A MINORITY OF ONE
Survey after survey over the past month tells us 40+% of people under 30 will not seek hospital care if they get the Corona Virus, because of the costs. The elderly represent more than 50% of the Virus deaths.
Is that why they crowd them into nursing centers). The economy will take a 20% hit (drop) in GDP
(Gross Domestic Production in the 2nd quarter)—DUH!! Do we really need a survey to tell us that?
Most industry is closed, no wonder there will be less production. Who pays for these surveys and
what real purpose do they serve? NOTHING. All one needs is some common sense and they would
know that sales of goods and products will be severely down in the 2nd quarter. Yes, I know, I shouldn’t be listening or reading this garbage, but it’s thrown at me, and you, every day. The worst example is that there is comparison of the deaths due to the virus has exceeded all American deaths during the Korean War. WHAT???? Where are these great pundits when every year we get hit with a different strain of Flu that takes 40-60,000 lives, every year?
When I see companies like AT &T and JNJ having good results for the 1st quarter AND Increasing their dividends, I am very hopeful for the year. NOT NECESSARILY for the 2nd quarter, but for the year overall. Both companies have spent a great deal in research and development and still have free cash flows of $2.5-$4.0B. They are not alone, there are many industry leaders that have done the same.
The second quarter results, which will be out by the middle of July will not be very pretty. Even the industry leaders are not giving any forecast as to potential sales and earnings. Because no one knows. Anyone telling you differently is ill-informed.
I believe I am a minority of one in believing this economy will bounce upward very quickly and that the third and fourth quarters will excellent. I believe IT HAS TO.
Once the economy “re-opens”, people cannot be stupid and think that the virus is gone forever. It is still there and the fall months will be the tell all. We must all use caution in our daily activities, but still live.
To that end, we have “held the course” with the investments we have in client portfolios. There has been very little selling and very little adding to positions. The markets will have a great deal of volatility during this second quarter. Right now (today is Wednesday 4/29/2020) the markets are looking very good. BUT, there will be, at times, large pullbacks. Do not get panicky. If you own well
established companies with a history of good earnings and dividends, ride this out. Our economy today looks like a recession, or a depression, but it isn’t either one. It is an unfortunate pause. If, and it’s merely a guess on my part, if we are going to get, what one would call a recession, or even one that appears to be, I do not see it happening until the second quarter next year, 2021.