james altucher modern wisdom

5 Things You Need to Know About the Coronavirus & Stock Market Today | James Altucher Show

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Key Takeaways

  • This isn’t the first time a virus caused a stock market crash:
    • Asian Flu in 1958
    • Hong Kong Flu in 1968
    • SARs virus in 2003
    • Swine Flu in 2009
  • Whenever there’s panic, there’s an opportunity for money to be made
    • Hypothetically, what would James do in the current market?
      • Don’t sell stocks
      • Buy stocks of oil companies
      • Buy India ETFs
  • 70% of factory production in China has shutdown
    • “If China is only at 70% capacity and if China goes into a recession, we could go into a massive, massive depression”James Altucher
  • The China-US trade war is over: China will be begging to trade with the US now

Intro

Books Mentioned

Stocks & Pandemic

  • A bear market is when the market drops at least 20%–even if it’s only for a few seconds
    • In the past 12 years, there have been 4-5 bear markets since 2010
      • Good news: Unemployment rate is at 3.5%, an all-time low
  • This isn’t the first time a virus caused a stock market crash:
    • Asian Flu in 1958
    • Hong Kong Flu in 1968
    • SARs virus in 2003
    • Swine Flu in 2009
  • Oil prices have dropped from $50 to $30 which is great for consumers because they’re saving money on gas
    • Oil prices aren’t down because of the virus, it’s down because Saudia Arabia is increasing its supply

Opportunities in the Current Market

  • Whenever there’s panic, there’s an opportunity for money to be made
    • Warren Buffet put $5 billion into the market during the 2008 financial crisis and made a ton of money from it
  • People aren’t afraid of the coronavirus, they’re afraid of fear
    • “The stock market doesn’t like uncertainty. The stock market is like a thermometer on the psychology of the world.” James Altucher
  • Hypothetically, what would James do in the current market?
    • Don’t sell any stocks
    • Buy stocks of oil companies
    • Buy India ETFs
  • James believes a recession is more likely to happen in 2021 than this year
    • He predicts the US will have 2% growth this quarter and 0% in the next

Thoughts on Coronavirus

  • Things we don’t know:
    • How many people have the virus since people can have it for days without showing symptoms
    • The actual fatality rate (experts estimate it’s between 0.3% and 3%)
    • How fast the virus will spread
  • Advice: Wash your hands, don’t touch your face, avoid crowds, and if you think you have the virus self-quarantine yourself

Impact of the Coronavirus on China

  • 70% of factory production in China has been shutdown
    • In the 2008 financial crisis, the world ran out of money, today’s worry is running out of basic goods
      • “If China is only at 70% capacity and if China goes into a recession, we could go into a massive, massive depression”James Altucher
        • Many small businesses are going out of business and laying people off because their supply-chain is down
  • China is currently working on reopening its factories and businesses
    • Tesla and Apple are currently reopening their factories
  • It looks like China and South Korea have done a good job of controlling the virus and limiting the rate of infection  
  • The China-US trade war is over: China will be begging to trade with the US now
    • “We’ll tell China tariffs they’re allowed to do and they’re going to say yes, yes…just please trade with us again”James Altucher
      • The US is looking to invest more in India and Indonesia to diversify manufacturing so that we aren’t totally dependant on China

James Altucher Show : , , ,
Notes By Alex Wiec

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