By March 1 2020, both HK and Japan restrained and quelled COVID19, compared to France, USA, UK. Don't hesitate to discuss other countries unscathed by COVID-19.

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    $\begingroup$ How could the answer to this be anything other than an opinion? $\endgroup$ – Brian Romanchuk Jul 24 '20 at 21:10
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    $\begingroup$ @BrianRomanchuk There could be a good theoretical argument $\endgroup$ – user253751 Jul 24 '20 at 21:34
  • $\begingroup$ @user253751 no Brian is right. The answer here is that stocks prices are basically the investors guess of present value of discounted dividend streams and depend on the expectation of what the profitability of the company relative to others will be. So answer here would be simply that the price dropped because investors, at that particular moment, expected that the future JP and HK firm profitability will be lower. But that just pushes the question further why did they expected that? We can only guess, at best you could show interviews with some of them but that would not be representative. $\endgroup$ – 1muflon1 Jul 24 '20 at 21:51
  • $\begingroup$ @1muflon1 There is a whole lot of theory that tries to predict investors' best guess of present value of discounted dividend streams. As well as predicting the streams themselves of course. There could be a simple reason, like "X happened and therefore expectations of dividend streams dropped" $\endgroup$ – user253751 Jul 25 '20 at 0:41
  • $\begingroup$ @user253751 right but theory gives you good idea about generally what fundamentals or investors preceptions/expectations of thereof drive prices of various assets - but it cant explain completely all variation in prices at any single point in the time. Also empirical studies will usually be more general then just focusing on one singular event. To address the OP's question as stated here an study of just this singular event would have to be concluded, aside from that we can just throw opinions around. If the question would be more general then it might have actually some non-opinionated answer $\endgroup$ – 1muflon1 Jul 25 '20 at 0:55

I cite some of better comments from r/investing and r/stocks.

  • Because all their customers are in countries that didn't curb it.

  • Everyone else follows America. US equities are half the value of all equities in the world.

  • I would guess that Asia is an export economy largely to the rest of the world so tends to correlate with the rest of the worlds performance. However, the P/E ratios are likely lower than what you'd find in the developed world so there might be some opportunity for good gains when the broader economy picks up.

  • Because there was a gigantic flight to the US dollar in March. Pretty much every single asset across the board (yes, including safe havens like gold and US treasuries) fell versus the USD.


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