Could the Coronavirus be "Healthy" for Stocks?

By Wayne Mulligan, on Thursday, March 12, 2020

As Lou and Matt explained earlier this week, stocks are in for a bumpy ride.

With multiple crises happening at once, things will likely get worse before they get better.

But here’s the thing…

Even with the market getting clobbered, individual stocks can generate profits. In fact, if you look at prior crises, you’ll see that times like this can create major opportunities.

So today, I’ll share some of our research — and then tell you how to prepare for profits.

A Multi-Front War

As Matt showed you yesterday, many factors are putting pressure on stock prices.

For starters, this is the longest running bull market is history. But stocks are like gravity: what goes up must eventually come down. And after 10 years of going straight up, it seems stocks are finally ready to come back to earth.

Furthermore, after spending the last few years cutting interest rates to nearly zero, the Federal Reserve has run out of ammunition. That’s why traders have so little confidence that we’ll see a rapid market recovery.

But the situation putting the greatest pressure on stocks today is the coronavirus…

Coronavirus Hitting U.S. Markets — Hard

China finally seems to have gotten the coronavirus under control.

But other countries are just stepping up their efforts now. For example, millions remain on lockdown in Northern Italy, and Trump is banning incoming flights from Europe.

Given the impact of this on industries from travel to retail to hospitality, U.S. markets are crumbling. Trading on the NYSE has been halted twice in the past few days.

You may think it’s time to cash out of stocks. But here’s the thing…

When you look back at previous health crises, you’ll see that situations like this can present extraordinary profit opportunities…

When Crisis Equals Opportunity

For example, look at the SARS epidemic of 2003.

Like the coronavirus, SARS created panic selling in the markets. But even while the overall market plummeted, forward-thinking investors were finding hugely profitable trades.

For instance, if you’d simply bought a basket of SARS-focused biotech stocks, you could have done quite well. Consider:

  • Based on reports that the company was developing a SARS treatment, shares of Medarex climbed by double-digits in a single day.
  • And simply because it was working on a SARS vaccine, shares of GenVec quickly shot up by 64%.

Opportunities like these — small biotechs rumored to be developing treatments for the “disease du jour” — can consistently hand investors big, fast profits.

As another example, look what happened during the Ebola scare in 2014:

As Barron’s reported, shares of Lakeland Industries, a maker of protective equipment for medical professionals, jumped “by almost six times after the 2014 Ebola problems came to light.”

That’s a quick 600% profit — even while the rest of the market was cratering.

History Repeating Itself

So don’t give up on stocks entirely.

If history is any guide, major profit opportunities are available to you right now.

That’s why, next Tuesday, Lou will share more of our investment research with you…

As you’ll see, there are several ways to protect yourself and grow your nest egg…

No matter what’s happening with the overall market.

So stay tuned!

Best Regards,
Wayne Mulligan
Wayne Mulligan


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Tags: Stock Market Coronavirus

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