Thoughts on the Coronavirus

MARCH 3, 2020

We do not claim to have any idea how far this outbreak will spread, nor how many lives it will claim, before it is brought under control. We’re reasonably certain that many of the world’s leading virologists and epidemiologists are working on it, and we believe their efforts will ultimately succeed. If the history of similar outbreaks in the recent past is any guide, this seems to be a reasonable hypothesis.

We draw your attention to:

  1. SARS in 2003-04, also originating in China
  2. The bird flu epidemic in 2005-06
  3. In 2009, a new strain of swine flu (H1N1)
  4. The Ebola outbreak in the autumn of 2014
  5. The mosquito-borne Zika virus outbreak in 2016-17

On January 31, 2003, the super-spreader of SARS - a fish seller - checked into a hospital in Guangzhou and infected the staff. The epidemic exploded from there.

On that first day of the litany of epidemics cited above, the S&P 500 closed at 855.70. Seventeen years and six epidemics later (including the current one), this past Friday the Index closed fairly close to four times higher. We’re confident you see where we’re going with this. 

As always, we welcome your inquiries around this issue. In the meantime, we think the most helpful investment advice would be to turn off your television set. 



Karl Kuelthau, Author, Principal
Louise Googins, Principal
Michael Googins, Administrator
Kim Rankin, Accountant
Carson Bieber, Associate
Mckayla Johnson, UW-Madison Intern
Brady Peat, UW-Madison Intern
Mason Buss, UW-Madison Intern


P.S. The history of the SARS epidemic, and of most if not all the others, is well documented by Wikipedia. The attached graphic by First Trust provides additional information about the Index’s performance following certain epidemics. There is nothing better than a graph of the stock market to portray the long term history of stocks!


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