“The three main U.S. stock indices closed at record highs as concerns over the coronavirus outbreak’s economic impact seemed to fade.” – Barron’s, February 12, 2020.

Perhaps not the “Dewey Beats Truman” of media misreads, but this quote reflected widely shared sentiments among market participants. “Can anything stop this rally?” the columnist went on to ask rhetorically.

Barely six weeks ago the Dow stood at 29,551. Today it’s 10,000 points lower, the economy at a standstill, global markets in shambles, Americans locked at home.

This, then, is the picture private equity sponsors are facing. As value investors by nature, these firms know at some point properties will present themselves at significantly lower prices. But how can you analyze a new investment when revenues and cash flows are uncertain, and in some cases, non-existent?