During times like this, there is one thing I want you to know…
I don’t have to tell you that, with over 100,000 reported coronavirus cases (COVID-19), investors are worried about risk right now.
That’s because risk is technically a future event with an uncertain outcome. Most people hate uncertainty.
It’s causing investors to sell their stocks because there’s no way of knowing how much the coronavirus will impact businesses. Car companies. Hotels. Airlines. They are all affected by what is happening right now.
And rather than waiting for an earnings report or a company update to see how COVID-19 has impacted the bottom line, investors are trying to gain a sense of control by selling stocks.
They may sell stocks and stash their money away until there is more clarity. Or they may be looking to buy silver and gold.
I get it.
And I don’t want to take away the seriousness of what’s happening.
With COVID-19, no one knew it would come into existence.
Now, one response to that statement would be that “a pandemic like this was inevitable, it was only a matter of time.”
Well, yes. A virus that turns into a pandemic was inevitable.
It’s happened before. It’s happening now. And it will happen again.
But pointing out the inevitable is not a prediction. To be a prediction, one had to know when it would start, how far and fast it would spread, and how long it lasted.
I could say that a fish will jump out of the lake and into a boat. But unless I provide some specifics, like whose boat, which lake, and when, it’s an empty statement that’s impossible to act upon.
And even now, three months after the first case, it’s impossible to predict what course the disease will take with any meaningful level of certainty.
It could burn out as quickly as it started, or economic activity could get cut in half for months.
I’ll tell you who knows. No one.
But this is the one thing I’m certain of – letting panic drive your actions only creates more opportunity for those who keep their heads.
“If you can keep your head about you, while everyone else is losing theirs and blaming it on you…you will be a man, my son.” Rudyard Kipling, If-
You can’t bury your head in the sand and wait for it all to pass.
In fact, it means quite the contrary.
Keep your head up and pay attention.
Don Yocham, CFA
Executive Director, National Institute for Cannabis Investors
22 responses to “Keep This in Perspective During the Coronavirus”
March 09 2020