You’ll likely get the coronavirus…

That’s according to Harvard epidemiology professor Marc Lipsitch.

He notes that the novel coronavirus – aka COVID-19 – is deadly. But it’s not as deadly as SARS or MERS, two previous outbreaks of this type of virus.

That means COVID-19 can infect more people. The dead don’t travel. Viruses need living hosts to spread.

Also, COVID-19 can be infectious even if you’re not showing symptoms. That makes it still more difficult to contain.

And Lipsitch warns that, over the coming year, this means COVID-19 will infect between 40% and 70% of the world’s population.

That’s about three to five billion people.

But as you’ll see in today’s dispatch, despite this shocking infection rate, this new coronavirus is still not the world-ending plague the media is making it out to be.

But before we get to that, let’s check in on how the panic over the spread of the virus is impacting your investments.

Yesterday, U.S. stocks plunged deep into the red again…

As coronavirus goes from a story of containment in China to contagion around the world… investors are taking stocks to the woodshed.

The Dow, the S&P 500, and the tech-heavy Nasdaq each ended the day down about 3%.

That takes the total losses for each of these indexes for the past five trading days to over 7%. And it’s wiped out trillions of dollars of U.S. stocks.

There’s no doubt the spread of the virus is causing widespread panic. But if you’re a regular Cut reader… we’ve got you covered.

I (Chris) have been hammering on the importance of owning plenty of cash and gold in your portfolio to cushion the blow to stocks.

I’ve also been stressing how vital it is that you put asset allocation at the center of your long-term investing strategy. (One of the simplest allocation strategies to follow is colleague E.B. Tucker’s five-bucket strategy.)

And yesterday, former Wall Street trader and colleague Jason Bodner shared three reasons why now is actually a great time to be a stock market investor.

Jeff agrees with Jason’s long-term bullish view…

Here at the Cut… our mission is to publish the best insights, ideas, and recommendations from the team of analysts here at Legacy Research.

I talk on a regular basis with Bill Bonner, Teeka Tiwari, Jeff Brown, E.B. Tucker, and the rest of the team about the opportunities they see to profit… and the threats they see to your wealth.

That comes in real handy at a time like this… when most investors are running around like headless chickens.

Take the wise words Jeff shared with readers of his Bleeding Edge e-letter about how to handle the virus-induced sell-off in stocks…

Finally, we are seeing a market pullback caused by uncertainty around the impact of COVID-19. […] While these moments are never comfortable, if it weren’t for the virus, the markets would still be on a roll. And the economic numbers coming out of the U.S. remain remarkably strong.

The reality is that the market was overdue for a breather, as many segments were supporting unsustainable valuations. I’ve been waiting for a nice pullback to present buying opportunities for fantastic bleeding-edge tech companies.

In short, Jeff is taking a contrarian approach…

Instead of following the crowd and panicking, he’s going to take advantage of the discounted stock prices panics like this produce.

That’s one of the core lessons we teach here at Legacy. As cofounder Doug Casey explains it…

Risk is mostly a function of price. Everything else being equal, when prices are low, it’s less risky. Most people think the opposite – they only buy when there’s a “good track record.” Which means prices are high.

Instead, you want to go where other people don’t go. That’s where you get the bargains.

Everybody knows the old expression “buy low, sell high.” Well, when are the prices absolutely the lowest? When everybody else is afraid of the situation and, as the original Baron Rothschild put it, “blood is running in the streets.”

As long as a company doesn’t go bankrupt, the less you pay to own its shares… and the higher your profits will be when you sell. It’s actually a mathematical certainty, but not one in 100 investors thinks that way.

But what about the human toll from the virus?

That’s where I have some good news for you…

As Marc Lipsitch emphatically points out, the virus isn’t necessarily a killer.

Already, other coronaviruses commonly infect humans on a seasonal basis, causing colds.

Lipsitch believes the likely outcome of this outbreak is simply a new seasonal disease to add to the list.

With colds and flus, folks don’t develop long-lasting immunity. That’s why you need a new flu shot each year.

If this new version of the coronavirus is similar, what we now call “cold and flu season” will become “cold, flu, and COVID-19 season.”

But that doesn’t spell disaster. As with regular flus, many COVID-19 infections can be mild… or even asymptomatic. You might not even know you’re infected.

And just like with regular flus, only folks with chronic health conditions… and older folks… will be at high risk of more serious consequences than some time off work and some home care.

And Jeff says there’s hope even for more vulnerable folks…

He’s spent the past several weeks analyzing companies that show promise for a cure for COVID-19.

And he’s found one that he believes is the front-runner in the race to make a vaccine for the new virus.

More than 80 clinical trials on a cure for the virus are now underway in China. But Jeff doesn’t have much hope that they’ll be a success.

Instead, he’s found a company that’s taking a different approach to combat the spread of COVID-19.

Here’s Jeff with more on that:

Most companies looking for a COVID-19 cure are testing existing drugs or repurposing others in hopes of finding something that will work. But the company I have identified is doing something different entirely.

Within hours of receiving the genetic sequence of COVID-19, it was able to design a synthetic vaccine. It’s remarkable – almost hard to believe – that this company could move that quickly to have a vaccine designed and ready for human testing. During a pandemic like this, speed is critically important when creating promising solutions.

And this isn’t an anomaly for the company Jeff identified. The company performed with similar speed during the heartbreaking Zika virus.

If you’re interested, Jeff’s full write-up on the coronavirus vaccine front-runner is available in his Exponential Tech Investor publication. To find out more about Jeff’s research, click here.



Chris Lowe
February 26, 2020
Owning Hill, Ireland

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