Only one week ago Trump said “stay calm and it will go away“. Well, Trump maybe will go away when the time comes to re-elect him, but COVID-19 is just getting started and if we can believe this research, then not only Europe, but also UK & US might get into lot of trouble - specially considering their delayed reaction.
If reading 20 pages is too much, check out this Twitter thread with main conclusions:
What will happen?
Expect more lockdowns like these - only grocery shops and pharmacies opened, everything else shut down:
Jobs will be lost:
“18% of U.S. workers have lost jobs or hours since coronavirus hit”, latimes.com
“More than half of American jobs are at risk because of coronavirus”, edition.cnn.com
Bailouts are coming:
“The clock is ticking for the government bailouts to begin“, qz.com
“The Coming Bailout Is a Moral Failure“, theatlantic.com
Epidemic might last a lot longer than many expect:
“UK coronavirus crisis 'to last until spring 2021 and could see 7.9m hospitalised'“, theguardian.com
Lot of money will be printed:
What have I done?
I might be wrong, but I don't expect that situation will improve soon, actually I am betting on the opposite, so my reaction in last couple of weeks has been following:
I've sold my stocks
I've stopped my Auto Invest portfolio in EstateGuru, don't plan to sell anything in secondary market yet, but might consider it later
I've sold 70% of my Mintos portfolio and expect to sell last 30% soon as well
I've increased my gambling portfolio about 10x
In general - the idea is to get as much cash as possible to use it when I see a good opportunity. In my opinion P2P is a good way to park your spare “cash“ when times are “good“, but in market crisis like these - you can get the same 10-12% return, but the risk is much higher and I better hold cash and have 0% than risk losing much more.
What I expect to do later?
Sell my PUT options with profit, if the market continues to go down
Buy Bitcoin - in my opinion the price of $5000 is already good, but if it gets lower - even better
Start buying stocks if they get much more cheaper
Consider buying Gold - the unprecedented printing of money should lead to a significant Gold price increase in next couple of years
What can go wrong?
If some miracle happens and suddenly everything goes back to “normal“, then stock markets should have a “V“ type of reaction and huge bounce back. In that case my PUT options will go to 0 very fast, and I would have missed an opportunity to buy stocks with a discount.
And in theory - the same thing of stocks going up might happen because of government reaction - we are not far from helicopter money - if every country that matters starts giving away free money like in Hong Kong & US, and people start getting used to it, it can get very unpredictable, what will happen to economy & stock markets - it might be good in the beginning, but end up with hyperinflation like in Venezuela.
P.S. Join “High-risk investments“ Telegram group for an informal discussion.