I stole this from an ASX investor page I am a member of. I agree with all points.
Quote:
New infections in Wuhan China have now dropped to a trickle...
The supply side of the economy is healing after only a couple of short months of hysteria.
The demand side is now in full hysteria... as cities go into lock down.
But if stores are re-opening in the city where the virus first started...
Would it not be the case in cities where it’s now spread?
“Every storm runs out of rain...”
The market is acting like cities will be closed indefinitely... like business will never happen again... like it’s the end of the world.
In a few months, when the virus passes.... and earnings move back to what they were prior... will stock prices stay the same?
I hope they do so we can all buy them for 3 times earnings!
But I dare say... they won’t be low for as long as we all think.
I think back to the GFC where entire countries were going bankrupt, where 100 year old banks were going broke... and I don’t think even back then we saw this type of panic selling.
This is not a financial crisis where collateralized NINJA loans were being sold...
It’s a temporary virus. That’s caused a statistically insignificant amount of deaths.
As the fear abates...
And as Tom Hanks recovers... so too will the earnings of businesses.
If markets recovered from a global financial fraud...
Then they will certainly recover from a seasonal flu.
Haters... please comment 👇😂 tell me how the world is going to end.
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