For the last few years, I’ve made a living talking about stocks. Let me start with that.
Don’t look at your retirement account. It won’t do you any good to sell right now. Unless you must. If you must, and you’re in a taxable account, sell your worst losers first. If you’re in a tax-free account, sell your strongest stocks first.
I have been expecting something like this for a long time. About 25% of my retirement account consists of cash, or equivalents like a three-month government note. I’m going to need to do some bargain hunting to get back to even.
That said, I’m not grabbing a falling knife. So long as the panic is ongoing, don’t get in front of it. The best time to buy, it turns out, is near the end of a down day. The best time to sell, meanwhile, is at the end of an up day.
There are three types of stocks to look at once we hit bottom. Some stocks involved in virus research, like Moderna, Inovio and Regeneron, are up on the virus. That’s stupid. Once the panic subsides, sell them and wait for them to return to normal values.
Some stocks should bounce back quickly. The Internet stocks are going to do great business, yet they’re falling with everything else. Grab them once the storm subsides. I’m talking about companies like Amazon.Com, Microsoft, Nvidia. I’m talking about Salesforce.com, Workday, and ServiceNOW. If anything, the move toward these companies will accelerate, as companies find telecommuting works.
Then there are companies that should recover with time. Start with the financials. This isn’t a financial crisis. People will start spending again, so Visa is worth buying at its bottom. Disney will come back. You can be patient with Delta, with Marriott, and with the cruise lines. That means you don’t need to buy them right away. But you will buy them.
Finally, there are the companies that won’t come back. The energy stocks won’t come back. We need to write off those loans. We need to let that equity go. Maybe Chevron will be good for their dividend as they self-liquidate. I’m not sure how long Exxon will, because they’re still drilling. The idea of offering a bailout for these jokers because they employ a lot of people is madness. We must take the hit.
Everything beyond that is politics.
We have seen how Republicans react to a crisis. I don’t see them recovering from this. It will take a generation. We want Obama back. That’s why Biden. Expertise is returning to power. Subject matter experts. End the stupid.
Recovery from this virus will take the rest of the year in the U.S., in Europe, and in other developed countries. If we’re lucky, we’re slowing that spread and hospitals can deal with the load. Doctors will get better at handling it. Protocols will be established so more people recover at home. If we’re lucky, a lot of people who aren’t sick, who won’t get sick, already have the virus now, and the death rate is much lower than what is being reported. Testing people who aren’t sick will tell us the answer to that.
People are resilient. Africa is young. The younger a society is, the more resilient it is.
The Coronavirus reminds all of us of how vulnerable we all are, and of the need for consensus in the face of existential challenge. It’s a warm-up for the climate crisis, which has already begun in the background of the Coronavirus. Sea levels are rising, some places can’t be saved. Florida and parts of the East Coast will go away. Houston is going to drown. It’s only a matter of time. The fallout will be massive, we need to face it together.
I don’t like having been right last year in predicting a crisis. I’m not immune to the hit. My retirement account is down, just as it was after the dot-com bubble and after the financial crisis of 2008. I wrote a lot about both before they happened. Warning about the coming car crash doesn’t mean you’re not going to be splattered when it happens.
What I can do is see over the horizon, and the promise I see is incredible. There are going to be start-ups in renewable energy that are just going to go. There is going to be money to be made in the Machine Internet. DNA is going to become the equivalent of a programming language and, despite the danger, we’re going to go there.
The Coronavirus crisis will pass. A lot of people are going to die as a result of past inaction. Who knows? I might still be one of them. I remember thinking, when I was 5 or 6, about how I was likely to die in 2020. I was a morbid kid, and 2020 was far away. That could happen. If it does, I know I’ve been very fortunate, fortunate in my friends, fortunate in my family, fortunate in what I have been able to see, experience, and write about. My regrets are personal ones. I wish I’d been better to people, even those I have been good to.
If I have more time to use, I’m going to be better at warning people of coming dangers and enlightening them on coming glories. I’m going to continue to grow kinder to those I care about and try to care about more people than I have. A crisis can make you very aware of just how small you are. It humbles you. Humility can be a gift, an opportunity to care about others beyond yourself.
I hope we all use that gift in the coming years.
