God$illa vs. The Covid

Sunday Evening Review of Barrons – Last week it was “Act Now”. This week its “America vs. Covid-19”.  “If we investors get this right, it could be the opportunity of a lifetime – unless of course we are poor, old, New Yorkers.” The issue ink is barely set when the news feeds of exponentially growing death counts begins to sink in on Sunday.

That is after a week where the DJIA surged 21.3% from Tuesday to Thursday. That spells “B-U-L-L”. Except Friday it fell 4%. What is foreseen is eventual recovery, but no snap back for the actual economy. Part of the opportunity is a Stimulus Package where the Patrons of the Politicians can add Riders for the Storm.

A little dull is Barrons on this one - something makes me turn to Mohammed El Erian, who opined this weekend in Bloomberg pages. But first a sidebar.

News buffets stocks and bonds, and challenges the analytics skills of an observer. I read the business news, never quite making sense of it. I turn it into a narrative on a blog, so as to measure the passing time.

Now back to our show.

The week that just passed saw a continuation of highly volatile and totally unique behavior in the equities and bonds markets

Since the Dow hit a record on February 12 – that despite clear danger of virus - the market has fallen precipitously. It’s seen central bank activity of heroic scale, and a crisis in liquidity, and the lifting of a curtain on a vista of potential global depression.

The economy was shut off to curb pandemic, and it wont simply be switched back on. Therefore, some kind of recession is here.

The market was down Friday after week of regaining ground. The new week brings optimists who suspect the market found its bottom and pessemists that smell a dead cat bounce.

M. El Erian takes an analytical position between the optimists and the pessimists – neither, he writes, has backing for their case of the definitive kind. He says:

“There is simply too much uncertainty about the severity and duration of the underlying disruptor - which is the spread of the corona virus" – in turn, there's plenty of uncertainty about1- the extent of damage already done to a-economies and b-markets and 2-the smoothness of the eventual process to restart the economy.

He is busy continuously assembling and updating information that is partial. He sees the week's rebound as a temporary exception in a highly volatile market on the downward trend. And I could buy this.

I think he suggests using this as opportunity to improve the quality of your holdings – informed by an overall risk mitigation approach. The likelihood of investing mistakes is high, just as the likelihood of governments’ policy mistakes.

He says to look for S&P 500 Holdings have the best balance sheets. How do you do that? Would it be something like the contrarian SPXS - DIREXION DAILY S&P 500 BEAR? How many variations and slice-plays on the SP 500 are there?



Dont read too much
https://www.bloomberg.com/opinion/articles/2020-03-28/coronavirus-don-t-read-too-much-into-stocks-sudden-rebound?srnd=opinion

Never miss a chance to line the pockets of the Robbers with the REIT stuff!  https://nyti.ms/2QKweAn

Show me the money
https://www.nytimes.com/2020/03/28/us/politics/coronavirus-money-lobbyists.html?

Use filters when shopping
https://www.barrons.com/articles/dow-jones-industrial-average-has-best-week-since-1938-time-to-go-shopping-for-stocks-51585354856


Dive!?
https://www.barrons.com/articles/dow-jones-industrial-average-ignores-coronavirus-for-one-week-it-wont-be-able-to-again-51585353765

Rally?
https://www.barrons.com/articles/bear-market-rally-doesnt-mean-stocks-will-revive-quickly-51585358951


On the week
DJIA +12.84
S&P 500 +10.26
Nasdaq +9.05
Dollar +0.40%