When the Avian Flu story lingered in the headlines in 2005, Don Coxe and Sherry Cooper wrote An Investor’s Guide to Avian Flu for BMO Nesbitt Burns. The report looked at the effect of a global pandemic on the economy and what (if anything) investors can do to be prepared:
The 1918 catastrophe was over in months. Soon, the world had entered the roaring 20s, and from that sustained outburst of economic activity and a booming stock market, there were hordes of newly-rich people… and many of the Old Rich had become fabulously rich.
They were the lucky survivors.
This time around, it will not be necessary to rely on luck to protect the value of one’s portfolio. Cash, put options on volatile stocks, high-quality bonds, and high-quality dividend-paying stocks of companies with minimal exposure to the risks we have described will be the best survival packs. They will provide the survivors of the pandemic with the capital to take advantage of the wide array of cheap assets that will—however temporarily—be available after the virus has joined its predecessors in whatever resting places the world has on offer.
With reports of the swine flu outbreak dominating the news, it may be useful to dust off the report and read it again.
