The Biggest Event of Our Lifetime

06/22/2020 1:00 pm EST

Focus: STOCKS

Al Brooks, MD

Professional Trader, Author, Lecturer, Brooks Price Action, LLC and Brooks Trading Course

What will the Coronavirus mean to us and our portfolios, asks Al Brooks.

I have been writing about the Coronavirus pandemic since February 2020, because of its obvious effect on the stock market. The media have failed to provide more than a short-sighted perspective and they have been too timid in their criticisms of our mistakes. They write about today’s news but have not adequately discussed what we did wrong and what we should realistically expect by the end of the pandemic in 2021 or 2022. I am providing my thoughts about the pandemic’s effects on the economy and health of the U.S. population.

We did not do enough to fight the pandemic early on, and I would still opt for a six-week absolute lock down to rid the country of the virus while we wait for a vaccine next year. But what we currently are doing is still reasonable, as anyone can see by looking at the stock market.

Americans are bored

Americans are bored with the pandemic, how it is affecting their lives, and all of the news coverage. A significant percentage of us have decided to forget about it and just move on.

However, outside of events in our own families, this will be the single biggest event of our lifetimes. It is historic and it will affect the entire world more than anything else any of us will ever see. It will kill more people, make us change our behavior more, and cost more money than any other event since World War II. Because it is so significant, I am writing a comprehensive article that looks back at our mistakes, and forward to how it will end.

My Authority

My M.D. degree is from the University of Chicago. My board certification is in ophthalmology and I have a subspecialty in infectious diseases of the eye. Viral eye infections are particularly important.
I also began my career as a medical scientist, and I have published many medical papers. With that background, I pay a lot of attention to the medical aspects of the pandemic.

I am disappointed by the path our political leaders have chosen. It is not too late to change direction and save lives and dollars.

However, it is clear that everyone has come to accept the current approach of everyone just being careful until there is a vaccine. I will simply continue to wear my mask and gloves when I am out. Also, I will defer travel and avoid crowds until after I am vaccinated.

I am a taxpayer

As a taxpayer, I am mad. Our mismanagement of this crisis in February and March is costing all of us money and it weakens our economic future. We will have spent $5 trillion by the time the pandemic is over. This is far greater than what we would have spent if we followed the recommendations of medical experts.

The United States pays twice as much as any other country for healthcare. As one of the people paying the bill, I expect to get the best product in the world when I pay so much more than people in other countries. Instead, the health care I am receiving for the pandemic is significantly worse than that of many other countries that are spending far less.

I am a U.S. citizen

As a U.S. citizen, I am angry that our government is responsible for tens of thousands of avoidable deaths. Also, it has been exposing me to more risk than people in other countries face.

The politicians from both parties have mismanaged this pandemic to an extent that I could never have imagined. This is especially true of January through March. Our death rate is many times greater than that in several other developed countries. I am 68-year-old with some medical issues, and the risk to my life is significantly higher because of the terrible decisions our politicians are making.

Columbia University estimates that more than half of the deaths up to this point were avoidable. If we end up with 500,000 dead Americans, that could mean that hundreds of thousands will have died needlessly. Blame this on the unwillingness of our politicians to do what countries with great leaders have done to save their citizens.

I am a trader in the financial markets

As a trader for 34 years, the economic impact of the pandemic fascinates me. The media have disappointed me by not being more aggressive in presenting realistic assessments of what has happened and what is likely to follow.

On Feb. 29, there were no deaths yet in the United States. I wrote, “You have to wonder if half the world will be infected before there is a vaccine.”

Then, I went on to say, “This could be the worst pandemic since the 1918 flu, which killed 50 million people. I know that sounds crazy, but that is what the math looks like to me.”

Also, I said, “If I am right and it is a much bigger problem than what the experts are saying, it could easily lead to a 30% to 50% correction this year.” The S&P 500 was down 34% less than a month later.

The stock market is telling us that the New York disaster was the result of no social distancing and no masks. It was not a sign of what was going to happen across the country. It is approving the current results, and therefore what we are doing now is reasonable. Not ideal, but reasonable.

The pandemic

It was obvious in February to medical experts.

Medical experts saw that our leaders did not understand what was going on. It was clear that the politicians were ignoring expert advice and instead made purely political decisions.

It is not as even the leaders had no way to know how serious this was in February or even January. President Trump’s trade representative, Peter Navarro, on Jan. 29 sent a memo to the President and many other officials warning that one to two million Americans could die, and the pandemic could cost trillions of dollars. The result? Don’t do anything because it could hurt the stock market and the fall election, and simply hope that the virus miraculously goes away.

I have frequently talked about the pandemic in my trading room and have also written extensively about it on this website. Ten days before the World health Organization (WHO) called it a pandemic, I said it was a pandemic. I speculated that their hesitation was political because they were denying the obvious.

Why do I give the pandemic so much attention? Because it is the single biggest event in our lifetimes, and the horrible way that Washington is handling it astonishes and saddens me. Big problems allow big people to stand tall. We have no giants in either party stepping up to meet the challenge.

I am shocked, and I think it is important for everyone to think much more about the pandemic. It is affecting all of us far more than it should. Maybe a million Americans will die. That is understandable in a poor country with a weak health care system. It is outrageous to have that happen in the United States, when so many other countries are doing an incomparably better job.

Editor note: Al Brooks has written extensively on the Coronavirus pandemic. He has done a deep dive into the crisis and reaction to it. This the first installment of a White Paper of Al’s analysis of the Covid-19 crisis.

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