The first cases of the coronavirus were reported in the United States in January of 2020, by March the stock market had recorded 3 of the biggest daily losses in history and investors had lost, on average, 38%.
Did you respond correctly or did you panic?
It was my senior year of high school and we had travelled to play our division rival, the Springville Red Devils, in their homecoming football game. As with any rivalry or homecoming game, the stakes were high, but they were especially high this year as both teams were battling for a spot in the region championship.
We were ahead 12 – 7 going into the 4th quarter, but the Red Devils were marching down the field and about to score. The receiver I was guarding ran a beautiful post corner route to the back of the end zone and the ball was coming his way. At the last minute I leaped up, intercepted the ball, and looked up field. To my surprise, I didn’t see anything standing between me and the end zone 105 yards away. I was about to be the hero.
blind sided by the unexpected
I’m sure you can relate to being blind sided by the unexpected, especially right now as the coronavirus outbreak has blindsided the entire world! That unexpected blindsiding has lead to PANIC, probably a highly reasonable response given the circumstances.
Overnight people became terrified about their financial and physical well being. Fear that they could lose their life. Fear that they would lose their job. Fear that they could unknowingly spread the virus to others. Fear that life as they knew it would never be the same.
The tragic consequence of panic
Unfortunately, after I intercepted the ball and ran towards the end zone during that high stakes football game, I learned about the tragic consequence of panic.
In the 2nd quarter, prior to the interception, Springville’s tight end, a 250 pound, 6 foot 5 inch monstrosity, ran down field to make a block on me. Weighing in at a sleek 160 pounds and standing just under 6 feet tall, I’m sure he was licking his chops. However, I was fast, fiercely competitive, and blind to any physical limitations. I was also extremely talented in the art of trash talk. Being undersized and over confident is a dangerous combo.
I channeled my inner matador as he lowered his head like a bull preparing for impact. I stepped out of the way at the last minute and laughed as he flew past me and collided with the frozen ground below!
Olé!
Like clock work, I started spewing perfectly crafted insults his way, forgetting that this man was big enough to kill me with his bare hands. I’ll spare you the details of what I said, but what he said as he walked back to the huddle wiped the smile off my face real quick.
I was about 40 yards down field, after intercepting the ball in the fourth quarter, when, out of the corner of my eye, I saw a defender approaching me at an angle. As he got closer I realized it was the Red Devil himself… the monstrosity of tight end… and there was no doubt that he was out for blood.
PANIC set in immediately and I was certain that if he caught me, he would kill me! Just like the panic caused from of an unknown virus, I started to fear for my physical well being. My desire to be the hero had been replaced with a desire to preserve my life, and instead of running to score a touchdown, I found myself running to avoid him!
Though I successfully avoided the monstrosity, I failed to reach the end zone, putting my team in a vulnerable position and nearly costing us the game.
Anytime we concentrate on FEAR & SCARCITY we are, by default, limiting our potential.
the correct response
When the first cases of the coronavirus creeped into the United States and the stock market started to crash, I felt myself start to panic. Fortunately, unlike my botched pick-six in high school, I didn’t panic and I certainly didn’t run away.
Instead, I calmly pivoted and ran directly into the market. On March 20th, I transferred as much cash as possible into my e-trade account and started buying up stocks. Two months later, I am up nearly 30% on those investments.
The BAD News
The stock market has already rebounded, which means if you didn’t do the same, you’ve already missed the opportunity.
The GOOD News
The stock market is FAR FROM the only opportunity that the coronavirus will produce.
How do you catch the bottom?
The proverbial knife takes days, sometimes hours, to fall on Wall Street, but that knife falls over quarters in real estate. Which means, even if you panicked and missed the bottom of the stock market, as long as you course correct, you can still catch the bottom of the real estate market.
Which begs the question… how in the world do you know when it hits bottom?
While speaking to my mentor about this he said, “You need to focus less on trying to identify when the knife hits the bottom and more on when it’s safe to grab the damn knife.”
That was a much needed eye opener for me. Once again, when we concentrate on FEAR & SCARCITY we are, by default, limiting our potential! The last thing I am going to do is allow fear and scarcity to limit the potential that this opportunity will provide.
CONCLUSION
Watching game film a couple days later was a humbling experience. My attempt to avoid the monstrosity seemed like such a reasonable response in the moment, but in reality, had I stayed the course and not panicked, I would have waltzed into the end zone a hero.
My hope is that, when you look back at this moment, it’s not one of regret but one of gratitude. Gratitude that you didn’t panic, that you stayed the course, and that you became the hero of your financial future.
To understand more about when it’s safe to grab the knife, check out “The Characteristics of The Covid-19 Real Estate Opportunity.”
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