Going Back into Buying ??

What we are going through is unprecedented in our lifetimes, and when individuals see uncertainty in both the financial markets and with their health, it can be a bit much. In essence, it can cause us to sit in defence too long and miss the financial opportunity. To use a health analogy, we have effectively seen are governments globally inducing a coma in the economy and begin applying rigorous medicine. Once it was clear that this was no longer a Chinese issue, policymakers learned from the playbook of 2008/09 that you act fast, you act decisively, and you bring a massive stick. While I typically don't have a problem picking holes in the actions of central banks and governments, I can only think of one word to describe their actions and the work they are doing at this time - outstanding. What they have achieved over the last few weeks took weeks and months to reach in 2008/09 to start to fix the economy then.

Back to our "patient in the coma." Once induced and remedied, you then have to revive the patient back out of the comatose state. From our standpoint, in a financial sense, the maximum benefit to your portfolio will occur before the economy comes back out of unconsciousness. Simply put, we want to be buyers before this date. We will still be dealing with the economic state of affairs brought about by this virus, but as evidenced by the current hiring need of Amazon, Grocery Stores and Delivery Companies, consumers, while more limited, are still spending and will continue to spend coming out of quarantine. According to data compiled by Bloomberg, the Chinese economy has returned to ~95% of normal course operating capacity for the week ended April 3rd, rising from 90% the previous week.

It is easy to allow paralysis to set in when it comes to times like this. Everyone feels some short-term pain from markets like this; the key is to not let that leak into long-term financial harm. Even the best investors have off days. Warren Buffett's Berkshire Hathaway said on Friday it sold about 18% of its stake in Delta Air Lines and 4% of its holdings in Southwest Airlines this week, as the coronavirus pandemic drives the airline industry into perhaps its biggest crisis ever. According to regulatory filings, Berkshire sold nearly 13 million Delta shares for about $314 million and roughly 2.3 million Southwest shares for about $74 million. The sales were conducted on Wednesday and Thursday, the filings show. Berkshire previously owned approximately 11.1% of Delta stock and 10.4% of Southwest stock, according to Refinitiv data. Like Mr. Buffett, tough and sometimes uncomfortable short-term decisions have to be made to cement a secure future.