Next 45 Days Will Be 'Most Critical Period' For US, Says Alan Lancz Who Predicted 1987 and 2008 Crises

According to Alan Lancz, the stock market is at a point of inflection, having recouped some of the losses caused by the coronavirus sell-off in March.

Keep An Eye On The Next 45 Days

In his newsletter published Wednesday, Lancz commented, “The next 45 days may just become the most critical period in United States’ financial history.” Lancz is the president of Alan B. Lancz & Associates Inc., an investment advisory company located in Toledo, Ohio.

He is known to be a contrarian and had a close relationship with Sir John Templeton, the famed investor, until the latter died in 2008. He advised clients to sell in 2007 before the markets crashed, and in 1987 he escaped unscathed from the bust, which saw the DOW fall 22% in a single session, reports MarketWatch.

Cautioning investors, Lancz suggested the present crisis is unlike any he has seen in his career. He wrote, “While on average we may face a bear market every 10 years, this one is like no other.”

Prepare For A U-Shaped Recovery

Dismissing the possibility of a V-shaped recovery, which denotes a quick and fast turnaround, Lancz remarked, “The much talked about ‘V’ shaped recovery is no longer in the equation because of the unprecedented combination of negatives with this crisis.”

He warned that even if the economic revival is meticulously executed, the result will be a U-shaped recovery, which would imply a slower and longer rebound in both consumer and business activity.

Crisis Threatens America’s Position In The World

COVID-19 has claimed 137,124 lives, with more than 2 million people infected worldwide. The U.S. has been the hardest hit with 30,985 fatalities and 639,664 confirmed cases, according to the John Hopkins Coronavirus Resource Center.

The U.S. economic parameters have been severely affected as well. Industrial production fell to 5.4% in March, which is the sharpest fall since 1946, and retail sales fell 8.7%.

Last month, President Donald Trump was advocating opening the economy, which remains largely shuttered. Lancz observed that the present crisis has “all three parts of the past bear markets’ sell-offs.” Reflecting on the threat posed by COVID-19, he said, “This pandemic not only threatens America’s standard of living but also could position us as a secondary global power.”

Slim Pickings In Crisis 

Although the forecast is not rosy, Lancz still thinks measured investments in some stocks can be viewed as opportunities. He recommended Amazon.com, Inc. AMZN, United Parcel Service Inc. UPS, Merck & Co. Inc. MRK, Cisco Systems Inc. CSCO and Abbott Laboratories ABT.