Jumped Back In

The stock market does not wait for the economy to bottom before it rebounds. Usually, the market rebounds a few months before the economy does.

As with many other investors, I have been waiting for a treatment, cure or vaccine before I would jump back in.

First, there was anecdotal evidence of positive results from HydroxyChloroquine with Azithromycin. However, there were also reports that it has negative side effects or that it may not work as well as first thought.

Then these came out:

68% of patients showed clinical improvement using Gilead’s Remdesivir in ‘compassionate use’

Gilead drug produced ‘rapid’ recovery in coronavirus patients, report says

Remdesivir: ‘Very potent inhibitor’ of SARS-CoV-2?

In addition to the above, there are over 30 treatments and therapeutics being worked on.

I do not have 100% certainty that there will be a home-run treatment. However, there are likely going to be a number of treatments that will treat different patients with different situations or pre-conditions.

Therefore, I think that the death rate will decline. The pandemic will likely slowly improve from this point on. It will not go back to normal anytime soon. It likely will take one to two years. But if you wait for everything to go normal, then you might miss out on opportunities to buy stocks cheaply.

Also, there are many companies working on a vaccine for SARS-CoV-2. Therefore, the probability of a vaccine coming out is greater than one coming out for MERS or SARS. There is even this:

Coronavirus vaccine could be ready by September with an 80% likelihood it will work, says Oxford University expert leading research team

The majority of these companies working on treatments and vaccines will fail. But because there are so many, there is a better probability of a company coming out with something for SARS-CoV-2 than for other viruses.

Therefore, I jumped back into stocks today.

Of course, I could be wrong with any or all of the above. There could be collateral damage that surfaces later on, that I cannot foresee, such as a credit crisis because so many consumers might stop paying their mortgages or credit cards. Corporations are heavily indebted as well and might start a domino of defaults. The chances of this happening is low, due to the trillions of dollars that the Federal Reserve and the U.S. federal government are pumping into companies and individuals. But there is still a chance of this or other collateral damages.

But there is never certainty when investing in anything.

Bought Back ROKU

Roku streams TV channels, movies and digital content such as Netflix, YouTube and Prime. It enables consumers to cut the cord. People get Roku mainly when they buy new TVs, which has Roku pre-installed, or less frequently when they buy Roku devices.

I had suspicion that as more people lose their jobs, they would buy fewer TVs. I questioned the amount of money that advertisers would spend to advertise to people with no income and stuck at home. Consumers are not driving, taking vacations and going to restaurants.

However, Roku released information about their users’ viewing pattern:

Roku says coronavirus is boosting streaming, stock shoots higher

The above announcement pertained to first quarter of the year, ending in March. Most of the “stay at home” orders will likely stay in effect until end of April or sometime in May. This will likely continue increasing usage of Roku.

I still think there is a possibility of a recession that lasts longer than what the stock market seems to indicate with this recent rally. If it does, it will have a material impact on Roku’s revenue. In which case, I might sell Roku again.

People should know that short term trades such as this are extremely difficult to make, and not recommended. There is a probability that this trade will become a losing trade. For most people, it’s better to buy and hold good businesses that will normalize in a few years and go on to new highs. Buy and hold is much easier than dealing with short term volatility. On the other hand, nobody knows if we will have a bear market and how long that lasts.

Dishonest CDC Tap Dances About Masks

CDC used to tell us to NOT wear masks.  They made a 180 degree turn and now they are recommending “cloth face covers“. They attribute this to “recent studies” and “new evidence”:

“We now know from recent studies that a significant portion of individuals with coronavirus lack symptoms (“asymptomatic”) and that even those who eventually develop symptoms (“pre-symptomatic”) can transmit the virus to others before showing symptoms.  This means that the virus can spread between people interacting in close proximity—for example, speaking, coughing, or sneezing—even if those people are not exhibiting symptoms.  In light of this new evidence, CDC recommends wearing cloth face coverings”

But, there was evidence since January 30th:

Transmission of 2019-nCoV Infection from an Asymptomatic Contact in Germany (January 30 date is at bottom.  This copy verifies this.)

As shown in my previous post (DO NOT LISTEN TO WHO OR GOVERNMENTS ABOUT MASKS), there have been numerous cases and studies of asymptomatic transmission since then.

Here is another:

A choir decided to go ahead with rehearsal. Now dozens of members have COVID-19 and two are dead

Here is one worth repeating. Asymptomatic transmission can be the source of 79% of infections.

Most of our cases are likely infected by people who thought they were healthy. If you want to avoid getting infected, you need to assume that anyone can be infected and contagious. If you want avoid infecting others, you need to wear a mask and keep your distance, even if you think you are healthy.

There is evidence that the virus is aerosol. Even CDC is concurring by stating that “speaking” can spread it. How far can your breath go? If people are breathing outside in the cold air, the warm breath probably stays in the air much longer than most think and get blown many meters away by the wind. Pedestrians and joggers are still on the streets and sidewalks. They are likely still infecting and getting infected. The young joggers may never get symptoms. But they might infect their parents or a nursing home worker.

But you cannot blame them because the government is not warning them. The Canadian government still thinks that only people with symptoms can spread the virus, by telling you that you do not need to wear a mask if you think you are healthy.

The authorities still give illogical reasons, such as:  you may not know how to wear a mask, or you might have a false sense of security.

It is easier to wear the mask than to tie your shoes.  Even if the mask provides less than 100% security, 50% is better than 0%, which is what you would have with no mask.

The virus enters you through the mouth, nose and sometimes through the eyes.  The mask stops you from touching your mouth and nose. The virus comes out of your mouth and nose. The mask stops most of this.

The most important reason to wear a mask is to stop asymptomatic transmission.  The main reason the surgeon wears a mask is NOT to protect himself/herself from the patient, but to protect the patient from the surgeon, so that the surgeon is not breathing germs into the patient.  If nursing/retirement home workers were told to wear masks, even if they think they are healthy, there would be fewer deaths today.