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200,000+ daily Covid infection rate continues in India. Investment implications?

edited April 2021 in Other Investing
“India’s coronavirus crisis is deepening, with hospitals buckling under increasing pressure from the second wave of infections. The South Asian country reported 259,170 new cases and 1,761 deaths over a 24-hour period on Tuesday, according to government data. It is the sixth straight day that India’s daily case count exceeded 200,000 while the daily death toll — still comparatively low — is inching higher. ”

Sad any way you cut it. (Could belong in off topic.) Just trying to get my head around how Covid is playing into investment returns.

- Is it a good time to buy Asia, EM or global funds because Covid-19 has depressed those prices relative to the U.S.? Or - maybe a bad time if you think this trend will continue?

- Is the U.S. currently ahead of other countries in the Covid (infection rate) game because of (A) better governance? (B) more money and resources? or (C) a population more receptive to vaccines along with cultural differences?

- Are investors overestimating the economic rebound from Covid-19 and bidding up some prices recklessly? If so, which ones?

CNBC

Comments

  • edited April 2021
    1. It is likely that COVID-19 pandemic will be brought into control with vaccination along with other mitigation practices, but it will take time and resources. Federal reserves across the globe have pledged to support this effort. As long term investors it would prudent to DCA into international funds over several months instead one lump sum, since this pandemic may take a year or longer before it stabilizes.

    2. Right now countries such as New Zealand, South Korea, and Taiwan who have gotten their COVID infection under control early and are doing well economically. US is playing catch-up with rapid deployment of vaccines (FEMA) and lots of resources. Delivering 200 million vaccines within 100 days is remarkable. However, there is a sizable population who do not want the vaccines and this will prevent US to reach the herd immunity this year. It is the rapid mutation of the coronavirus that is most concerning. The worst scenario would be the new variants would greatly reduce the efficacy of COVID vaccines, and render them much less effective. So far these variants are found to be more contagious but not necessary more lethal.

    3. The FANNG stocks along with those that enable remote working have advanced more than the rest of the S&P 500. The market have broadened out the economically sensitive value stocks in fall 2020. Recent interview with Leann Sonder (Schwab) posted by @Derf also discussed the recent change of stock leadership and the direction moving toward “quality” stocks.
  • www.nytimes.com/2021/04/21/health/vaccine-nursing-homes-infections.html

    Suggest you read this link.
    Try to stay save, Derf
  • edited April 2021
    Don't understand how these healthcare workers don't want to get immunized and so selfish to infected others. This is related to the education level of these workers whom may not have a college degree and only 2 year education beyond the high school degree. Physicians and surgeons I know are fully vaccinated when the vaccines were made available.

    Since COVID vaccines are approved under the Emergency Authorization Act, people who choose to take it on a volunteer basis. When the EAA expires the government can make it mandatory Just like smallpox and other vaccination for entering public schools.

    In the meantime countries like India is facing vaccine shortage while facing thousand infection cases on a daily basis. Brazil is also facing the same issue and complicated by the incompetent political leadership.
  • You can argue that all the bad news is factored into India and Brazil BUT each is only down by 5 to 6% YTD and compared to loss 50% March 2020. If their covid rates are skyrocketing, the impact on local economy is hard to predict. Agree DCA would be wise, but if you wait till "all clear " it will be late. I would not use money you need for anything in the next 3 years.

    There is an increasing consensus that the Chinese vaccine is almost worthless with efficacy of just 50% apparently just beating WHO requirements ( why does that not surprise me?) JNJ vaccine will be much better bet for EM despite very rare Cerebral vein thrombosis issues. But it will take months to roll out
  • "Don't understand how these healthcare workers don't want to get immunized and so selfish to infected others."
    TRUTH.
  • Confining myself just to India I had to look up just what they produce and export. I was surprised to find out that refined petroleum leads the list and not just by a little bit. I'm even less educated as to how the Covid virus is affecting the nation as a whole and what steps they are taking to control it. Apparently not many but possibly the differences in culture affect that. I should add that this opinion (investment wise) is biased because I don't invest in emerging markets to any great extent because of the curveballs foreign governments throw out of nowhere whenever they feel like it. I feel that I should be invested more globally but can't find compelling. reasons to do so.
  • From my recall relative to investing in biopharma and related, I searched again for current data and impacts from an economy and business sectors impaired by a large Covid outbreak. The pharma production area is my initial concern.

    India is the largest provider of generic drugs globally. Indian pharmaceutical sector supplies over 50% of global demand for various vaccines, 40% of generic demand in the US and 25% of all medicine in the UK. India enjoys an important position in the global pharmaceuticals sector.Mar 22, 2021

    India industry(s) overview

    Sidenote: Modi was elected in 2014, and is a Trump like policy(s) leader. India broad equities investing peaked in Jan. 2018 and have not yet recovered those highs.
  • edited April 2021
    In addition to fine chemical manufacturing for pharmaceuticals and other products, India is also a contract manufacturer for AstroZeneca COVID vaccine. They are also developing their own vaccines, presumably using similar technology as J&J and AstroZeneca. Exporting COVID vaccines has been banned for local consumption, and they need many dosages. In addition, call centers for computer customer support is often located in India. In my opinion, India's contribution to the developed world and economy is sizable. The current infection rate and resulting death toll is unprecedented and it will likely to have lasting impact on their workforce and economy.

    As an example, portfolio of Matthews India fund, MINDX is enclosed below.
    https://fundresearch.fidelity.com/mutual-funds/composition/577130859

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