On another tough day for stocks across the spectrum, some of China's top tech companies had it even worse. Shares of iQiyi (NASDAQ:IQ) were down more than 12% in afternoon trading and closed down 8%; Bilibili (NASDAQ:BILI) shares fell 13.7%, while Sohu.com (NASDAQ:SOHU) shares dropped 17.6%.
Today's sell-off for these tech stocks was largely a product of a broader market rout. The S&P 500 lost 5% today, while the NASDAQ Composite fell 4.7% as investors became more worried that the global coronavirus pandemic would have a bigger and longer impact on the global economy than had been expected.
Today's sell-off wasn't just about stocks, either. Crude oil futures suffered one of their worst days in history, falling by double digits and sending crude prices to their lowest levels in nearly two decades. Bonds -- even U.S. Treasury notes, generally regarded as the epitome of safety -- were driven by sellers as investors raced for the exits to bolster their cash positions.
Even a solid quarter by Bilibili wasn't enough to stop the rout. The Chinese online entertainment platform reported fourth-quarter results after market close on March 27, with revenue up 74%, active users up 40%, and monthly paying users up by 100%.
At this stage of the market, everything is up in the air and uncertainty is driving the bus. And to a large degree this makes sense; we simply don't know how severe the health or economic impacts of COVID-19 will be, and investors are clearly expecting things to get worse. That's likely to prove the case; unemployment is expected to skyrocket as thousands of businesses close, putting millions of people out of work or severely reducing the hours they can work.
What about the impact on these three companies? The irony is, they are all internet-based companies, offering the kinds of things people will likely be utilizing more of if they can't go out in public: gaming, streaming, and online search.
The coming months -- and possibly beyond -- will continue to be volatile and painful. But this is when investors must use history to help guide their actions, and history makes it abundantly clear that now is the time to start buying.
Yes, it's possible that buying at today's prices could look bad in a month or two, or even six, as things play out. But when you fast-forward a year or a decade, it's the people who bought during the 2020 coronavirus crash who will come out ahead.