Coronavirus

[rb]

We will learn the true cost of not having socialized healthcare with this crisis. As with a lot of things (e.g. climate change), we are not very good at anticipating and protecting against complex, nonlinear phenomena that pose 2nd and 3rd order effects.

 

As Churchill said: "Americans will always do the right thing--only after they have tried everything else"

 

Or Munger: We'll have single payer healthcare as soon as Dems take WH and Congress. Or "America's healthcare system is a disgrace".

 

Let's see how fattening up the pharmaceutical company bottom lines over the years help us with this black swan. Let's see how much they put into R&D and how long it takes to get treatment/vaccine out. Prepare to be disappointed.

 

If America finds a cure faster than other countries then perhaps the fattening of the pharmaceutical companies has been worthwhile. Do you think another country (socialized medicine or otherwise) has a better chance?

Well during the last Ebola outbreak it was a lab in Winnipeg that developed the vaccine. And a lab in Saskatoon that was created to deal with exactly these types of viruses and has tons of experience with corona viruses (including developing vaccines for them) has a already been working on this for a while. So we'll see...

[Spekulatius]

We will learn the true cost of not having socialized healthcare with this crisis. As with a lot of things (e.g. climate change), we are not very good at anticipating and protecting against complex, nonlinear phenomena that pose 2nd and 3rd order effects.

 

As Churchill said: "Americans will always do the right thing--only after they have tried everything else"

 

Or Munger: We'll have single payer healthcare as soon as Dems take WH and Congress. Or "America's healthcare system is a disgrace".

 

Let's see how fattening up the pharmaceutical company bottom lines over the years help us with this black swan. Let's see how much they put into R&D and how long it takes to get treatment/vaccine out. Prepare to be disappointed.

 

If America finds a cure faster than other countries then perhaps the fattening of the pharmaceutical companies has been worthwhile. Do you think another country (socialized medicine or otherwise) has a better chance?

Well during the last Ebola outbreak it was a lab in Winnipeg that developed the vaccine. And a lab in Saskatoon that was created to deal with exactly these types of viruses and has tons of experience with corona viruses (including developing vaccines for them) has a already been working on this for a while. So we'll see...

 

Vaccines are cheap. Not that much money to be made bd a minefield for lawsuits. It’s one of the best return on investment for public health, but not for Pharma or biotech companies. It’s one field where public funding is needed.

[clutch]

We will learn the true cost of not having socialized healthcare with this crisis. As with a lot of things (e.g. climate change), we are not very good at anticipating and protecting against complex, nonlinear phenomena that pose 2nd and 3rd order effects.

 

As Churchill said: "Americans will always do the right thing--only after they have tried everything else"

 

Or Munger: We'll have single payer healthcare as soon as Dems take WH and Congress. Or "America's healthcare system is a disgrace".

 

Let's see how fattening up the pharmaceutical company bottom lines over the years help us with this black swan. Let's see how much they put into R&D and how long it takes to get treatment/vaccine out. Prepare to be disappointed.

 

If America finds a cure faster than other countries then perhaps the fattening of the pharmaceutical companies has been worthwhile. Do you think another country (socialized medicine or otherwise) has a better chance?

 

Yes, China, with the biggest socialized medicine in the world.

 

(I'm being sarcastic, of course)

[Guest]

 

The burden for world security and r&d is on America's tax payers. Overall, I agree with you. The healthcare system is highly bloated. Insurance is a big waste too. A lot of physicians make surprisingly little (especially when you factor in hours worked, high rates of suicide/depression, etc). I would say that if America pharmaceuticals don't come out with the cure (and I'm not talking about a university), then it'll be perfect fodder for the Sanders of the world to hit them hard (and rightfully so).

 

Boeing, Lockheed and Northrop have remained domiciled in the U.S. though and sell planes/gear abroad and the discount to the gear they sell is not as steep as Pharma discount of U.S. drug prices vs even Canada. So defense co profits are brought back home and they pay U.S. taxes. Compare that to tax inverted pharma co now domiciled in Ireland that Medicare has no power to negotiate with.

 

If the burden of world security is on America, tell that to the Pres who is asking for NATO members to chip in for their fair share.

 

Fact is, the gap between America and ROW has narrowed over past 70 years, so the burden for pharma R&D and other stuff should not rest so disproportionately on Americans.

 

Also, you think that all that excess $$ from ripping of Americans going to drug companies went to more lab benches and scientists? More was probably spent on patent attorneys than scientists (For Abbvie/Humira, it seems like $$ well spent--a great ROI! For patients & society, not so much). I could go on and on, but easier to just stick to Munger's brevity and call the U.S. system a "national disgrace".

 

Like I said, as far as development of an effective treatment/vaccine rollout for Coronavirus is concerned, prepare to be disappointed.

 

Fair points.

[Dalal.Holdings]

We will learn the true cost of not having socialized healthcare with this crisis. As with a lot of things (e.g. climate change), we are not very good at anticipating and protecting against complex, nonlinear phenomena that pose 2nd and 3rd order effects.

 

As Churchill said: "Americans will always do the right thing--only after they have tried everything else"

 

Or Munger: We'll have single payer healthcare as soon as Dems take WH and Congress. Or "America's healthcare system is a disgrace".

 

Let's see how fattening up the pharmaceutical company bottom lines over the years help us with this black swan. Let's see how much they put into R&D and how long it takes to get treatment/vaccine out. Prepare to be disappointed.

 

If America finds a cure faster than other countries then perhaps the fattening of the pharmaceutical companies has been worthwhile. Do you think another country (socialized medicine or otherwise) has a better chance?

Well during the last Ebola outbreak it was a lab in Winnipeg that developed the vaccine. And a lab in Saskatoon that was created to deal with exactly these types of viruses and has tons of experience with corona viruses (including developing vaccines for them) has a already been working on this for a while. So we'll see...

 

Vaccines are cheap. Not that much money to be made bd a minefield for lawsuits. It’s one of the best return on investment for public health, but not for Pharma or biotech companies. It’s one field where public funding is needed.

 

Not necessarily. GSK set to make $2B in sales on Shingrix, a vaccine for a very target demographic. Vaccines can be very lucrative, esp in a case like this where just about everyone will want one.

 

Vaccines are also probably the most bang for your buck thing our healthcare system does -- a great man once said "an ounce of prevention is worth a pound of cure", so it's probably ok if they cost a bit (an individual only requires 1-2x shots with them unlike the recurring revenue treatments like humira earn on individual patients).

 

Even the ebola vaccine took years for rollout (which would have been late without containment). Anyone who has ever looked at companies in drug development knows -- best to temper expectations with respect to drug approval and rollout. Developing new drugs is much easier said than done.

[Gregmal]

A little more anecdotal stuff

 

My sister and a bunch of friends had recently planned a trip to Spain. This weekend, she contacted me asking if her trip got cancelled if should would be able to fly up and visit me here in NJ. Curiously I asked why it was cancelled. She said it wasn't actually cancelled but her friends were debating moving it back a month or two from the original mid March date. Why? Not because they were scared of getting the virus, but because they didn't want to risk dealing with any quarantine. Most of them, if the consensus is to cancel and reschedule a couple months out, have decided to make alternative domestic travel plans that week.

 

Following this, I tell my wife she may be visiting, and the response immediately was, "if she goes to Spain she cant come here"....

 

I internally LOL'd. Both sides of the coin there. One, not a worry, the other, just likes to worry. But nonetheless real to both of them. Definitely an impact on peoples lives, but at the same time, people still arent going to just sit around and do nothing. They adapt. I made a point to track attendance at some sporting events this weekend. Nothing in the numbers yet that tells me people arent going out.

[Viking]

A little more anecdotal stuff

 

My sister and a bunch of friends had recently planned a trip to Spain. This weekend, she contacted me asking if her trip got cancelled if should would be able to fly up and visit me here in NJ. Curiously I asked why it was cancelled. She said it wasn't actually cancelled but her friends were debating moving it back a month or two from the original mid March date. Why? Not because they were scared of getting the virus, but because they didn't want to risk dealing with any quarantine. Most of them, if the consensus is to cancel and reschedule a couple months out, have decided to make alternative domestic travel plans that week.

 

Following this, I tell my wife she may be visiting, and the response immediately was, "if she goes to Spain she cant come here"....

 

I internally LOL'd. Both sides of the coin there. One, not a worry, the other, just likes to worry. But nonetheless real to both of them. Definitely an impact on peoples lives, but at the same time, people still arent going to just sit around and do nothing. They adapt. I made a point to track attendance at some sporting events this weekend. Nothing in the numbers yet that tells me people arent going out.

 

Gregmal, i think the general population in the US is still in the Disney stage of this virus; it is a concept but not a reality. People in parts of Washington State are graduating to the next stage; no longer a concept but a reality. When the fear stage hits people start adjusting their behaviour pretty quickly.

 

We were planning a family trip to Oregon for March spring break. Not anymore. One reason is the risk of getting stranded and quarantined. Another big reason is the insane cost of medical care in the US; uncertainty around medical costs in the US (coming from Canada) should someone need care; yes, we are covered through our provincial health plan for some things and there is travel insurance but this can get quite messy depending on the fine print. Why take the chance is what we are thinking.

 

My son has a class trip scheduled for April to Oregon for a Shakespear festival (60 people). My guess is it will be cancelled; there is no way the school will be taking on the risk of travel to the US with this blowing up. This is real economic loss and will quickly start to add up.

[Gregmal]

Viking, I dont disagree all in all. I am not "raging bull" bullish but rather probably what Id describe as cautiously optimistic that this is a market opportunity and economic overreaction in terms of how things just got hit. Often times, I like to play devils advocate or throw out contrarian perspectives because it helps even out +/-'s and its helpful to view responses and their validity against them. The news flow the past week has been horrendously negative and massively on the side of fear and irrationality. Even the WHO guy basically just said, people arent being rational:

 

https://www.cnbc.com/2020/03/01/who-chief-on-coronavirus-global-markets-should-calm-down-see-reality.html

 

I read a MS piece on range of outcomes

 

https://www.yahoo.com/finance/news/3-scenarios-for-how-covid-19-plays-out-morgan-stanley-184343790.html

 

All in all those of us that tread cautiously over the past few months are probably in decent shape. As you've said, the real question is when to hop. I think some of that "when" may be now. GOOG just shed $200 a share and trades at like 16x ex cash. Another 10% off? Im a buyer all day. BRK we dont even need to discuss. Cheap at 230? How bout $200 now? Stuff like that.

 

The news flow or headline risk I just view as opportunity. I was thinking earlier this week, "hey, I haven't heard from Marc Faber or Nouriel Roubini lately, I wonder what those jackasses are up to". This weekend I found plenty of articles blasting Roubinis calls now for "30-40% declines" and its just like, well, thats how the sausage is made. When things are good you've got Bill Miller and Cathie Wood getting the mic, and when they are bad its guys like Roubini and Dennis Gartman. The trick Ive learned is to try to realize how this works and associate, at least based upon past outcomes, what side you want to be on when such figures and news flow is most prevalent.

 

 

[Guest cherzeca]

you never "know" when to hop in or out because that requires the benefit of hindsight and god put our eyes in front of our heads.  and mirrors dont seem to work.  so I set a commitment target and then I edge in when things look panicky (25%), and then when things look more panicky I edge in more, then twice more ( I have one more tranche to go).  I may be early, or I may be late and never do my fourth tranche.  and if I dont have a long time horizon, I dont do it at all. but god willing, I have a long time horizon.

[John Hjorth]

Great idea with some anecdotal stuff about everyday life in this topic, Greg,

 

Gregmal, i think the general population in the US is still in the Disney stage of this virus; it is a concept but not a reality. People in parts of Washington State are graduating to the next stage; no longer a concept but a reality. When the fear stage hits people start adjusting their behaviour pretty quickly. ...

 

... Why take the chance is what we are thinking. ...

Viking,

If we project that first quoted part above of yours onto the investment sphere, isen't this then to decoded to that we are not near a buttom yet?

 

- - - o 0 o - - -

 

Thursday, I had a hypothecial discussion with the Lady of the House about what to do, if we were booked for a weeks stay or so in Milano. We quickly agreed on not to go, ref. my latter quote of yours. And that's no matter the terms in our travel insurance, which I haven't checked, because it's not relevant for us.

 

Today we discussed it again. We agreed on "mutual veto", no matter what the future about this may bring. [We are in the same bed, thus also in the same boat. [ ; - ) ]] Three cases in Denmark. None in our city [Odense]. Life here continues as usual.

[Viking]

Greg, i the more i read the more i think the US is just ending the first inning of dealing with this virus. Look at the carnage in markets already.

 

My province (BC) with a population of 4 million says it has up to now done 2X the number of test versus the entire US with a population of 327 million (as of 2 days ago). 1,012 versus 459. My guess is BC is not testing people who should not be tested.

 

What this tells me is the US has not been testing incoming people nearly enough. So there is a very high likelihood the virus is now in the US in multiple locations and silently spreading. There was a window to vigorously test and dramatically slow the spread of the virus from late Janaury until now; the US did not do this.

 

The proof of this starting to morph and really get out of control is when cases are found that cannot be traced to a known source. And these are just starting to pop up in the US. If this thing breaks out in the US in multiple locations then look out below. The US is not ready to deal with a pandemic.

 

I am sorry if i sound all doom and gloom. But i see no facts (i.e. US has been vigorously screening) to give me comfort that this is going to blow over in the next week or two or even month. All i see are red flags on this issue.

 

Regarding when to get back in i agree that some stocks are starting to look cheap. And i will likely start to buy if markets continue to sell off.

 

The problem we have from an investment perspective is we really have no playbook. Yes, there was SARS and a few other outbreaks. But each one is so different it is not really possible to compare. Bottom line is we still do not understand what we are up against with this virus. The news flow will likely get worse from here. The impact on the global economy will get worse. This tells me to be patient. Yes, stocks could be higher in 6 months and the bull market will re-emerge; perhaps this time will be different.

 

- https://globalnews.ca/news/6610416/bc-covid-19-testing-more-than-united-states-premier/

 

[Guest cherzeca]

"Bottom line is we still do not understand what we are up against with this virus. The news flow will likely get worse from here."

 

the second sentence is undoubtedly true, but that tells you more about the business of journalism these days than it tells you about the epidemic.

 

I would humbly suggest that the first sentence is not true.  we know enough about this virus (highly infectious even when asymptomatic and a danger to those compromised by the wages of age and compromised immunity, but not a danger to most people) to know that it will have a geometric rise (perhaps china has completed its geometric rise) and a geometric fall (as these epidemics always dissipate).  when and how quickly the geometric fall will occur is still up for debate, but the mitigation being done by all countries will hasten it. 

 

the importance of language should be noted.  because this virus has a name (just like we name all hurricanes), we are better engaged to counteract it.  seasonal flus dont have names, and some people opt to not get their flu shots.  we have an enemy if we have a name, and so the better to counteract it, but since we have an enemy when we have a name, the news flow will feed the panic.

[Viking]

Cherzeca, my read is people are not panicking enough right now. 450 tests in all of the US? Really? People need to call their elected representatives and tell them to get the necessary resources allocated to this issue. A month ago!

 

Why? Look at the devastation when an outbreak hits... northern Italy, Iran, South Korea etc.

 

There is a reason health professions are sounding the alarm bells. These are smart people and they are genuinely concerned. Unless handled very well, this virus will become an even bigger health/economic problem for all of us. We are all in this together. Does anyone think the US is the global leader in how they are handling this virus? Maybe we need a little panic to get people focussed on doing what’s needed.

 

 

[Guest cherzeca]

I see the panic and while I understand it I dont give it much long term credence.  every flu season involves a novel virus to a certain extent.  and the incidence of infection is wider in a normal flu season than with covid 19, it is just not reported (effect of language as per prior post).  with death rates, I cant tell but again I think that is part of the effect of our not naming a normal flu season with an insidious name.  part of our panic/fear seems to be conjecture that this started out in a weapons lab or an unregulated unconventional animal market.  seems more ominous and odious that way...builds a more ominous and odious narrative for the press to sell papers...ooops sorry clicks.  and of course, the transition from papers to clicks is viral inducing even when not discussing a virus.

[Viking]

For those who think this virus is a short term blip watch this video on U-tube. Gruesome stuff. No sugar coating. One could make the case the media (and the WHO are asleep at the wheel). I am not suggesting what happened in China is going to happen in the US or elsewhere. What I am suggesting is this virus is a serious problem that is still being underestimated. Let's hope I am very wrong.

 

It has been an absolute tragedy to those who have been affected. It has been consistently underestimated by health authorities. It is only after an outbreak happens that authorities take it seriously. And of course, at that point in time it is too late for those affected.

 

Coronavirus: How the deadly epidemic sparked a global emergency | Four Corners

-

 

China is at the epicenter. Fortunately, they have been very transparent through the entire process. The information coming out of China is excellent. They are saying things are getting much better so I believe them. Just a short term blip to their population and economy. Should be back to normal soon. (Sarcasm, just to be clear)

[no_free_lunch]

I see the panic and while I understand it I dont give it much long term credence.  every flu season involves a novel virus to a certain extent.  and the incidence of infection is wider in a normal flu season than with covid 19, it is just not reported (effect of language as per prior post).  with death rates, I cant tell but again I think that is part of the effect of our not naming a normal flu season with an insidious name.  part of our panic/fear seems to be conjecture that this started out in a weapons lab or an unregulated unconventional animal market.  seems more ominous and odious that way...builds a more ominous and odious narrative for the press to sell papers...ooops sorry clicks.  and of course, the transition from papers to clicks is viral inducing even when not discussing a virus.

 

It is good to be skeptical but I keep coming back to China's reaction. The country is locked in a cold conflict with the US. Much of that boils down to economic growth. Given that background they aren't going to shut down huge parts of their economy voluntarily for a regular flu season.  The government officials in China made a cold calculation that the cost of letting the virus run wild outweighs the economic hit of mass quarantine. Their actions indicate it is serious.

[Liberty]

Interesting perspective:

 

[Castanza]

Interesting perspective:

 

 

By far the most level headed logical approach to this situation.

[John Hjorth]

Interesting perspective:

 

https://twitter.com/elonbachman/status/1234172256898732032?s=21

 

By far the most level headed logical approach to this situation.

 

Castanza,

 

"Level headed" ? - Please look at the "/6" and read it again. Basically all countermeasures to contain this thing are now enabled. It's BS.

[Viking]

Interesting perspective:

 

 

By far the most level headed logical approach to this situation.

 

So can someone please square what this ‘level headed’ guy is saying and what we are seeing in China, South Korea, Italy, Iran, Japan? Why are these governments instituting such extreme measures (shutting down whole regions) to contain the virus? Clearly some pretty smart people are taking the other side of the argument that this virus is a serious health problem (and not just another flu).

 

1.) Barry from Texas@solar2029 46m Replying to  @ElonBachman

“2 months of data is not enough yet... incubation period is 1-2 weeks and disease course is ~1-2 weeks ... even with say 0.2-0.5% CFR - still 2-5x flu with higher transmissibility than flu - also ~5-15% end up hospitalized or in ICU - huge$$$ and strain”

 

2.) @merlinvestor 2h Replying to @ElonBachman

“Hands down biggest issue is strain on the health system. I have zero faith in china data but in Northern Italy, 1 / 11 goes in ICU.”

 

3.) Merl investor@merlinvestor 2hReplying to @ElonBachman

“Old people survive this thing *IF* they get proper care.. Lockdowns slow the spread so that health system can keep up. Therefore economic impact of the virus is real.”

 

[John Hjorth]

"Former" is the key to relate to that message. [useless.]

[Castanza]

Interesting perspective:

 

https://twitter.com/elonbachman/status/1234172256898732032?s=21

 

By far the most level headed logical approach to this situation.

 

Castanza,

 

"Level headed" ? - Please look at the "/6" and read it again. Basically all countermeasures to contain this thing are now enabled. It's BS.

 

Level headed as in not inducing panic. The facts we have are the facts we have. Speculation to the extreme doesn’t solve anything. I’m not saying this guy is 100% correct in his analysis.

[Spekulatius]

Interesting perspective:

 

https://twitter.com/elonbachman/status/1234172256898732032?s=21

 

By far the most level headed logical approach to this situation.

 

Castanza,

 

"Level headed" ? - Please look at the "/6" and read it again. Basically all countermeasures to contain this thing are now enabled. It's BS.

 

Level headed as in not inducing panic. The facts we have are the facts we have. Speculation to the extreme doesn’t solve anything. I’m not saying this guy is 100% correct in his analysis.

 

One thing I have learned in financial markets is that you want to panic before everyone else does. ???

[Castanza]

Interesting perspective:

 

https://twitter.com/elonbachman/status/1234172256898732032?s=21

 

By far the most level headed logical approach to this situation.

 

Castanza,

 

"Level headed" ? - Please look at the "/6" and read it again. Basically all countermeasures to contain this thing are now enabled. It's BS.

 

Level headed as in not inducing panic. The facts we have are the facts we have. Speculation to the extreme doesn’t solve anything. I’m not saying this guy is 100% correct in his analysis.

 

One thing I have learned in financial markets is that you want to panic before everyone else does. ???

 

Lol fair enough. But I would say being prepared is different than panicking.

[Gregmal]

Interesting perspective:

 

https://twitter.com/elonbachman/status/1234172256898732032?s=21

 

By far the most level headed logical approach to this situation.

 

Castanza,

 

"Level headed" ? - Please look at the "/6" and read it again. Basically all countermeasures to contain this thing are now enabled. It's BS.

 

Level headed as in not inducing panic. The facts we have are the facts we have. Speculation to the extreme doesn’t solve anything. I’m not saying this guy is 100% correct in his analysis.

 

One thing I have learned in financial markets is that you want to panic before everyone else does. ???

 

Lol fair enough. But I would say being prepared is different than panicking.

 

Well IDK, maybe I’m missing something, but one of the strongest, most resilient markets any of us have ever seen just fell 12% in 5 days. Seems to me like everyone panicked at the same time.