604.685.1096 wealthinfo@zlc.net Client Login Home About Us Wealth Solutions Resources Blog Contact It May Get Worse Before It Gets Better April 27, 2020ArticlesNo comments On September 25, 2014, in Dallas Texas, a 45-year-old male became the first imported Ebola patient in the US. On October 15 of that year, Dallas mayor Mike Rawlings said it “may get worse before it gets better. But it will get better.” He was right. It got better, and quickly. COVID is different. There turned out to be only 3 Ebola patients in North America in 2014, but today we have over 600,000 confirmed COVID cases in North America and 2 million worldwide. COVID may be less deadly, but it is certainly more contagious, and we expect it will get worse before it gets better. But it will also get better. The problem for investors is uncertainty. Markets hate uncertainty. But uncertainty also means many excellent businesses are on sale. Long-term investors, like Warren Buffett, find some of the best deals when short-term uncertainty is high. They expect the economy to get better over time, as it always has, and for assets to eventually rise to reflect the growth in earnings and dividends that result from what will ultimately be a growing economy. It has never paid to bet against America. In our view, while COVID is a disaster for so many individuals and families stricken with the disease, it is but a speedbump for long growth of the North American economy. It is a really big speed bump. In fact, by some measures it is the biggest ever, resulting in the most crippling short-term destruction of economic value we have ever seen. No one is booking a Hawaii vacation or a cruise, but in time we will. Some airport runways now look parking lots. Pittsburg International has 100 American Airlines planes waiting for better days. Memories are short and we will, in time, return to what we love – travel, entertainment, restaurant meals and so on. All of us are seeing signs that the growth curve of the virus risk is flattening. Statistics on new cases in Italy, Spain, Germany and the new epicenter of the virus, New York, are showing positive signs. Another area giving us hope are the numbers coming out of China. The dying has stopped in China, at least for now. The only new cases being reported in China are the Chinese citizens returning from abroad. Also, nearly all of China’s major industrial companies have headed back to work. The Economist noted on April 11 that: “China’s economy shows distinct signs of recovery. Bernstein, an investment firm, notes that many of the swanky metropolitan restaurants it tracks there were full by the first weekend in April”. Of course, we do have concerns about the quality of the Chinese data, as many think they underreport, and there is always the risk of a second wave of infections there, but citizens seem to be moving past COVID. KEEP IN TOUCH If you have questions or comments, please feel free to any member of the ZLC Wealth service team. • Jon McKinney, Tom Suggitt, or Josh Brown (Portfolio Managers) • Grace Gumban (VP of Administration), or • Lisa Der (Account Manager) We’re here to help in any way we can. Kind regards, -The ZLC Wealth Team COVID-19 Related Articles ZLC Foundation Charity Golf Tournament September 30, 2013 Vertex Managed Value Portfolio December 15, 2011 Complaint Process July 23, 2014 You must be logged in to post a comment. Learn More Home About Us Wealth Solutions Resources Blog Contact Other Careers Disclaimer Privacy Policy Recent Articles Peak Oil and Sustainable Investing COVID-19 is a Black Swan The Economy is Stressed, But there is Still Growth Strategic Decoupling Of China It May Get Worse Before It Gets Better Contact Us wealthinfo@zlc.net Tel: (604) 685 1096 Toll-free: +1 (800) 663 1499 1200 Park Place 666 Burrard Street Vancouver, BC V6C 2X8 Canada © Copyright to ZLC Wealth, 2015. All Rights Reserved.