Kaegi2011

Aaand I'm out. Finally. [golf clap]

It is foolish to believe that the economy can be saved by descending into something worse than a 2nd world country with hundred thousand if not millions dying. It makes no sense and is more than foolish thinking. There isn't going to be an early restart, and the economy is NOT going to suddenly 'snap back' to what it was, What happens when we see images of the people on respirators, the medical staff collapsing, the full medical and cruise ships, the empty closets of supplies, the trucks removing bodies .... in NY, SF, LA, etc. Messaging that 'Covid-19 is no worse than vehicle fatalities' - is not going to drown out the images and calls of 'granny killer'. Economy versus 'granny killer', which message wins ?? It is much more likely that Trump RE is being pushed to collapse, within weeks/months at best. Push through an economic re-start, and maybe they recover; Trump loses the presidency but keeps the empire. Continue as is, and Trump loses BOTH the presidency AND the empire. When business people see their businesses collapsing - they typically do stupid things. Is that not EXACTLY what we are seeing here? Floating trial zeppelin balloons. SD Absolutely. Who here is going out like pre-virus when the lockdown advisory (unlikely the coasts will go along either way...) ends, knowing that a bunch of people still might have it and get us sick? The muddle through option seems to be the worst of all. We can do a full lockdown and eat the pain, or don't do it at all and accept the deaths. Both of those have consequences, but the middle option seems to be the worst - don't minimize deaths and at the same time ensure an L recovery...

If he is right that 50 people have it for every 1 we know about, then 22 people have died out of 180,000 infected in NYC. You have to take into account time it takes for the virus to run its course, though. Daily exponential growth means the vast majority of infections are early stage and haven’t had time to create complications. Do we also upwardly adjust the 180,000 number to add back the number of people who were once infected but no longer are? Really we need to look at this data at a cohort level, which as far as I know does not exist publicly. Without it we need to look at places like China where it's mostly run its course - otherwise we'll be comparing apples and oranges. The Chinese data tells us that 3.4% of the cases they identified died. But it doesn't tell us the % of infected that were identified. The Diamond Princess is the best population that I've heard of yet. 1% of infected died -- relatively old people go on cruises. So if we were to take the number of people who died in NYC yesterday, and if we can estimate when they contracted it, then perhaps we could estimate the number of infected people in NYC at that time. If we then estimate the rate of spread, we can take a stab at how many are infected in NYC today. I haven't looked into Diamond Princess in depth so I just tried to find some info. While I agree that it may be the best possible data set so far, it also seems potentially incomplete: https://www.sciencemag.org/news/2020/02/coronavirus-infections-keep-mounting-after-cruise-ship-fiasco-japan Given the number of people who were infected but did not test so at the time of disembarkment, I'm just not sure how reliable the data is (again, may be the best we have). Either way, still a high level of imprecision it seems.

Mount Sinai in NYC - 150 positive and admitted, 20 in ICU beds. Expect dramatic uptick in the next seven days. Med school is now closed so healthcare workers can live in the dorms. New beds with tents set up in all the open areas. Total capacity right now of 1200 beds and 100 ventilators. They expect another 500 ventilators from canada soon and will turn 1/2 of the hospital to ICU.

If he is right that 50 people have it for every 1 we know about, then 22 people have died out of 180,000 infected in NYC. You have to take into account time it takes for the virus to run its course, though. Daily exponential growth means the vast majority of infections are early stage and haven’t had time to create complications. Do we also upwardly adjust the 180,000 number to add back the number of people who were once infected but no longer are? Really we need to look at this data at a cohort level, which as far as I know does not exist publicly. Without it we need to look at places like China where it's mostly run its course - otherwise we'll be comparing apples and oranges.

Given the Communist party covered up the issue and did not declare an emergency until a couple of days before. Thank China for letting 10,000 /day or whatever fly into the USA during the coverup, before the Trump ban. All three are facts: 1) China delayed the recognition of the new virus and tried to play it down. This lead to virus spreading very quickly. 2) Trumps travel "ban" from China likely slowed the spread, but remember the "ban" did not extend to Americans, and many flights still entered the US originating from China. 3) Trump did not take the virus seriously, leading to where we are now. Many people, including those on this very thread, have laid out the case for why the delayed reaction has been catastrophic. The above really isn't in dispute, so you can take two positions: 1) Eric's statement is wrong. The travel "ban" slowed down the spread of the virus from China and saved lives perhaps earlier, but that the administration also had more time to react, but did not, and we are where we are, or 2) Eric's statement is right. The "ban" slowed down the spread of the virus from China, which perhaps gave the administration some confidence that it could be contained, only to realize and pivot too late to stop the ultimate spread. I think Eric's point is that at the end, given how we've handled the situation, the US will not have less people die as a result of the travel "ban."

Interesting. Thanks for posting!

Not sure I understand this. A month ago, no one was dead in Italy. Now 3000+ plus are dead with an additional 400-500 coming in daily despite the fact the entire country has been shut down for 9 days. Similar numbers in the US would be 15,000 dead in 2 weeks time with a full shutdown - but we haven't done that yet. LA just announced it. Nowhere else has and we have over 100k confirmed cases w/o testing. This is already on course to be way worse than the 30k annually from the flu even w/ the shutdown which hasn't been implemented yet. I'm not trying to fear monger - just extrapolating the data that's available What I find mind-boggling is that the first confirmed case in Italy was on Jan 31. The first confirmed case in the USA (WA state) was on Jan 21. Obviously the two areas are different, but to date there are 74 coronavirus deaths in WA, versus 3,400 in Italy. On the flip side, let's compare Italy vs NYC: Italy first case: Jan 31 NYC first case: March 1 NYC has about 4500 cases and about 30 deaths. When Italy had about 4600 cases, deaths were around 175. It's still not clear to me that we've counted the cause of death correctly in the US so far. Orthopa mentioned previously that we're not wasting tests on folks who have died (rightly so...), so absent that how does one put cause of death as CV19?

I thought about that, and you could def be correct. But even if we 4x the denominator, the probability is still much higher than I expected. Where it becomes not a concern is if the undercount relative to older population is like 10-20x. Also, european countries are seeing similar trends, so not a US only issue.

No disputing that. However, the hospitalization rate is much higher than I expected. I thought for me (in the 20-44 group) - it was going to be a bad flu. I didn't think i'd have a 1/5 to 1/7 chance of going to the hospital. Well, I would suggest a little caution on the interpretation of that. The table covers confirmed cases, and it includes the column for hospitalization. It doesn't say why people were hospitalized. There may have been a number of people that were hospitalized out of an abundance of caution or as part of a quarantine effort. What should be more concerning than the hospitalization column is the ICU column. You might be put into a hospital for a night or two "for observation" but usually you don't end up in the ICU unless you absolutely need to be there. The ICU numbers for the young who were diagnosed are pretty high. SJ Very fair. However, in reading twitter and also hearing Othropa people are getting turned away from any care and/or testing. So I don't think they were put into hospitalization out of caution. If anything it looks like the other way around.

Another interesting chart...

No disputing that. However, the hospitalization rate is much higher than I expected. I thought for me (in the 20-44 group) - it was going to be a bad flu. I didn't think i'd have a 1/5 to 1/7 chance of going to the hospital.

Another concerning article (tho like a day or two late): https://www.wsj.com/articles/singapore-taiwan-and-hong-kong-face-second-wave-of-coronavirus-cases-11584445836 I think this is the reason why China is imposing quarantine for all international travelers. Would still love to hear from folks about whether the virus is endemic and whether we need to quarantine for longer to ensure new cases don't flare up after initial wave.

Unfortunately the article does not provide much from a scientific perspective, only a few anecdotes.

https://www.bloomberg.com/news/articles/2020-03-19/coronavirus-in-young-people-is-it-dangerous-data-show-it-can-be The data bears out that concern. In Italy, the hardest hit country in Europe, almost a quarter of the nearly 28,000 coronavirus patients are between the ages of 19 and 50, according to data website Statista. Similar trends have been seen in the U.S. Among nearly 2,500 of the first coronavirus cases in the U.S., 705 were aged 20 to 44, according to the Centers for Disease Control and Prevention. Between 15% and 20% eventually ended up in the hospital, including as many as 4% who needed intensive care. Few died.

This is backwards looking. Hypothetical: The market goes up 10% (you invest after it goes up - investment moment A). After 6 months, it then declines 11% and hits the bottom. Over the next six months it then rises 10% (you invest at the end of those 6 months - investment moment B). 12 month returns will be flat for investment moment A. B will likely outperform A, but we don't know if we are at A or B in the midst of things. Well there's no certainty, which is why I think they used a time based test vs. a % increase test. Anything is possible and should not be ruled out. The results were just surprising for me b/c I thought waiting 6 months after the bottom would've caught as much of the gains.

Thank you, Cigarbutt. I am not qualified but Bill Gates (and, more importantly, his scientific advisors) are. Here's what he said about the study you linked: "Fortunately it appears the parameters used in that model were too negative. The experience in China is the most critical data we have. They did their "shut down" and were able to reduce the number of cases. They are testing widely so they see rebounds immediately and so far there have not been a lot. They avoided widespread infection. The Imperial model does not match this experience. Models are only as good as the assumptions put into them. People are working on models that match what we are seeing more closely and they will become a key tool. A group called Institute for Disease Modeling that I fund is one of the groups working with others on this." https://old.reddit.com/r/Coronavirus/comments/fksnbf/im_bill_gates_cochair_of_the_bill_melinda_gates/fkujznm/ Thank you both for the quick response. W/r/t the Bill Gates' response, which I can understand, my question would be whether China is a good example to follow. Here's what I have heard in speaking with folks in China: China's lockdown was severe, over a long period, and as such the disease is **contained** (e.g., not endemic). I see support for this when I read that China is now forcing everyone coming into the country to be placed in quarantine for 14 days at their expense to ensure the person is not infecting the Chinese population, which has no general immunity. If the virus is not endemic, as it was isolated to ~1% of the Wuhan population (and much smaller % for the total of China), then there should be no fear of it flaring up again absent new vectors of transmission (eg., foreigners who have been exposed to the virus ans has made a full circle...). In contrast to China, the rest of the world seems to have really spread the disease, and is way past the containment stage and it seems endemic. If that's the case, someone portion of the population will have an active case and thus can still spread it around, causing another wave. Is the above logic a bridge between what Bill said and what the study I referenced concludes?

Thank you, Cigarbutt. I am not qualified but Bill Gates (and, more importantly, his scientific advisors) are. Here's what he said about the study you linked: "Fortunately it appears the parameters used in that model were too negative. The experience in China is the most critical data we have. They did their "shut down" and were able to reduce the number of cases. They are testing widely so they see rebounds immediately and so far there have not been a lot. They avoided widespread infection. The Imperial model does not match this experience. Models are only as good as the assumptions put into them. People are working on models that match what we are seeing more closely and they will become a key tool. A group called Institute for Disease Modeling that I fund is one of the groups working with others on this." https://old.reddit.com/r/Coronavirus/comments/fksnbf/im_bill_gates_cochair_of_the_bill_melinda_gates/fkujznm/ Thank you both for the quick response. W/r/t the Bill Gates' response, which I can understand, my question would be whether China is a good example to follow. Here's what I have heard in speaking with folks in China: China's lockdown was severe, over a long period, and as such the disease is **contained** (e.g., not endemic). I see support for this when I read that China is now forcing everyone coming into the country to be placed in quarantine for 14 days at their expense to ensure the person is not infecting the Chinese population, which has no general immunity. If the virus is not endemic, as it was isolated to ~1% of the Wuhan population (and much smaller % for the total of China), then there should be no fear of it flaring up again. In contrast to China, the rest of the world seems to have really spread the disease, and is way past the containment stage and it seems endemic. If that's the case, someone portion of the population will have an active case and thus can still spread it around, causing another wave. Is the above logic a bridge between what Bill said and what the study I referenced concludes?

https://www.imperial.ac.uk/media/imperial-college/medicine/sph/ide/gida-fellowships/Imperial-College-COVID19-NPI-modelling-16-03-2020.pdf This is a rather interesting read. Anyone more qualified to speak about this? Specifically this caught my eye... We show that in the UK and US context, suppression will minimally require a combination of social distancing of the entire population, home isolation of cases and household quarantine of their family members. This may need to be supplemented by school and university closures, though it should be recognised that such closures may have negative impacts on health systems due to increased absenteeism. The major challenge of suppression is that this type of intensive intervention package – or something equivalently effective at reducing transmission – will need to be maintained until a vaccine becomes available (potentially 18 months or more) – given that we predict that transmission will quickly rebound if interventions are relaxed. We show that intermittent social distancing – triggered by trends in disease surveillance – may allow interventions to be relaxed temporarily in relative short time windows, but measures will need to be reintroduced if or when case numbers rebound. Last, while experience in China and now South Korea show that suppression is possible in the short term, it remains to be seen whether it is possible long-term, and whether the social and economic costs of the interventions adopted thus far can be reduced.

??? Did you read the article and the table?

Also, I'm curious to see if anyone has an opinion on this. It was pretty surprising to see actually... Would also be a lot less stressful vs. legging into the market. https://rbadvisors.com/images/pdfs/RBA_QuickInsight_Dont_panic_03.20.pdf

Does anyone have access to historical options pricing data? I wonder what deep in the money calls on large, cash rich corporates would have done during the same period. On a risk adjusted basis it feels like it wouldn't be more risky than a bunch of levered small caps?

Perhaps after restructuring - have you looked at their balance sheet and cash flow statement? E-commerce is hard enough to begin with, let alone when you are trying to sell heavy, difficult to ship products at 20-25% gross margins. Also consider that a company that enjoys a negative working capital cycle when sales are expanding (and finances growth from that) will see that unwind, with declining sales causing a cash drain. Good point. That could come back to really bite all the SAAS darlings as well. Dig into their wonderful FCF generation and it's mostly D&A, stock compensation (which will likely decline either due to lower headcount, which kills the growth narratives, or employees demanding more comp in the form of cash), and upfront cash payments on multi-year contracts. In the furniture retail world, many brick-and-mortar stores have embraced the negative working capital model and now the negative aspects related to cash flow generation are starting to show. Isn't Wayfair the 'champion' of the negative working capital model? Won't slowing (or heaven forbid negative) growth mean losing even more money for a while? https://finbox.com/NYSE:W/explorer/nwc I see Wayfair as a company coming back to earth. What am I missing to explain the potential rebound? Edit: Apologies as I realize that the link submitted may require subscription. The graph in the link basically shows a pattern similar to what Dell accomplished at some point but in an exponential (negative) way. Dell was profitable though. All fair points, and I realize it's not a risk free name, but that's why it's even in the discussion, because if it was not down something like 85% we wouldn't be talking about it. On the other hand, I don't think it's unrealistic to think that if they can survive relatively unscathed and that this crisis impacts their competitors much more than them. Of course, I could be wrong on all of this.

Not sure about 100x, but at some point Wayfair will be a winner. Can't imagine many physical furniture stores are going to make it through this alive. So benefit of online shopping + huge selection, but unclear how many of their sellers can survive...

What is in the not too hard bucket for you?