Thread by @MebFaber

The coronavirus is wrecking economies and overloading health care systems around the globe.

Due to the uncertainty involved, one could easily make a case for two wildly different outcomes...

Here's how to prep your investments for both...

mebfaber.com/2020/03/15/inv…

The Bull Case:

Following the dire experience of Italy, countries around the world take the threat seriously. Tests are plentiful, events are cancelled, and citizens self-quarantine. Governments around the world coordinate fiscal, monetary, and health care policies...

...to address most major threats. The infection rate peaks soon (we’re already seeing the number of new infections in China drop to single digits for the first time since reporting began back in mid-January), with hospitals well-staffed and able to manage the patient load.

Deaths totals are mild. Treatments are developed, vaccines are distributed, and global immunity prevents any major future outbreaks.

Economies and markets rebound vigorously, citizens around the world are euphoric, and risk-on markets rebound with a fury not seen in decades. Financial markets hit new highs by year end....

Now, what if this doesn't work?

The Bear Case:

Some countries around the world take this threat seriously, but it is too late and the virus has already spread too far. Much of the global population ignores suggestions to self-quarantine.

Cases go exponential, and hospitals are overwhelmed and unable to manage the patient load. Death totals soar beyond expectations. World leaders, celebrities, and athletes are not spared. Most people know a friend or family member that dies from the virus.

Treatments are ineffective, vaccines are years away, and the experiments with herd immunity are a disaster. Governments try to implement various financial and social stimulus policies to no avail. Previously expected to be a short-term problem...

...economies and markets are impacted massively, citizens around the world are fearful and depressed, and risky financial markets continue to plummet.

The US stock market declines 30%, taking it back to its historically-average CAPE ratio valuation of around 18.

Oil, real estate, gold, and most financial assets slide as well. The summer brings some relief from the virus, and economies improve and markets stabilize. People sense the nightmare is over.

However, by fall the virus reemerges, prompting despair amongst global citizens and markets decline to valuation levels not seen since the bottom of the Global Financial crisis, another 30% down (to a CAPE ratio of 12), and 60% down from the peak in early 2020.

Which scenario is most likely to occur?

I don’t know. No one really knows, but the reality is likely somewhere in the middle.

But with such massively different future possibilities, many investors are wondering what to do…and the answer for most of us is…

Ok, that's the intro...click through to read the rest including how I'm investing my money as well as opportunistic investments I'm considering in the coming months...

I hope this helps. And as always, we’re here for our investors if you want to talk. But likely you don’t need to, because you prepared for this.

Stay safe and healthy everyone!

mebfaber.com/2020/03/15/inv…