Sure seems that we are in a win-win right now. We can buy stocks that do well during a pandemic, the stay-at-home, work-at-home companies, and we can own stocks that do well when we get vaccinated.
We have flight from the cities, we buy the homebuilders. We have people returning to the cities, we buy the apartments. We have people who are eating at home now, but they will soon go out. We can't can't go out to dinner, we cook at home, but don't worry it won't be long before we will be hitting the bars and sitting down for a terrific dinner in a crowded place.
That's why the market's been able to be so robust. If you can't lose then why not just stay long and hold on. You don't need to listen to me to figure that out.
But after a huge run since November began and a ton of strategists raising their forecasts for next year, some suggesting we might have as much as a 25% gain, I think you do need someone who can articulate a different opinion, if only so you can be ready if the market does drop.
First, it's terrific that we can see through the valley of the shadow of Covid-related death, at least in the stock market. But the fact is that we are getting infected at a rate that even if the lethality is low the mass hospitalizations might mean that we can't save everyone who we would otherwise and we may have to triage those who can't be taken care of even if we have the medicines and the knowledge to save them.
We need to be thinking much like this is a war. We have plenty of people who can be saved as their injuries are not life threatening unless, of course, they can't get to the field hospital. I think we are being very cavalier about the fact that we are running at 130,000 people a day. Who knows? Given that we don't practice much social distancing, or contact tracing or mask wearing, although we wash our hands a lot, why should it stop at these levels? Why not two times that? Three times that. Testing won't do much in the end if so many people have it.
Let's face it. There are enough people in this country who hate masks that we have super spreaders all over the place. Social distancing can be a weapon if we have no masks but everyone in this country is so eager to open everything that there's no room for social distancing in many places. Contact tracing is considered invasive. When you try to explain these issues to 50% of the population they think you are a wuss or a scare monger. It's a runaway freight train and as long as the bars and restaurants remain open it is just going to get worse. Look, I owned bars and restaurants. As long as they were outside we were OK. But indoors? Can't be done without a radical reduction in seats and all new ventilation.
I simply don't know how we are going to get this under control.
In fact, it might not happen until we have a new person in the White House who believes in what may have to be a national mandate. But that's not going to happen for ages. Which brings me to the second thing that could go wrong.
Ever since the press called the election, the president has doubled down on the idea that he isn't going anywhere. I know that there are plenty of people who say don't worry, he can't do anything. Those people are wrong. I think that it is entirely possible that Attorney General Bill Barr could find a sympathetic judge who allows him to seize election materials in disputed states. That would cause the Electoral College to miss the December 14 deadline to vote. Who knows, Barr could seek a search warrant to prove that there's fraud, perhaps from any state that's run by Democrats.
You could argue it is all for show. President Trump isn't going to orchestrate a coup from what I can tell. But his tweets are begging a response that would most certainly hold up the whole Electoral College process. Maybe at that point he quits the battle. Maybe he just wants to be able to say that he lost the race because it was not legit. No matter, I just don't hear enough people talking about the constitutional crisis that could befall us if Trump gets Barr to do his bidding -- not hard -- or we get dueling Electoral college electors or if we actually get not a recount but a revote.
Come on, take stock here. Do you see any prominent Republicans saying that Trump should concede? I am not saying that the president fired the head of the Department of Defense because he wants "his generals" on his side. I am saying that when the president tweets regularly about how the election was rigged, he's not going to vacate without more of a fight than he has so far, especially because this Justice Department is a lot more sympathetic, say, than the Nixon Justice Department. Hate him or like him, would you really put it past the president, who got 70 million votes, to entrench himself with legal battles brought by his attorney general? At least call it a wild card, if not a doomsday one.
Finally, because there is such hatred, outright vile, hatred between the two parties, there is most likely not going to be a stimulus bill to allow some money to go to the states and to employees of businesses that must close. Our hospitals don't have the money to do what they are doing to fight the pandemic. The fourteen million people who will be thrown out of work don't have much to cling on. Whole downtowns could end up being wastelands until the vaccines are widely available, which sounds like at least a six-month proposition. Only a pill that ends the illness can stop this process.
I expect many companies to fail before we get the vaccine. I think that hospitality companies that have great balance sheets and retailers with a lot of borrowing power will make it. But the others? I just can't see, given the widening gulf between when we get the vaccine, how our country can handle the lost jobs and the bad loans without help from Washington and if Washington is torn asunder by a constitutional crisis involving two presidents, one entrenched and the other that is elected, it's not a recipe for higher prices.
Of course, maybe we catch a break. Maybe the virus goes away. Maybe people don't care if they get infected because only old people seem to die from it. Maybe we all get it and then we don't have to worry.
I think that none of this is an acceptable situation, or at least one that allows you to buy all stocks. I hate to say it but the Covid 100 is back in play under the nightmare scenarios I just traced out and that's only if businesses have enough money to buy stay-at-home equipment and consumers have enough money to buy dinner.
Scaremonger? How about simply saying that if you aren't thinking of these things, if you have raised no cash, sure I sound like a scaremonger, but you sound like an ostrich, which last I heard is pretty scary in itself.