Dividends and Hedge funds get creative in seeking indicators on economic effects of coronavirus outbreak

China has a monopoly on what it releases to the public, which means to understand how the economy is functioning, given billions of dollars are resting on the outcome, hedge fund managers are trying are being creative in understand how the real economy is doing. In an article by Ira Iosebashvili and Megan Davies of Reuters, the first thing is to consider the China’s economy.

In the global supply chain, China and the companies are a huge player and their ports and shipping areas are massive. China has developed infrastructure systems that you can see on YouTube. Are they functioning and to what degree? View the views with a well functioning economy and how well it is doing at the present time.

Air pollution is a wonderful indicator, the shutdown of the country as reduced air pollution because the factories are not emitting wastes. What is the Air Quality Index website showing? If it is too clean, the factories and refineries and smelters are not producing. Anyone who has lived in a company town, looked to the smokestacks to see how things were doing.

Companies are using AI and computer modelling to simple word of the mouth, for example how many people were on the subway? How many planes are flying, what does the airports look like? Normally it is full, it is hard to produce goods from home.

If you wanted to see how many people were dying, crematorium activity would be valuable. Data from the World Health Organization and John Hopkins Center for Health Security can be accessed.

Linking to dividend paying stocks, when you do not trust the government statistics you have to consider what data would you trust? If you are nervous, in a world that is deeply connected some companies are seemingly less connected than others. Warren Buffett has a large cash ready to be deployed, but he has the patience to wait. Sometimes doing nothing is ok for a couple months anyway.

There are more questions than answers, till the next time – to raising questions.

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