Covid crash #2 started

Apodemus

In regards to the vaccine, while there are indeed hurdles to go and it isn't yet a done deal,  I wouldn't be near as pessimistic as you guys above.  

Firstly, assuming that we have a vaccine that can protect the vulnerable, once that category are vaccinated, Governments will no longer need to take special measures to lock down parts of the economy.  There is a good chance that we (in UK) might reach that point early in Feb/March, even though the pandemic is far from over at that point.

Cold chain delivery is simply a logistics challenge and easily overcome in a developed country like UK.  Liquid Nitrogen storage and delivery has been routinely used in remote locations across the globe, so this is nothing new.   Suppliers such as BOC are capable of delivering on this and shares in the BOC owner, Linde (NYSE:LIN), rose 20% on the news.

itwasntme001

ProDave said:

I thought it worth re visiting this thread that I started.

Well clearly I called it "wrong" (at least for now.)  but just to recap, what I saw at the time I started the thread was the markets on a slow decline since July, nothing but bad news, rising Covid cases again, more lockdowns just about everywhere, more Furlough and cost to the tax payer, rising unemployement etc etc.  Add in the unresolved Brexit deal (or not) and the presidential election and uncertainty over Trump leaving quietly. Then I saw some technical analysis that said the markets had reached a trigger point and would break out of their trend, and whichever way they broke the trend would continue for some time.  Finally I saw an increasingly rapid downward trend and called it that the markets had broken out on a downward trend and would continue falling.

I did not predict the vaccine announcement.  I was not expecting any substantial progress on that from any of the players until the end of the year.  I doubt anyone would have called that without inside information.

So I sold one of my finds and kept the other.  I am not unhappy with that position. Yes I have missed some gains but I also potentially missed some losses.  What it has shown is the fund I chose to keep has been performing a lot better than the one I sold so I will in due course be buying something different.  But not yet.  The time to buy is not just after a big rise. 

I still feel the markets are so far removed from the reality and it is only government bail outs, furlough etc that is keeping the true situation at bay, and nobody has a clue how or when all this debt will ever get repaid.  So my finger is never going to be far from the sell button just in case.

You make the classic mistake many others do.  The stock market does not have to follow the general economy.  Incomes actually rose to levels more than the pre-COVID levels given the fiscal stimulus.  Guess where this money ended?  To companies like Amazon, Apple and Microsoft.  What are the biggest components of the US stock market?  Yes you probably guessed right.  The very same aforementioned companies.

itwasntme001

Apodemus said:

In regards to the vaccine, while there are indeed hurdles to go and it isn't yet a done deal,  I wouldn't be near as pessimistic as you guys above.  

Firstly, assuming that we have a vaccine that can protect the vulnerable, once that category are vaccinated, Governments will no longer need to take special measures to lock down parts of the economy.  There is a good chance that we (in UK) might reach that point early in Feb/March, even though the pandemic is far from over at that point.

Cold chain delivery is simply a logistics challenge and easily overcome in a developed country like UK.  Liquid Nitrogen storage and delivery has been routinely used in remote locations across the globe, so this is nothing new.   Suppliers such as BOC are capable of delivering on this and shares in the BOC owner, Linde (NYSE:LIN), rose 20% on the news.

If this is the case, then we need to be really sure that the vaccine is effective as they say it is for the vulnerable.  That may not necessarily be the case.  Do the results of the vaccine show this?  I can't see anywhere about this breakdown.

If we only target the vulnerable, the virus will remain.  This means more chance of mutating and you will still get a higher number of hospital cases than under normal times.  Herd immunity is the only option.  It can still happen but it will take a whilst longer.

Prism

ProDave said:

I thought it worth re visiting this thread that I started.

Well clearly I called it "wrong" (at least for now.)  but just to recap, what I saw at the time I started the thread was the markets on a slow decline since July, nothing but bad news, rising Covid cases again, more lockdowns just about everywhere, more Furlough and cost to the tax payer, rising unemployement etc etc.  Add in the unresolved Brexit deal (or not) and the presidential election and uncertainty over Trump leaving quietly. Then I saw some technical analysis that said the markets had reached a trigger point and would break out of their trend, and whichever way they broke the trend would continue for some time.  Finally I saw an increasingly rapid downward trend and called it that the markets had broken out on a downward trend and would continue falling.

I did not predict the vaccine announcement.  I was not expecting any substantial progress on that from any of the players until the end of the year.  I doubt anyone would have called that without inside information.

So I sold one of my finds and kept the other.  I am not unhappy with that position. Yes I have missed some gains but I also potentially missed some losses.  What it has shown is the fund I chose to keep has been performing a lot better than the one I sold so I will in due course be buying something different.  But not yet.  The time to buy is not just after a big rise. 

I still feel the markets are so far removed from the reality and it is only government bail outs, furlough etc that is keeping the true situation at bay, and nobody has a clue how or when all this debt will ever get repaid.  So my finger is never going to be far from the sell button just in case.

You are going to struggle to make much money if you keeping selling out after small drops based on your predictions of future drops. You have missed a recent nice recovery and might well miss the next year or two waiting for another drop. Why not just invest in something that meets your risk level better and then ride it out. I haven't been tempted to sell any equities for over 18 months because I am happy with my allocation. I'm very happy with this years performance and didn't see much of a drop in March.

Sailtheworld

ProDave said:

I still feel the markets are so far removed from the reality and it is only government bail outs, furlough etc that is keeping the true situation at bay, and nobody has a clue how or when all this debt will ever get repaid.  So my finger is never going to be far from the sell button just in case.

Government bail outs, stimulus & furloughs ARE the reality. If you keep discounting reality then the markets are always going to look far removed and you'll remain in a permanent state of bemusement.

Alexland

itwasntme001 said:

Alexland said:

The pandemic doesn't need to cease just stop killing the most vulnerable people by offering it to them first.

I disagree.  The aim should be to vaccinate enough people to create herd immunity in order for the virus to be eradicated.  Just vaccinating the vulnerable will mean the virus stays.  More chance of mutating.  More hospitalization rates.  More concerns about catching it and spreading it.  More economic uncertainty.

Mine wasn't a medical point but in terms of the general population behaviour recovering once they see death rates decrease

Apodemus

itwasntme001 said:

If this is the case, then we need to be really sure that the vaccine is effective as they say it is for the vulnerable.  That may not necessarily be the case.  Do the results of the vaccine show this?  I can't see anywhere about this breakdown.

If we only target the vulnerable, the virus will remain.  This means more chance of mutating and you will still get a higher number of hospital cases than under normal times.  Herd immunity is the only option.  It can still happen but it will take a whilst longer.

Given that the total number of infections in the Pfizer trial so far is only 94, I would be very surprised if Pfizer had any firm evidence for efficacy at different ages or different levels of vulnerability. My point was simply that if Governments believe that they have taken sufficient steps to protect the vulnerable, it will be politically very difficult to retain restrictions while the rest of the vaccine roll-out process continues. They'll still go for herd immunity and probably want at a 70% - 80% vaccination rate in the wider population, but I believe that the restrictions will fall away quite rapidly once the most vulnerable group has been vaccinated.

itwasntme001

Apodemus said:

itwasntme001 said:

If this is the case, then we need to be really sure that the vaccine is effective as they say it is for the vulnerable.  That may not necessarily be the case.  Do the results of the vaccine show this?  I can't see anywhere about this breakdown.

If we only target the vulnerable, the virus will remain.  This means more chance of mutating and you will still get a higher number of hospital cases than under normal times.  Herd immunity is the only option.  It can still happen but it will take a whilst longer.

Given that the total number of infections in the Pfizer trial so far is only 94, I would be very surprised if Pfizer had any firm evidence for efficacy at different ages or different levels of vulnerability. My point was simply that if Governments believe that they have taken sufficient steps to protect the vulnerable, it will be politically very difficult to retain restrictions while the rest of the vaccine roll-out process continues. They'll still go for herd immunity and probably want at a 70% - 80% vaccination rate in the wider population, but I believe that the restrictions will fall away quite rapidly once the most vulnerable group has been vaccinated.

Even without a vaccine, restrictions would eventually be relaxed as the number of cases fall back to sustainable levels.  The vaccine may result in restrictions being lifted permanently.  But they may still require periodic lockdowns.  Much will depend on how effective it is for the vulnerable, how many of the population they vaccinate and, the most important of all, how effective the vaccine is long term given the possibility of mutations.

Still a lot of uncertainties and a long road ahead.

itwasntme001

Alexland said:

itwasntme001 said:

Alexland said:

The pandemic doesn't need to cease just stop killing the most vulnerable people by offering it to them first.

I disagree.  The aim should be to vaccinate enough people to create herd immunity in order for the virus to be eradicated.  Just vaccinating the vulnerable will mean the virus stays.  More chance of mutating.  More hospitalization rates.  More concerns about catching it and spreading it.  More economic uncertainty.

Mine wasn't a medical point but in terms of the general population behaviour recovering once they see death rates decrease

The more important factor is hospitalization rates.  Remains to be seen whether this vaccine (and its implementation) will be enough to result in restrictions being lifted permanently.  You could still have hospital capacity being overburdened even with a vaccine (if its not as effective for the vulnerable and/or not enough of the population receive it).  Therefore behaviour may not necessarily go back to "normal" anytime soon whether due to government restrictions or otherwise.

adonis10

itwasntme001 said:

Apodemus said:

itwasntme001 said:

If this is the case, then we need to be really sure that the vaccine is effective as they say it is for the vulnerable.  That may not necessarily be the case.  Do the results of the vaccine show this?  I can't see anywhere about this breakdown.

If we only target the vulnerable, the virus will remain.  This means more chance of mutating and you will still get a higher number of hospital cases than under normal times.  Herd immunity is the only option.  It can still happen but it will take a whilst longer.

Given that the total number of infections in the Pfizer trial so far is only 94, I would be very surprised if Pfizer had any firm evidence for efficacy at different ages or different levels of vulnerability. My point was simply that if Governments believe that they have taken sufficient steps to protect the vulnerable, it will be politically very difficult to retain restrictions while the rest of the vaccine roll-out process continues. They'll still go for herd immunity and probably want at a 70% - 80% vaccination rate in the wider population, but I believe that the restrictions will fall away quite rapidly once the most vulnerable group has been vaccinated.

Even without a vaccine, restrictions would eventually be relaxed as the number of cases fall back to sustainable levels.  The vaccine may result in restrictions being lifted permanently.  But they may still require periodic lockdowns.  Much will depend on how effective it is for the vulnerable, how many of the population they vaccinate and, the most important of all, how effective the vaccine is long term given the possibility of mutations.

Still a lot of uncertainties and a long road ahead.

Good points made here but do you think the current government are interested in what happens long term? They seem to do everything on the fly so can't imagine they are thinking 5-10 years down the line (they won't be in power then anyway so won't care). There won't be periodic lockdowns, not a chance. People are calling what England is currently in as a lockdown but it isn't, it's more a Tier 3+ or Tier 4. Besides, many many people don't appear to be following the guidelines or much care for them. The current lot will just say "vaccine great, covid gone, aren't we wonderful", and no doubt the markets will react accordingly (due to easing restrictions etc) as we have seen this week.