“Your success in investing will depend in part on your character and guts and in part on your ability to realize, at the height of ebullience and the depth of despair alike, that this too, shall pass.”
– Jack Bogle


At the beginning of the year, it seemed almost unfathomable to those in the West that the world would change as drastically as it did at the end of the first quarter. In fact, as recently as the end of February when we published “The Virus Heard ‘Round the World,” we received some serious blowback on our alarmist message that Covid-19 was a serious threat to people, companies, and markets. One reader even commented, “I’m no bull, but I can’t buy the Coronavirus being a serious matter. I think you cherry-picked your sources to be pessimistic.”

Just over a month later, the number of confirmed Covid-19 cases has officially – and unceremoniously – surpassed the million-person mark globally. When we published our missive five weeks ago, the pandemic was concentrated in Asia and Europe, with only a very small sprinkling of cases in the USA. Today, the United States leads the globe in the number of reported cases by a pretty unhealthy healthy margin. The point of this quick look-back is not to gloat that Evergreen was ahead of the curve in our understanding of the impact of Covid-19. Rather, it serves as a very important reminder of how quickly this pandemic has evolved – and could evolve further.

While there’s plenty of uncertainty around the long-term impact of Covid-19, what’s clear about the pandemic is that it’s not just attacking people’s physical health. It’s also trickling cascading into the financial, emotional, and mental health of people everywhere.

As such, the question “who will win the war on Covid-19” might seem tone-deaf at face-value. After all, does anybody really “win” a war? You may have heard the old saying that when it comes to war it’s not who is right but who is left! However, the question is a very important one because in the midst of incredible uncertainty and fear is when opportunity presents itself. One of Warren Buffett’s most famous quotes is, “Be fearful when others are greedy, and greedy when others are fearful.” Two weeks ago, when markets were in the midst of an unprecedented (and fear-inducing) slide, we argued that it was time to buy depressed securities. Within a week, the Dow roared back into bull territory.

Again, the point is not to gloat in any short-term successes, particularly since we are concerned that this bear market isn’t done mauling the millions of investors who allowed themselves to become over- exposed to stocks. Yet, despite our near-term worries, we’d like to relay the message that “this too shall pass” – and when “this” does, investors who sat paralyzed by fear will have wished they’d sprung into action. (To reiterate a long-standing EVA recommendation, we strongly believe investors these days should be springing into precious metals and those companies that produce gold, platinum and silver. The enormous government expenditures now occurring to win this particular war, combined with equally enormous monetary stimuli, are producing a hurricane-force tail wind for this still very neglected corner of the investment world.)

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Πηγή: blog.evergreengavekal.com

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