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Guess who has Coronavirus?


BuffJim

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9 minutes ago, Kirby said:

I think the outbreak in Italy, and to a lesser degree South Korea,  is particularly concerning as it's the first serious spread outside China. 

8 dead in Iran and it has escaped in Japan, South Korea, Italy and overall 28 countries with over 1500 cases.  Pardon the pun but IMO that ship has sailed.

 

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31 minutes ago, BuffJim said:

The Dow Jones, and other world financial markets.

The implications of this injury to the world's supplies chains are starting to affect the markets,

 

Dow craters more than 700 points as deadly coronavirus crisis spirals

It will yo-yo.  The market seems very disconnected from reality, so today it could drop 700 and tomorrow it could rise 700. Who the hell even knows anymore?

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20 minutes ago, Kirby said:

I think the outbreak in Italy, and to a lesser degree South Korea,  is particularly concerning as it's the first serious spread outside China. 

The Diamond Princess is an interesting study. One passenger picked up the Coronavirus in Hong Kong. When the ship reached Japan, ten passengers were infected and the ship was quarantined for 14 days. Infection jumped to more than 630. That stuff is contagious!

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Just now, Old#7 said:

The Diamond Princess is an interesting study. One passenger picked up the Coronavirus in Hong Kong. When the ship reached Japan, ten passengers were infected and the ship was quarantined for 14 days. Infection jumped to more than 630. That stuff is contagious!

Japan handled the situation deplorably.

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Seriously though, I had a plan Friday for today. The plan has changed. I was going to expand my portfolio with the purchase of a good value stock and a new long term investment. Instead, I bought a small piece of the good value stock and increased my position in an existing long term investment in my portfolio.

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Right now (1:23 pm Monday), the S&P 500 is down 3.6% for today, and for 2020 is down 0.42% (down 0.15% including dividends) which is a -1.0% annual rate.

My stocks have been have been whacked today as well, down 2.8%. For 2020 I'm up 1.54% which is a +10.2% annual rate.

The coronavirus, even if it spreads worldwide, is expected (WHO, NIH, CDC) to kill a small fraction of those killed by the flu.

So if there's a significant drop in stocks due to the coronavirus, it should be a stock buying opportunity.

The problem is that stocks are overpriced to begin with, by about 35% by long term historic trends and about 12% by comparing historical AAA corporate bond rates to stock P/E's.

I have 4 stocks where I automatically purchase small amounts each month. There are 5 other stocks I own where I'd like to make a single larger purchase in each one, to partly rebalance my portfolio, during 2020 if my finances allow them. If the stock market falls 5% to 10% below 2019's finish, I may tighten my belt and make some or all of those 5 single purchases while the opportunity is there.

One of those stocks, CVS, is down 4.7% today and down 7.6% on the year. If it drops to 10% down I'm definitely adding to it.  It's adjusted P/E is only 9.6 with a steady, annually-growing 2.9% dividend compared to 25.8 and 1.79%, respectively, for the S&P 500.  It's earnings have been goofy the last couple years only because it acquired Aetna Insurance and integration caused some accounting glitches. That gives CVS, the largest pharmacy chain and Insurance Prescription Benefits Manager, 24 million addition Aetna Health Insurance customers and CVS is beginning to transform its pharmacies into total heathcare centeres with prescriptions, urgent care, and health insurance all under one roof.

All that says Durable Competitive Advantages to me (Buffett's "Wide Moat").  I expect to keep holding it for years unless fundamentals change.

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43 minutes ago, MickinMD said:

The coronavirus, even if it spreads worldwide, is expected (WHO, NIH, CDC) to kill a small fraction of those killed by the flu.

The big difference is that you don't close factories due to the flu, but do for something significantly worse in nature like the coronavirus.

 

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25 minutes ago, Razors Edge said:

The big difference is that you don't close factories due to the flu, but do for something significantly worse in nature like the coronavirus.

 

They're closing factories due to panic and lack of local healthcare capabilities more than infection - and they're already reopening many of them. The Chinese government does not expect a serious hit to its economy. Many early problems occurred because the Wuhan CDC did nothing and blocked early information from getting to key officials in Beijing. Still, the coronavirus is not doing anything close to what the flu is doing.

Sure, it's serious, but what makes you think the coronavirus is "significantly worse" than the flu?  Here are links to reports of official medical people, not of sensationalist journalism, that say it should not be a long-lasting problem.

In the USA alone, the number of annual flu deaths since 2010 have been 12,000 to 61,000, the number of hospitalizations 140,000 to 810,000, and the number of cases 9,000,000 to 45,000,000 (https://www.cdc.gov/flu/about/burden/index.html). The coronavirus may not hit those numbers worldwide!

World Health Organization (Feb. 24: "we are not witnessing large-scale severe disease or deaths," https://www.cnn.com/2020/02/24/health/coronavirus-outbreak-pandemic-who-bn/index.html)

U.S Center for Disease Control, (Feb. 14: "About 80 percent of those infected [by coronavirus] will only have a mild illness, like a cold, according to world health officials. About fifteen percent of infected patients get pneumonia, and three to five percent of infected individuals will end up in the intensive care unit." https://www.labroots.com/trending/microbiology/16821/cdc-director-expects-coronavirus-foothold)

U.S. National Institutes of Health (Feb, 17: "Whenever you have the threat of a transmissible infection, there are varying degrees from understandable to outlandish extrapolations of fear," https://www.usatoday.com/story/news/health/2020/02/17/nih-disease-official-anthony-fauci-risk-of-coronavirus-in-u-s-is-minuscule-skip-mask-and-wash-hands/4787209002/)

Consequently, I don't see coronavirus having a lasting effect on stock prices.  They should easily rebound to where they'd otherwise be with a year or two.

 

 

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It may not hit those numbers, but then we've only got about 2 months worth of real data.......assuming that the data is real.  One has to consider what the death rate is as a percentage of those infected and then ask what the rate is for those who have contracted the disease and gotten better.  So far it appears that coronavirus kills about 1 person out of 50 who contract it.  All of this in spite of unprecedented attempts to lock down and contain it.  Since Friday it's spread to 4 more countries bringing the total up to 32.  It appears that Iran is under reporting as the 12 deaths there are the most outside of China but their case numbers are being reported as lower.  Watch the middle east for a few days as there is little containment in place for that part of the world.

Italy on the other hand has locked down 10 cities/towns where the virus has suddenly exploded.

https://www.nytimes.com/2020/02/24/world/asia/china-coronavirus.html

 

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24 minutes ago, MickinMD said:

They're closing factories due to panic and lack of local healthcare capabilities more than infection - and they're already reopening many of them. The Chinese government does not expect a serious hit to its economy. Many early problems occurred because the Wuhan CDC did nothing and blocked early information from getting to key officials in Beijing. Still, the coronavirus is not doing anything close to what the flu is doing.

Sure, it's serious, but what makes you think the coronavirus is "significantly worse" than the flu?  Here are links to reports of official medical people, not of sensationalist journalism, that say it should not be a long-lasting problem.

In the USA alone, the number of annual flu deaths since 2010 have been 12,000 to 61,000, the number of hospitalizations 140,000 to 810,000, and the number of cases 9,000,000 to 45,000,000 (https://www.cdc.gov/flu/about/burden/index.html). The coronavirus may not hit those numbers worldwide!

I'm with you on the regular flu is a mofo and kills a lot of people.  But to use the year in, year out death by flu as the hurdle the coronavirus has to surpass to be serious is not a good idea.  We can talk round and round, but at what point would you consider it a good idea to contain a deadlier sickness? Imagine a factory with the workers exposed to the flu. Now imagine one across the street exposed to the coronavirus.  In the one with the flu, maybe one of the 1,000 employees would die from the flu. In the coronavirus one, it would kill 20 or more.  It can be ugly and ugly fast.  And the flu shot isn't gonna be a stop gap against it like the it is against the flu.

It's a developing crisis - and, if we are lucky, it plays out like earlier similar ones that were deadly, but not massive killers.  Until the peak is determined and passed, China will need to be careful in how much they want to keep a factory open versus how much they want to prevent providing an easy way for it to spread.

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3 hours ago, MickinMD said:

They're closing factories due to panic and lack of local healthcare capabilities more than infection - and they're already reopening many of them. The Chinese government does not expect a serious hit to its economy. Many early problems occurred because the Wuhan CDC did nothing and blocked early information from getting to key officials in Beijing. Still, the coronavirus is not doing anything close to what the flu is doing.

Sure, it's serious, but what makes you think the coronavirus is "significantly worse" than the flu?  Here are links to reports of official medical people, not of sensationalist journalism, that say it should not be a long-lasting problem.

In the USA alone, the number of annual flu deaths since 2010 have been 12,000 to 61,000, the number of hospitalizations 140,000 to 810,000, and the number of cases 9,000,000 to 45,000,000 (https://www.cdc.gov/flu/about/burden/index.html). The coronavirus may not hit those numbers worldwide!

World Health Organization (Feb. 24: "we are not witnessing large-scale severe disease or deaths," https://www.cnn.com/2020/02/24/health/coronavirus-outbreak-pandemic-who-bn/index.html)

U.S Center for Disease Control, (Feb. 14: "About 80 percent of those infected [by coronavirus] will only have a mild illness, like a cold, according to world health officials. About fifteen percent of infected patients get pneumonia, and three to five percent of infected individuals will end up in the intensive care unit." https://www.labroots.com/trending/microbiology/16821/cdc-director-expects-coronavirus-foothold)

U.S. National Institutes of Health (Feb, 17: "Whenever you have the threat of a transmissible infection, there are varying degrees from understandable to outlandish extrapolations of fear," https://www.usatoday.com/story/news/health/2020/02/17/nih-disease-official-anthony-fauci-risk-of-coronavirus-in-u-s-is-minuscule-skip-mask-and-wash-hands/4787209002/)

Consequently, I don't see coronavirus having a lasting effect on stock prices.  They should easily rebound to where they'd otherwise be with a year or two.

 

 

Corona virus is several hundred times more deadly than the flu. Some of the panic is justified. But not all. I’m stocking up on non perishable items and supplies. 20 or 30 bucks a week. In northern Italy there was very little warning before grocery shelves emptied. 

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5 minutes ago, BuffJim said:

Corona virus is several hundred times more deadly than the flu. Some of the panic is justified. But not all. I’m stocking up on non perishable items and supplies. 20 or 30 bucks a week. In northern Italy there was very little warning before grocery shelves emptied. 

I've been stocking up for about a month now.  Rice, pasta, canned soup and about 30 gallons of water.  Tude rolls her eyes every time I walk in the house with something.  I don't blame her -- but I'm protective.

I really hope this shit slows down and doesn't become the new norm.  I am generally a pretty rational guy but lately, I've let my emotions get the best of me over this.

My fear is if something happens to both of us and our pets are harmed because of it.

Mudkipz

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20 minutes ago, Couch_Incident said:

I've been stocking up for about a month now.  Rice, pasta, canned soup and about 30 gallons of water.  Tude rolls her eyes every time I walk in the house with something.  I don't blame her -- but I'm protective.

I really hope this shit slows down and doesn't become the new norm.  I am generally a pretty rational guy but lately, I've let my emotions get the best of me over this.

My fear is if something happens to both of us and our pets are harmed because of it.

Mudkipz

Exactly my fear. 

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The market isn't dropping out of fear that this is some sort of population decimating plague.  It's strictly dollars.

Anecdotal:  The Chinese government required many companies to extend the New Years holiday for at least a week.  Some of our places were extended even further.  People trying to work from home couldn't get through the Chinese internet wall.  When people came back, they didn't all come back.  Attendance is spotty.  We've pushed back a lot of production, meaning inventory is down, less to sell.  Development projects are significantly delayed, new products to sell won't be available until later.  This is going to cost us a LOT, and no way of knowing how much for at least a year.

Now figure how many companies are in our same situation.  THAT'S why the markets dropped - corporate profits are taking a hit.

Now, add to that, the market is irrationally high, still riding the false highs of stock buybacks after the tax cuts.  Traders have been looking for an excuse to finally admit the ride is over, this may have finally pushed it over the top.  We're way overdue for a down cycle, indicators and the economy say it should have happened already.

Be careful buying on a coronavirus dip.  It might not be a dip.

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On 2/24/2020 at 11:35 AM, BuffJim said:

The Dow Jones, and other world financial markets.

The implications of this injury to the world's supplies chains are starting to affect the markets,

 

Dow craters more than 700 points as deadly coronavirus crisis spirals

It’s worse than you think, there is an upcoming shortage of composite hockey sticks in the NHL due to worker shortages in China. Hopefully Connor Sheary and Evan Rodrigues raided the Saber’s stock closet before heading to Pittsburgh!

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Purely anecdotal at this time as a lot of stuff around coronavirus is - We resell for IBM and they source many of their data storage products from IBM facilities in China.  I just checked with a source there due to some sales we just had.  According to my guy they have not experienced any shipment issues with storage products but are keeping their eye on it.

 

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21 minutes ago, Kzoo said:

Purely anecdotal at this time as a lot of stuff around coronavirus is - We resell for IBM and they source many of their data storage products from IBM facilities in China.  I just checked with a source there due to some sales we just had.  According to my guy they have not experienced any shipment issues with storage products but are keeping their eye on it.

A LOT remains to be seen to determine if stuff is just sporadic and short-term, or if the situation tips into a longer period of disruption.  And, assuming S Korea and Japan start reacting, they may affect other sectors and trigger more disruptions.

 

 

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5 minutes ago, Razors Edge said:

A LOT remains to be seen to determine if stuff is just sporadic and short-term, or if the situation tips into a longer period of disruption.  And, assuming S Korea and Japan start reacting, they may affect other sectors and trigger more disruptions.

 

 

You're right

 

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4 minutes ago, Old#7 said:

Trek sent a message to retailers to order as usual. They have inventory in their distribution centers. If the crisis continues over several months (unlikely IMHO) there could be supply chain disruptions.

My understanding of the bicycle industry, US warehouses are filled long before the buying season (spring) based on orders that LBSs had to place in the fall.  If my understanding is correct 2020 inventory is almost all in warehouses in the US already.

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4 minutes ago, maddmaxx said:

In addition to stock in warehouse getting low (possibly) the methods of shipping it out of China are in many cases closed.

Isn't that also how economists gauge things - look at the shipping network (primarily cargo ships) and see how many are en route, how many are full, how many are idle, etc..  Even use satellites to track it. This won't be hard to tell if things are getting worse or better.

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8 minutes ago, Kzoo said:

My understanding of the bicycle industry, US warehouses are filled long before the buying season (spring) based on orders that LBSs had to place in the fall.  If my understanding is correct 2020 inventory is almost all in warehouses in the US already.

That’s not how the email that I saw read. It stated 79 days of bicycle inventory with another 30 days of inventory in transit. They don’t expect there to be an issue in meeting demand, just notifying their retailers. Bike sales will rise with the temperature and Trek has a big sales push in July to coincide with the Tour. Past years we’ve seen supplies of popular bikes bottom out and we can’t get some model/sizes in even though we could sell them.

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I just tightened my budget belt and put in an order to buy CVS, increasing my CVS holdings by about 1/7.

Whether were in a temporary dip or not, CVS is at a great price.

CVS soared 3% on 2/12 when it released an excellent last quarter's earnings report.  Insanely, it dropped 5.02% on Monday and is down another 5.15% now.

CVS, which has goofy official earnings the past two years only because of accounting rules regarding its total acquisition of Aetna Insurance, has actually had steady growth and should beat the market in the future from its current 9.1 P/E to something closer to its usual 16.

E*Trade Analysts survey shows 17 say strong buy, 2 buy, and 8 hold - and that was before the price dropped 10%.

The current stock price is $64.42.

The latest Argus Report says, "With CVS stores blanketing the country and within three miles of 70% of the U.S. population, acquisition of Aetna should make it easier for an aging population to get the advice, medicines, and care they need to stay healthy and avoid more costly treatment in the future.
• The company can use its trusted pharmacists, Minute Clinics and clinical programs to lower treatment costs, improve compliance with doctors' orders, and reduce the need for patients to be readmitted to hospitals.
• By demonstrating that it can control costs and improve patient health CVS should be in a position to retain existing customers, win new business and gain market share.
• We expect the company to earn approximately $8.50 in 2022 [It earned an adjusted $7.08 in 2019]. If the stock trades at 12-times earnings in 2022, the shares would be worth $102. Discounted for two years at 8%, they would be worth $87 at the end of 2020.

I don't know if those forecasts will be met but a decent gain is a relatively safe bet. Every report and article I've checked likes the longer term outlook of CVS, the gorilla with durable competitive advantages in the pharmacy sector.

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10 minutes ago, MickinMD said:

I just tightened my budget belt and put in an order to buy CVS, increasing my CVS holdings by about 1/7.

There are CVS stores opening up EVERYWHERE lately.  I'm not sure what their growth of stores is, but it seems quicker than any other bricks and mortar places right now.

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I pulled some profits off the table with a re-balance last Thursday.  Kinda glad for that.  

Today and yesterday had some big red numbers in the portfolio.  That being said, I am still long position with the plan I had before.  Kinda perfect timing, as my normal monthly contribution is about to go in.  

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5 minutes ago, Dirtyhip said:

I pulled some profits off the table with a re-balance last Thursday.  Kinda glad for that.  

 

Wish I had done that Thursday. 

I moved all my 401K  dollars out of the current funds to the one that is equivalent to stuffing your money under a mattress. It doesn't do anything, but at least that includes not losing more and more money.  I did this around 1:30 today. Unfortunately, the amounts in those funds depends on where they are this evening after market close. Oh well, at least I'm not down a ton like last year. I stopped the bleeding before it turned to hemorrhaging. 

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26 minutes ago, Prophet Zacharia said:

You mean from December to now, or from last February???  I went from 5% gain from January to 0.4% gain, but no major losses.

I mean I have lost the profits accumulated over the last twelve months. I still have some stocks that can be sold for more than I paid but my overall profits are down.

I had made some major changes to my portfolio before this week. I believe I am poised to profit in the next year. 

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20 minutes ago, donkpow said:

I mean I have lost the profits accumulated over the last twelve months. I still have some stocks that can be sold for more than I paid but my overall profits are down.

I had made some major changes to my portfolio before this week. I believe I am poised to profit in the next year. 

Still long position in many of the mutual funds.  Overall a very conservative position, mostly.  I'm a little too close to be too heavy in equities.

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25 minutes ago, Dirtyhip said:

Still long position in many of the mutual funds.  Overall a very conservative position, mostly.  I'm a little too close to be too heavy in equities.

I knew this day was coming, everything has been too expensive for quite a while. It was hard to find something with good value in my price range. I'm not rich like you. :)

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