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Ray Dalio posted about the coronavirus today, and the potential impact on everything from our economy, to our health care system.
I always find his insights worth reading and paying attention to. So I thought I would post the highlights here for those that did not read the post.
Here are some of his main points that I picked up on:
- He does not like to take bets on things that he does not feel he has a big edge on, He does not like to make any one bet really big, and would rather seek how to neutralize myself against big unknowns than how to bet on them.
- Off chance that it will trigger the downturn that Dalio has been worried would happen with both the big wealth/political gap and the end of the big debt cycle.
- He is told (by experts) that the stresses on hospitals could become very large, which will make handling the cases of all patients more difficult. In short, he is told that we should expect much more serious problems ahead.
- It seems to Dalio that this is one of those once in 100 years catastrophic events that annihilates those who provide insurance against it and those who don’t take insurance to protect themselves.
- Interest-rate cuts and increased liquidity won’t lead to any material pickup in buying and activity from people who don’t want to go out and buy, though they can goose risky asset prices a bit at the cost of bringing rates closer to hitting ground zero.
You can read the full post here, and I recommend reading it and following him.