Chris’ note: Welcome to our Daily Cut AM… Market Mission Control newsletter. It’s where you’ll find our best ideas – paid or free – about the coronavirus and its impact on your health and wealth.
We’ve talked a lot about the wealth side of the equation in The Daily Cut AM this week. For example, yesterday, we showed you the best precious metal to hold in a crisis.
But today, we’re turning our focus to what you can do to stay safe.
Our tech expert at Legacy, Jeff Brown, has been monitoring the outbreak closely. And he says there are four dangerous coronavirus myths. Some (like Myth No. 3) may shock you. But it’s vital we bust these myths once and for all. They’re downright dangerous.
So, after you’ve read through today’s dispatch, I urge you to forward Jeff’s warning to your friends and family. And make sure to stick around after Jeff’s insight for more mailbag comments from your fellow readers…
My colleagues and I at Legacy Research are doing our best to get good information on the spread of this virus… and its impacts on the economy and on stocks… to as many of our readers as possible.
I’ve been closely tracking the progress of COVID-19 and its impact on financial markets for my paid-up readers.
But I believe the mainstream media is fueling the flames of fear and panic.
As a result, many people are scared right now. Maybe you’re one of them…
We see this every time we go to the grocery store. Shelves empty fast.
And now, some stores are limiting how many “essential items” each customer can buy.
I’ll be blunt. I believe the mainstream media’s coverage of this outbreak is one-sided and dishonest.
It’s sowing panic and fueling unrest rather than doing factual reporting. It offers very little useful information.
And social media isn’t much better. There’s a huge amount of “fake news” and misinformation on these platforms.
If you’re looking for real facts on the virus, I recommend you subscribe to my free daily tech e-letter, The Bleeding Edge. It’s where I share all the latest updates on what’s going on… including the race for a vaccine. [You can sign up for free here.]
I also recently recorded a special presentation all about ways to protect your health and your wealth during the COVID-19 pandemic. In it, I reveal the top tech stocks every investor needs to own right now – even during this market volatility.
And I’ve also been keeping tabs on some unhelpful “myths” that are circulating online.
Today, I’d like to set the record straight on some of them…
Masks like the one I’m wearing in the picture below won’t protect you from COVID-19.
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Jeff tries on a surgical facemask
I’ll be generous and say they’re better than nothing.
But unless a mask has an airtight seal around your mouth and nose (and you wear protective eyewear that also makes a seal), you’re still potentially exposed.
Masks, however, are useful for folks who are already infected by COVID-19. They stop a carrier expelling respiratory droplets that contain the virus. And they’re needed by healthcare professionals to protect them from all diseases and keep them healthy so that they can continue to work on the front lines in the battle against COVID-19.
COVID-19 is spread through respiratory droplets which travel through the air.
Generally, you must be within six feet of someone who is contagious to come in contact with these droplets.
These droplets can infiltrate your body through your eyes, nose, mouth… or even an open wound.
Symptoms may not appear for up to 14 days. And community spread of COVID-19 has been going on for many weeks now in the U.S.
Because the WHO did not recognize the situation as a public health emergency until January 31, the world was actively, if unknowingly, spreading COVID-19.
Harvard University epidemiologist Marc Lipsitch reckons as much as 20% to 60% of the world’s population will become infected with COVID-19 at some point. He says it’s “almost inevitable.”
That does not mean that 20% to 60% of us will have a severe illness or die. Many cases will be mild… or asymptomatic.
In recent weeks, we’ve seen an unprecedented level of fear-based selling in the stock market.
As of yesterday’s close, the S&P 500 is down 27% from its February 19, 2020 peak.
The common assumption is that all stocks will do poorly while the world gets COVID-19 under control in the months ahead. But my analysis is showing something different…
5G player Nokia just released data saying most wireless networks around the world will see 30-45% growth in traffic over a year. But peak usage has jumped 20-40% over just the past four weeks.
These are beyond-crazy numbers. It’s because people are staying home. Videoconferencing – for work and socializing – has spiked 300%. Gaming has exploded 400%… probably because the kids are staying home from school.
Network data traffic will more than double every 12 months if this goes on. That’s exponential growth. It will overwhelm networks all over the world, unless companies build more capacity.
What does this mean for you and your wealth?
Any company providing wireless services has seen a massive spike in demand. And any company producing the products that go into data centers, wireless networks, and 5G infrastructure is getting slammed with new orders right now.
For these companies, sales are going up, not down. But their stocks have pulled back. That’s a massive opportunity for savvy tech investors.
Travel-related industries such as airlines, hotel chains, and restaurants are suffering right now. But for key tech companies, business is booming.
At times like these, it’s important to rely on data, not guesswork. By staying rational, the world will weather this pandemic. And as tech investors, we can look forward to a brighter future once the dust has settled.
Chris here – Each day, we’re putting together a kind of “community center” for you and your fellow readers.
This is where you can share your updates and personal stories about how you’re getting through this crisis. It’s also where you can put your most pressing questions to our analysts.
I’ll get to as many of your emails as I can.
Then I’ll publish answers from the Legacy Research team.
And if you have a personal story to share about how you’re coping with a lockdown… or how you and your family are staying safe… send it on.
We’re also interested in updates on quarantines in your area… stories from frontline medical staff… and the response by the feds.
Let’s make this an alternative to the fearmongering and hysteria in the mainstream news… and the usual BS coming out of Washington.
So send your questions and stories my way. You can reach me and The Daily Cut AM team at [email protected].
We’ll kick off today with a subject that’s been on a lot of readers’ minds lately – gold.
I love it when all the newsletters like yours tell everyone to buy gold and silver because the market will crash. Then, after we lose our butts, you say, “Actually, the metals will go down with stocks and THEN you start to buy”!!! What a joke.
– Mike K.
Chris’ comment: Hey, Mike. Thanks for writing in. Since the coronavirus panic made front-pages news in the U.S. at the start of the year, gold has had a drawdown (a peak-to-trough fall) of 11%.
By contrast, the S&P 500 – our regular stand-in for the U.S. stock market – has had a drawdown of 34%. The folks who really lost their butts are those who followed the stock market cheerleaders on CNBC and went all-in on stocks.
Here at The Daily Cut, I first urged you to buy gold at the bottom of the gold market in August 2018.
Things were so bad at the time, The Vanguard Group – one of the world’s largest asset managers – had just shuttered its flagship precious metals miners fund.
And colleagues E.B. Tucker and Dave Forest were screaming from the rooftops that this was a great time to buy in. (Catch up here and here.)
Since that recommendation, gold is up 40%. And as I showed you in Tuesday’s Daily Cut, I expect rampant money printing will send gold even higher from here.
Here’s another question on gold…
Where is the best place to buy gold? Bullion or coins.
– Raymond O.
Chris’ comment: You can find a list of the reputable dealers in this free guide from the analysts at Casey Research. But as I detailed in yesterday’s Daily Cut, there is a massive “gold crunch” going on right now.
That’s because there’s panic buying by individuals looking to pick up coins and bars… and virus-related interruptions to refineries and shipments of gold. So physical gold supply has all but dried up. You might have to wait up to three months to get your gold.
Van Simmons is one of the country’s top gold dealers. Here’s what he told colleague Steve Sjuggerud over at his Daily Wealth e-letter…
There is no physical gold available today. I’ve never seen anything like it in decades. Gold refiners around the world are shutting down due to coronavirus. So the supply of physical gold is disappearing for now. That creates the risk that there won’t be enough gold available in New York to fulfill futures contracts. It’s crazy.
I wrote more about this topic in yesterday’s Daily Cut. And I’ll be tackling it again in future updates. So stay tuned for those.
But the short answer is it’s almost impossible to get your hands on physical gold right now. And if you do get your hands on some bars or coins, your dealer will likely ask you pay a premium over the quoted gold price.
A simple alternative is something like the Sprott Physical Gold Trust (PHYS). This exchange-traded fund holds physical gold on your behalf in vaults at the Royal Canadian Mint. You can find out more about that here.
Switching gears… one of the most pressing questions on your mind at the moment is whether the cure for the spread of the virus – the lockdowns – is more dangerous than the disease…
First up, a reader who’s dead set against the lockdowns…
Why are we shutting down everything? We don’t for the flu. Didn’t for the MRSA [super bug]. I’m 72. I’ll take my chances rather than bankrupt the country. If I die, so be it. At least my children and grandchildren will not be under such a horrendous outcome as they are projecting.
– John K.
But, as another reader says, it’s not so black and white…
By the time a national emergency was called for the swine flu, 1,000 were already dead. That number climbed dramatically.
That pandemic never made much news. At work, we got instructions on how to wash our hands and were told to avoid people with flu symptoms. It was much higher risk for the elderly, or those with existing health issues.
What is a life worth?
If we asked those with families in the nursing home in Washington state, it would likely be an offensive question. If we asked the young couple with two kids and their first home, who are now both out of work (none of the four would ever show more than mild, or possibly moderate, symptoms), we may get a different answer.
– Vann W.
I know this is a controversial topic. As I’ve said before in these pages, the virus is more infectious than the seasonal flu… and will prove more deadly as it spreads.
But some folks, like John, rightly point out that the economic consequences of a lengthy lockdown are dire.
Where do you stand? Should we open back up the economy… and risk losing more loved ones? Or should we sacrifice GDP to save lives?
Write me and the rest of The Daily Cut AM team at [email protected]. And don’t forget to send in your personal stories about how you’re coping with lockdown.
Now, more on the coronavirus outbreak… and why the U.S. is quickly becoming its epicenter…
The coronavirus is tightening its grip on America…
Yesterday when I wrote to you, there were more than 55,000 confirmed cases in the U.S. and 802 confirmed COVID-19 deaths.
As I type today, Johns Hopkins data shows that 69,197 Americans have tested positive for the virus… and 1,046 have perished.
As you can tell from today’s mailbag above, not everyone agrees that the lockdown is necessary.
Maybe hundreds of thousands of seniors are happy to die to save the economy, who knows?
But it seems to us to be the inevitable math of contagion that the more the virus spreads… the more people will die.
And it’s not a death you’d wish on anyone… especially if the healthcare system is overwhelmed.
That’s why Teeka Tiwari is urging you to take the virus seriously. As Teeka just put it to our Palm Beach Confidential readers…
I cancelled all of my travel and upset the people I was supposed to have meetings with. I took a lot of flak for cancelling those meetings. Some were with powerful politicians. But now, those people who I cancelled with all have coronavirus.
I know it may seem like it isn’t really as bad as people say. But depending upon your age, it can be. So this is a situation where an ounce of prevention is worth a pound of cure.
Please use social distancing. Please wash your hands regularly. Please keep young people away from old people.
A state-by-state breakdown of U.S. cases shows the virus is ripping through New York.
There are more than 33,000 confirmed cases in New York State. And 280 of its residents have died from the disease. The state now accounts for more than 6% of all COVID-19 cases worldwide.
And on Tuesday, the World Health Organization (WHO) warned that the U.S. could become the new epicenter of the coronavirus pandemic.
Meanwhile, about 100 million people across the U.S. are getting used to life under lockdown.
But unless President Trump orders a national lockdown, it’s up to each state to make the call about how to handle the coronavirus outbreak. Find out here how each state has reacted.
I’ll have more for you on this in future updates.
And I’ll be back with you later with our regular Daily Cut dispatch. So look out for that in your inbox this evening.
Regards,
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Chris Lowe
March 26, 2020
County Kilkenny, Ireland
P.S. As cities across the U.S. go into lockdown, here at Legacy, we want to go the extra mile for you. It can be boring being stuck indoors with nothing to do. So we’re unlocking a digital copy of Legacy cofounder Bill Bonner’s latest book for you.
It’s called Win-Win or Lose: A Modest Theory of Civilization. And it’s a Bonner classic. In fact, it’s one of the best insights into how society and the economy really work that I (Chris) have read. And it’s almost diametrically opposed to the mainstream view.
You see, Bill believes government bailouts… quantitative easing (QE)… zero interest-rate policy (ZIRP)… trade wars… and all other Washington boondoggles are win-lose deals. The remedy for the economy is something different entirely. You can access your free copy of Win-Win or Lose here, courtesy of Bill.
Like what you’re reading? Send your thoughts to [email protected].