Opening Statement from the May 2020 Intelligent Investor (part 1) 

Opening Statement from the May 2020 Intelligent Investor (part 1) 

Originally published on May 6, 2020 (pre-market release)

It is important to acknowledge that the current economic crisis has been caused not by greedy Wall Street bankers (as is usually the case) but by reckless politicians and corporate bureaucrats who have jumped aboard the fearmongering COVID-19 bandwagon, which might ultimately serve other agendas. At some point, if the truth is ever recorded the COVID-19 hysteria will be viewed as an economic disaster that could have been avoided if not for the misguided actions of officials. 

Fortunately, many of the same officials who were quick to shut down the economy are beginning to realize how bad things will get the longer the economy remains closed. Officials from around the world are now starting to gradually reopen their economies as new COVID-19 infections are either in decline or leveling off. But we cannot neglect the possibility of a recurrence during the winter months given the virus’ (rarely mentioned) low ability to survive in hot climates. 

Global Economy

China: China’s economy was already fragile due to the trade dispute with the US. Of particular concern is China’s very risky, opaque and bloated financial system which is closely linked to its (largely) state-run economy. COVID-19 has already resulted in record-low PMI and GDP data. Although China appears to be in the process of an economic recovery...