Markets In The Corona Virus Crisis - How Long Will It Last?

Mahmut Karayel
17 May 2020

MARKETS IN THE CORONA VIRUS CRISIS - HOW LONG WILL IT LAST?

It took six months from the day that Lehman Brothers failed in 2008 to when the stock market recovery began in March 2009. We started tracking our comparison of the markets during the COVID-19 crisis that started three months ago to the Financial Crisis in 2008/2009. As it seems like we are not going to be out of the woods for some weeks to come, I have expanded our comparison horizon to six months.

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

Every week, The Economist, The New Yorker, Barron’s and many others publish articles trying to prepare their readers for what is to come in a post COVID-19 world, and issuing warnings against all sorts of evil, including increase in organized crime.

Many people appreciate now what they took for granted before. I can only hope that despite the job losses, isolationism, supply chain breakdowns and the blame game, we will not succumb to tribalism.

We recommend caution for the investor. The end of this cycle is not yet well defined.

Please share your thoughts in the comments section.

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Suggested Data References in This Article (ALTADATA Marketplace)