Today surely felt like a day where fear met reality, and stocks basically were overwhelmed by headlines. The WHO finally declared that the world was experiencing a pandemic with regards to Covid-19. Cancellation of sporting events, concerts, rodeos, and gatherings of any type continued to make headlines, and as each hit the tape, stocks took another leg down. We have said for some time that global economies were going to be affected by Covid-19 and over the past couple of weeks, the markets are coming to grips with that. The problem is, that no one knows how deep the economic slowdown will be. Given all the cancellations, and reduced travel etc., the pain is going to be quite significant. But, as long term investors, we have to understand that however bad the pain will be, and however long it lasts, it is a temporary phenomenon. We talk all the time about disruptions that will happen, and that when they happen we always feel like it’s the end of the world. This is a new one. A health crisis, and the fear it is causing, of this magnitude hasn’t happened in my 35 years of managing money. I’m pretty sure that we won’t turn the corner until we get good health news-drug treatments, vaccines, etc. We will get responses from central banks and governments around the world, but until we get good news on the virus, it’s not likely the others will matter for more than a short period of time. We will likely continue to see violent counter trend rallies, but they are likely to be met with more selling, as have the few that we have already seen. Selling begets selling as fear begets fear. Until we get some good news on the virus, it’s going to be a rough ride.

As mentioned, stocks collapsed under the weight of a series of headlines as for the day, the Dow Jones Industrial Average was down 1,464 points to close at 23,553. The S&P 500 was down 140 points to finish the day at 2,741. Gold was down $18 to trade at $1,641 per ounce, while oil was down $1.62 to trade at $32.74 per barrel WTI.

We will continue to keep you updated on market proceedings. As we have mentioned, our job during these moments is to help you deal with the stress and fear of times like this. Managing human behavior is vital right now. I know it is not easy, but that is what you have hired us to help you do. I have heard from many of you in the past couple of weeks and have enjoyed our conversations, which are sometimes difficult but necessary. Don’t hesitate to call in to hear a friendly voice. We’ll all get through this together, just like we did the financial collapse of 2008 and 2009, the Dot.Com bubble of 2000-2003, 9/11, the Asian contagion in the 90’s, the 87 Crash …

Have a nice evening everyone.

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