![\"Nurses](\"\/blog\/wp-content\/uploads\/2020\/03\/spanish-influenza-epidemic.jpg\")
Published: March 19, 2020 at 1:50 p.m. ET, By Shawn Langlois<\/p>\n
\u201cJust as the market started discounting the worst case scenario in 1917,\u201d he wrote<\/a>, \u201cit was already discounting a recovery months before the worst case scenario actually occurred in 1918.\u201d<\/p>\n What was going on in 1917? The Spanish Flu was just starting to bubble up, with the deadliest month of the whole pandemic not hitting until October 1918 \u2014 by then, as you can see from this chart, the Dow Jones Industrial Average DJIA had already begun to heal.<\/p>\n Hayes then posted this chart of the modern-day market plunge, noting that the nasty drawdowns amid the early stages of both pandemics were virtually the same.<\/p>\n \u201cSo while the worst was ahead in terms of the Spanish Flu in December of 1917, the worst was done for the stock market after the 33% drop,\u201d Hayes wrote. \u201cThe difference [now] is that we have better medicine, methods and experience to mitigate the outcome.\u201d<\/p>\n Of course, that doesn\u2019t mean we\u2019ll see that kind of rebound, but Hayes is hopeful.<\/p>\n \u201cThe market has already discounted a lot of pain based on its current drop,\u201d he said. \u201cIt will be just as quick to discount a recovery once the initial shock subsides.\u201d<\/p>\n Hayes explained that if the cases peak in the next few weeks and the stimulus package does its job, these current levels could look like a bottom in hindsight.<\/p>\n \u201cIf the virus goes on beyond what we have seen in China (in time), it is possible we could drop significantly more, but that is a lower probability,\u201d he said. \u201cThere is no way to perfectly handicap this … but regardless of what the general market does in coming weeks, I see opportunity on a company by company basis now and am nibbling each \u2018down\u2019 day and sitting tight each green day.\u201d<\/p>\n![\"Spanish](\"\/blog\/wp-content\/uploads\/2020\/03\/spanish-flu-vs-dow-jones.png\")
<\/p>\n![\"Coronavirus](\"\/blog\/wp-content\/uploads\/2020\/03\/coronavirus-vs-dow-jones.png\")
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