DocSnowball

New model published in Lancet ID based on China, Diamond princess and those who came out of China to the rest of the world, revising fatality rates down. Attached fatality rates table. Anyone know how good their "estimate" is in making the leap from "cases" to those who are potentially "infected". Overall quite reassuring if you're under 50. NYTimes reports that White House will release the models they are using today as well. Will be interesting to see. https://www.thelancet.com/action/showPdf?pii=S1473-3099%2820%2930243-7 A second healthcare system and population based projection here from IHMI: This is the best modeling I have seen for COVID-19. It models the burden on hospital resources and deaths for the US and for each state. NY is predicted to peak on 6 April, and the US as a whole in mid-April. Although there are wide confidence intervals, the number are sobering. They predict about 80K deaths. The IHME has been the lead on the global burden of disease study – the definitive ongoing study of disease burden (mortality & disability) for more than 350 diseases and 84 risk factors in 195 countries (https://vizhub.healthdata.org/gbd-compare/). https://covid19.healthdata.org/projections Lancet_ID_Table_1.pdf

+1 And this is not priced into the markets yet...especially that the social distancing will need to go on another month or so and it's financial impacts

"Covid 19 Protecting Your Family" Take a listen, excellent practical explanations. Well worth your time!

OMG! Never seen anything like this graph in 15 years of tracking these seasonal flu curves!!!

Yes, where we go from here is the million $ question. Three weeks ago looking at China, South Korea, Iran and Italy provided great insight of what was coming to North America. We got confirmation when the cluster was confirmed in Washington State and a week later in New York. The impact of the virus on a country for the first month or so has been fairly predictable. The challenge looking forward is each country has taken rather different approaches to managing the virus. The asian countries have similar strategies built around testing, contact tracing and some social distancing measures. Europe and North America have executed very different strategies built around limited testing (resulting in rampant community transfer) followed by soft or hard lock downs (depending on severity). Looking forward, i can see the asian countries path forward. They have been able to get control of their destiny. Again, it is built around aggressive testing and contact tracing and social distancing; slowly they will be able to find ways to bring more parts of the economy back on line. So my view is the asian countries will see their economies slowly start to grow again, but still slower than is expected. The virus is still present and strict measures will need to be in place, likely until a vaccine is ready (12-18 months?). What is the path forward in Europe and North America? We are still out of control, with no articulated plan to get in control of our destiny. We also will need time to execute said plan. This tells me we are still in the early stages in our battle with this virus. And we are now losing precious time and falling behind asia in the process of recovering from this epidemic. This means it will take us longer for us to re-open our economy up (compared to asia). Another learning from asia is what your economy looks like once you get the virus somewhat under control. It is definitely not V shaped recovery for the economy. Perhaps L For a couple of months with the prospect of U afterwards. if you do a great job of not letting the virus to get re-established. The economy needs time to adapt to a world where the virus is ever-present and trying to break out again. All of the above leads me to the following conclusion: the time it takes to get control of the virus in Europe and North America is going to be much longer than people think. Therefore the economic impact is going to be worse than currently expected. And once we eventually get control of the virus in Europe and North America the ’recovery’ is going to be slower as The virus will still be with us and it will take time for everyone to adjust (people, companies and governments). +1 First order effects are now obvious. But social distancing has not been done in a systematic manner in the US. NYC is as ongoing disaster; unfortunately the Northeast is seeded now without fully realizing it because of inadequate testing. I think a prolonged phase is not priced into equities, the bounce back isn't making sense in terms of fundamental developments (US is the pandemic epicenter now and will remain for the next month, digest that and reflect if you thought that would be the case two weeks ago). I'm waiting for second order and third order effects to show as this plays our over a longer period of time.

@Orthopa - there is always value in considering the disconfirming opinion. One data point that I have not been able to reconcile, while clearly being in disagreement with your views, is why deaths have plateaued in countries like Iran - is the CFR lower and it burns through the population after a few weeks? I don't know, will have to watch Europe and NYC to support or refute this. But I'm curious to see the death curve flattening out after a few weeks first in China and then Iran. Italy is still in the mid-700s daily deaths, but has stopped going up further. Social distancing is the obvious intervention everywhere and confounds this data. Another aspect is why so few cases in Asia south of China, despite fewer measures - is it much less contagious in warmer weather? It looks like that at this point. There was a publication to support that higher temperatures and humidity make it less contagious. One new data point I'm seeing is that China and Korea continue to have about 100 or so cases daily. Until these go to zero for a months or two, one has to consider that the virus will remain in the human population somewhere around the globe and new outbreaks can occur despite the upfront economic costs we are incurring.

The successful counties all have a number of things in common: robust, aggressive testing process in place. Information is communicated via their cell phone (personal freedom is secondary). Their populations are also educated and supportive of containment measures. Most everyone wears masks when they are out. Until we are able to do all these things we will need to keep everyone in lock down (very blunt instrument). Much should change in the next 8 weeks. Smart people should be able to figure this out. The sooner the better. I am least optimistic on the timing front; politicians and elected officials are often not the best and the brightest (and i say that will all due respect). FDA has now approved the routine nasal swab for COVID testing. Removes another bottleneck. Expect testing to be widespread and easily available. 45-60 minutes turnaround time for inside the hospital, a day or at the most two for drive through testing. https://www.fda.gov/emergency-preparedness-and-response/mcm-issues/coronavirus-disease-2019-covid-19 CMS did a nationwide conference call with physicians today (Seema Verma and Deborah Birx were on it) - what is notable is how quickly this administration is removing roadblocks to Telehealth, and to COVID testing. FDA has also set up numerous clinical trials for treatment and prophylaxis, so that we find out what works and what doesn't. While the planning phase was an obvious botch up, it's been more than a decade since anyone in administration has been even bothered to talk with or listen to physicians in this country. On the downside, if we open too soon, while the economy may or may not improve quicker (don't know enough to comment), what is certain is COVID clusters will show up in hospitals uninvited and be a healthcare transmitted infection (plenty of precedent with MERS-CoV in Middle East). I shudder to think of the safety of our healthcare workforce in the coming months. What's not clear from the decision makers isn't "what we will do", rather "how we will decide". I'd think the data about daily cases and deaths will drive this decision, as well as lessons learned from European countries a few days ahead of the US.

Great idea. I would love for Trump to be “sheltered in place”. The sooner the better :-) This may be a framework/ strategy after the 2-3 week hiatus ends...a phased resumption of social and economic activity while protecting the high risk population a bit longer until it is clear the resumption is progressing without the numbers going up again.

Oh boy, Ioannidis is the author of one of my favorite contrarian pieces of all time:Why most published research findings are false (an excellent read and on the money) https://journals.plos.org/plosmedicine/article?id=10.1371/journal.pmed.0020124 The only way to solve this dilemma is serologic (antibody) testing in a closed population like a small village or town, or even the Diamond princess for starters to know how many of the asymptomatic still mounted antibodies. He makes a good point about not extrapolating mortality rates from early cohorts onto the entire population. Or better said, what the final case fatality rate will look like will be different from the initial numbers look like. It's just we don't have any choice but to assume the worst for now. However, the only reasonable path right now is social distancing to buy more time. Instead of thinking it will solve the problem, it may be better to think of it as a bridge. If you're not thinking ahead about where the bridge will take you and what you'll need at the other end, the problem can go on with multiple second order effects. This is where both diagnostic testing for cases, and serologic testing for estimating infection and case fatality rates may become key to making evidence guided decisions.

A nice 25 minute webinar from Johns Hopkins, available for free on youtube. If you're just starting to learn about COVID, this is a good place to learn the technical side of it. CDC recommendations on how to prevent COVID from spreading to another household contact (it's long I know, needs to be converted to a checklist by someone who has time). Please know this happened quite a lot in China. https://www.cdc.gov/coronavirus/2019-ncov/hcp/guidance-prevent-spread.html?CDC_AA_refVal=https%3A%2F%2Fwww.cdc.gov%2Fcoronavirus%2F2019-ncov%2Fguidance-prevent-spread.html

Adding 2.5-5% of portfolio daily. 25% more to go.

This thread courtesy @ReadTheFootnotes Goal: Curate the best evidence-based information on how to prepare: 1) to not get Coronavirus in the first place 2) to survive it if you get it (focus on this thread is curating information about self-care at home not medical care) Two quick links to start, more can be posted using our collective wisdom. https://www.cdc.gov/coronavirus/2019-ncov/prepare/index.html https://www.cdc.gov/coronavirus/2019-ncov/faq.html Once we have enough good information, we can try to make a checklist CDC checklist here: https://www.cdc.gov/coronavirus/2019-ncov/prepare/checklist-household-ready.html Disclaimer: This is not professional medical opinion, only general information on a discussion board.

Every physician I know in real life is taking it very very seriously. None is taking a step back from the challenge ahead. Multiple have had transmission in their hospitals to healthcare workers already, and are tackling incompetent administrators who still want to continue "business as usual" but are buckling over one by one to move non-urgent visits to phone or televisits to prevent further transmission from presymptomatic patients. Respect for healthcare workers in this time of crisis.

@ReadTheFootnotes thank you for that summary, and for everyone sharing their thoughts! Definitely a lot of panic and anxiety amongst healthcare workers I'm in touch with across the Northeast US (my wife and I are both physicians). A survey amongst Infectious disease specialists across the US done last week showed near universally problems with access to testing, anticipated shortages of personal protective equipment (we are already running out of N95 respirators in hospitals before this thing has really hit), and poor communication from organizational and administrative leadership to the frontlines. If we see base case numbers like we are seeing across Europe, I'm concerned about how many healthcare workers will be exposed to COVID. It is crazy that NY is not preparing to shut down officially. I think both coasts will see near or full lockdowns within the next week as hospital admissions and deaths mount (remember "riding in to save the base"). Our healthcare system is simply not prepared (or designed) for anything like this. So far actions from the top and the team paraded on Friday have not matched the press conference words so far. I'm half expecting markets to again deliver the message until lockdowns are in effect. Reading this post about projections sent a chill down my spine (no it is not peer reviewed but fwiw): https://medium.com/@tomaspueyo/coronavirus-act-today-or-people-will-die-f4d3d9cd99ca Be well everyone. Sleep well, stress less, and eat healthy (not too much sugar). Continue to check in daily on this board to have a community amongst the mayhem that awaits.

VOO, VOO, and VOO all day long

I listened to the press conference and came out impressed about the mindset change underway. Finally, leadership and teamwork 101! The doctors in the team were finally being listened to, the measures to create capacity in hospitals for COVID and via Telemedicine for non-COVID care were sincere. Testing in bulk will be available soon, drive-in is the appropriate method of testing in a lean and high throughput manner and will be helpful in longer term control - there were many pharmacy retailers who put their reputation on the line by being involved. If anyone can be trusted to build a website efficiently (and be able to track locations of those signing up for testing) it's Google. On another front, CDC and IDSA were conducting a nationwide webinar brainstorming best implementation of infection control measures which is the next frontier on the horizon. Overall while COVID and other opportunistic risks remain I feel the tone of administration's approach has changed. Now looking for actions to match words. It may take 7-10 days before it makes an impact, and the near term news flow will remain dismal. But there seems to be hope at the end of the tunnel...

I welcome the criticism. What I've learned over time is my inability to have any edge in market timing, and have decided to drip in to average over time. It may be flawed but it beats what I would achieve otherwise. If you have better ideas would love to hear - my main goal is to find out where I'm wrong so feel free to let loose. You went wrong when you estimated the cash flows of tomorrow will look like yesterday, or projections based on last year. There has been a gigantic hit to the economy....a gigantic hit to humanity. DCFs are for normal times, not during the beginning of a global pandemic which will cause companies to fail, employees to be laid off, and massive disruptions to the economy. Companies will fail and disruptions will happen, agree. What key metrics can we track to disprove the thesis that things will be back up in 4-6 months, even with 50% business from this year permanently lost? Case count and mortality graphs over time in China or across all countries with >1000 cases? Any financial metrics we can track?

VOO, FXI and INDA Dollar cost averaging over the next few weeks

Downwards if I had to bet. LOL! You are a fierce betting-man LC :) It does start to feel like a real deep shit swamp and maybe it's time to start to consider buying. Why? We are only at a 12 month low. I don't think we are close to the bottom. Yes, probably not the bottom, perhaps far from it, but who knows, I sure don't. When it comes to USA equities it pays to be optimistic. Can we talk market valuation and strategies? Futures in freefall after lack of leadership shown tonight. Means things will get worse before they get better. This is Damodaran's S&P valuation, fair value can come anywhere between 2400 and 3050 depending on how much you think profits fall and how long they take to recover (our assumptions determine our fair value). http://aswathdamodaran.blogspot.com/2020/03/a-viral-market-meltdown-part-ii-clues.html I think 20%-25% fall in profits and 50% recovery of these profits down the line is reasonable, so anything under 2720 is fair game, under 2600 is better, and under 2425 is a no brainer "when it's raining gold...". I also looked at the daily case detection graphs in China - numbers started to come down in 7-14 days after social distancing (still optimistic that once enough pockets of outbreaks occur, widespread social distancing will be put in place and infection rates will go down over the next 1-2 weeks- can't predict the future but it's my base case). I'm starting to wonder if that is the measure that will calm markets down. My bias is wanting to index once again so I can give more time to my other pursuits, so trying not to get lazy and go in too quick or too slow. I studied from Damodaran so anchor around his numbers more than I should. Thoughts on how you're valuing the S&P500 and what's in the ballpark of fairly valued?

Yes, that was a pretty good press conference. No sugar coating, stating what is known and admit was it not. Simply factual and forward looking. Compare this to Trump’s press conference yesterday. It was a clown show with a bit of campaigning and boasting thrown in. Spek, I was thinking the exact same thing about Trump. It really is mind boggling. PS: I also owe you a thanks. When you posted about 2 weeks ago that you were busy selling a bunch of stuff due to your concerns it aligned with what i was thinking at the time and likely helped with my decision. :-) Thanks for sharing. An act of leadership by Inslee, hoping actions will speak louder than words. I'm not sure if you were being sarcastic - I don't think a US epidemic is priced in. Clusters in some states yes, but if they have 1000s of infected patients in more than a couple of states moving freely across the country, I don't think the kind of interventions that will be needed and economic disruption that will ensue are priced in.

That's kind of you to say. No reason to be overconfident just because any one is in the medical field, they may not know what they don't know or be overconfident because of it. This is a great place to share ideas, try to disconfirm one's own thinking, and be in a community (helps T-cell function which may help survive the virus, so continue to be kind to each other). My take is in the West we are willingly paying an economic price to save lives of the elderly and healthcare workers, especially after China set the tone. This too shall pass, at the end with not a lot of mortalities given what will be done to intervene, and we can all say we were right depending on how we see it. One mistake to avoid is trying to fit this in one's mental model of flu or SARS or whatever; this virus has it's own model and we don't fully know it yet. Just my 2c.

One more chilling healthcare worker thread from Italy - @Orthopa seems like there is a lull before the storm hits https://twitter.com/silviast9/status/1236933818654896129?s=20 I agree with the above posts, it is a question of taking an economic loss for saving lives - you can always make money back, but can't bring back a life lost, and thank you for noting scenario 3 where decision makers come in as heroes to rescue the base (either economically or with quarantine measures). WHO has broken outbreak status into 4 tiers: no cases, sporadic cases, clusters of cases, and community spread. I think the quarantine measures will be individualized to regions based on where they are in these tiers. In the US, CDC updated and expanded it's "guidance" on testing yesterday, now including anyone who wants to be tested while suggesting focusing on those with travel or exposure history, severe respiratory disease and high risk medical conditions. Turn around testing time is still 24-48 hours, rather than rapid testing. While this will guide clinical care for the sick and high risk, it will not be enough to stop transmission IMHO. https://www.cdc.gov/coronavirus/2019-nCoV/hcp/clinical-criteria.html One more excellent resource to add: Our world in data website - puts things into perspective and WHO map tracks new daily cases nicely if you're looking for what's going on as time elapses in each country that is affected. China, South Korea both show trends of declining numbers over 4-6 weeks whereas Italy does not (yet). I'm very curious and find it interesting to see fewer deaths in countries south of China and in Africa so far. https://ourworldindata.org/coronavirus

+1 In most instances, it is impossible to prevent the spread of a pathogen like this. So, you do what you can to slow the rate of infection. (1) Implement social distancing early on; (2) Implement widespread testing to find, isolate, and treat patients; (3) begin development of a therapeutic; and (4) Begin development of a vaccine. This is basic epidemiology 101, but the people that coordinate this work for the Federal Govt are gone, moved along/out due to the current administration. In the United States, we have the ability to do #3 and #4 quickly (relatively speaking). I'll bet there is a vaccine available in early 2021. The problem, in the meantime, is what the morbidity and mortality rates will look like in the meantime, and the extent to which our hospital system is overwhelmed by people seeking treatment. If we (US society) were intelligent, we would bite the bullet now, and: 1. Close schools for 3 weeks; 2. Close daycares for 3 weeks; 3. Close gov offices for 3 weeks; 4. Direct gov employees and private sector employees to stay home and telework for the next 3 weeks. 5. Roll-out diagnostic testing to anyone who thinks they may be sick, or have been in contact with infected individuals. 6. Cover the cost of #5 so that people are not discouraged from seeking out testing. Unfortunately, we have a president that is 100% concerned about re-election. And as a result, none of this will happen until it is to late. A lot of what's on this list will need to happen. It may happen one region or one state at a time. Once the playbook is created, the rest of the regions or state will iterate and improve it further, but are unlikely to do less than that. The best mindset to have is to believe it will show up in our community tonight or tomorrow, and to prepare accordingly. If it ends up being anything less than that and in a few months we are still here discussing missing out on 10% stock gains, wouldn't that be a great outcome to have.

Thanks for sharing Viking. From a physician standpoint, I agree with all that they are saying. May I add, hospitals are running out of N95 respirators, and have an additional disincentive to testing. If they suspect someone, they need to initiate high level precautions and dedicate resources and staff until the results are back. Outside the hospital, stores are already out of hand sanitizer and disinfectant solutions and wipes. The way the US agencies are responding is baffling in terms of the message of treating this as business as usual, and the barriers in testing. They have not understood the concept of "margin of safety" in preventing transmission of this infection. All you need to do is look at what happened between Christmas, when Wuhan had a handful cases, and three weeks later when they did nothing to prevent the chain of transmission. Another helpful link is the WHO briefing given by one of the members of the team visiting China. It is long, but well worth it - if you listen to the first 40 minutes or so you get the message that a new mindset is needed. It has 3 sections: what did China do, what impact did it have, and what it means for the rest of the world: https://www.cnbc.com/2020/02/25/watch-world-health-organization-holds-press-conference-on-the-coronavirus-outbreak.html

+1 Agree. Staying put at 5% of portfolio. Statements from key stakeholder FHFA/ Calabria have been positive, except for timeline - acknowledgement of overpayment, "there isn't going to be that big of a windfall", receivership being out as per Calabria are all big positives. Even if JPS stay put for 2 years they will still beat the market, or at least my alternative picks. Add the fact that this is not correlated with broader market risk, and remains a mispriced bet. Still on the 20 punch card list for me, albeit with a reasonable position size.