Payne's Perspective: February 24, 2020: Navigating Facts and Fearmongering
I got an email from a subscriber this morning:
I am hearing that the virus is manmade and that the deaths and number of those with the disease in China far exceed the number being reported. My fear is that the market will start to crash, and I will lose all I have gained and then some. Is there a plan to defend from that happening?
The coronavirus is a big business story, although I would argue it’s a bigger humanitarian story, as lives that were lost and near-death experiences will scar families and communities forever. Meanwhile, the impact on businesses and stock markets will be temporary. That doesn’t mean the market can’t take a hit before the worst is over and the coast is clear.
The near-term impact pends on emotions, which are being fueled, in part from stories and videos on the Internet - a lot of it is scary stuff. Also, it puts a lot of pressure on the traditional financial press, knowing that periods of heightened anxiety make the line between reporting news and making news even thinner.
I’ve seen a lot of coverage, and I think a lot of it has been irresponsible reporting. When the market is down, there is rampant fear; when the market is up, it’s somehow ignoring the fear. As reported cases in China began to grow slower, most of the media pulled back on talking about the virus except for Bloomberg News, which has gone into overdrive.
I think the financial media lays it on too thick about the trade war focusing on day-to-day speculation. There were times when their obsession with a “potential recession,” despite the lack of proof, spooked consumers.
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