The Flinchum File
Thoughtful Economic Analysis and Existential Opinions

Daddy, Are We There Yet?

03/05/2020

Anybody who has ever traveled by car with a child remembers the repetitive question of “are we there yet?”  Over and over again!  That is the current perspective of investors traveling through this major correction in the stock market – “is it over yet?”

Remember:  The stock market HATES uncertainty.  When uncertainty rises, the stock market runs away and investors lose — temporarily.  Right now, the underlying economy is still doing relatively well.  Sure, the GDP growth rates may get slightly negative for this quarter and the next, but the American consumer cannot be restrained and quarantined forever.

Tell me when the coronavirus pandemic will be over, and I will tell you the bulls would be running BEFORE then.  Many believe that Spring weather will kill the virus soon, and a vaccine will be available before next year, but who knows?  The problem with the market is NOT the virus but the uncertainty it causes.

Have you ever heard anybody worry about when goods will no longer be on SALE?  The kid in the back seat might be saying he doesn’t want to buy anything on SALE, but the parents should drive straight to the Mall and buy things . . . like stocks, while they are on sale.

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