Constantin Gurdgiev: Pandemics, panics and the markets

The good news is, to-date, the latest global health crisis does not seem to be a trigger for a major and sustained sell-off. The bad news is, we are yet to see its full impact.

4th Feb, 2020 - 8 min read

Panics are the one feature of the financial world, where behavioural biases of investors and traders ebb and flow from category three, ‘fun-to-run rapids,’ to category six, ‘raging widow-makers’. It is, therefore, only apt to think about the financial markets reaction space when it comes to the latest public health crisis, the new coronavirus, or the Covid-19 outbreak in China. As I write this article, the health risk of contagion is spreading like a fire across a dry forest, threatening tens of thousands of lives and the global economic outlook for 2020.

Which makes it quite surprising that, so far, the markets are reacting to...

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