Earnings are now being reported for the first quarter. It’s interesting to see how companies did going into the current economic shutdown, but of little predictive value. The world turned dramatically in March when so many businesses closed; in the U.S. approximately 29% shut down. It isn’t just America, but across the globe.

We have long stated that this year is a write-off for earnings results. There are companies that benefit from the current environment however, they are few. Even companies that are not badly affected may take the opportunity to lower expectations; why not be measured against an easier benchmark?

Investors are going to have to look through this year and make assessments about how companies will perform a year from now. That requires some assumptions as to how and when the economy reopens. This in turn depends upon when broad-based testing and therapies become available. We are optimistic these will begin appearing this summer. Vaccines are probably further off. Once we can identify those that have the Covid-19 virus and treat them, the infection will become a more manageable and possibly acceptable risk.

We will get there, stay steady, my friends.

The Lonely Bull