A ton of investors fail to understand just how many companies were already in trouble, before COVID-19 began wreaking its cataclysmic havoc.

As Hedgeye CEO Keith McCullough explains in the clip above, 36% of companies in the Russell 2000 had negative pre-tax income.

In addition, 27% of S&P 500 companies with a market cap greater than $10 billion had negative year-over-year EPS growth before the year even started.

“There was a major virus in corporate profitability,” McCullough explains.

“[Negative EPS growth] will be 40 to 50 percent of companies – at least. There is no check that you can write to offset that.”

Watch the full clip above for more.

Profits? They Were Slowing BEFORE The Virus - early look