Why The Coronavirus Might Be Presenting A Buying Opportunity

“It is scary stuff, but I don’t think the coronavirus outbreak should affect what you do in stocks... the sell-off is a chance to buy stocks at a cheaper price.” - Warren Buffett

As the coronavirus outbreak spreads beyond China, this will probably only get worse for the foreseeable near-term future.  Our hopes are of course with all the medical professionals racing to contain it. From an investing standpoint, though, don't let this fool you. 

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Many investors are fleeing for the exits, selling stocks and moving to "safe haven" assets like bonds and gold. We think that's a bit foolish. If you're a long-term investor, you must ask yourself: "How does this virus impact the long-term earnings power of the companies I own?"

• Will it affect Uber Technologies Inc's (NYSE:UBER) potential to be a market leader in ride-sharing?
• Will Apple Inc (NASDAQ:AAPL) have less upside in consumer technology?
• Will Google's (NASDAQ:GOOGL) monopoly on search erode?

(We could keep going)

Thinking like a business owner provides clarity during external market shocks like the coronavirus. If you think rationally, you realize that the impact of this outbreak is minimal to your companies' long-term earnings potential and will likely only (marginally) affect this year's earnings.

As a net buyer of stocks (i.e., if you're not in the last few years of your retirement), you should want the market to decline so you can buy in at cheaper prices. Or put more simply, if you're going to own a stock for many years, you in theory should want to buy it at the lowest possible price. 

This is what we're telling our clients at Titan - that the volatility in this market has gifted you a potential buying opportunity. Don't let it fool you. This all may read counterintuitively, but it's crucial investing doctrine to understand. It's why fund managers on average were shifting away from cash in February, as the coronavirus began to spread.  

This is why we're staying calm as investors. We manage capital for 8,000 clients and counting. To learn more about us, head here. 

That said, this is an extremely deadly virus that is not to be taken lightly as a consumer and global citizen. Everyone should take precautions to stay safe.

Disclosure: Uber, Google, Apple were portfolio holdings of Titan clients. They may cease to be a holding in the future.
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This should not be considered an offer, solicitation of an offer, or advice to buy or sell securities. Statements made herein may be outdated and subsequent events may have occurred, information may have changed, that could make any statement in these materials inaccurate or incomplete. The media presented may contain certain forward-looking or promissory language regarding the performance of Titan Invest or a company; these statements should not be relied upon to make an investment decision. Before investing, consider your investment objectives as certain investments are not suitable for all investors. Please consult with your financial advisor before making any investment decisions. Past performance is no guarantee of future results. The graphs, charts and other visual aids are provided for informational purposes only, not to be used to make investment decisions. Prospective clients must refer to our website, and in particular, our Advisory Agreement for a complete description of Titan’s objectives and investment strategies. See full disclosures on Titan's website (www.titanvest.com)

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