(Bloomberg Opinion) — When the coronavirus hit, traders weren’t fairly certain what to check it to. Many used the 1918 Spanish Flu pandemic as their body of reference, which served nobody very nicely, says this week’s visitor on Grasp in Enterprise, Jeremy Siegel, professor on the Wharton College of Enterprise, adviser to Knowledge Tree and writer of “Stocks for the Lengthy Run.”Initially, traders had been complacent, as had been America’s leaders, amid discuss that the an infection was simply one other model of the frequent flu. That rapidly shifted to concern that this may very well be like 1918, serving to to create a radical overreaction. Amid shortages of disinfectants, face masks, gloves and different necessities, mixed with an unprepared and botched response by the federal authorities, panic promoting gripped the market, inflicting the March stock-market crash. Siegel laments the dearth of management from the federal authorities, particularly the Facilities for Illness Management and Prevention.Even when the S&P 500 Index earnings for 2020 had been worn out due to the coronavirus pandemic, the March decline was unwarranted, Siegel says. Assuming subsequent yr’s earnings will look extra like these of 2019 reasonably than 2020, the market ought to have fallen solely 5% to six%, not the 34% that marked the March low. This makes the market restoration appear extra rational than many imagine.His favourite books are right here; a transcript of our dialog is right here.You may stream and obtain our full dialog, together with the podcast extras, on iTunes, Spotify, Overcast, Google, Bloomberg and Stitcher. All of our earlier podcasts in your favourite pod hosts might be discovered right here.Subsequent week, we communicate with Ron Carson, founder and chief govt officer of Cwn LLC, which manages $12 billion.(Corrects final paragraph of article revealed Tuesday to point that Cwm LLC has $12 billion below administration, not $7.5 billion.)This column doesn’t essentially mirror the opinion of the editorial board or Bloomberg LP and its homeowners.Barry Ritholtz is a Bloomberg Opinion columnist. He’s chairman and chief funding officer of Ritholtz Wealth Administration, and was beforehand chief market strategist at Maxim Group. He’s the writer of “Bailout Nation.”For extra articles like this, please go to us at bloomberg.com/opinionSubscribe now to remain forward with probably the most trusted enterprise information supply.©2020 Bloomberg L.P.