Your Monday Market Blip 2/24/20

Your Monday Market Blip 2/24/20

Stocks took a massive hit today as coronavirus fears elevated with the reports that the virus had spread to South Korea and Italy. The Dow sold off 1,031 points and closed the day at 27,960. Shares seem to be selling off as a result of relative short-term value rather than long-term affects to the economy. For example, 2003 had SARS and 2009 had the H1N1 virus, and in both those years the S&P 500 was up over 25%. They both had significant impact, and in fact, H1N1 hit a lot closer to home. However, both those years the market was coming off historic lows and so the risk was taken out of stocks and they still traded up significantly. This year, markets are a lot more fully valued, and so investors are not willing to pay for the risk now. Gold continues to shine, as does digital-fake-millenial-gold, a.k.a. Bitcoin.
This weekend, Berkshire Hathaway, and Warren Buffett, released their annual shareholder letter. Amongst many things such as corporate governance, corporate reinvestment, and Berkshire’s company results, he also reiterated his long held belief in buying quality businesses for the long term, and not worrying about short term headlines. Unfortunately, many Fidelity and Schwab investors either didn’t read his letter or think he’s a crazy old man, and they raced to log in to their accounts this morning and found them momentarily unavailable due to all of the high traffic. This was all fixed relatively quickly, but when some people logged in initially it showed their account as temporarily unavailable, and also with an account balance of $0.00!

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