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Jul 2, 2020

OPINION: Covid-19 May Impair Your Financial Judgement

by Richard Morrison

Richard MorrisonAs the Covid-19 pandemic spread around the world, millions were forced to stay home and watch helplessly while their jobs, businesses and savings diminished. As a result, anxiety and depression have become rampant. Scientists and doctors have also noted the appearance of some new psychological conditions that have been triggered or exacerbated by Covid-19.



Among these:

“Letsbuyaboatomania”: Despite having lost their job or business and watched as their investments plunged in value, letsbuyaboatomania sufferers are unable to recognize the need to reduce their expenses and seek employment. Instead, despite their dire financial straits, those afflicted with this condition go deeper into debt to buy a boat, vessel or other seagoing watercraft. The condition is particularly insidious since it is well known that a boat is an infinitely deep hole in the water into which their owners pour money. Studies have shown that the happiest day of a boaterís life is the day in which he or she purchases a boat; the second happiest is the day they fob off its costly maintenance headaches by selling it. Those afflicted with letsbuyaboatomania feel there is little point in working hard and saving for retirement, since everything will just get wiped out again when the next pandemic hits.

“CERBolazia”: While letsbuyaboatomania diminishes the suffererís otherwise semi-rational attitude toward personal finance, CERBolazia is defined as indolence and hypochondria brought on by the $2,000-a-month Canada Emergency Response Benefit. Even if Covid-19 ís effects diminish, CERBolazia sufferers believe they are permanently entitled to CERB payments since their coworkers or customers could carry Covid-19 or a new virus, perhaps Covid-20. Factors that complicate treatment include the fact that doctors have nothing to gain by ordering patients back to work, together with the fact few politicians will want to take the political risk of cancelling CERB. In its final and most severe stages, the CERBolaziac will lapse into a belief that society would actually be better off if everyone was entitled to a guaranteed minimum income.

Many CERBolazia patients also suffer from letsbuyaboatomania, a combination that makes treatment even more difficult, since employers, doctors and creditors may have difficulty finding a CERBolaziac adrift on his or her boat. The dual condition often results in the $2,000-per-month CERB payment going directly to marina owners.

“Covid Profiteering Fever”: Minor versions of this disease manifest themselves in those who invest their CERB payments in cases of alcohol wipes which they subsequently attempt to sell at a premium. When fevers rise, however, sufferers develop the delusion they will soon profit by purchasing shares in already overpriced makers of surgical masks or drug developers.

“Turnaroundia”: The opposite of Covid Profiteering Fever, this condition causes sufferers to believe shares of companies harmed by Covid-19 will soon recover. Those afflicted with turnaroundia buy stocks in airlines, cruise companies and any business connected with China in the expectation the share prices will turn around before the sufferer must sell to finance their retirement. The condition is especially prevalent among investors who feel no need to save for retirement thanks to the Canada Emergency Response Benefit (see CERBolazia above). Some psychologists report cases of patients suffering from a particularly insidious and extreme strain of turnaroundia unrelated to Covid-19, in which sufferers believe that energy stocks and marijuana companies are undervalued and are poised to recover. There is no known cure.

Richard Morrison, CIM, is a former editor and investment columnist at the Financial Post.