According to a national news paper columnist who invites Albertans and other “western bastards” not residing in her Centre of the Universe to freeze in hell because we’re not very excited about visiting or something, life in Canada’s SARS capital goes on pretty much in normal fashion.

Perhaps Christie Blatchford doesn’t get out enough.

If Blatchford, who was in a huff over the World Health Organization’s advisory against non-essential travel to Toronto, had visited Bay Street, she may have been enlightened well enough.

There, she could have observed some near-empty offices in a financial community that is as good a gauge as any as to how serious SARS ought be taken, for these are the people whose livelihoods are based on a philosophy of forward thinking and erring on the side of caution.

The sell-on-rumour investment community simply can’t afford not to take Severe Acute Respiratory Syndrome seriously, and their portfolios are already making a rather bold and ominous fashion statement, sporting SARS masks.

Even Bank of Canada governor David Dodge, who hardly ever says anything remotely interesting, has ventured that, with Toronto as one of the hotspots for the mysterious and deadly disease, SARS is an economic issue that can’t be ignored.

Merrill Lynch has forecast a SARS impact on our economy of between a half and one per cent annually for the second quarter.

The firm cited statistics showing that, in a five-week span, the number of people suspected to be carrying the virus worldwide had increased from 167 to 4,500, the number of deaths had increased from four to 260 and the number of countries with reported cases had increased from seven to 27.

Several firms have already issued economic downgrades for China and other Asian countries affected by the disease.

When a receptionist answered the phone at Toronto investment firm Sprott Securities recently, one could hear an echo. Most of the fund managers were present only in voicemail.

As a precaution against SARS, the majority of Sprott’s staff have been either moved to a separate office or are working from home. Sprott’s employees have been ordered not to use public transit and CEO Scott Lamacraft has said that, if there were any suspected cases of the disease in the firm, he would use his own home to quarantine staff.

“People are just not taking this seriously yet,” says Jean-Francois Tardif, the Sprott portfolio manager who has been doing his research from his home. “You just need a few people who don’t care and go out and spread this virus. It could become a very big issue if people don’t take the necessary precautions.”

From an investment perspective, Tardif says SARS has already become a factor in equity research and is a hot topic in the daily research meetings.

“If it ever spread in a big way, it would have tremendous effects on the economy,” cautions Tardif. “Already today, there are effects on restaurants and hotels. It could be ugly.”

Even if SARS does not have a major impact on the economy, Tardif paints a grim picture for the stock market, citing a vulnerable U.S. dollar and a massive U.S. budget deficit.

“I hope I don’t depress you too much, but the U.S. economy is not sustainable and we think it can get a lot worse,” says Tardif, who favours gold and natural-gas weighted stocks as hedges against the market (for Tardif’s top picks, see Pro’s 3 Stars).

“A lot of people believe everything will be alright, but our job is not to be optimistic. It is to be realistic.”

The SARS factor hasn’t taken a broad swipe at the stock market, but that could still happen if the disease were to escalate, triggering panic selling.

Already, SARS is cropping up in many analyst research reports and some Canadian companies are being singled out by investors.

In the two days after CIBC World Markets cut its earnings forecast for Cara Operations (CAO.A-TSX), one of Canada’s largest restaurant and food service companies, the Class A shares that normally trade on light volume plunged 22 per cent on massive volume.

Cara is particularly vulnerable considering it owns the Cara airport restaurants along with numerous others, including Harvey’s, Swiss Chalet, Kelsey’s, Montana’s and Second Cup.

While restaurant, travel, airline and insurance stocks have come under SARS- related pressure, pundits have been burning the midnight oil to unearth stocks that may benefit from the SARS scare.



HOT ALBERTA STOCK: WIRELESS MATRIX
WRX-TSX $2.00
Up 35 cents (+21.2%) on 1,158,600 shares (for week ending April 25).
Hey, not all of the fledgling wireless plays are lying dormant while plugged into that wireless life-support system. Calgary’s Wireless Matrix had a banner week with back-to-back press releases, one trumpeting an injection of approximately $1 million for oil and gas licensing and contract fees and the other announcing a service agreement with U.S. medical transportation giant American Medical Response.



COLD ALBERTA STOCK: NEWMEX MINERALS
NMM-TSX Venture .145
Down 161/2 cents (-53.2%) on 900 shares (for week ending April 25).
Can things possibly get worse for Newmex shareholders? The Calgary mining company recently announced it had misstated its cash-flow statement. There’s been a shakeup of its board of directors. And it hasn’t had a clear business plan. No wonder the shares are at a 52-week low, off 88 per cent from their 52-week high of $1.20.