Markets In The Corona Virus Crisis - Continued

Mahmut Karayel
20 Mar 2020

MARKETS IN THE CORONA VIRUS CRISIS (Continued on 2019-03-20)

  • This is the update of last week's blog as we promised.
  • Week of March 16 has been the most volatile week in Wall Street History
  • Annualized volatility of the COVID-19 Reality Crisis is now at 84%.
  • What this means is that there is 1 out of 6 chance that an investor may lose 84% of his investment by the end of the year.
  • …or more optimistically, investors may regain everything that they've lost since the beginning of this year and then some.
  • These are truly unprecedendent times.

Good news:

  • COVID-19 reality so far made people more empathetic and polite.
  • We are viewing this as a worldwide disaster and taking emergency measures.
  • Virus effecting everybody equally has to a large extend silenced the haters and the conspiracy theorists.

When the dust settles, no assumption will be spared. We will re-examine, disect and digest all of our assumptions.

The graph below shows the value of a $10,000 portfolio during the two most severe downturns in the past 80 years.

Comparison of Two Black Swans

Volatility is more severe in the Corona Virus Reality down-turn.

Please share your thoughts in the comments section.

Check out last week's post here:

Suggested Data References in This Article (ALTADATA Marketplace)