Coronavirus Economical Impact - How Will Coronavirus Change The World As We Know?

We've all heard about the latest Coronavirus news and the situation that the world is in. And probably, we've all been already affected by it.

Dow Jones decreased more than in 2008. And this might only be the beginning of another period of economical instability and huge market fluctuations. With over 25.19% lost in less than 3 months, we should probably prepare for a period when neither the graphs nor the best wall street financial advisers could guess what will happen with the market. But first, some history.

In the modern era of stock markets, there have been only 2 diseases that might have impacted the stock market one way or another: the flu pandemic from 1968 and the HIV/AIDS pandemic from 2005-2012. Both of these killed millions all over the world, but what was the economical impact?

The answer? 0. There hasn't been a crash on the stock markets due to a pandemic or a disease, until now. We're living in a time when history it is being made - and we're witnessing it day by day. The bear market on the stock markets started on 24 February 2020 - the so-called 'Black Monday' - but its continuing even on the 16th of March 2020. In only one day, all the major American stocks lost more than 5%.

And this might only be the start of a major crash. A crash that might make the 2008 crisis look like a 'bad day'. There are more than 3 scenarios that can happen in the current case:

Scenario A - Bull - The cure for coronavirus would be found in the next one or two weeks. Vaccines will be made, people will be treated and cured and despite the bad period, everyone will go back to work and the industry alongside the stock markets will rise once again.

Scenario B - Bear - The Coronavirus will disrupt the entire industry in the USA. The USA will rely solely on importing and a lot of hospitals would be full with patients. The whole nation will be paralyzed, unable to move forward with their lives for a while. The patients would focus on paying their medical bills instead of other things and this would have a major impact on the economy and the life of every American.

Scenario C - Neutral - USA will treat the infected people for free, other countries would jump to help them pass over this situation and the cases would reduce dramatically over the next weeks. The impact won't be so big, as the cured people can keep up with their lives as they do before - without a major medical bill. However, the USA economy will still be damaged and the money paid by the state should come back from the people, so a few taxes might be increased.

As the situation is now, the bull scenario is less likely than the other two. The normal odds would be 33.33% for each, but this is not the case as it depending on many factors: the number of active people infected, the number of people affording healthcare, the number of people not showing symptoms but that are infected and many, many others.

The situation is unpleasant for everybody. But can this situation turn into a holy grail for smart investors in the long run?

In my opinion, yes. And let me explain the situation properly by the power of examples.

The power of habit 

According to ScienceAlert, it takes 66 days to change a habit. People are now forced to stay in their homes for at least 2 weeks. But no one knows if these two weeks won't be 2 months in the long term. However, if this happens, the following industries can see an increase in revenue:

1. A) Food Delivery Services - Food delivery services started a while back and they've seen a major increase in customers. However, with more and more people being stuck at home - they can turn this situation into a habit for their customers. Instead of going to a restaurant, more people will choose to eat at home and order from that restaurant or from a service that brings the food to them ( Example: Uber Eats ).
2. B) eCommerce - Are you thinking Amazon made a fortune by delivering the products to their customers? You're right. And it would probably increase more and moreover the years. The e-commerce sector will soon become the #1 choice of consumers. With the right to return the item and get a refund, a lot of people will order it instead of going to the shop and buy it.
3. C) Pharmacy delivery - The responsible people will understand that in a period when they get the flu or they're sick, they should order their treatment online delivered to them. Its a faster, easier method with a low chance of spreading the virus around. This is something humans never thought about it, but more people will acknowledge it over the years.
4. D) Basic Doctor consultations to be made online - Sounds like a joke now, but won't probably be so bad in the future. Some smart companies will probably invent a stethoscope that would record the sounds and you could connect that trough a USB to your computer. Same with your temperature and other minor things. Basically, anyone could probably buy these into the future and avoid getting out and spreading the disease.

The new type of companies that might appear

After World War II, the technology changed and evolved faster than ever. We got faxes, walkmans, cassettes, mobile phones, and many, many other cool stuff. Why? Because humans understood that a war is won with technology. And they've become passionate about creating better technology day-by-day. Now, we have commercial quantum computers and plans to colonize Mars.

Based on these presumptions, people will now understand that there are things worst than war - which is a pandemic scenario. As we may see, these diseases caught us all unprepared. And some people won't be the same for the next one. Humans are learning from mistakes. World War II was won because of better technology so all the world focused on developing technology. Coronavirus is a pandemic and can only be killed by a proper treatment/ vaccine.

Given that, let's see what companies might appear in the future:

1. A) A company to assure you in case of pandemic scenarios ( financially ) - After this, who wouldn't put aside $10 or $20 per month to send it to a company that can assure you in case this happens again? You might lose your job while this happens and it might take months or even years until you can find something new. With a company assuring you the same income per month in case the pandemic scenario happens again, you could rest assured that you have money to pay for the treatment you need or to stay at home unemployed for at least 5-6 months. However, we might get lucky and not get another one in our lifetime. Even like this, some people would pay for that.
2. B) A company to deliver you food and other necessities in case of a pandemic scenario - The biggest issue that we've seen now is the fact that a lot of people are going in public and shopping. They're actually exposing them and their loved ones by doing that, without acknowledging it. However, a company that will deliver a kit of survival alongside with food for the next 2-3 weeks could be something that people would be really interested in.
3. C) An app to teach people how to treat their disease and when they're safe to get out - The 'normal' flu makes a lot of victims. However, some smart guys can create an app to explain to people what are the recommended things to do when they have the flu or anything that can be transferred via air or human touch. The app could realize when your situation would get worse and announce your doctor, it could announce to you when you need to take your pills and so on.

Many other similar companies might appear - and they'd be probably a good investment if you get in early. However, it's only a guess so don't take this as financial advice.

The Holy Grail of Investments

After a period when everything will go down, the markets will probably bounce back. But where can we find the holy grail of investments? What are the stocks or industries that were the most affected and will come back stronger than ever?

1. American Stock Market - The USA stock market is in a bad place right now. But once the pandemic will stop and most people will get back to their jobs - the sector will grow again. Of course, it would take some time - but don't you want to buy an S&P 500 or a Nasdaq stock cheaper and gain 20-30% in the following year? Its an investor's dream.
2. Crypto - The bigger the crash, the bigger the potential for a good outcome. Bitcoin crashed in 2017 from $20,000 to $3,200 in December 2018. And then it went back again to over $12,000. And now, it is back to $5,000. The cryptocurrency market is highly volatile and that's why most of the crypto enthusiasts prefer to earn crypto than to invest in it directly. You're not putting in your money, only your time for the services you're good at.
3. Buying cheap real estate - The real estate market crashed hard in 2008 - then got back to its glory days in around ....10 years? However, investors understood that the real estate market is one of the safest investments that you can ever make from a long term perspective. Now, the real estate market will have to suffer a lot, as more and more people will stay in their rented apartments with the fear of not getting the Coronavirus. And after this is done, a small decrease in price for all the apartments will probably be enough to push this market up again. But until then, a few weeks or months of a decline are awaited.
4. Buying affected physical businesses - The physical businesses are affected worldwide. Let's say a person has a wedding event where people come and find the company they need to hire for their wedding. A good company like this can earn as much as $1M in revenue per year, with more than 20% being pure profit. After this period, there would be some people willing to sell these for a lower evaluation. Of course, you'd need to put some extra funds in branding, to make the business grow again and so on. But it would probably be worth it.

In conclusion, this Coronavirus will have a major impact on our daily lives for at least the next few weeks. The industries worldwide are affected, the markets are crashing and some people even lost their job due to it.