Recorded on Monday May 18, 2020.
Typical bear market stock chart:
How things are shaping up here in Beijing. All schools will basically be opened in June.
Divorces are up double percentage points as couples can’t stand each other. Turns out we need that distance!
Not as deadly
Will there be a resurgence? Looks like it wasn’t as deadly as what people thought it would be
But, again, the Spanish Flu passed through the first time with little damage, it was the second wave that was more deadly. But did they have the same awareness and ability to communicate what was going? They might not have had the same equipment, but ours is better now and, moreover, we can communicate much better these days, even if there are pockets of people who don’t believe the hype.
“New Data Suggests the Coronavirus Isn’t As Deadly As We Thought” – https://www.wsj.com/articles/new-data-suggest-the-coronavirus-isnt-as-deadly-as-we-thought-11587155298?
“Is the Coronavirus as Deadly as They Say?” – https://www.wsj.com/articles/is-the-coronavirus-as-deadly-as-they-say-11585088464
Coronavirus not as deadly as once thought, though it sounds scary, deaths haven’t gone beyond a harsh flu season.
More people might have been infected, but they may have also recovered without having to go to the doctor’s. So, in that sense, the virus, although scrary, isn’t as bad as the social media frenzy is making it out to be.
Now, could there be a resurgence? Yes.
But what’s different this time? As I mentioned before, better hygiene overall and, as we’re seeing, a “war-time” drive to combat the thing. Companies are re-routing their manufacturing to make the things needed to fight the virus. The climate change argument has gone out the window for now as we deal with what’s happening inside the house.
It seems that the reason for the massive number of infections in New York, a social media hub, is the result of one thing: more people were tested.
***One of the top virology labs in the USA and in the world is the Center for Disease Control which is based in Atlanta.
Barack Obama and Bill Gates
Barack Obama and Bill Gates both have come out an said they warned of this years ago. It’s a generic statement
Bill Gates is right than a pandemic would be a massive problem, but is his point that we actually can’t solve this current one?
The reason there isn’t a vaccine for COVID is because it wasn’t a threat until just this year. There was no way to no that this exact virus would cause such a disruption, such a loss of life.
Sure, I see the videos of Obama warning of this, but he never said that the Coronavirus would be the cause. He said a global pandemic. A generic statement! Even countries that don’t follow ‘the American way’ are getting hit hard with this virus, at least according to the news media.
We can’t stock medical supplies because they have a shelf life. Yes, you can keep a rotation of goods, much like they do with other goods marked as reserve (staple products), but they would still only have a quota to keep in stock, no more. Would that quota meet the surprising demand?
“Bill Gates has regrets” – https://www.wsj.com/articles/bill-gates-coronavirus-vaccine-covid-19-11589207803?
If once in a century, could there be any other generation that deal with it? Do you think you can deal with it? If you’ve lost your job, do you think you can find a new one? Can you re skill or upskill and get back to work? Do you really believed we’re all damned or do you need some guidance in where to look and what to look for?
If this is SARS-2, then hasn’t it already been dealt with faster and more efficiently than the last time?
Central bank funding across the world, especially in the US, companies reformed to make the necessary equipment to fight this virus.
Why didn’t SARS resurrect itself? Ebola pops up now and again, and has for years. AIDS is prevalent, no vaccine but is mitigated.
When you chastise “big business”, who do you mean? Do you mean the companies that Bill Gates and other famous businessmen created who speak the liberal book and are funding research using the money they made while making a big business? Who do you mean?
Amazon for making the world a shipping hub, anything and everything can be gotten for a good price and shipped anywhere within a short period of time, overnight if you want? How is that bad?
What small and medium businesses should survive? The knitters and coffee roasters? Or the people researching vaccines and natural ways of fighting and preventing disease? Or small businesses that support EMTs or technologies in those areas? Think about that when you say “support local. What “local business” is needed not just now, but going forward?
Typically, in a recession, the sectors that do the best in terms of return on investment are real estate, utilities, resources (such as oil), precious metals, biotech seems to be doing well these days. Of course there are others, you’ll need to investigate these on your own and see what your risk tolerance is.
One last thing, and this is part of a common saying in stock market trading: if everyone is talking about it then it probably won’t happen. So, it almost seems that the more people talk about a recession or a depression that it’s not likely to be as bad as they say. I’ll link to Investopedia’s Guide to Economic Recession for you to have a look through. And this is one of our chief strengths these days: knowledge and the spread of information.
- https://www.investopedia.com/terms/r/recession.asp
Global weakness
But, if COVID-19 has shown weaknesses in the global “chain”, then isn’t it a good thing to get rid of it now? Even if it’s not “good”, but very painful, if it was inevitable, then COVID-19 just made it come to the fore a lot quicker, which is true of many things these days
But is globalization bad?
I remember reading Tim Ferriss’ book “The 4-Hour Work Week”, which inspired a lot of people after 2008 and was a brilliantly marketed product via blogs and social media (he owns part of Twitter), in which I was first exposed to the idea of drop-shipping. Now, whether or not this is still possible, I’m not sure. But the idea that you could literally run your company from a phone anywhere in the world with an internet connection seemed remarkable.
I tried to do it but lacked the focus to get it done.
You can source materials from cheaper parts of the world and ship them anywhere in the world. This was made clear when I visited Hoi An in Vietnam. Having heard that my brother had ordered a tailored suit from Thailand or China, I can’t remember which one, for only $500, it seemed a little remarkable that is was possible. But there I was, strolling through the streets of Hoi An where I could bulk order any number of textiles, have them sown and customized for a price, and then be able to ship them out to anywhere in the world. The cheapest shipping option is by land, which is why so many companies say that you need to wait 4-6 weeks for delivery: because they have to place the order, manufacture the good, and then ship it the slowest and cheapest method possible. Brilliant!
- “China Manufacturers Feel the Heat in the Trade War” – https://geopoliticalfutures.com/china-manufacturers-feel-heat-trade-war/
There have been people who said that COVID-19 simply expedited things that were going to happen anyway. That includes the move of manufacturing out of China. Japan and European countries were already looking for new places to build and re-route their supply chains. If COVID-19 showed one thing, it’s that depending on one place to manufacture everything is a really bad idea. China still has a few things going for it: cheap labour and an obstinate refusal for protests demanding higher wages (such luxury those in the US have to go protest and demand things, and then buy the cheapest stuff made in another country!) This is the reality of that exact situation.
It also has a massive labour force that makes other regions tiny in comparison.
I thought other countries in southeast Asia would take up the burden, but you only need to look at some of their faults: corruption.
- Malaysia especially suffers from this as evidenced by the fall of their government and the 1MDB, One Malaysian Development Bank, that was being used by politicians to siphon off money for their own use.
- Vietnam I’ve talked about before, but costs are rising there already which makes it a touch more costly than China, so is it worth the move to a new location?
- What about Latin America or South America? Again, workforce size, ability and corruption prevent a lot of that from being a viable alternative from the scale used in China.
Two Bears talk about the stock market
Larry Berman and David Rosenberg, worth a watch, talk about the massive scatter from China that is happening right now and that things should and will get a lot worse. On the upshot, gold should do well. Listen to what they have to say on their Thursday May 7th, 2020 discussion.
- Investors Guide to Thriving – https://investorsguidetothriving.com/webinars/
- Bob Farrell’s Ten Rules – https://school.stockcharts.com/doku.php?id=overview:bob_farrell_10_rules
Where are we heading?
Maybe I just need to get away from social media a bit more. I have been muting people’s feeds. Don’t need any more Trump hating or blame them or that or don’t believe these numbers or those numbers. I’ve been trying to fill my feed with things I can actually use not more ‘awareness’ crap. It’s become useless because it doesn’t address the issue.
I’m amazed at how this virus can shut down the world, despite all of our modern technology and advances in health. What is all of this stuff worth if we can’t make it work for us now?
And I don’t mean finger pointing at the governments or politicians. I’m pointing at us as a whole! We never figured out a vaccine for SARS or Ebola, yet those still exist as a threat.
If you stayed out of the political discussion, do you like where you are? I ask this because as much as people like to give their opinion and think they have to voice it, any of the changes said by politicians, do you see it? There might be one or two, but the International policies? Do you ever see or feel those if the news didn’t point it out in its fanatic way?
Stock market movement. I’ll post a link to an article I read about last week’s stock market price movements. It’ll demonstrate a few things: First, reading price movements is more of an art than a science; second, even people whose job it is to do this stuff can get it wrong; third, pay attention to the homework given: what would you do with your money today based on what you know?
- “Raging Bull Passes First Test” – https://www.investors.com/market-trend/stock-market-update-raging-bull-passes-first-test/
Leading into: a lot of people like to point out the IPO price of some famous name Ten or twenty years ago and say that if you invested X number of dollars into it it’d be worth X amount of millions now. So, do you know what stock will be that million dollar winner Ten years from now? If not, join the club. No one does. So take those articles with a large dosage of sugar and a pinch of salt.
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That’s it for this week.
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