Coronavirus Update 3/24/2020

By Whitney Tilson

Tuesday, March 24, 2020

1) I’ve been spending every waking moment over the past week preparing for the free webinar that my colleague Enrique Abeyta and I are hosting tomorrow night at 8 p.m. Eastern time on the coronavirus crisis and its implications for investors.

I’ve given hundreds of presentations over the years, including many in which I warned investors about the great financial crisis long before the storm hit.

But I think this presentation is the most important of my life.

It’s absolutely free to attend – we’ll even be giving away two of our favorite stock ideas, just for watching – but you must sign up in advance. You can do so right here

During the webinar, we’ll explain, in great detail, why we’ve come to the firm conclusion that this is the absolute best time to be an investor in more than a decade. To borrow a phrase from one of my friends, “we’re trembling with greed” right now.

There are five main reasons why. I’ve been covering the first one for the past few weeks already…

My in-depth analysis – most importantly, studying how China, Japan, South Korea, Taiwan, Hong Kong, and Singapore have managed to beat the coronavirus – tells us that we too are likely to stop the rapid spread of the virus much sooner than investors are anticipating.

I’m optimistic that the measures we started taking a couple of weeks ago – and especially the stronger measures in the past week – are working. When we look back months from now, we’ll see that the number of newly infected people across the U.S. has already slowed down dramatically and will soon plateau and then start dropping, as the latest measures kick in – exactly along the lines of what happened in China two months ago.

But I believe that the expectations built into stock prices today are that the virus will keep spreading at a high rate for another one or two months at least, and that hundreds of thousands of Americans die from it this year. 

If this doomsday scenario doesn’t come to pass, stocks will likely go nuts.

Tune in tomorrow at 8 p.m. Eastern time for the whole story… as well as the rest of the reasons why I’m so bullish today. I’m also giving away two of my favorite stock ideas on the webinar as a thank you for watching. Again, reserve your seat here

2) An article about how Hong Kong and other Asian countries are seeing an uptick to do infected people coming in, so are having to re-impose strong measures: Hong Kong appeared to have the coronavirus under control, then it let its guard down. Excerpt:

Now, however, Hong Kong is providing a very different object lesson — what happens when you let your guard down too soon. The number of confirmed cases has almost doubled in the past week, with many imported from overseas, as Hong Kong residents who had left — either to work or study abroad, or to seek safety when the city seemed destined for a major outbreak earlier this year — return, bringing the virus back with them.

On Monday, Hong Kong Chief Executive Carrie Lam announced that all non-residents would be barred from the territory as of Wednesday, the latest addition to a raft of new measures.

This is a pattern playing out across parts of Asia — mainland China, Singapore, Taiwan — that were among the first to tackle the outbreak. All are now introducing new restrictions as a sudden wave of renewed cases begins to crest.

Compared to major cities in the West, like London or New York, residents in Hong Kong can sometimes feel as if they’re living in the future. Many of the measures enacted in the Asian metropolis back in February are now being rolled out in European and American cities.

But this latest lesson may be a bitter pill to swallow, as it indicates that quarantines and social distancing must continue well beyond the initial wave of cases, if another round of infections is to be avoided. 

Whitney Tilson

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About Whitney Tilson

Prior to creating Empire Financial Research, Whitney Tilson founded and ran Kase Capital Management, which managed three value-oriented hedge funds and two mutual funds. Starting out of his bedroom with only $1 million, Tilson grew assets under management to nearly $200 million.

Tilson graduated magna cum laude from Harvard College with a bachelor's degree in government in 1989. After college, he helped Wendy Kopp launch Teach for America and then spent two years as a consultant at the Boston Consulting Group. He earned his MBA from Harvard Business School in 1994, where he graduated in the top 5% of his class and was named a Baker Scholar.

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