How to position for the post-corona economy

[Ralph Fults]

Anyone have any ideas on how to best position yourself for after the coronavirus has gone?

If it peters out like SARS did in a few weeks, I don’t think things will change that much.

But if, and big if, this thing goes on for the next 12-18 months, until a vaccine or protocol is established, changes in the economy will be dramatic. Disruption will reign supreme. There will business lines that will completely disappear and new ones created.

Inflation? Hyperinflation? Deflation?

What are y’all’s predictions?

[Chung Tran]

deflation, obviously.. we are already seeing that with energy, although I was surprised today, to see that KFC has abandoned their $5 fill-up, it is now $5.99.. strange move in an almost dead economy, but whatever.

I don't think it will last 12-18 months. the virus may, but we will deal with it in the next 3 months, figuring out a way to spend and produce regardless, albeit at lower levels.

and just like the past 2 Market meltdowns, 50% of those who had money in the stock market will stay out, even as a recovery is fully under way. when money disappears on balance sheets as fast as it has, distrust of the system is not easily forgotten.

[billw1032]

I expect it will peak and then tail off in a few weeks, almost certainly by summer. It may make a reappearance in the fall, but probably to a lesser extent and we'll be more prepared. Of course, I could well be wrong about this and it may be with us for a long time, in which case the economy is in serious trouble, but I hope not and IMHO the chances of that are low.

In terms of business, many small businesses will have a tough time and some won't make it, but new ones will emerge. People are resilient that way. Big business will feel pressure to reduce dependence on China, but that may or may not mean bringing manufacturing back to the U.S. At the very least many companies will be looking to have multiple sources for product (maybe India, Vietnam, Singapore, Malaysia, Korea ...) instead of a single source (China).

One day folks in the DOD and elsewhere will wake up and realize that state-of-the-art electronics that we depend on are all made in Asia. The most leading edge chips are made by TSMC (Taiwan) and Samsung (South Korea). This is a problem without an easy or obvious fix. I worked in that field my whole career and I can't think of a company in the U.S. that is prepared to resume the lead, even if it was given substantial incentive by the government. If an obvious answer were to emerge that would be a place to invest for sure, but that was my career expertise for many years and I just don't see it right now.

As for the stock market, I suspect it will bottom at some point and then slowly turn up. When it becomes clear that the worst is over and it is turning up, it will then probably rise very rapidly. A lot of money has moved to cash on the sidelines, and FOMO (fear of missing out) will take over and push it up quickly. The average investor, who panicked and sold too late, will decide to get back in (also too late), which is why average folks should not try to time the market.

What am I doing to get positioned? For most of my holdings, nothing, which is what the average investor should do. With the spare cash that I have, I'm looking for solid companies that pay a good dividend. Nothing fancy or speculative, I want companies that will be around for a long while and are well-managed. At my age it doesn't make sense to bet on something trendy that may not pan out. Buying a little at a time, not all at once, since I'm not sure how much lower it may go. Actually, I'm not buying stock. Rather I'm choosing companies I want to own and selling at-the-money or near-the-money puts that I have the cash to cover if I get assigned. Volatility is high, so the premium is high, and that gives some additional down-side cushion.

Summary, the main thing will be trying to cut our dependence on China, but it's not obvious to me how that will happen. If anyone has ideas, please speak up. Otherwise, I expect it will be back to more-or-less normal by summer if not before, but things won't really be quite the same. Growth (maybe a little slower) should return to the U.S., not so much in Europe (which had problems, anyway, before this epidemic hit). China will have trouble getting back on track, in no small part because Xi Jinping is a Mao-ist ideologue, but expect them to make a very strong push to re-exert their influence

*Disclaimer* I am not a business or market professional. This is purely my opinion and speculation, and is probably worth exactly what you paid for it..

[georgecam]

I am just on holding. Don’t make any move. I relocated 50% of assets to cash fund. I bought some delivery service stock. Other 50% is just stay as it is. Can’t do anything and no need to do anything.

We do need to get out of China dependency. However, we need to do it only in certain sectors and willing to get hit. Only hard part about this is that with people’s wage and salary need to be sacrificed. We should start with stop or reduce importing farming and produce. I doubt we can ever bring latest technology back to US. Only way for technologies to be back in US is that multiple companies need to merge and fed got to step in. This requires changes in law. We need to break some legal agreements and tell many countries to fuck you. We will be isolated for little. This is what Trump has been trying to do but he approached it wrong way.

I don’t know what future will bring. All I know is that we need to position ourselves and be prepare when this shit is over. Things will move fast and quick blink will put us behind again.

Good luck and hope for the best.

[Grace Preston]

I'm changing absolutely nothing. Still making the same contributions to my 401k. While I've lost some money-- I've still outperformed the market so.. I guess I'll take that as a victory in the current climate.

[mtabsw]

I'm taking every penny I can scrounge up and putting it into company stocks for makers of baby products. 8-11 months from now there will a huge need.

[TexTushHog]

Inadvertent double post.

[TexTushHog]

Deflation. And I think it’s going to be here and very significant until early To mid next year. As long as the R0 is above 1, it’s just a question of how long it takes before everyone who is susceptible gets it.

I think countries that have stopped the outbreak by test and trace are going to have a very big advantage, especially China and S. Korea. But before then I think the economic dislocations are going to be huge.

[Grace Preston]

Yeah.. our complete lack of tracing is a big problem. When you have someone who tested 8 days ago and was just found to be positive.. but refuse to release anything about where they work or go to school-- there is no way to pinpoint who else may need monitoring.

[BLM69]

Originally Posted by Grace Preston

Yeah.. our complete lack of tracing is a big problem. When you have someone who tested 8 days ago and was just found to be positive.. but refuse to release anything about where they work or go to school-- there is no way to pinpoint who else may need monitoring.

Maybe try to pound some knowledge into all the hookers posting here and Twitter still acting like nothing is wrong, some will have to learn the hard way when it bites them and loved ones in the ass.

[georgecam]

Originally Posted by BLM69

Maybe try to pound some knowledge into all the hookers posting here and Twitter still acting like nothing is wrong, some will have to learn the hard way when it bites them and loved ones in the ass.

You should see OH2. eccie is nothing. There are girls posting corona specials and quarantine specials. Just pure numbers are crazy. To some money is everything

[BLM69]

Originally Posted by georgecam

You should see OH2. eccie is nothing. There are girls posting corona specials and quarantine specials. Just pure numbers are crazy. To some money is everything

Comes to show what's more important, $ over health

[Grace Preston]

Originally Posted by BLM69

Comes to show what's more important, $ over health

You've got nothing without your health. Absolutely nothing.

[georgecam]

Originally Posted by Grace Preston

You've got nothing without your health. Absolutely nothing.

You been around. You should preach that to ladies who still advertise. Society is try to contain this virus and they are not being smart about it (all cause of $)

[Tex9401]

I can still work. since I am Field Service IT. My hobbying is on hold. I think the shutdowns, and indoor dining will go longer than two weeks.