Counting the cost

“Economic data in the near future will be not just bad but unrecognizable.”

– From a Credit Suisse research note, referenced in a 3/21/20 New York Times article about the impossibility of accurately forecasting how much damage the COVID-19 pandemic will inflict on the U.S. economy. While the severity may be in question, the article said it’s all but certain the U.S. will experience a recession. Read more at nyti.ms/2WCrqks

Not a recession, not a bailout

“Frame this as a massive investment in U.S. public health.”

– James Bullard, president of the Federal Reserve Bank of St. Louis, quoted in a 3/22/20 Reuters article. He said the economic toll taken by the COVID-19 pandemic should not be described as a recession. Recessions, he said, are ordinary, predictable contractions that mark the end of a normal business cycle. He expressed confidence that massive injections of money by the Federal government and the Federal Reserve eventually will enable the economy to pick up where it left off before the pandemic. Read more at reut.rs/3blZrtA

Looking for good news

“Deciphering such clues is like forecasting the weather before radar or telegraphs: Noticing how the wind ruffles the leaves, watching how the animals are acting.”

– CNBC senior markets commentator Michael Santoli, in a 3/22/20 article in which he said there are “tenuous signs” that the market is beginning to find its footing—fewer individual stocks making new lows, better market breadth, and lower trading volume — but you have to squint to see them. Read more at cnb.cx/2xln0DQ

The winner’s game

“You make most of your money in a bear market; you just don’t realize it at the time.”

– Value investor Shelby Davis, quoted in a 3/21/20 MarketWatch article about the opportunity bear markets represent for long-term investors. Read more at on.mktw.net/3ahvUBc

The race is not to the swift

“The advantage of being able to invest for the long-term is at its greatest when it is the hardest thing to do. The only way to benefit from this is to have a sensible investment plan that is clear about objectives and the decision making process. Sticking with this through tough times can provide a major behavioural edge.”

– Fund manager Joe Wiggins, in a 3/16/20 post on his Behavioural Investment blog, in which he said that having a plan is the best way for investors to overcome the many cognitive biases that get so many investors in trouble. Read more at bit.ly/2y11PY9