March 12, 2020 - Dennis Prager Show
03:50
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| Time | Text |
|---|---|
| I look to you because of my admiration for your sobriety on these matters and insight and experience. | |
| So I was just talking to a caller who works in the field. | |
| How do you explain the collapse of the stock market? | |
| Well, you know, as we all know, the coronavirus is contagious. | |
| Panic is also contagious. | |
| And I think what you're seeing in the stock market is an overreaction to a disease that, while it will have meaningful humanitarian—it's a meaningful humanitarian crisis. | |
| In other words, people will die. | |
| It shouldn't be a financial crisis. | |
| Because, you know, the young are immune. | |
| The survival rate is very strong unless you're elderly and have another health condition that impacts your immune system. | |
| So this is an overreaction to something that so far doesn't appear as though it will be even as devastating in this country as the annual flu is. | |
| And we have a vaccine for the flu. | |
| So I think we're seeing people react to what could happen in a worst possible case scenario rather than to what is likely to happen. | |
| Right. | |
| So I want people to understand I had no idea what Andy Posner's response would be. | |
| But your second sentence is my sentence, that panic is contagious. | |
| And that's my take on this whole thing. | |
| What is in the mind of somebody? | |
| I can't quite wrap my mind around it. | |
| Let's say, I was giving the example earlier. | |
| Somebody owns IHG, the company that owns Holiday Inn and other hotel chains. | |
| So they sell their stock. | |
| What is in their mind? | |
| People will not go to hotels in a year? | |
| No, no, I'm not joking. | |
| I know you're not, but that doesn't make it any less funny. | |
| I mean, people are—look, if you're out there right now and you're investing in the stock market or you've got stocks in the market you've already invested and you're going, oh, my God, I'm losing all my wealth. | |
| Everything's going to hell in a handbasket. | |
| Keep in mind, the time that people make money in the stock market isn't when the stock market's super high. | |
| You make money when the stock market comes down. | |
| There are very solid American companies, hotel companies, car companies, telephone, or I guess now it's communications companies, whose stock is very low, and you're actually seeing dividend yields. | |
| So the amount of money you would earn, like you would earn interest in a savings account, the amount of money you would earn from these stocks is 6%, 7%, 8%, 9%. | |
| Annually, these are very, very good returns, particularly at a time when bonds are, you know, the 10-year treasuries that have like half a percent. | |
| And you can buy very solid American companies with very high yields. | |
| And when the market recovers, and this will come to an end, the market will recover. | |
| And when it comes back, it'll come back with a boom. | |
| So you've got a chance to make money on stocks. | |
| And in the interim, you've got the potential to get a very high return on the dollars you invest. | |
| So don't think so much about how you're suffering. | |
| Think more about how you can benefit. | |
| Right. | |
| All right. | |
| Hold on there, Andy Puzler, if you would. | |
| I have to take a break. | |
| Relief factor. |
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