Coronavirus - Financial, Health and Other impacts II

[BeachOrCity]

So I came back from Florida today. Super long drive. Ugh....

A little tale....

I am probably one of the least germophobic people you will meet. I could care less about toilet seats at gas stations, door handles in public bathrooms, or sniffling fast food clerks.

Today these things raised the hair on my neck. Covid19 is not here in volume yet so I ignored it.

But I can tell you this.....

If Covid19 was here in any volume I would have avoided all of these encounters as much as possible. I would have stayed home and or done whatever I could to minimize any contact.

I am not a germophobe. Most people are.

75 percent of our economy is services.

I am sticking with my thesis that unless this is contained somehow, the global economy is screwed because people will want to minimize contact. Heck some people here won’t open a box from China without gloves even though it has been in transit for weeks.

I think some of what is going on is people are denying it will be a huge problem because they cannot control it. They want to control it so they insist it won’t happen.

 

[Teacher Terry]

Beach, I totally agree and also think it’s why some people don’t question the government and take as gospel reported death rates,etc. They want to put their heads in the sand.

 

[GenXguy]

So I came back from Florida today.
I am sticking with my thesis that unless this is contained somehow, the global economy is screwed because people will want to minimize contact. Heck some people here won’t open a box from China without gloves even though it has been in transit for weeks.

Earlier this month, I had a shipment from China that took 4 days to ship from China to my home. I set it aside, washed my hands, and didn't touch it again for about 2 weeks.

As far as containing COVID-19, that train has already left the station.

 

[sanfanciscotreat]

Would expect the market drop in this situation to be similar to that for SARS.
That was also a coronavirus which played out in late spring and valuations returned in a short time. I was fortunate to cash in some investments in late January which puts us in good shape for a few years, especially with 44K SS per year.

 

[BeachOrCity]

Would expect the market drop in this situation to be similar to that for SARS.
That was also a coronavirus which played out in late spring and valuations returned in a short time. I was fortunate to cash in some investments in late January which puts us in good shape for a few years, especially with 44K SS per year.

If it is similar to SARS why is Chinas quarantine and response so much more extensive (order of magnitude) with this one? They know something is my guess.

 

[NW-Bound]

SARS is deadlier than COVID-19. However, this coronavirus appears to be much more contagious.

From Wikipedia:

Between November 2002 and July 2003, an outbreak of SARS in southern China caused an eventual 8,098 cases, resulting in 774 deaths reported in 17 countries (9.6% fatality rate), with the majority of cases in mainland China and Hong Kong. No cases of SARS have been reported worldwide since 2004.

As of this writing, there have been 86,893 cases of COVID-19. WHO reported that fatality rate started out as high as 17.3% in Wuhan, and is as low as 0.7% for recent patients elsewhere in China with better care. Mortality among people above 80 is 21.9%.

After symptom onset, people who died lingered from 2 weeks to 8 weeks. That long a period puts great strain on the health care resources.

COVID-19 can be more serious than the more lethal SARS because it overwhelms the health care system. Undertreated, COVID-19 has caused higher death rates than SARS.

 

[Another Reader]

Considering the impact your chair purchase had on the stock market I hope you will give us a heads up before your next purchase.

At least she didn't buy another house or even that SUV...imagine where we would be if our leading market indicator spent that amount of money!

 

[audreyh1]

I lucked out a bit also. My DS needed some cash to buy a home, so I sold 250K of stock to help him out in December. I readjusted the beneficiary designations to my other son in fairness.
My mom always said it is better to give when you are alive, so you can enjoy the appreciation of your gifts.
I also pulled 18K out of my IRA RMD to pay the 4 qtr estimated taxes and to pay for our cruise.

I agree the virus is a problem, and the steps taken to contain it are drastic, especially in China. Time will tell.

We also gave some large gifts at the beginning of this year. Made a larger withdrawal than usual from retirement investments Jan 2 then rebalanced. We figured with everything so high this was a good time for us to do the extra gifting. We also very much believe in gifting while alive. In our case heirs are siblings so sooner is better than later.

Are we glad we went ahead in Jan? Yes! We wouldn’t have gifted if we were concerned about needing the funds in the near future.

 

[DrRoy]

Yes it’s been a week. I’d be interested in those who do 100% self investing if they’ve held tight or radically changed AA this week or gone cash.

100% self. Have taken no action except for some Roth conversion. Don't plan to. I took out some extra $ in Dec for some remodeling projects around the house, and also reduced the equity AA nearly 2 points to 58%. With the drop it is now 53.6%. That makes it easier to ride it out compared to earlier (pre-RE) years when I was much more exposed.

2/18/2020 after the close of the market today.
Just a few minutes ago I was listening to an NPR reporter interviewing a supposedly knowledgeable person on the Coronavirus effects on the econmy and the stock market. This person, who is smart enough to be interviewed on NPR, said that this week's losses wiped out all the gains from last year (ie. 2019).

YTD return is -4.1% and only down about 1/4 of last year's gain.

 

[DRC726]

Yes it’s been a week. I’d be interested in those who do 100% self investing if they’ve held tight or radically changed AA this week or gone cash.

I also self invest 100% and have stayed the course and sold nothing. Actually had a limit order for VYM execute last Monday at $89.98 to add to this position. OF course, in hindsight, I should have waited as its down significantly since then. No worries as this is in my long-term bucket and my short term bucket is adequately funded thru age 67, my FTA. I'm 59 now and will be retiring at the end of the month. I'm so excited...and I just can't hide it!

 

[Dtail]

I also self invest 100% and have stayed the course and sold nothing. Actually had a limit order for VYM execute last Monday at $89.98 to add to this position. OF course, in hindsight, I should have waited as its down significantly since then. No worries as this is in my long-term bucket and my short term bucket is adequately funded thru age 67, my FTA. I'm 59 now and will be retiring at the end of the month. I'm so excited...and I just can't hide it!

Sounds like you aren't about to lose control....

 

[atmsmshr]

As a long term DIYer, seem to be lucky once again.

No overseas funds in the past year. Transferred nearly all of the S&P 500 index to short term bonds in the year before I retired in 2019. (Essentially 100% equity allocation during my working years)

Kept all (nearly) mega LESOP stock for NUA treatment. (Rolled over one newer and smaller ESOP account to IRA because gains were small). In January, with Fidelity service center help and after several exploratory phone calls, I implemented NUA strategy to capture LTCGs in a 401k to brokerage and IRA rollover distribution at age 58. (No 10% tax penalty on this first time 401k withdraw.) Two weeks ago, sold enough NEE to cash to cover expenses for remainder of 2020.

On Friday, noticed that my bond fund gain matched stock losses. Nice surprise following Fed talk.

My plan is to sit back and do nothing, unless to rebalance into stocks. IMHO, I don't think utilities (NEE for me) are going to be hit as hard from Covid19 because its an essential service and (except for some parts supply) mostly unaffected in the current environment.

 

[The Cosmic Avenger]

Also 100% self-managed, and also not changing my AA at all. As I've mentioned elsewhere, I learned from my mistakes with cryptocurrency and Tesla not to try to make predictions, but to play the long-term odds and stick to the plan.

 

[Dtail]

I did transfer my Int'l equities to Domestic equities at the start of the year, so there is that, although nothing to do with the virus.

 

[DRC726]

Sounds like you aren't about to lose control....

Oh yeah!

 

[NYEXPAT]

The other day there was a rumor floating around that the Pope and 4 aides had tested positive for virus. This morning the Vatican announced that the Pope had a cold and he was cancelling all activities associated with Lent, for the first time in his Papacy.

On another note, 86 customers have been quarantined in a brothel in Spain along with the Owners and employees. The financial impact should be positive as there is an ATM inside!

 

[Pellice]

On another note, 86 customers have been quarantined in a brothel in Spain along with the Owners and employees. The financial impact should be positive as there is an ATM inside!

What a subject for a Roman-style (e.g. one by Plautus) farce! The chorus of beauties! Their boyfriends. The mournful owner who can't spend his loot anywhere. The john who really, really was in love with his wife. The john who is a prominent member of the community. The john who is a sensitve student.

*All assuming this is one of the organized European establishments with unionized workers with benefits. I hate the thought of sex slavery.

 

[Lsbcal]

What a subject for a Roman-style (e.g. one by Plautus) farce! The chorus of beauties! Their boyfriends. The mournful owner who can't spend his loot anywhere. The john who really, really was in love with his wife. The john who is a prominent member of the community. The john who is a sensitve student.

*All assuming this is one of the organized European establishments with unionized workers with benefits. I hate the thought of sex slavery.

When will I be able to see this on Netflix?

 

[gwraigty]

Heck some people here won’t open a box from China without gloves even though it has been in transit for weeks.

That was me. Ironically, I bought my daughter a Japanese snack box 3 month gift subscription in December. The 3rd box has recently been shipped. No idea if it's coming from/through the outbreak areas in Japan. Transit time on the last 2 shipments was an amazingly fast 6 days for the 1st one and a couple of weeks for the 2nd one. She doesn't want me to take any special precautions with the shipment. And yes, she's sharing her snacks with us.

To keep this financial, it's our small way of keeping the Japanese economy going through this crisis.

 

[Pellice]

When will I be able to see this on Netflix?

It practically writes itself, doesn't it? Thought of a couple of other stock characters for it - the Soldier. and the Public Health Official (ok, back in ancient times it would have been the Tax Collector.).

*Ok, and The Spy

 

[NW-Bound]

Are there legal brothels in Spain?

A Web site said the above news originated from CereBrother, which has this disclaimer that “it is a satirical newspaper whose only purpose is entertainment.
All its contents are fiction and do not correspond to reality. All references, names, brands or institutions that appear on the web are used as contextual elements, as in any fiction novel or story..."

 

[Sunset]

Are there legal brothels in Spain?

A Web site said the above news originated from CereBrother, which has this disclaimer that “it is a satirical newspaper whose only purpose is entertainment.
All its contents are fiction and do not correspond to reality. All references, names, brands or institutions that appear on the web are used as contextual elements, as in any fiction novel or story..."

Thinking of RV'ing in Spain now ....

 

[NYEXPAT]

Are there legal brothels in Spain?

[/I]

Well there are no laws regarding it, so I suppose there are no illegal one's.

 

[Aerides]

On another note, 86 customers have been quarantined in a brothel in Spain along with the Owners and employees. The financial impact should be positive as there is an ATM inside!

The brothel story is a hoax and has already been debunked.

 

[DallasGuy]

My gut feel is that this is only going to get worse in the short to medium term (next 2-6 months). I don't expect the markets to rally back to where they were anytime soon. Long term, probably yes.