a very real possibility in my opinion. We are so much more connected on a global scale than ever before it makes me doubt our ability to truly contain a bad one especially if it spreads quickly before symptoms are apparent.
I agree that none of us should be doing anything with our portfolios other than looking for buying opportunities though. I’m keeping my fingers crossed for a really big correction because I happen to be sitting on a bunch of cash at the moment.

[JBME]

If hightower is right, then we have much much bigger things to worry about than our portfolios

[Tim]

I would hate to be quarantined until summer. 35mm people in 12 cities so far. Just the logistics are mind boggling. It does have the potential to have economic impacts. Quarantines are great from a public health standpoint, devastating from an economic standpoint.