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Are we ready to open things up?
Good morning.
Actions by investors are often driven by two things … fear and greed … but in recent days a new catalyst entered the arena … hope … as investors appear to be placing hope this morning that a new virus-fighting drug will prove successful enough that things will soon return to normal.
Frankly, I don’t know if things will ever again be like they were in the past. One interesting article in Bloomberg offered views that restaurant dining in the future might be considered a luxury … as social distancing will reduce the number of tables and individuals might no longer crowd into bar areas waiting for a table to open up. That would, of course, probably result in higher prices … as restaurants will need to meet fixed expenses while serving fewer meals.
Still, the next few weeks promise to be interesting (although many of us might end up as unwitting pawns in some grand experiment) as select geographical areas slowly open up to commerce and individuals will be asked to follow some safety suggestions (good luck with that one).
Are we ready to open things up?
On the issue of physical health, it might be a little early … but this is being weighed against mental health … for it appears many can’t stand being “locked down” any longer … and that, on its own merits, has social consequences. In fact, protests have started up … and they seem to be growing in intensity and, as an example, I just read thousands are expected to gather in the state capital of Pennsylvania on Monday to make demands for an end to our own quarantine.
One thing to note about all this is we are witnessing the true behavior of people. I see many cases where people are offering to make masks for neighbors, drop off food and … well … do whatever they can to make things easier for others in these stressful times. I am, however, also seeing some dark sides … especially where people are “price gouging” … locating life-saving products and hiking prices ridiculously high … taking advantage.
You might think there is little wrong with that … but there is a time to be a capitalist and a time to be a humanitarian. I just hope someone makes a list of who these people and companies are who have taken advantage … so I know what companies never to work with in the future.
On a final note, some liquor stores are open in my state so I put on a mask and gloves and took a bicycle trip to one to pick up a bottle of scotch. As I was about to leave it suddenly dawned on me that if I fell off the bicycle the bottle would break … so … not wanting to risk it … I guzzled all of it before I left.
In hindsight, it was a smart choice … because before I arrived home I fell off the bike seven times!
Have a great day,
Joseph G. Witthohn, CFA
Vice President
Emerald Asset Management PA, LLC
610 Freedom Business Center Drive
King of Prussia, PA 19406
#flattenthecurve
A Quick Look At The News
… as of 12:13 PM today …
Well … there now seems to be plan to “reopen” the economy … but it will be conducted in three phases (Time)
https://time.com/5822955/trump-unveils-phased-economy-reopening-coronavirus/
… and a rush is certainly to get things back to normal (whatever that means) is taking place as protests have started by those who either want to get back to work or feel immune (CNN)
https://www.cnn.com/2020/04/16/us/protests-coronavirus-stay-home-orders/index.html
We might be able to look at other countries for guidance as there is not a worldwide standard and data is just now coming in on their handling, successes and failures (CNN)
https://www.cnn.com/2020/04/17/europe/denmark-coronavirus-first-school-intl/index.html
Do you want to protect yourself a bit better? Exercise. Maybe the thought is that healthy lungs are more difficult to attack (StudyFinds)
… but it still makes sense to wear a mask in public … and if you can’t buy one you can make one … even if your sewing talents just aren’t there (Time)
https://time.com/5816956/how-to-make-a-face-mask-coronavirus/
Yes, stocks have risen in recent days … but while we talk about a “dead cat bounce” when considering the overall market … it could also be true regarding certain sectors (CNBC)
https://www.cnbc.com/2020/04/17/certain-sectors-could-be-a-trap-as-stocks-rally-strategist-says.html