Share Market Rallying! End of COVID-19 Pandemic?

timmeh15 on 08/04/2020 - 02:51

This is the punch line that fund managers and listed company directors would you want to fall for. The recent market rallies are defying basic fundamentals and a dangerous trap for investors to jump in to buy into this rally. The recent rally is fed off news that European infection and death rates are flattening which is indeed fantastic news but the economies and factories haven't exactly restarted which leads to my next point.

So when would this all end?

I see there are 2 realistic options happening:

  • Vaccine is found and the pandemic is over but unfortunately this isn't going to happen for at least 12-18 months according to Google. Vaccine takes time to go through its testing phase and then manufacturing them for the entire population. True fact is a vaccine was never successfully developed for previous coronaviruses such SARS and MERS but with the current COVID-19 situation a lot more resources and importantly funding has been put towards the vaccine.

  • Herd immunity method which Boris Johnson first suggested which is getting a majority of the population infected so a sufficiently high proportion of individuals are immune to the disease. If a vaccine is never developed, this is the next likely the solution to the end of the pandemic but unfortunately death toll would be lot higher.

Until either of the above situations occur, any market rallies should be taken a BIG pinch of salt as restarting the economy is not simply for governments to hit the GO button and everyone restarting their lives to pre-pandemic days. The biggest challenge for the government is how to get people back to work without further infections as there are several cases around the world where it only takes one person to infect an entire group of people see Webasto case in Germany or Hong Kong hot pot family case. Until the coronavirus is completely contained, I simply do not see the market rising due to simple economics. If the majority of the population is still in lock down who is there to produce and who is there to consume to sustain the companies? Could the government continue to bail out companies with tax payer's money for the next 12-18 months?

TLDR: Hold your cash and be careful of recent market rallies as pandemic is not over.

Ozbargain must included: MS Paint picture + poll
https://imgur.com/gMf5mpN

When would this pandemic end?

Poll Options

  • 11
    <3-6 months>
  • 30
    <6-12 months>
  • 36
    <12 months+>
Financial

Comments

  • TheBilly on 08/04/2020 - 06:07
    +1

    How successful of an investor are you and how can you prove this success?

    • timmeh15 on 08/04/2020 - 13:30

      This is not a gloat thread, there's another thread on that already. Just sharing my 2 cents.

      • TheBilly on 08/04/2020 - 13:32

        Just sharing my 2 cents

        Just sharing my financial advice

  • [Deactivated] on 08/04/2020 - 06:50
    +1

    By end of pandemic, you're probably referring to a vaccine.

    At this point in time, it is at least 6-8 months away. At least.

    When it does become commercially produced, which country is going to receive the vaccine first, allowing their economy to resume first thus placing them in a much better exit position?

    At the end of the pandemic, we are entering into global conflict.

  • Oofy Doofy on 08/04/2020 - 07:00

    A realistic time frame, if you know the process of developing brand new vaccines for novel diseases, is around 5 years or so. They had lots of previous R&D for Ebola and literally got lucky.

    I actually don't believe we'll have a vaccine in 18 months time. There are around 60 vaccines in R&D atm, around the world. I honestly believe most of them will fail in some way. Efficacy and safety, the two major criteria. In this circumstance I hope several of these vaccines produce a good immune response with low side effects, but I would be comfortable with an efficacious vaccine and side effects. I think the trade off is worth it. Another problem they are having is with getting a vaccine approved only if it has minor/minimal side effects…

    Seems to me a drug treatment cocktail will come about before any vaccine, and/or other methods like blood transfusions from people who have recovered from Covid-19.

    He who dollar cost average's into the market will be the overall winner, whether it's up/down/stagnate.

  • DingoBilly on 08/04/2020 - 09:20
    +1

    This is some weird clickbait news article but on Ozbargain for some reason.

    Like "Yeah! I was going to invest now as everything is back to normal! But oh wait, you don't think COVID is over? Damn, I didn't realise! I thought the whole quarantine and stuff was just how we live from here on out?"

    • timmeh15 on 08/04/2020 - 13:32

      I secretly work for Scotty to increase traffic to OZB forum :)

  • xuqi on 08/04/2020 - 09:43

    When will it end?

    When 5.5+ Billion people are vaccinated.

  • darque on 08/04/2020 - 09:50
    +1

    I think the pandemic ending and returning to relative norm in society will be two different things. Though I don't see the pandemic officially ending until a vaccine comes in 12-18 months, I can't see society operating on hold for more than 6 months. The economic fallout will simply be too much for any country to handle.

    That said, parts of Asia who are opening up are seeing another wave of patients, but we will see how they weigh that up cases with economic impact

  • JimmyF on 08/04/2020 - 10:09

    So when would this all end?

    No idea, but the fact that the 3 main cruise line shares have jumped 20% one day and 10% the next, is strange. They have lots of cruises cancelled on their books and I don't see them returning to sailing this year maybe Nov or Dec 2020, but more likely next year! So where did this jump come from?

  • [Deactivated] on 08/04/2020 - 10:28
    +1

    Or else the stock market is purely a sentiment driven industry, with the products being the shares rather than the products or services their attached companies provide.

  • kahn on 08/04/2020 - 10:31

    The best indicator of us recovering is if this post gets merged into the megathread.

  • cameldownunder on 08/04/2020 - 11:02
    +2

    The positive movement are the "opportunists" who think the worst is over, and shares will go up. For a short period buyer will outweigh sellers, but as soon as the few buy orders are filled, the sell orders will be stuck in the order book, pushing prices further down, till the price is low enough for the next set of opportunists to buy in. Once all opportunistic buyers have invested all their free cash, the market will collapse again.

  • JCrown9 on 08/04/2020 - 11:04
    +1

    Your poll and question are asking 2 different things:

    When would this pandemic end?
    &
    Share Market Rallying! End of COVID-19 Pandemic?

    The poll may somewhat be accurate to answering the question: When would this pandemic end?
    But the stock market prices things in 12months +/- into the future. So the rally we are seeing now could very well be pricing in a low.
    We may not see to many more gains as thats unknown, but we may also stop seeing falls past the low thats already in place based on future expectation.

    It will get to a point that we already know things are bad or will be bad. But for the stockmarket to consider are things worse than whats already known or are things better than whats already known 12months from now???

    Thats what investors need to consider :)

  • Trying2SaveABuck on 06/06/2020 - 00:10

    Market is rallying right now just under 6000

    i dont think it will hit over 7000 b4 the end of the year but the 6500~ mark is possible

    There is a lot of blood in the water and stupid people taking $$ out of there super to gamble/Booze it away have cheapened traditionally solid shares like TLS, Big Banks etc smart rich people are capitalising

    Rich get richer and the poor get poorer

    DYOR but if you want me advice just buy VAS and set to reinvest dividends into more VAS it is the only investment advice a mum and dad investor needs

  • RocketSwitch on 09/06/2020 - 11:36

    I think I am one of the stupids who went 100% in Cash from High Growth in their Super. Now, that looks like a silly decision in hindsight, but am young. But, the question is, do you buy back now or wait since the damage is done. I think my stupid advice would be since I'm already in a hole, wait to see if this is just a trap. So if at the end of year it's not at 5000, then the market will recover.

    Pandemic? Riots? Global conflict? Nah, rise ASX RISE!

    I did buy shares in the company I work for (since they're 50% down from what they were), as company matches your shares with what you put in. So that's one less stupid decision I did.

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