 Good day, fellow investors. Welcome to the stock market news for real long-term investors where we discuss the facts and what really matters for your long-term financial well-being, for your long-term portfolio, how to take advantages of the opportunities that have been showing themselves in this environment and how not to risk too much. Let's start with first an economic overview. What's really the situation? What will happen with the virus, with what's going on? What might happen with the markets, with the Fed, with the ECB? What are they doing? Is it effective? Is it not effective? And then how am I placed? What's my personal portfolio strategy? Anything can happen, so better be ready for anything. That's the message of this video. Let's go into the details. Most headlines are about airlines, the dropping revenues, the dropping earnings, cruises of course. When you see those headlines of quarantined people, that is definitely negative marketing for the whole sector. But the key is, okay, what are the repercussions on the economy? And given what's going on, it is certain that there will be repercussions on the economy. And likely a recession definitely in Italy, it was on the brink of recession already. Now it will be certainly into a recession. Then on other countries, China will slow down. So let's see the real economic impact. If we look at the virus, okay, unfortunately spreading around the world, it has been almost contained in China with new confirmed cases much, much lower. So China managed to contain it now as the quarantine, as the forced holidays end up. We'll see how that ends and how that continues if they have really managed to control this or not. However, the economic impact has been significant. Also, if you look at the right slide, the density of nitrogen dioxide in China, real economic activity has been down. It will slowly revamp and OECD has lowered forecasts for 2020. But all these analysis that you see online, those are based on what happened in the last month, two months. As the coronavirus impact gets longer and longer, all these forecasts will get revised, revised, revised on the lower, lower and lower. So that's something to keep in mind. When airlines give a statement, what they expect is from the facts they have in the past. They will never forecast a head based on assumptions. They will always forecast a head based on facts that happened because that is what they have to do based on sec regulations, etc. So forecasts will get revised lower because that is how things are looking now with all the quarantines, the controls, the lower traveling, the lower spending and everything. Another economic fact, car sales in China have fallen sharply. So that will affect the economy. We have to see whether it will affect it short term or long term. And later we'll even discuss Ray Dalio's views how most likely it's most likely that this will be a significant but short term impact on the economy. He discusses how China will excel and is already doing great with the coronavirus. Developed countries will likely do okay, but then the weaker economies might be an issue. And if we go back to the chart with the coronavirus spread, we can see that it can be about the weather. So the weather, this kind of weather, winter, it's very good for these viruses. And we hope, I think a lot of us hopes that as the weather gets better in the northern hemisphere, also the coronavirus becomes less and less often an issue. And we have seen that in warmer places it's not that much of an issue and there is not that much contamination. So there is really hope and what's going on in China is also a good indication for the future. So humans have trust in humanity. We will prevail. Digging deeper into Ray Dalio's thoughts on the economy, he forecasts a big short term economic decline followed by a rebound which probably will not leave a big sustained economic impact. He uses the Spanish flu as an example. However, it can lead to other conflicts because of other large problems like deaths and ineffective monetary policies that we're going to discuss in a moment. These are the temporary forecasts from Goldman Sachs for the United States left. You see the declines, GDP declines, expected declines in Q1 and Q2 of 2020 with a subsequent rebound. In Europe also hardly hard hit to Italy, France. This is another forecast, but I think Q2 will also be severely down if the coronavirus doesn't subdue itself. So it's hard to make forecasts, but what's certain is that we will already have an economic impact with a likely rebound following that. China also, big economic impact down to just 4% growth. So that's inevitable and we will see an economic recession, economic impact. The next phase is how will we deal with that and how will the market deal with that, which means real economic things, can the Fed save the economy or not? How much can it help? And then how will the market react? And the market usually reacts in panic, selling everything, even the good and the bad, which creates an opportunity. We have already seen the first reactions from monetary policy, but it's likely that they will need also fiscal policy reactions. So Bank of Canada, lowering the interest rates, the Fed lowered the interest rates and we expect also the ECB on March 12th to make a decision, the Bank of Japan on March 19th, the Bank of England on March 26th. And it's likely that they will increase asset purchases, lower interest rates, try to do whatever they can to help the economy. But many think it will not be that effective. However, there is also a benefit now. If you have a mortgage, go to the bank, try to refinance it, try to take advantage of the 30-year, extremely low interest rates, because everybody is plowing their money into safe assets like the 10-year, 2-year bonds, which is now at extremely low interest rates, below 1%. So everybody is rushing for safety. The fact is that there is so much money and people are trying to speculate on saving their situation, too much debt, too much leverage, rushing away from risky assets into safe assets, which gives you an opportunity to take a mortgage very, very cheaply. And I personally, we have made an offer, we are waiting for the response on one property. And I think my wife is going to buy it so that I can take another loan, very cheap loan on another property as an investment. That's something I'm thinking. Also, to take advantage of this, what I think is a temporary situation. Temporary means a few years, or for me, it's okay. I plan to invest for another 50. These are the issues that Ray Dalio is mentioning. The federal deficits have been huge already and will increase as the economy slows down. So more borrowing, but the low interest rates help and the safe haven of the dollar also helps. However, if we dig deeper into Dalio's view, so the US, Europe and Japan monetary policy is virtually out of gas. So it's difficult to imagine how pure monetary policy will work. They will need fiscal policy stimulation, but as we have seen, there is already so much debt there. So we'll see how that works and it will need coordinated monetary and fiscal policy. Same approach from Sequoia Capital Publication. I read their letter. Monetary policy might prove a blunt tool in alleviating the economic ramification of the global health crisis. So more will be needed. And when you are in an environment, many are scared of 2009, which was the liquidity crisis. But that happened in 2009. Monetary policy and fiscal policy now are ready to prevent that, prevent the liquidity crisis, which tells me, okay, the economy is going to slow down, many businesses are going to get hit, but there is plenty of liquidity. So it's most likely it will be a short-term economic impact with the following rebound, which means there will be plenty of opportunities for investors to invest and that something we'll discuss later also with my strategy. If we look at the impact on the market, markets are down since suddenly after February 20, the coronavirus issue became a big issue. But when you look at stocks, the S&P 500 index, it's at the same level where it was, what, just six months ago. Nothing really significant has yet happened. Further on Ray Dalio's market view, it's important to understand that the world is leveraged long equities and all risky assets with lots of cash on the sidelines and likely more cash coming, which is my addition. And that would likely lead to a V or U-shaped financials for most companies. And now the question is, which company will survive and which will not survive? Those leveraged, those will be severely impacted and will be significant. But there is money and if a company goes bankrupt, somebody else will pick up the assets and continue with business, which is good for the economy. So Dalio's guess is that the markets will probably not distinguish well between those which cannot withstand well the temporary shock and will focus more on their temporary hit to revenues than they should and underweight the credit impact. So markets will hit all stocks equally and there will see opportunities to buy great assets for low prices. That's also what I'm waiting for. I already made the purchase on Monday and I plan to do more purchases during the year because the current impact will low financial numbers over the next two quarters earnings and the market simply cannot see, will not see other things, might panic and give me more great, great opportunities. And Ray Dalio also mentions how it's interesting, how attractive already some companies have become. I'm going to discuss 3M this Sunday so please subscribe and click the notification bell so that you get notified when there is a video and then you see whether it is significant for you or not. Thank you for subscribing but the price earnings ratio of great businesses has already started to decline which might create more opportunities. Sequoia, similar message that many will get squeezed and the most adaptable to change will survive. What does this mean in practice? If you look at the four airlines, the four big airlines in the United States, you see that, and we have discussed this in the video analysis, you see that American Airlines is the most levered and therefore the stock has taken the biggest hit, 43% down. Other less leveraged companies are down just 20% and this shows what is the situation and as always, as is the message also of this channel, if you think about risk then you avoid these American Airlines situations that is 44% down because of that. It has been bankrupt twice in the last 20 years, it might happen again if this issue persists. So it's better for me at least I sleep well if I invest in companies that are unlikely to go bankrupt and can survive longer periods of lower cash flows and lower revenues. That's the key when it's investing, when value investing, when investing with a margin of safety. So my forecast for the market, expect a lot of volatility. We have seen also that already starting with the SAP up and down with more than 3% changes on a daily basis and that will, especially with individual stock, will continue for the next quarter, two quarters, three quarters. So volatility for me equals opportunity. However, the central banks will do whatever it takes. Italy has announced a big package of billions and they will do whatever it takes to help, which means there will be plenty of liquidity, which means that the upturned rebound will come and therefore we have to just stage our investments, take advantage of the opportunities. The market will be giving us over the next, let's say, months and years. My strategy is pretty simple. I will discuss my lump sum portfolio that I started in 2019 with 100,000 investing. Before this Monday, I had 80% invested. Now I made a 4% investment and I will stage another 3 investments over the next months. So two ways to see how this goes and then if there are more opportunities as my plan is with that portfolio, I will simply go into margin up to 25%. So I still have about 40-40% of my portfolio to be invested, which is also my attitude when it comes to investing. I don't know what will happen. Therefore, it's better for me to be ready for anything and not try to predict what will happen, because that's too risky and I don't sleep well. If I'm ready for anything, I sleep well, I accumulate assets over time and that's it. That has been proven to work since eternity. How am I ready for anything? As I said, normal situation, 80% invested, looking for businesses that will give returns from 10% to 15% over the long term. When there are opportunities that give 20% returns, we go to 100% invested, more than 25%. I'll go to 125% invested. Good business is that the market is punishing because the market can't differentiate between one, the good and the bad. For those that are interested in what I do, please check my stock market research platform. Subscribe to my free stock market educational course, all in the links down below this YouTube video. Thank you for watching. If you like this attitude, subscribe, click that notification bell. I'm looking for your comments, questions. Don't forget to check my free M video that's coming on Sunday and comment on other stocks that you would like to see analyzed. Thank you and I'll see you in the next video.