Coronavirus
Apple Changes Its Message.
Late Monday evening, Apple posted an update on their Investor Relations Page. It was the President's Day Holiday, and obviously Apple was anxious to down-play this news. The news was that Apple would have to reduce their Quarterly Guidance. Two factors were reducing Apple sales: the first was slow down in Apple iPhone production due to the Covid-19 Virus affecting China. And the second, related news was that Apple Stores throughout China were closed also due to the pandemic.
Read moreChina, all the Cunning of the Planned Economy.
Over the next few months, we will no doubt see economic history begin made. On full display will be all of the tools and strategies of a Centrally Planned Economy. As China deals with the full ramifications of the Novel Coronavirus, now labeled Covid-19.
Read moreThe Chinese Coronavirus: How to Keep ScoreNew Article
It was just over 2 weeks ago, that the Chinese Celebrated their News Years, the Year of the Rat. Legally the New Year's celebration last an entire week. And businesses and factories are often closed for most of that time. But this year, in light of the Coronavirus, the Chinese Authorities extended the holiday for another week, and closed many shops and manufacturing plants.
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Coronavirus: The Numbers Don't Add Up.
With that mindset, we come to the outbreak of the Coronavirus in China, with a very different perspective. We try to look past the wild speculation that we see on the internet and much of the main stream press. Just as we look beyond the official proclamations of the Chinese Authorities. Why? Because those sources may not have the information and/or they may have an agenda, that will slant the information that they provide. To me, the best current information on the Coronavirus, is the actions of the companies and businesses in China.
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Coronavirus: An Investor's Challenge.
Since the outbreak of the Coronavirus, just a couple of weeks ago, the Chinese Authorities have carefully managed this epidemic. Quarantining entire cities, limiting travel, and closing the stock market for an extended “holiday.” For investment professionals this presents a particular challenge. Like any investor, they must decide whether to hold on to their current positions, or to sell. Whether to maintain their current course, or correct to a new direction.
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Coronavirus Impact? Look To Second Order Reactions.
It's the governments and authorities which will control the full impact of the Coronavirus.
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Did Earnings Season Become Meaningless?
This week we will see about 1/3rd of the major S&P 5000 companies report their last quarter results, and give guidance on what they see ahead. Now the earnings are already done. That's all history, and it ended last December 31st. But the guidance, well that's a different matter entirely. As you know, we have been carefully following the developments in the spread of the Coronavirus, 2019 n-CoV.. Over the past week, we have seen this new, novel virus infect literally thousands of residents in China, and most unfortunately kill dozens.
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How An Investor Should Approach The Coronavirus.
This is a time, when just such a crisis is threatening. The Wuhan China Coronavirus. Before we begin there are three basic questions that we want to ask in any crisis like this: 1. How close are we to a resolution of the problem. 2. How serious might this problem be and 3. How might this crisis affect my personal portfolio.
Read moreHow To Manage Your Invstments In A Crisis, Like The Coronavirus.
There's a true story told, about a young Peter Lynch. You may have heard me talk about it before. The year was 1987, and Peter Lynch was the manager of one of the most successful, and largest mutual funds of all time: The Magellan Fund. Now Peter had been working very hard for years, shepherding the fund as it grew and grew. It was time for a well deserved vacation, and as he was an avid golfer, he choose a vacation in Scotland, the home of sport. Well just as Peter was teeing off on the third green, a caddy came running across the fairway. Mr. Lynch, Mr. Lynch, you have a satellite phone call from the United States.
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Coronavirus: Where Did It come From?
For those of you who follow this podcast, you know that our primary interest are the financial markets. But sometimes outside events can be so strong, that they affect the world's stock markets. I think this is one of those events. So, today a look at this new Coronavirus. Known to scientist as: 2019 n-CoV, the “Novel” Coronavirus.
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Investing Unknowns.
From my perspective, the markets are currently living in a time of “known unknowns.” That is we know that there are certain things that will play out in a way we don't exactly know, but we feel comfortable that we can handle any eventuality. In the stock market there is always a whole list of things like this. We don't know, for instance, what the comings corporate earnings will be. But we're comfortable, that they will fall within an anticipated range. Next week we will get the latest number on the Gross Domestic Product, we don't know exactly what that will be, but current estimates are that it will be about the same as the last estimate, a 2.1% growth rate. And we are comfortable with that. Same with interest rates, also announced next week. We're comfortable that they will remain about where they are. And so it goes throughout the financial world right now. We think we know what lies ahead, and we're reasonably assured that it will be a smooth ride ahead.
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Coronavirus: A New Health Threat
Its that time of the year again: the Flu Season. We see it every year at this time, and we try to take all the necessary precautions. If you're more conscientious than I am, you have probably taken a flu shot. My daughter, who works at a local school, told me recently that 40 of their students were home sick. That's a large number for this small school. And we try not to come in contact with any strangers. At Church, our Priest has instructed that there will be no passing of the Peace, until Flu Season is over. Perhaps most surprising to many, even the Stock Market took note of the recent outbreak of the Coronavirus in China, by opening down on Tuesday's opening. And I think that financial markets are right in begin concerned about a possible outbreak of this new strain on Viral Infection.
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