Special Virus Update #4


SUMMARY. With the media focused on number of cases & death totals we believe it will be difficult to reduce fear leading to continued market volatility. However, there continues to be mounting evidence that the Hydroxycholoroquine & Z Pak combo drug therapy (malaria & antibiotic) is not only working to reduce deaths & hospitalizations (see our many Facebook posts), but is being more widely used among medical professionals. It still needs to demonstrate this in formal large scale trial like the one being done in NY. This is despite the media ex Fox News NOT covering the promise of this drug therapy among many others being explored. In fact, most media outlets are casting doubt, not promise, of this specific therapy instead focused on the march toward the "apex" in cases & death rates in the coming weeks. We continue to believe headline virus case driven news isn't where focused should be placed. Instead, it should be on the impact of drug therapies that can in the short term reduce deaths & hospitalizations which in turn can reduce fear so that economic activity can resume. We look forward to news regarding the NY Trial of the drug combo above which now is in day 8 of trials (the therapy takes 8 days to administer). It may not be a complete panacea, but drug therapies overall hold one of the keys, in our view, to reduce fear and return the world to economic normalcy. We believe it will be critical to re-open the economies of the world in next 6-8 weeks despite the passage of the stimulus bill recently. The longer this fails to occur the deeper the recession and longer it will take for economic recovery.


INVESTMENT IMPACT. We continue to believe drug therapy breakthroughs hold the promise to accelerate a return to economic normalcy & growth. Although we admit we remain in the extreme minority here. Either way, the Administration believes cases/deaths will peak in coming weeks. To be clear, our outlook for better growth ahead in second half 2020 and has not changed as media driven fear have re-emerged near-term. Further, we are focused on positioning portfolios for better growth ahead and what assets will benefit vs the current environment. Remember, market bottoms occur when things look bleakest either emotionally or fundamentally depending of the nature of the selling. The assets one owns today may not be the ones to own in the environment to come so the key is to figure that before the future becomes apparent and being positioned correctly. We are more focused on this point vs timing the market or day to day market swings.


For more insights see our website and disclosures found there at BCA. As always contact us for further explanation of how these events can effect your finances.

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