WEST PALM BEACH, FLORIDA – The news gets worse and worse.

I was on a panel discussion this weekend using Zoom. One of the questions was, “How will the stock market perform through this?” (My answer is below.) 

Sticking Together

Greetings from West Palm Beach, Florida…

A year ago, we were in India. The Monsoon had started. We were in Goa.

Goa is normally one of the most popular tourist destinations in India, famous for its beach parties and luxury resorts. But when we were there, it rained every day.

The rain came down so hard it turned the streets to mud and we couldn’t go outside.

We were staying in a little room above a restaurant. It wasn’t a hotel room. It was a restaurant bedroom.

Our hotel. Dusty looks out from our balcony

We’d run into the restaurant to get out of the rain. We noticed a flyer advertising a room upstairs, taped to one of the walls, and we took it for $16 a night.

So for two weeks, we stayed in our little dumpy room listening to the rain drum on the roof, smelling the aroma of greasy Indian cooking and homeschooling the kids.

When we did venture out to the beach, we got soaked by the rain and the only other beachgoers that day was a pack of wild dogs. 

Wild dogs on the beach

We didn’t mind being stuck together then. And we don’t mind being stuck together now.

Here are the kids watching a movie together this weekend…

Penny, Miles, and Dusty

By the way, I’m watching India carefully in the news.

India is the dirtiest, least hygienic, most crowded country I’ve ever been to. It would seem to be ideal conditions for coronavirus to spread. 

What’s Next for Stocks

I don’t know how the stock market will trade in the short term.

But here’s what I told Bonner-Denning Letter coauthor Dan Denning this weekend (Dan moderated the panel discussion I was on):

In one year’s time, I think stock prices around the world will be considerably higher than they are now.

The pandemic will pass, but in its place, we’ll be left with inflation. And as soon as the bond markets start to sniff inflation, there’s going to be a stampede into real assets unlike anything any of us have ever seen before.

Think of all those trillions of dollars that have been forced into the bond markets… at negative interest rates. It’s going to rush into real, hard assets. And that’s what stocks are.

I don’t own any stocks, though…

The world’s financial system is over-leveraged, overvalued and over-connected. There’s too much central bank intervention and government growth. In short, we’re part of an epic financial experiment and we don’t want anything to do with it.

So we’re doing the Henry David Thoreau investment strategy. Call it “financial distancing.”

It’s the investment equivalent of living alone in the woods, reading paperbacks, and scavenging for grubs. Of course, what I mean by this, is we’ve put all our money into gold. 

Coming Soon: Postcard Q&A Videos

I’ve started making little videos from the porch of our house to answer your questions. We’re putting the finishing touches on the first one, so stay tuned…

In the meantime, please send your questions to [email protected] and I’ll try to answer them in one of my videos.

– Tom Dyson

P.S. I saw this Tweet from Paul Mozur, working on the ground in China as a correspondent for The Wall Street Journal…

Today on my final reporting trip in China, my colleague and I are eating when a man walks up: “You foreign trash. Foreign trash! What are you doing in my country? And you, with him, you b*tch.” I think he wanted to fight, but we stayed silent and let him rant. Quite the farewell.

I think people are going to be mad at China when this is all over. And it seems China is starting to get defensive, too.

Their propaganda machine is at full throttle. They’ve kicked out the foreign press (including Paul). And they’re not letting foreigners in… even those who lived in China before the pandemic. They won’t be allowed to return. 

The days of the Chinese buying America’s debt are long gone. But I think the days of the Chinese even cooperating with America in business are gone, too. Instead, we’re entering a new stage of the cold war…

FROM THE MAILBAG

Readers express gratitude for the Postcards and share their own coronavirus stories…

Reader comment: A big “thank you” to Bill Bonner, Dan Denning, and Tom Dyson. Your writings over this last several years are what saved me from the pains many are feeling in this crisis. Please continue “connecting the dots,” as only you can.

Reader comment: Thank you for your homeschooling tips – I’m an elementary teacher in Scotland, leading my pupils’ learning from home via Google Classroom. Your educational tips will help brighten up my kids’ days, and your financial tips will hopefully help brighten my own family’s financial future.

Hope you and your family are well and not too bored with lockdown! Thanks again. P.S. The reawakening of your relationship with Kate is very touching and to be greatly admired. Good luck to you both.

Reader comment: I am a longtime reader of Bonner & Partners work and have enjoyed reading about your unique life experience. My wife and I are retired health care workers who have a daughter-in-law who is a critical care nurse, so we are interested in reading about others’ experiences in coping with the pandemic. We also have a daughter and 8-year-old grandson living with us and appreciate the tips on homeschooling. Intuitively, we feel that schools in our area will be closed longer than currently anticipated and feel that we need all the help that we can get. Thank you and we appreciate your work.

Reader comment: I read with interest your Postcards From the Fringe. I greatly admire what you and your family are doing together. I think it is the best experience and education for your kids, and for all of you together as a family! 

Reader comment: I have three grandchildren here at home that had their schools shut down on them with no warning. Even their books are still at school. Your leads for homeschooling are proving very, very useful. Anything that you can post up is much appreciated by all of us parents. Also, I am sure that now parents are realizing how valuable their children’s teachers are.

Tom’s note: Thank you for your messages! Please keep writing us at [email protected].