Coronavirus update

Author: , Post Date: January 28, 2020

Excerpt from Politico’s Morning Money

Coronavirus update



Coronavirus update — I wrote here about the walloping markets took over the latest news of the coronavirus spread with the Dow closing down around 460.

Key line from David Kotok: “If we see an outbreak, or a cluster of cases in a mature economy like the U.S. or France or you name it and fear is no longer attached to China but spreads, then I think this really tanks markets …

“Then you see a global fear and global slowdown and rightfully so. I’m walking around conferences and I’m the only one wearing a mask. Complacency is a very grave danger in this type of risk environment.”

Alternate view: Leuthold’s Jim Paulsen emails: “Overall Ben – If you are not a pandemic expert – and I am not – how can you really tell? I think this primarily falls into the category of ‘why everyone diversifies their investments.’ Diversification is done to prepare for unpredictable risks, which in my opinion, a virus crisis clearly qualifies.

“The only thing which may be appropriate is perhaps taking advantage of significant stock market weakness by adding to positions. … When SARS hit in the 1990s, both stock prices and bond yields collapsed only to fully recovery a few months later.”

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