The stock market doesn't know anything about the coronavirus. The rally yesterday after the WHO declared that the virus is an international emergency should not have occurred. The advisory telling our citizens not to travel that was issued last night came from left field, at precisely the moment that I think some believed there has to be some sort of vaccine or we wouldn't have rallied after the WHO declaration.
You put it altogether and you could see why I want to wait until after we get the worst case -- deaths in this country from people who did not go to China and were not the spouses of those who did -- before I say it's okay to be aggressive. I didn't want what we have right now, a market that's going back down because it should never have been up.
You see patterns if you have been around long enough, patterns that aren't giant algorithms that may or may not beat benchmarks but sure sound authoritative. One of those patterns is recognizing when the stock market is confused and can't process right. Lots of times, it is because the market doesn't know how to process non-business news. How right was the market when it plunged after Trump became president. Admittedly he was a total wild card, but, in fact the admittance is everything.
The coronavirus is a total wild card. You can't trust it until it is cured or it is "worst cased." And I don't think we have either right now, or we would not have had such a huge ramp up after the WHO declared an emergency -- bad -- and then went back down hard when the U.S. acknowledged that emergency with its suggestion not to travel. Notice the U.S. did not ban flights. I figure that's next. But, again, that's another wild card. It's a deck full of wild cards so no one can count or predict the totals.
I will give you another example. Yesterday, I donned my Jimmy Chill hat and gave the feedback I got from people who are very close to the government's stance on this. The feedback I got is that there have been 8,200 preventable deaths from flu in this country and why don't you do us all a favor and tell people to get a flu shot.
When I put what I thought was a pretty good response on Twitter, I was immediately called out as someone who minimized the threat of the coronavirus, its lethality and what it's going to do to world commerce when everyone realizes how easy it is to catch.
I took off the chill hat for second and pointed out that we are a country of 325 million people and we only have six cases, versus 15 million cases of a flu that has caused 140,000 hospitalizations and 8,200 deaths. I was immediately mocked by a bunch of serious Yale-trained immunologists who solved SARS and MERS who told me that this could be the Spanish flu. Well, maybe they weren't that credentialed.
To which I then said, do you want me to go all Billy from the Predator and say "we're all going to die," while Arnold yells "Get to the Chopper?"
In other words, there is no winning with these people. But because they are out there and they run gobs of money, there's no winning with the market: A non-gameable event can't be named. The fact that the CDC is outright dismissing that we are on the cusp of a new vaccine for this illness is always being dismissed. The fact that we have the genome mapped which could lead to a faster vaccine at some point is equally dismissed.
So what can you do? NOT REACT. Not go up and down with joy. Be clinical, watch a Mondelez (MDLZ) or a Coca Cola (KO) . They are buys on bad coronavirus news that brings everything down. But don't bottom fish. There's no bottom until the fat lady dies of coronavirus, or sings when it crests.