Liquidate entire portfolio until virus is over?

bowlhead99

JohnRo said

Countries with relatively small, high density populations are tending to skew the percentage numbers, why exclude China though where new cases are now currently falling?

I realise there will in all likelihood be a second and third wave and things could get worse if it mutates but the fact remains a tiny fraction of the global population are being directly affected by the virus itself.

In China 'new cases are falling' does not mean that people are not dying, just that the rate of increase of cases and death toll is slowing.

It is not surprising that the number of new cases in China are falling given the cities have been locked down and people confined to homes. Communities have rallied together with people setting up social media apps to get groceries delivered to their blocks en masse and then messaging the residents to come out a few at a time and get their share of the goods and then scurry back inside. Fortunately the population doesn't mind being controlled by the state and puts up with whatever they need to, but the state now wants to get the factories back on line so will need to allow people out, and then we will see what the next wave looks like as any one person who has it can unknowingly give it to the rest and start it all off again. The level of immunity people will have is unknown until we get a lot of data, and people do not know whether they can trust the figures coming out of China anyway.

Sure, a small fraction of the population will get it and be 'directly affected by the virus itself' by actually having it, but literally billions of people are indirectly affected by it by having friends and relatives having it and needing to abruptly change their lifestyles etc. Won't be forgotten in a hurry. Even when people are 'back to work', a stark reminder of what could happen to economies and markets if there is another funny disease around the corner will act as a drag on the economies and markets to the extent it is in recent memory.  Nobody who had their city shut down for a month will easily forget that time their city got shut down for a month.

tropic_of_Username019

The deaths caused are the most serious consequence of the virus. It's worth mentioning that again, to keep some perspective. However, the economic consequences will not mostly be from the deaths, but from the side-effects that the necessary measures to reduce deaths have on the economy. The most likely scenario may be on-off lockdowns for 12-18 months until we have a vaccine, but that we're then back to "normal".

benbay001

Many scientists were predicting this from late January.

Maybe, but many many more were not.
Are you suggesting all western markets and governments totally ignored a scientific consensus that hundreds of thousands of western citizens would become infected in less than a month?
I think you are talking in hindsight.
A month ago markets and governments and scientific consensus hadnt gotten close to predicting the speed of the spread we have seen.

MK62

JohnRo said:

MK62 said:

JohnRo said:

MK62 said:

Alexland said:

JohnRo said:

I realise this isn't on message for some in here

I agree some posters on this thread seem unduly pessimistic focusing on the worst case possibilities. In 20 years we will look back at this and go 'yeah that happened, people died, then for most people life carried on'.

While that will hopefully be the case for the majority, sadly many will probably never be able to see it that way......

That will be the case for the vast majority...

The current total number of cases equates to 87 people in every 1,000,000

The current deaths attributed to Coronavirus equate to 4 people in every 1,000,000

A sense of perspective is important.

In 2017 approx 56 million people died.

Investors should stick to the long term plan and take this crisis in their stride.

Perhaps if the numbers stayed that way........but your stats are already out of date......and getting worse. Each death does not just affect one person.......

At time of posting they are the current stats, like it or lump it. They aren't 'out of date'

As  significantly more people are dying by the hour, any stat is out of date within minutes.....and in areas where there is an outbreak, the situation is far worse than the "total global population divided by total global covid-19 deaths" statistic implies......

BrockStoker

Estimated direct job losses in the Travel and Leisure Industry in the short term globally have been put at 50 million. Europe as a whole is primarily service industry based.

The travel industry is certainly going to be one of the hardest hit sectors. Unfortunate, but most other sectors should be able to resume near normal business I would think.

On the other hand there are bound to be opportunities that come out of this. It's obvious that our healthcare infrastructure is inadequate, and if we want to avert similar situations like this in the future, investment into the sector will be needed (a good argument for being invested in healthcare/biotech right now too!). That should create at least some new jobs that could offset the large numbers of people that worked in the travel/leisure sectors.

Thrugelmir

BrockStoker said:

Estimated direct job losses in the Travel and Leisure Industry in the short term globally have been put at 50 million. Europe as a whole is primarily service industry based.

The travel industry is certainly going to be one of the hardest hit sectors. Unfortunate, but most other sectors should be able to resume near normal business I would think.

On the other hand there are bound to be opportunities that come out of this. It's obvious that our healthcare infrastructure is inadequate, and if we want to avert similar situations like this in the future, investment into the sector will be needed (a good argument for being invested in healthcare/biotech right now too!). That should create at least some new jobs that could offset the large numbers of people that worked in the travel/leisure sectors.

I always think of a recession as throwing a stone into the centre of a pond. From the centre the ripples stretch out far and wide. Progressively less impact but nevertheless financial pain for someone somewhere. Write yourself a list of industries, businesses and occupations dependent on the travel industry. Will be a long comprehensive one. 
Friend in Australia works for Quantas. Has been put on 6 months unpaid leave. Companies are battening down for the longer term just to survive. 

BrockStoker

I always think of a recession as throwing a stone into the centre of a pond. From the centre the ripples stretch out far and wide. Progressively less impact but nevertheless financial pain for someone somewhere. Write yourself a list of industries, businesses and occupations dependent on the travel industry. Will be a long comprehensive one.

That is an excellent point, and one I had not considered till now. However, our strength as a human civilization is built on our ability to adapt and solve problems such as this one, so I think we will find answers if we are forced to, as we have done in the past. Of course we will have to adapt to the new "normal", and it will not be easy to begin with, but remember, the world had to change anyway as the way we were living (IMO travel was a big part of the problem) was unsustainable in terms of carbon footprint. We have an opportunity here to kill two birds with one stone so to speak, and I think we should try as much as possible to turn the negatives into positives.

kinger101

tropic_of_Username019 said:

The deaths caused are the most serious consequence of the virus. It's worth mentioning that again, to keep some perspective. However, the economic consequences will not mostly be from the deaths, but from the side-effects that the necessary measures to reduce deaths have on the economy. The most likely scenario may be on-off lockdowns for 12-18 months until we have a vaccine, but that we're then back to "normal".

The irony of course is that some academics have calculated that for now at least, the reduction in pollution has probably resulted in more lives being saved by Covid than have been lost. 

I'd say it deaths caused by the virus are the most direct consequence, but it's hard to know as present whether they'll be the most serious.  Every action a government takes is going to have consequences of some sort.  On one hand, it's probable increased isolation will have impacts on suicide rates.  But without it, the lives lost from an overwhelmed healthcare system aren't just those caused by Covid, but those caused by reduction in early cancer diagnoses for example.

I don't envy any of the people needing to make the critical decisions right now.   

bowlhead99

Thrugelmir said:
I always think of a recession as throwing a stone into the centre of a pond. From the centre the ripples stretch out far and wide. Progressively less impact but nevertheless financial pain for someone somewhere. Write yourself a list of industries, businesses and occupations dependent on the travel industry. Will be a long comprehensive one. 

Friend in Australia works for Quantas. Has been put on 6 months unpaid leave. Companies are battening down for the longer term just to survive. 

Yes, everything is interconnected. The pounds or dollars your friend doesn't earn is a pound or dollar that can't be paid to his corner shop owner, domestic cleaner, consumer goods store, cinema, bar.

The corner shop owner that doesn't get the pound of sales revenue can't pay as much in wages to his employee, buy a new industrial refrigeration unit just yet, or qualify for the same discounted pricing from his supplier due to lower volumes, so he'll make lower profits, and won't buy the new van he was thinking of getting. 

The cleaner can't buy new clothes or smartphone or give as much money to her daughter to help clear debts or to her mother to help buy a new bed.

The operator of the consumer goods store has missed out on a smartphone sale from both the Quantas worker and from the worker's home help, so there's less revenue to keep employees on or upgrade the electronic point of sale system and the CCTV system so staff get fewer hours and the projects go on hold, meanwhile the smartphone manufacturer in Korea cuts the number of shifts and buys fewer semiconductors from Taiwan, and the people selling and installing industrial refrigeration units and EPOS systems and CCTV systems, or assembling EPOS systems and CCTV systems, or grinding lenses to power CCTV systems, or producing LEDs for barcode readers or thermostats for fridges, all get less work.

The cleaner's mother's bed purchase postponement hits the bed retailers business and one fewer tree is felled because nobody is ready to buy the wood from the lumber yard just yet and they cut the shifts there, and the workers start looking for ways to save money so share their hardhats rather than buying one each.

The makers of hardhats suffer a drop in sales to the lumber yard at the same time as they suffer a drop in prop sales to movie production companies because the Quantas guy is not going to the cinema and the movies are not being licensed to show on Quantas flights and the directors can't justify buying as many yellow hats, they'll just have the CGI guys edit more of them in, but not pay more money for the incremental work because the studio is tightening its metaphorical belt and we all have to pull together right lads?

The Quantas guy isn't going to his bar, and neither is the cleaner's daughter because her mum couldn't help with her loan repayments as she'd hoped, and the CGI guys aren't in a mood for celebrating because they're doing extra work for no more pay, and the people who were going to assemble the new van for the corner shop owner have been cut to a three day week, so they're not out partying and neither are the hardhat assembly line workers, so the bottle of vodka doesn't get consumed and stays in the stockroom. The vodka manufacturer has a drop in sales from that bar and thousands like it, and isn't selling any of the miniatures for Quantas flights or IAG flights or Virgin flights etc, so it cuts its dividend and buys fewer tonnes of wheat.

The CEO of the vodka company doesn't get his bonus and its major investor doesn't get the dividend on his shares so neither of them buy a new luxury car. The wheat farmers postpone the upgrade of their combine harvester to the one with automated GPS guidance which saves the job of the driver, but they also hold off on testing the new expensive GMO wheat grains because they don't have the volume to take a chance on it, so the lab scientists have to wait for another year to get project funding for the GM testing and don't buy the celebratory cake and wine like they were going to. The cake decorators lose a sale, blah blah blah.

RIPPLES.

Or, 'every other industry is back to work like usual and only 50 million people from the travel and hospitality sectors are impacted, so the stock market will be back to normal by Christmas'.

tropic_of_Username019

Well, the eventual number of deaths can't be estimated at this stage. But would clearly be so big, if most people in the world were allowed to catch the virus, that making sure most people don't catch it (until we have a vaccine, or something else as effective) is the only viable way forward. A successful strategy may keep the number of actual deaths relatively low. But that won't imply it wasn't necessary.

Until about 2 weeks ago, the UK Government's strategy was to let most poeple in the UK catch it. That has not just delayed the implementation of a more sensible strategy in the UK (though it has, costing many lives). It is also a failure in the most basic duties of a Government.