Coronavirus - what are you doing with your investments / 401k’s?

[ChpBstrd]

Fall, baby, fall!!!

My NW is down 6.5% from its February peak compared to the market’s 17.5%, and I’m about to hit the strike prices of my protective puts so loses slow from here (I watched those long puts and short calls bleed value all 2019 but held my AA). Let’s hope for a bottom 30% below here. Could be a retirement-in-one-move situation a year or two from now, like going all-in in 2009.

[Michael in ABQ]

In mid-February my 401k allocation bought ~10.5 shares of S&P500 index, on the 28th it was 12 shares, so by this Friday it will probably be 13-14 shares. It's nice getting all these stocks on sale - especially buying them with tax-free income for my Roth 401k while I'm deployed.

[MustacheAndaHalf]

My prediction of 1,000 U.S. cases by next Mon/Tues seems quaint now that the U.S. has over 500 COVID-19 cases.  The question is what comes next, and I spent a few hours thinking about it.  I decided to move some equities into bonds, and await the next panic.  I expect there will be an additional panic at 10,000 U.S. cases of COVID-19.

The U.S. market is down -5.4% so far today, with international down -5.7%.  I actually submitted limit orders that triggered at the market open (it worked!), but wound up selling at 1.3% lower than current prices.  Selling ETF gives me a credit, which I then used to buy a long-term treasury ETF and gold.  That ETF was up +10% when I bought, and is up +7% now, so I paid about +3.5% more than current prices.  Similarly, gold is slightly down, and I paid +0.6% more there.  So combine those two, and it's about +3.1% higher cost for buying early, compared to current market prices.

Essentially I'm predicting the U.S. will hit 10,000 cases of corona virus and trigger another panic.  But I expect some time before or after that, I'll see a repeat of Friday Feb 28th where the market is 100% in panic mode.  I plan to reverse half my trades on each of those panics.  Time to wait and see.

[Michael in ABQ]

Wow! I think this may be the first time we've ever actually hit a circuit breaker. (In fairness the 7% and 13% breakers are less than a decade old, so that's not quite as exciting as it sounds.)

I was looking at a CNBC article and at a 7% drop, this still doesn't break into the top 20 one-day S&P 500 drops. Most of those were from the 1930s or 2008, plus the huge drop in 1987 - over 20%.

[use2betrix]

Still have my auto-deposit of $4k twice a month into VTSAX, however I dumped an extra $10k in today, in addition to another $10k into a major oil and gas company that I work for.

I’ve transferred over another $20k from my checking acct into my money market acct to continue with these drops.

I typically keep a 2 year FU fund, but am find bumping it to 1 year in this scenario. Once the markets climb back up, I can hold off on my automatic deposits and other savings and replenish the years worth of living expenses in about 4 months.

[maizefolk]

Still have my auto-deposit of $4k twice a month into VTSAX, however I dumped an extra $10k in today, in addition to another $10k into a major oil and gas company that I work for.

I’ve transferred over another $20k from my checking acct into my money market acct to continue with these drops.

I typically keep a 2 year FU fund, but am find bumping it to 1 year in this scenario. Once the markets climb back up, I can hold off on my automatic deposits and other savings and replenish the years worth of living expenses in about 4 months.

Hey use2betrix, are you going to be okay at work?

Normally I'm all for reducing the size of efunds to put more money into the market. Since you're working in the oil and gas sector just want to make sure your position isn't likely to be impacted by WTI Crude dropping 17% or so today (when I went to sleep it was closer to 30% down, but it looks like it has made up some of the losses today) and/or the type of work you do for the company could also be done for companies in other sectors.

[fattest_foot]

Here in the US, with just as much warning, and without the handicap of widespread lockdowns and quarantines messing with our economy and supply chains, the CDC botched developing our own test. In the past week it appears we managed a grant total of less than 1,600 tests, barely 200 people tested per day.

It is worse than that.  We had the option of using the existing WHO test while developing our own, but rejected the WHO test because it wasn't invented here.

Not sure where you read that, but the CDC began developing their test before the WHO did. It's just that it went poorly so they didn't field it until they got it fixed. We could have dropped the CDC development and gone with the WHO one, but that bureaucracy for you.

[fattest_foot]

Here in the US, with just as much warning, and without the handicap of widespread lockdowns and quarantines messing with our economy and supply chains, the CDC botched developing our own test. In the past week it appears we managed a grant total of less than 1,600 tests, barely 200 people tested per day.

It is worse than that.  We had the option of using the existing WHO test while developing our own, but rejected the WHO test because it wasn't invented here.

Not sure where you read that, but the CDC began developing their test before the WHO did. It's just that it went poorly so they didn't field it until they got it fixed. We could have dropped the CDC development and gone with the WHO one, but that's bureaucracy for you.

[Queen Frugal]

About a year ago I invested $7k in LGLV (large cap low volatility fund) in my brokerage account with money ear marked for some rather short term purposes. Then it made a really nice profit and I didn't want to sell it until the gains became long term after a year. I made a deal with myself months ago that I would hang on to it until either a year passed, I lost the gains, or I needed the money. So rather than trying to time the market I sold it this morning as Friday my total gains were down to $55.

I got my trade in just before the 7% pause hit. Maybe that was minute 5. Ha! And lost 4.5% total. The loss is not a big deal - and I am still glad I kept to my promise to myself. But wow does that make me see with a lot more clarity just how hard it is to time the market and how you could drive yourself crazy with it.

All of my other investments have at least a decade to recover and I don't have any urge to sell. I am confident this too shall pass.  I would love to be buying right now but it's not on my normal schedule so I'll hold off for now.

Investment policy statements are a really good thing.

And on to nuttier news... maybe this is completely irrational, but I am taking enough cash out of my bank today to pay a month's worth of normal expenses. That might be ridiculous but I'm doing it. 

[use2betrix]

Still have my auto-deposit of $4k twice a month into VTSAX, however I dumped an extra $10k in today, in addition to another $10k into a major oil and gas company that I work for.

I’ve transferred over another $20k from my checking acct into my money market acct to continue with these drops.

I typically keep a 2 year FU fund, but am find bumping it to 1 year in this scenario. Once the markets climb back up, I can hold off on my automatic deposits and other savings and replenish the years worth of living expenses in about 4 months.

Hey use2betrix, are you going to be okay at work?

Normally I'm all for reducing the size of efunds to put more money into the market. Since you're working in the oil and gas sector just want to make sure your position isn't likely to be impacted by WTI Crude dropping 17% or so today (when I went to sleep it was closer to 30% down, but it looks like it has made up some of the losses today) and/or the type of work you do for the company could also be done for companies in other sectors.

I’m a contractor, so there’s always some volatility. That being said, I am over new construction projects and my current projects are slated to last another 15 months, so I should be at least good until then. I stand out pretty heavily on our project team (I have been given two huge raises since I started about 20 months ago, along with more vacation, most recently just last week) so I will likely be towards the end of a layoff list, if that did happen.

Even if I did get laid off now, or in 15 months, I’d be fine with whatever. The wife and I are more than ready for a long sabbatical at any given moment! We’ll always keep a years worth of living expenses, just in case.

[Buffaloski Boris]

Circuit breaker tripped, 7% plus drop at the close, VIX hits 62.

It wasan interesting day!

[waltworks]

Yawn. Another week, another $1500 unceremoniously deposited into the market.

-W

[Radagast]

Last week I scraped up the spare change in my Fidelity account and put in a limit order for a few shares, about $370 worth or something. So pretty life changing. Looks like that filled today...

Put in more limit orders to sell ZROZ, since it was both insane and over my rebalance band. But that didn't go through, hopefully it will have a chance this week.

But so far this has not been that big of a deal. If the crash recovers now before losing 20%, it will go down in history as "second worst crisis in the S&P500 in the 18 months ending April 2020." Yawn.

I am actually feeling a little depressed because I think it will be a V correction with the low today, and a quick recovery. I would really like a chance to buy on the cheap, but in my investing since 2015 every correction has been lightning fast and I do not think I have bought more than 10% below an all time high as a result of the spacing of my monthly or (as of last year) biweekly deposits. Most of my money went in last Monday and Tuesday, now nothing until next Tuesday... Unless this correction grows, the 2015 start year might be shaping up to be the worst starting sequence since 1995! (btw I did not do any investigation for this paragraph, so my statements could be wrong.)

[MustacheAndaHalf]

... I am actually feeling a little depressed because I think it will be a V correction with the low today, and a quick recovery. I would really like a chance to buy on the cheap, but in my investing since 2015 every correction has been lightning fast ...

Feeling a little depressed might fit the circumstances, but not over the markets.  The U.S. has an outbreak that already numbers 700+ cases (according to CNN 2 hours ago), showing it's out of control.  With months to prepare, the U.S. waited until very recently to produce and deliver test kits.  Maybe that's why the "Wu Han Organization" (WHO) data is not believable, with zero new U.S. cases from Mar 7-9, while the U.S. stock market drops -8% over fears of U.S. outbreaks.

My current thesis might help with your market-driven mood.  I predict the U.S. will hit 10,000 cases, and that will trigger another panic.  Look at what happened in China after 500 cases... they went all the way to 80k cases today.  And in Italy there's over 7k cases, same in South Korea.  What I see is an early period of denial, while the virus spreads without testing.  That's followed by test kits, and a massive growth rate in new cases - they are actually being detected.  Finally, the virus grows quickly despite testing, and you get China/Italy/South Korea.  I don't see any reason to view the U.S. as especially different.

[BicycleB]

Sold big huge - ah, er, effectively $2k of bonds. And bought the same of stock.

I don't really have an Investment Policy Statement. More of an Investment Policy Opinion that floats in my brain. Basically, it's "keep the house, rent out rooms, keep the financial assets around 70% stock 30% bonds until I get around to diversifying the non-stock financial assets better. Rebalance quarterly to annually if needed." Then I do nothing whatsoever, except for sell financial assets when I need spending money for the next couple of months. Do as I say, not as I do!

I "decided" this sophisticated policy a while back. My stock portion at the time was in the 60s as best I could tell. By early February, over 70%. The pullback dropped stock to just a tiny bit under target.

Rather impulsively, I decided that NOW is the time to rebalance. That's when I realized just how to close to 70% I am (I think). Hence the satisfyingly tiny amount of rebalancing.

To tidy up some details, I placed the order tonight to sell $10k of VASGX (which is 20% bonds, 80% global stock) and buy $10k VTWAX (100% global stock). That's my big "FIREd guy dodges coronavirus" move.

[Vapour]

I don't really have an Investment Policy Statement. More of an Investment Policy Opinion that floats in my brain.

Ha. That's kind of how I am.  I at least wrote down an asset allocation a few years back that I loosely try and stick to.  I usually only rebalance with new funds, but I did sell a bit of bonds recently to buy stocks in this downturn.  I'm currently 90/10 and I'm sort of considering going down to more like 5% bonds so I can buy stocks at discount now.  Maybe this is why I really should have an IPS...

[Radagast]

... I am actually feeling a little depressed because I think it will be a V correction with the low today, and a quick recovery. I would really like a chance to buy on the cheap, but in my investing since 2015 every correction has been lightning fast ...

Feeling a little depressed might fit the circumstances, but not over the markets.  The U.S. has an outbreak that already numbers 700+ cases (according to CNN 2 hours ago), showing it's out of control.  With months to prepare, the U.S. waited until very recently to produce and deliver test kits.  Maybe that's why the "Wu Han Organization" (WHO) data is not believable, with zero new U.S. cases from Mar 7-9, while the U.S. stock market drops -8% over fears of U.S. outbreaks.

My current thesis might help with your market-driven mood.  I predict the U.S. will hit 10,000 cases, and that will trigger another panic.  Look at what happened in China after 500 cases... they went all the way to 80k cases today.  And in Italy there's over 7k cases, same in South Korea.  What I see is an early period of denial, while the virus spreads without testing.  That's followed by test kits, and a massive growth rate in new cases - they are actually being detected.  Finally, the virus grows quickly despite testing, and you get China/Italy/South Korea.  I don't see any reason to view the U.S. as especially different.

Yeah, that is a little selfish of me to say that. I need to adjust my thinking.

[ender]

Feeling a little depressed might fit the circumstances, but not over the markets.  The U.S. has an outbreak that already numbers 700+ cases (according to CNN 2 hours ago), showing it's out of control.  With months to prepare, the U.S. waited until very recently to produce and deliver test kits.  Maybe that's why the "Wu Han Organization" (WHO) data is not believable, with zero new U.S. cases from Mar 7-9, while the U.S. stock market drops -8% over fears of U.S. outbreaks.

Markets got hammered because of the oil games Russia and Saudi Arabia are playing, not Corona.

[nereo]

Feeling a little depressed might fit the circumstances, but not over the markets.  The U.S. has an outbreak that already numbers 700+ cases (according to CNN 2 hours ago), showing it's out of control.  With months to prepare, the U.S. waited until very recently to produce and deliver test kits.  Maybe that's why the "Wu Han Organization" (WHO) data is not believable, with zero new U.S. cases from Mar 7-9, while the U.S. stock market drops -8% over fears of U.S. outbreaks.

Markets got hammered because of the oil games Russia and Saudi Arabia are playing, not Corona.

Are we sure?  I’m not.  For certain the oil market bled into (and possibly drove) the sell off, but we’re also learning just how extensive a disruption all the efforts to slow down COVID-19 will have on the economy.  By at least one estimate the US airline industry will lose $20B this quarter. I think the cruise-ship industry could suffer for years. Apple and Samsung have both released downward revisions citing supply-chain disruptions, and the world bank estimates that the US economy will grow at just 0.9% this quarter, and predicts it will be flat (0.0%) next quarter.  A few months ago the predictions were for 2.5% growth, so this is a huge downgrade

All of this came out over the weekend, and it all suggests a very real global slowdown.

My read is that oil supply just threw gasoline (pun intended) onto some already uncertain and pessimistic outlooks. And the markets hate uncertainty.

[MustacheAndaHalf]

Feeling a little depressed might fit the circumstances, but not over the markets.  The U.S. has an outbreak that already numbers 700+ cases (according to CNN 2 hours ago), showing it's out of control.  With months to prepare, the U.S. waited until very recently to produce and deliver test kits.  Maybe that's why the "Wu Han Organization" (WHO) data is not believable, with zero new U.S. cases from Mar 7-9, while the U.S. stock market drops -8% over fears of U.S. outbreaks.

Markets got hammered because of the oil games Russia and Saudi Arabia are playing, not Corona.

As the stock market dropped -7% in the first minutes of trading, oil company stocks were down about -30%.
Today the markets are going to open +3% higher, with oil company stocks up about +30%.

Let's say you scale that to make them equivalent: +4.3% equals +43% (1 x .7 * 1.43 = 1).
Looks to me like oil isn't the whole story.

[MustacheAndaHalf]

The -5% drop in S&P 500 futures suggests the market is aware of the problem.  But I think it's worse than expected, and the panic at 1,000 may be followed by further panic.  It could be another long week.

That -5% is determined by trading limits on stock market index futures contracts. So there could be a bit more awareness/concern/panic baked in to people's expectations than we're seeing from the futures.

My best guess is that the S&P 500 opens down 6-7%, comparable to european and australian markets, worse than asian markets.

But of course if I was any good at predicting what the stock market would do, I'd be doing that, not watching from my kitchen table over breakfast.

Edit: Opened at -6.7%. Hit -7% in the first six minutes of trading.

I missed this earlier, but yes, that's exactly right.  Apparently when futures markets trade more than -5% or +5%, trading is halted for a time.  That happened right before the stock market opened, and left everyone with "-5% or more" drop, which turned out to be just under a -7% drop.  A few minutes into trading, it hit -7% and stock market trading was halted for 15 minutes to let people cool off and revise their plans.

Today the market is opening a few percent higher, but still down for the week so far.

[frugalnacho]

It's almost like no one has any idea and trying to predict and time the market is futile?

[nereo]

It's almost like no one has any idea and trying to predict and time the market is futile?

Shhhhh....  You're going to make a lot of financial-types look silly and pointless.

[MustacheAndaHalf]

It's almost like no one has any idea and trying to predict and time the market is futile?

Earlier this year, I assumed Iran would attack the U.S., and send oil higher.  Then Iran accidentally shot down a civilian airplane, and suddenly nobody cared about a lone drone strike on Sulemani.  I was wrong to predict global events.

Yesterday I couldn't separate COVID-19 from oil prices - it looks like both were factors in the -8% price drop.  Per the paragraph above, I can't predict oil.  I just let it be.

For COVID-19, I've watched it play out in the same way repeatedly.  China shut down an entire province, and Beijing was deserted.  Italy is on lock down now.  In both cases, people stop shopping and stop working.  It's a double economic hit to both consumption and production.  So if it hits the U.S. hard, the impact should be much greater than just -5%.

Look at the U.S. situation: 700+ cases, rising quickly.  Let me quote the CDC:
"It’s likely that at some point, widespread transmission of COVID-19 in the United States will occur."
https://www.cdc.gov/coronavirus/2019-nCoV/summary.html#anchor_1582494216224

I understand people are hopeful and think the U.S. is different.  But the data paints a different picture, as does the CDC.  That's why I think a roughly -5% market drop (-8% +3%) is too small to represent what happens next with COVID-19.

If I'm wrong, the stock markets will be fine through March 20.  Nothing will happen for the next 10 days.
If I'm right, a new panic will occur and it will be time to buy stocks on sale.  I'll probably buy too early - which is fine.  My goal is just to prove the markets under-estimated the crisis, and I got it right.

[frugalnacho]

It's almost like no one has any idea and trying to predict and time the market is futile?

Shhhhh....  You're going to make a lot of financial-types look silly and pointless.

And people in this thread.  Definitely some great predictions in this thread that have been on point, and makes me think "this guy knows what he's talking about and is predicting market moves!", but then I think of the hundreds of other threads of people dropping predictions that were well thought out and made logical sense and the market just did whatever it wanted.  You don't have to be a genius to be able to see that coronavirus might have some negative economic impact...but as far as predicting which way the market will move over any given time period, it still seems like the market is just doing what it wants and it's not possible to predict it accurately.

The market at all times:

[nereo]

I feel like we need a mantra:

"I cannot predict what the markets will do on any particular week, and that is ok.  If I stay the course in time I shall be rewarded"

[frugalnacho]

It's almost like no one has any idea and trying to predict and time the market is futile?

Earlier this year, I assumed Iran would attack the U.S., and send oil higher.  Then Iran accidentally shot down a civilian airplane, and suddenly nobody cared about a lone drone strike on Sulemani.  I was wrong to predict global events.

Yesterday I couldn't separate COVID-19 from oil prices - it looks like both were factors in the -8% price drop.  Per the paragraph above, I can't predict oil.  I just let it be.

For COVID-19, I've watched it play out in the same way repeatedly.  China shut down an entire province, and Beijing was deserted.  Italy is on lock down now.  In both cases, people stop shopping and stop working.  It's a double economic hit to both consumption and production.  So if it hits the U.S. hard, the impact should be much greater than just -5%.

Look at the U.S. situation: 700+ cases, rising quickly.  Let me quote the CDC:
"It’s likely that at some point, widespread transmission of COVID-19 in the United States will occur."
https://www.cdc.gov/coronavirus/2019-nCoV/summary.html#anchor_1582494216224

I understand people are hopeful and think the U.S. is different.  But the data paints a different picture, as does the CDC.  That's why I think a roughly -5% market drop (-8% +3%) is too small to represent what happens next with COVID-19.

If I'm wrong, the stock markets will be fine through March 20.  Nothing will happen for the next 10 days.
If I'm right, a new panic will occur and it will be time to buy stocks on sale.  I'll probably buy too early - which is fine.  My goal is just to prove the markets under-estimated the crisis, and I got it right.

I would just caution that you might be deluding yourself if you think you can accurately predict any of these things.  I mean we all know coronavirus is going to impact the world economically, and also the usa.  Everyone knows that.  But as far as predicting which direction and magnitude the market will swing...what gives you better insight than literally the entire market?  Everyone in the world has the same information you do and yet stock prices are where they are.  Some most people are idiots, but there are a shit ton of people way smarter than you or me that are being factored into the current price.

You may be right, or you may be wrong.  Those are pretty much the only 2 options.  I've already seen this play out dozens of times just on this forum though.  Each time was a "this time it's different" and some huge factor that was going to majorly impact the stock market.  Almost everyone of those threads seems ridiculous in retrospect as the market kept marching onward and upward.  Is this the beginning of a recession? Is this just a minor dip that will be recovered in the next 2 weeks? 2 months? 2 years?

I have no idea.   

[DadJokes]

Earlier this year, I assumed Iran would attack the U.S., and send oil higher.  Then Iran accidentally shot down a civilian airplane, and suddenly nobody cared about a lone drone strike on Sulemani.  I was wrong to predict global events.

Yesterday I couldn't separate COVID-19 from oil prices - it looks like both were factors in the -8% price drop.  Per the paragraph above, I can't predict oil.  I just let it be.

For COVID-19, I've watched it play out in the same way repeatedly.  China shut down an entire province, and Beijing was deserted.  Italy is on lock down now.  In both cases, people stop shopping and stop working.  It's a double economic hit to both consumption and production.  So if it hits the U.S. hard, the impact should be much greater than just -5%.

Look at the U.S. situation: 700+ cases, rising quickly.  Let me quote the CDC:
"It’s likely that at some point, widespread transmission of COVID-19 in the United States will occur."
https://www.cdc.gov/coronavirus/2019-nCoV/summary.html#anchor_1582494216224

I understand people are hopeful and think the U.S. is different.  But the data paints a different picture, as does the CDC.  That's why I think a roughly -5% market drop (-8% +3%) is too small to represent what happens next with COVID-19.

If I'm wrong, the stock markets will be fine through March 20.  Nothing will happen for the next 10 days.
If I'm right, a new panic will occur and it will be time to buy stocks on sale.  I'll probably buy too early - which is fine.  My goal is just to prove the markets under-estimated the crisis, and I got it right.

In the first two paragraphs, you admit to failings at market prediction. You then spend the rest of your post attempting to predict the market.

A vaccine could be formulated tomorrow, and the market could recover overnight as a result of the news. Or a dozen other things could happen. We just don't know.

[Davnasty]

I understand people are hopeful and think the U.S. is different.  But the data paints a different picture, as does the CDC.  That's why I think a roughly -5% market drop (-8% +3%) is too small to represent what happens next with COVID-19.

If I'm wrong, the stock markets will be fine through March 20.  Nothing will happen for the next 10 days.
If I'm right, a new panic will occur and it will be time to buy stocks on sale.  I'll probably buy too early - which is fine.  My goal is just to prove the markets under-estimated the crisis, and I got it right.

You're looking at this as if all you need to do is predict the direction of the economy, but really what you're trying to do is predict how millions of semi rational human brains with varying levels of intelligence will consume and process the available information and how their collective choices will impact the market.

[MustacheAndaHalf]

I deliberately mentioned my failings above, to give a more balanced view.  If all you saw was me predicting 10,000 cases in China before the media & markets caught on, you might think I can predict all kind of things.

From this past weekend to now, I dropped from 73% equities to 64% equities.  Which is kinda like being 6/7ths in favor of staying the course, and 1/7th in favor of predicting a market panic in the next ~10 days.  My portfolio will mostly be hurt if my prediction is accurate.

Drugs and vaccines must go through testing - there is no chance the U.S. starts using a vaccine tomorrow.  Maybe you're thinking of remdesivir, which is really far along: it is starting a small human trial, with the eventual goal of an experiment with hundreds of volunteers.  Why would a drug company take the risk to break laws to skip required testing?

[v8rx7guy]

I deliberately mentioned my failings above, to give a more balanced view.  If all you saw was me predicting 10,000 cases in China before the media & markets caught on, you might think I can predict all kind of things.

From this past weekend to now, I dropped from 73% equities to 64% equities.  Which is kinda like being 6/7ths in favor of staying the course, and 1/7th in favor of predicting a market panic in the next ~10 days.  My portfolio will mostly be hurt if my prediction is accurate.

Drugs and vaccines must go through testing - there is no chance the U.S. starts using a vaccine tomorrow.  Maybe you're thinking of remdesivir, which is really far along: it is starting a small human trial, with the eventual goal of an experiment with hundreds of volunteers.  Why would a drug company take the risk to break laws to skip required testing?

I could see the President permitting the fast tracking of a vaccine.  I'm not sure if he could do this with an executive order or what it would take, but I could very easily see him try that... obviously there would be some criticizing that, but he's going to get criticized for everything he does by half the population...  just like Obama before him.

[MustacheAndaHalf]

I understand people are hopeful and think the U.S. is different.
...
If I'm right, a new panic will occur and it will be time to buy stocks on sale.

You're looking at this as if all you need to do is predict the direction of the economy, but really what you're trying to do is predict how millions of semi rational human brains with varying levels of intelligence will consume and process the available information and how their collective choices will impact the market.

The coronavirus can spread very quickly when nobody reacts to it.  So if people and markets completely ignore it, the situation actually gets worse.  People over 80 have about a 1 in 7 chance of dying, based on China's data.  That's well over 50x more deadly than the flu.  There is some level of people getting infected where it simply can't be ignored.

The other choice is to react - people avoid contact with each other.  That means large events canceled - sporting events with zero tickets sold.  People staying away from work, and from stores.  That very reaction to avoid the illness will also impact markets.

So people do nothing, and make it worse later... or people avoid contact with each other, which causes significant impacts to the economy.

[MustacheAndaHalf]

...
Drugs and vaccines must go through testing - there is no chance the U.S. starts using a vaccine tomorrow.  Maybe you're thinking of remdesivir, which is really far along: it is starting a small human trial, with the eventual goal of an experiment with hundreds of volunteers.  Why would a drug company take the risk to break laws to skip required testing?

I could see the President permitting the fast tracking of a vaccine.  I'm not sure if he could do this with an executive order or what it would take, but I could very easily see him try that... obviously there would be some criticizing that, but he's going to get criticized for everything he does by half the population...  just like Obama before him.

To be clear, you're saying skip the 5 person trial and 400 person trial, and directly experiment on thousands of Americans who may not even be sick?

[DadJokes]

I deliberately mentioned my failings above, to give a more balanced view.  If all you saw was me predicting 10,000 cases in China before the media & markets caught on, you might think I can predict all kind of things.

From this past weekend to now, I dropped from 73% equities to 64% equities.  Which is kinda like being 6/7ths in favor of staying the course, and 1/7th in favor of predicting a market panic in the next ~10 days.  My portfolio will mostly be hurt if my prediction is accurate.

Drugs and vaccines must go through testing - there is no chance the U.S. starts using a vaccine tomorrow.  Maybe you're thinking of remdesivir, which is really far along: it is starting a small human trial, with the eventual goal of an experiment with hundreds of volunteers.  Why would a drug company take the risk to break laws to skip required testing?

I didn't say anything about a vaccine being used. All it would take is the news that a viable one is ready for testing for the markets to potentially recover.

[v8rx7guy]

...
Drugs and vaccines must go through testing - there is no chance the U.S. starts using a vaccine tomorrow.  Maybe you're thinking of remdesivir, which is really far along: it is starting a small human trial, with the eventual goal of an experiment with hundreds of volunteers.  Why would a drug company take the risk to break laws to skip required testing?

I could see the President permitting the fast tracking of a vaccine.  I'm not sure if he could do this with an executive order or what it would take, but I could very easily see him try that... obviously there would be some criticizing that, but he's going to get criticized for everything he does by half the population...  just like Obama before him.

To be clear, you're saying skip the 5 person trial and 400 person trial, and directly experiment on thousands of Americans who may not even be sick?

Well is the Corona virus a big deal, or not?  I'm not saying I agree with it, it's just something that I could see happening and I've heard it floated in at least one podcast.  Could it could even be disguised in a "right to try" law, where-in you are allowed to try an untested vaccine, or a vaccine that is approved overseas but not in the US, under your own risk?

[bigblock440]

I deliberately mentioned my failings above, to give a more balanced view.  If all you saw was me predicting 10,000 cases in China before the media & markets caught on, you might think I can predict all kind of things.

From this past weekend to now, I dropped from 73% equities to 64% equities.  Which is kinda like being 6/7ths in favor of staying the course, and 1/7th in favor of predicting a market panic in the next ~10 days.  My portfolio will mostly be hurt if my prediction is accurate.

Drugs and vaccines must go through testing - there is no chance the U.S. starts using a vaccine tomorrow.  Maybe you're thinking of remdesivir, which is really far along: it is starting a small human trial, with the eventual goal of an experiment with hundreds of volunteers.  Why would a drug company take the risk to break laws to skip required testing?

I could see the President permitting the fast tracking of a vaccine.  I'm not sure if he could do this with an executive order or what it would take, but I could very easily see him try that... obviously there would be some criticizing that, but he's going to get criticized for everything he does by half the population...  just like Obama before him.

I'm too lazy to look it up, but I'm assuming there's no law outlining the approval process, it's a regulation put in place by unelected bureaucrats placed by the executive branch.  That being the case, no reason they can't be waived solely with an executive branch decision.   

[Telecaster]

Well is the Corona virus a big deal, or not?  I'm not saying I agree with it, it's just something that I could see happening and I've heard it floated in at least one podcast.  Could it could even be disguised in a "right to try" law, where-in you are allowed to try an untested vaccine, or a vaccine that is approved overseas but not in the US, under your own risk?

Our current laws already hold drug companies harmless from side effects of vaccines.  The reason is vaccines are a low margin business and drug companies would not be particularly interested otherwise. 

You can't fast track vaccines.  By their nature, you can't know if a vaccine actually works until you run clinical trials and analyze the data.   You cannot speed up the clock with the clinical trials.  They simply take a certain amount of time.  FWIW, clinical trials have already started in this country and other countries.  If you want to volunteer for the trials I'm sure they will hook you right up. 

[nereo]

I'm too lazy to look it up, but I'm assuming there's no law outlining the approval process, it's a regulation put in place by unelected bureaucrats placed by the executive branch.  That being the case, no reason they can't be waived solely with an executive branch decision.

Actually it is codified law, the Drug Approval Pathway (see 505(b)1-2).  There's a bunch of different pathways but the short version is, it's the law, passed by congress and enforced by congressional mandate by the FDA. 

perhaps the WH would get creative and use some emergency powers to suspend the normal process, but it's perhaps equally likely that a majority of legislatures would band together if this really gets bad to pass a special COVID-19 act which could provide additional funding, pave a pathway for fast-tracking vsaccine(s) and do any of another number of stuff (e.g. allow for forced quarantines?)_

fast-tracking a vaccine is incredibly risky, as it may be ineffective or (far worse) wind up somehow killing, injuring, or leaving vulnerable more people than it saves.

[v8rx7guy]

Well is the Corona virus a big deal, or not?  I'm not saying I agree with it, it's just something that I could see happening and I've heard it floated in at least one podcast.  Could it could even be disguised in a "right to try" law, where-in you are allowed to try an untested vaccine, or a vaccine that is approved overseas but not in the US, under your own risk?

Our current laws already hold drug companies harmless from side effects of vaccines.  The reason is vaccines are a low margin business and drug companies would not be particularly interested otherwise. 

You can't fast track vaccines.  By their nature, you can't know if a vaccine actually works until you run clinical trials and analyze the data.   You cannot speed up the clock with the clinical trials.  They simply take a certain amount of time.  FWIW, clinical trials have already started in this country and other countries.  If you want to volunteer for the trials I'm sure they will hook you right up.

So correct me if I'm wrong, but I have often heard people say regarding the flu vaccine every year, "getting the flu vaccine is dumb because they are just guessing which strain(s) are going to be around that given year and they may not even work because they are targeting the wrong thing".  I still get the flu shot, even if it doesn't work, don't you?  Wouldn't this also kind of be the case for a potential CV vaccine, "well we are not sure if it's going to work effectively, but it's our best guess and we think it could save the lives of millions"? 

I could totally see the President trying to be the hero and claiming to fast track a vaccine, even if "fast tracking" means you don't know if it's going to be 100% effective or not.  I can especially see him doing it so that he backs up the claims that many have called ridiculous about how soon he thinks we could see a vaccine.  I think he's had it in his mind that he'll be able to make some executive orders on the matter.

[Telecaster]

I'm too lazy to look it up, but I'm assuming there's no law outlining the approval process, it's a regulation put in place by unelected bureaucrats placed by the executive branch.  That being the case, no reason they can't be waived solely with an executive branch decision.

I'm too lazy to look it up as well, but the way this usually works is Congress writes a law-Call it the "Vaccine Safety Law"--that defines what a safe vaccine is, and then gives FDA the authority to ensure vaccines meet the standards as applied by Congress (if that makes sense).    That's really broad brush, but this is why you hear about EPA always getting sued over everything.  People claim EPA isn't following the rules as stated by Congress and sue in order to enforce compliance (or what they believe is compliance).   Sometimes they win, sometimes they lose. 

There might be some red tape to cut around the edges, but FDA can't stray too far from the process.   However, I don't think we want them too.  The 737 Max debacle was caused in part by trying to cut red tape at FAA.   Turns out they cut a little too much.   I would much prefer a safe and effective vaccine over something that got rushed out the door in order to temporarily calm markets. 

[Raymond Reddington]

Holding, reinvesting dividends, and adding 1K month to 457. Adding small amounts to various other investments here and there. Still think there's more pain to come. Oil & Gas debt and ripples through the financial system of likely defaults will be more of a medium term impact than the virus. Likewise, new GAAP rules that require unrealized gains and losses to roll into earnings may cause another round of selling when companies declare Q1 earnings and the GAAP number underwhelms. The smart money will focus on non-GAAP net income. Companies' share buybacks may act as a circuit breaker, but I don't think this is the worst of it so just continuing to add out of cash flow...not digging into reserves yet as that reeks of market timing. I think this is a leg down, but there is more to come. Depending on corporate earnings, this will either be a very short, steep blip (like end of 2018), or it will be the start of something much longer. Either way, there will be time to get back in before new highs. So best to dollar cost average in, as always.

[nereo]

Well is the Corona virus a big deal, or not?  I'm not saying I agree with it, it's just something that I could see happening and I've heard it floated in at least one podcast.  Could it could even be disguised in a "right to try" law, where-in you are allowed to try an untested vaccine, or a vaccine that is approved overseas but not in the US, under your own risk?

Our current laws already hold drug companies harmless from side effects of vaccines.  The reason is vaccines are a low margin business and drug companies would not be particularly interested otherwise. 

You can't fast track vaccines.  By their nature, you can't know if a vaccine actually works until you run clinical trials and analyze the data.   You cannot speed up the clock with the clinical trials.  They simply take a certain amount of time.  FWIW, clinical trials have already started in this country and other countries.  If you want to volunteer for the trials I'm sure they will hook you right up.

So correct me if I'm wrong, but I have often heard people say regarding the flu vaccine every year, "getting the flu vaccine is dumb because they are just guessing which strain(s) are going to be around that given year and they may not even work because they are targeting the wrong thing".  I still get the flu shot, even if it doesn't work, don't you?  Wouldn't this also kind of be the case for a potential CV vaccine, "well we are not sure if it's going to work effectively, but it's our best guess and we think it could save the lives of millions"? 

I could totally see the President trying to be the hero and claiming to fast track a vaccine, even if "fast tracking" means you don't know if it's going to be 100% effective or not.  I can especially see him doing it so that he backs up the claims that many have called ridiculous about how soon he thinks we could see a vaccine.  I think he's had it in his mind that he'll be able to make some executive orders on the matter.

I know some people that get a bit irritated when what they do is described as 'just guessing'.  Its true they don't always catch the dominant strain(s), but they put a hell of a lot of effort, statistics and computing power to maximize their predictive power.  Kind of like how meteorologists aren't 'just guessing' what the weather will be like..  Sometimes they are off, but more than often it's at least partially right.

Anyway, there's a difference in the flu when it  shot vs stage III vaccine testing.  By the time the flu vaccine comes around we know which strains it is targeted at preventing and roughly how effective they are at generating limited immunity.  For reasons still largely unknown, the human body largely 'forgets' how to fight RNA viruses like the flu, which is why the same strain can circle around years later and whallop you even if you were previously vaccinated for that exact strain.  In constrast, stage III (safety) and stage IV (in a broader population) trails are still looking to see if there are unknown, unexpected interactions.  It might be effective at stopping COVID-19 but could make you way more succeptible to an autoimmune response which might be more deadly. 

[Telecaster]

I could totally see the President trying to be the hero and claiming to fast track a vaccine, even if "fast tracking" means you don't know if it's going to be 100% effective or not.  I can especially see him doing it so that he backs up the claims that many have called ridiculous about how soon he thinks we could see a vaccine.  I think he's had it in his mind that he'll be able to make some executive orders on the matter.

I think you're right.  He's stated at least three times that a vaccine is months to a year away, including twice after being corrected by his own public health officials and drug company execs.   He apparently thinks you can speed up the process if you throw money at the problem or something, or wants the public to think that.

This makes me more nervous, not less.  Our government should be focused on sober, calm analysis of this problem, not engaging in wishful thinking.  This lack of focus at the top is disturbing to me. 

[v8rx7guy]

Well is the Corona virus a big deal, or not?  I'm not saying I agree with it, it's just something that I could see happening and I've heard it floated in at least one podcast.  Could it could even be disguised in a "right to try" law, where-in you are allowed to try an untested vaccine, or a vaccine that is approved overseas but not in the US, under your own risk?

Our current laws already hold drug companies harmless from side effects of vaccines.  The reason is vaccines are a low margin business and drug companies would not be particularly interested otherwise. 

You can't fast track vaccines.  By their nature, you can't know if a vaccine actually works until you run clinical trials and analyze the data.   You cannot speed up the clock with the clinical trials.  They simply take a certain amount of time.  FWIW, clinical trials have already started in this country and other countries.  If you want to volunteer for the trials I'm sure they will hook you right up.

So correct me if I'm wrong, but I have often heard people say regarding the flu vaccine every year, "getting the flu vaccine is dumb because they are just guessing which strain(s) are going to be around that given year and they may not even work because they are targeting the wrong thing".  I still get the flu shot, even if it doesn't work, don't you?  Wouldn't this also kind of be the case for a potential CV vaccine, "well we are not sure if it's going to work effectively, but it's our best guess and we think it could save the lives of millions"? 

I could totally see the President trying to be the hero and claiming to fast track a vaccine, even if "fast tracking" means you don't know if it's going to be 100% effective or not.  I can especially see him doing it so that he backs up the claims that many have called ridiculous about how soon he thinks we could see a vaccine.  I think he's had it in his mind that he'll be able to make some executive orders on the matter.

I know some people that get a bit irritated when what they do is described as 'just guessing'.  Its true they don't always catch the dominant strain(s), but they put a hell of a lot of effort, statistics and computing power to maximize their predictive power.  Kind of like how meteorologists aren't 'just guessing' what the weather will be like..  Sometimes they are off, but more than often it's at least partially right.

Anyway, there's a difference in the flu when it  shot vs stage III vaccine testing.  By the time the flu vaccine comes around we know which strains it is targeted at preventing and roughly how effective they are at generating limited immunity.  For reasons still largely unknown, the human body largely 'forgets' how to fight RNA viruses like the flu, which is why the same strain can circle around years later and whallop you even if you were previously vaccinated for that exact strain.  In constrast, stage III (safety) and stage IV (in a broader population) trails are still looking to see if there are unknown, unexpected interactions.  It might be effective at stopping COVID-19 but could make you way more succeptible to an autoimmune response which might be more deadly.

My point was that Telecaster says "You can't fast track vaccines.  By their nature, you can't know if a vaccine actually works until you run clinical trials and analyze the data.", but if that's the case the flu shot by their nature not exist because you don't know for certain how effective that vaccine will be?  Maybe I am making a bad comparison... I don't know?  Do they know that all of the base "ingredients" of the flu vaccine are safe and they just put their best predictive power into the special sauce for the upcoming season?  If this is really as bad as they say it's going to be, 40+% of the US population with 3% death rate, at what point does the risk of a ineffective vaccine outweigh the potential reward of saving millions?  Would it make any difference if it was proposed as a "right to try"?

Obviously, I don't know what I'm talking about, but I do know that this is something I could very easily seeing the POTUS doing...

[bigblock440]

I'm too lazy to look it up, but I'm assuming there's no law outlining the approval process, it's a regulation put in place by unelected bureaucrats placed by the executive branch.  That being the case, no reason they can't be waived solely with an executive branch decision.

Actually it is codified law, the Drug Approval Pathway (see 505(b)1-2).  There's a bunch of different pathways but the short version is, it's the law, passed by congress and enforced by congressional mandate by the FDA. 

perhaps the WH would get creative and use some emergency powers to suspend the normal process, but it's perhaps equally likely that a majority of legislatures would band together if this really gets bad to pass a special COVID-19 act which could provide additional funding, pave a pathway for fast-tracking vsaccine(s) and do any of another number of stuff (e.g. allow for forced quarantines?)_

fast-tracking a vaccine is incredibly risky, as it may be ineffective or (far worse) wind up somehow killing, injuring, or leaving vulnerable more people than it saves.

Proving what they say about assuming. 

[Davnasty]

Well is the Corona virus a big deal, or not?  I'm not saying I agree with it, it's just something that I could see happening and I've heard it floated in at least one podcast.  Could it could even be disguised in a "right to try" law, where-in you are allowed to try an untested vaccine, or a vaccine that is approved overseas but not in the US, under your own risk?

Our current laws already hold drug companies harmless from side effects of vaccines.  The reason is vaccines are a low margin business and drug companies would not be particularly interested otherwise. 

You can't fast track vaccines.  By their nature, you can't know if a vaccine actually works until you run clinical trials and analyze the data.   You cannot speed up the clock with the clinical trials.  They simply take a certain amount of time.  FWIW, clinical trials have already started in this country and other countries.  If you want to volunteer for the trials I'm sure they will hook you right up.

So correct me if I'm wrong, but I have often heard people say regarding the flu vaccine every year, "getting the flu vaccine is dumb because they are just guessing which strain(s) are going to be around that given year and they may not even work because they are targeting the wrong thing".  I still get the flu shot, even if it doesn't work, don't you?  Wouldn't this also kind of be the case for a potential CV vaccine, "well we are not sure if it's going to work effectively, but it's our best guess and we think it could save the lives of millions"? 

I could totally see the President trying to be the hero and claiming to fast track a vaccine, even if "fast tracking" means you don't know if it's going to be 100% effective or not.  I can especially see him doing it so that he backs up the claims that many have called ridiculous about how soon he thinks we could see a vaccine.  I think he's had it in his mind that he'll be able to make some executive orders on the matter.

I know some people that get a bit irritated when what they do is described as 'just guessing'.  Its true they don't always catch the dominant strain(s), but they put a hell of a lot of effort, statistics and computing power to maximize their predictive power.  Kind of like how meteorologists aren't 'just guessing' what the weather will be like..  Sometimes they are off, but more than often it's at least partially right.

Anyway, there's a difference in the flu when it  shot vs stage III vaccine testing.  By the time the flu vaccine comes around we know which strains it is targeted at preventing and roughly how effective they are at generating limited immunity.  For reasons still largely unknown, the human body largely 'forgets' how to fight RNA viruses like the flu, which is why the same strain can circle around years later and whallop you even if you were previously vaccinated for that exact strain.  In constrast, stage III (safety) and stage IV (in a broader population) trails are still looking to see if there are unknown, unexpected interactions.  It might be effective at stopping COVID-19 but could make you way more succeptible to an autoimmune response which might be more deadly.

My point was that Telecaster says "You can't fast track vaccines.  By their nature, you can't know if a vaccine actually works until you run clinical trials and analyze the data.", but if that's the case the flu shot by their nature not exist because you don't know for certain how effective that vaccine will be?  Maybe I am making a bad comparison... I don't know?  Do they know that all of the base "ingredients" of the flu vaccine are safe and they just put their best predictive power into the special sauce for the upcoming season?  If this is really as bad as they say it's going to be, 40+% of the US population with 3% death rate, at what point does the risk of a ineffective vaccine outweigh the potential reward of saving millions?  Would it make any difference if it was proposed as a "right to try"?

Obviously, I don't know what I'm talking about, but I do know that this is something I could very easily seeing the POTUS doing...

I think the difference is that we know the flu vaccine has been tested to confirm it is effective against specific strains of virus and that it is safe. The unknown is what the most prevalent strains of flu will be for the upcoming season.

In the case of covid-19 we know exactly what virus we want to protect against, but we do not know if the vaccine will be effective or safe.

[fattest_foot]

So correct me if I'm wrong, but I have often heard people say regarding the flu vaccine every year, "getting the flu vaccine is dumb because they are just guessing which strain(s) are going to be around that given year and they may not even work because they are targeting the wrong thing".  I still get the flu shot, even if it doesn't work, don't you?

Uh, no, because I'm not in a group prone to major complications from the flu (those being the very young and very old, or those with compromised immune systems). Similarly, I don't interact with the at risk groups often enough to warrant getting a flu vaccine.

By the same logic, I'm not even remotely worried about coronavirus, because for me personally and those I interact with, it's not a big deal.

[nereo]

So long as your insurance covers vaccinations, I’m not sure there is any level of social contact where it is not “warranted to get a flu shot”. Maybe true recluses.

[waltworks]

Uh, no, because I'm not in a group prone to major complications from the flu (those being the very young and very old, or those with compromised immune systems). Similarly, I don't interact with the at risk groups often enough to warrant getting a flu vaccine.

By the same logic, I'm not even remotely worried about coronavirus, because for me personally and those I interact with, it's not a big deal.

Spoken like someone who has never had the flu, and/or is so young and naive they think they're indestructible. Or just doesn't give a crap about anyone else and doesn't mind the possibility of spreading the flu to more vulnerable individuals.

-W

[TempusFugit]

Uh, no, because I'm not in a group prone to major complications from the flu (those being the very young and very old, or those with compromised immune systems). Similarly, I don't interact with the at risk groups often enough to warrant getting a flu vaccine.

By the same logic, I'm not even remotely worried about coronavirus, because for me personally and those I interact with, it's not a big deal.

Spoken like someone who has never had the flu, and/or is so young and naive they think they're indestructible. Or just doesn't give a crap about anyone else and doesn't mind the possibility of spreading the flu to more vulnerable individuals.

-W

I hope that in a few months we’re all chuckling about the hysteria. But I'm not so sanguine about this just because the consequences for misjudging it might be so severe.    I spoke with a friend earlier this evening who has a similar attitude as mr. foot does and i find it a bit - I’ll say it, childish.  “I hope i get it soon.  Im not changing my life one bit”. Ok then.  Even if you don't personally suffer any major issues from this virus, you could very easily pass it to other people who will. I had the regular flu already this year and that is plenty for me, thanks. 

The irony is that if most people started taking this seriously before it seems like its urgent in your area, we might dodge this thing without too many people dying.   But to take it seriously now in most places here in the US makes you look like an alarmist or a prepper of some sort.  I don't mean hoarding supplies or wearing a mask, just saying no thanks to big gatherings and maybe avoiding large meetings at the office.

Im concerned about where we may find ourselves in about 10 or 12 days if everyone goes to St Patricks parties and parades.