former Cisco CEO John Chambers

Former long-time Cisco CEO John Chambers knows a thing or two about managing through major economic crises. So when he says the U.S. economy may not bounce back so quickly from the devastating black swan event that is the coronavirus — investors should listen carefully, and plan accordingly.

“I think unfortunately this next 12-18 months will be very tough, that’s why I think a government program helping the startups financially is very, very key,” Chambers said on Yahoo Finance’s The First Trade.

Chambers served as Cisco CEO for 24 years, navigating the tech giant through the depths of the dot com bubble and Great Recession. Today, he heads JC2 Ventures — a VC firm he founded that now has stakes in 18 startups. Chambers told me on a Zoom call a week ago he is advising leaders of his portfolio companies to expect large drops in sales and to think more prudently about growth.

Former CEO of Cisco Systems, John Chambers, answers the media during the “Choose France” summit, at the Chateau de Versailles, outside Paris on January 22, 2018. (Photo credit should read THIBAULT CAMUS/AFP via Getty Images)

“But just as we saw in 2008 and the dot com bubble in 2001, we will navigate through it. This is where some surprising companies will break away and some companies will disappoint,” Chambers said.

Nothing like a calming voice amidst the stock market carnage. But at this point, the market more broadly continues to operate under the view the light at the end of the tunnel for Corporate America is well, well off into the distance.

The most pressing concern, according to experts Yahoo Finance has talked with, is the chance some household name companies simply go out of business as the U.S. economy grinds to a halt amid coronavirus quarantining and travel restrictions. Panic of that happening — which is a full on liquidity crisis — continues to be acutely felt in airline stocks such as Delta and United Airlines as well as hotel chains Marriott, Hyatt and Hilton.

Experts say the government needs to get going with backstops to critical industries like the airlines. If not, it could be game over for many — and for a lot of investors.

Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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