NEW YORK (Real Money) -- Maybe all you really need to do is find a hedge-fund thesis and shoot against it. I know that sounds cavalier, but I am looking at all of the so-called Ebola plays from last month -- a front-and-center, hedge fund-end-of-the-world hypothesis -- and I am aghast at how far these stocks have run since the crisis has ebbed. It's another case of hedge-fund groupthink gone wrong.
Almost exactly one month ago we were in the mental vice grips of the Ebola panic. It's astounding how stark it stands out when you look at the charts of most stocks, and particularly when it comes to those involved in the travel-and-leisure industries. Now, I am totally conscious of the fact that you are never out of the woods with Ebola, and I am not dismissing that we will witness more cases, perhaps many more. But, at that very moment, if you go back and look at the headlines at the exact nadir, there were three common themes to the coverage:
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1. The plague is among us, and it is being distributed by all of the myriad people who were in contact with the sad and fatal case of Thomas Duncan, who died at Texas Presbyterian under less-than-ideal circumstances.
2. The U.S. government and health care system are woefully inadequate, and will not be able to contain the plague. It could run unchecked because of federal and state incompetence.
3. It's much easier to catch than anyone thinks, and can be passed on with casual contact, and it is almost always fatal.
Now we look back and we think: Shame on us.
First, Ebola is harder to catch than fearmongers had thought. We learned, after all, that 40 people had casual contact with Duncan were declared to be Ebola-free after the 21-day incubation period came and went. For the record, by the way, the stock-market rally began 22 days into when Duncan was known to be infectious -- because about the only thing we seemed to know about Ebola at the time was that, if you hadn't caught it within 21 days of contact, you wouldn't be getting it.