An eventful four months

On 24th March, the government imposed a national lockdown when there were 564 Covid-19 cases. Last week, India crossed the 10 lakh-mark. So is the situation getting better or worse? We answer such questions and do a recap of the last four months.

The lockdown worked

First things first. Despite a poor health infrastructure and low per capita income, India's situation is better than most of the world. It is clear from the column on deaths per million given below. To illustrate, USA (with a population of 1/4th of India) has seen more than four times as many deaths as India.

Country	Deaths	Deaths per million	Testing per million
USA	142,991	437.06	150,753
Spain	28,426	608.38	135,188
UK	45,501	684.34	199,874
France	30,077	449	44,189
Sweden	5,667	556.51	67,488
India	30,645	22.08	10,664

Source: Statista, data updated till July 23

But the worst is yet to come

In the last 7 days, India's total cases have increased more than 20%. As given in the table above, India is testing far less than other countries. The recent serological survey in Mumbai and Delhi indicates that one in every four residents may have been infected by the virus. Bangalore, which was doing remarkably well until recently, saw a sudden surge in cases forcing the administration to impose a lockdown.

In other words, it will get tougher from here.

What can’t be cured, must be endured!

For the most part and the near future, that will hold true for the pandemic. Countries, philanthropists like Bill Gates, and organizations are trying to find a vaccine for the pandemic even as experiment are being done with older drugs like HCQ (Hydroxychloroquine, a drug for malaria) and Dexamethasone (a steroid prescribed for Tuberculosis among others).

As this article on The New York Times explains, “rarely has a vaccine been developed in less than five years.” No wonder, the recent letter by ICMR expecting a vaccine by August 15 made headlines. It will be many months before a vaccine can cross the hurdles of trials, approval, mass manufacturing, and delivery.

This should reflect in all your decisions and plans. To reword an old saying, hope for the earliest but be prepared for the longest.

Swinging between hope and fear

Usually, the words bull and bear are enough to describe a market. But in the current situation, the average investor finds himself swinging between hope and fear like a pendulum.

On the positive side, Sensex and Nifty are nearing their pre-Covid-19 numbers, more demat accounts are being opened, rural consumption is recovering, and a good monsoon is expected. On the other hand, the economy is shrinking, Covid-19 cases are surging, and entire industries like aviation, tourism, and media are battling pay cuts and layoffs.

Put simply, two investors can look at this current situation and see it differently. The current situation presents an opportunity only to those who can identify it, spare the cash, and withstand the volatility. To quote from our recent interview with a successful investor, “there is no reward just for taking risk.”

Blue Dash

This Week's Talking Points

6 out of 192 MFs gave double-digit returns
Monika Halan: Real estate cost is 50% bribes
Why this investor thinks market rally is FOMO
When banks sell their favourite MFs
Rs. 8 lakh crores sitting idle in banks
Indian Investors rushing into penny stocks

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