Coronavirus

[Gregmal]

Stories like this are good reason to question whether quarantines would actually be enforceable here. I agree the best current course of action would probably be a well designed quarantine for specific high risk counties/states.

 

https://nypost.com/2020/03/07/what-life-is-like-inside-milan-amid-italys-coronavirus-epidemic/

 

[Casey]

As soon as they hear "Quarantine" people will try to get out of dodge, which will be both chaos and a very efficient way to spread the virus.

 

It seems like the best quarantine is either no quarantine so that people don't panic and disperse, or a very well-implemented one. Latter seems hard to get right. I don't trust particularly trust us to do it based on how most of the rest of this has been going.

 

Basing all this on the plot of Contagion though, so YMMV.

[kab60]

Yep, less flu deaths: https://amp.ft.com/content/ad7ae6b4-5eab-11ea-b0ab-339c2307bcd4?__twitter_impression=true

[Viking]

For those who think I have been taking Coronavirus thing too seriously... First, I should say that I do not entirely believe that this video is real (even as a drill). The rational part of my brain is telling me that it is a fake (why would you do a drill like this?). It looks like a Monty Python skit. You can make up your own mind. If it is real I am starting to understand the effort China is making to control the outbreak. And scroll down and read a few of the comments... 'gallows humour' at its best.

 

-

[Viking]

Sports leagues in the US are starting to think about what to do in a Coronavirus world. As sports leagues cancel games what will people do with all their free time? President Trump, when asked today, confirmed he would continue to hold tremendous rallies.

 

I never thought of this... what a clever plot... the country shuts down... no school, work or play. That will make everyone available for the one activity still available: a Trump rally :-) This guy is practically a genius!

 

Coronavirus Outbreak Could Prompt Alarming Ripple Effect Across Sports

- https://www.si.com/nba/2020/03/08/coronavirus-sports-job-losses-sponsorship-lawsuits

 

“On Friday, the NBA sent a memo to teams indicating that they should prepare for the possibility of playing games without fans in attendance. These preparations, the memo reportedly notes, include “the possibility of implementing temperature checks on players, team staff, referees, and anyone else who is essential to conducting such a game in the team’s arena.” Earlier in the week, the NBA encouraged players to avoid contact with pens, balls, jerseys and other objects presented by fans for autographs. The league advised players to refrain from shaking hands or high-fiving fans, suggesting fist-bumps instead.”

 

 

[Dalal.Holdings]

Which is fine and all, but again we come back to "see what" in a few weeks? RCL files for bankruptcy? A further 20% market drop? 10,000 US deaths? Or just more pom pom waving because you correctly predicted more cases would emerge?

 

*Groans*

 

This might be hard to grasp, but it’s called thinking probabilistically. So—I would not board a flight with 10% risk of crashing even if 90% of time I will be fine. Apply similar notion to risks of 1) further, significant contraction in economic activity leading to likely recession, 2) yes further S&P declines, 3) unfortunately more deaths which will lead to fear leading to #1 and #2. I hope I am wrong and people do not get hurt, especially from a medical perspective.

 

Not everyone lost their home or job in 2008, but fear has a powerful and real tangible effect on the economy. The stock market is a leading indicator so it is the first to show signs (though often a false alarm), but if other areas follow suit, you get an economic contraction.

 

So those are some tangible things that I am throwing out there for you to plant a flag here on March 8, 2020. It does not mean the probability is >50% like the flight example I used above. If those things happen, some of them will take quarters to become apparent. After 11 year bull mkt and 30% S&P gain last year, I am willing to sit this flight out. So that is the action I am taking in response to my assessment above. There you have it—the assessment and the action. Something to chew on.

 

Now I am out for real. See you in April.

[Liberty]

2018: https://twitter.com/nadabakos/status/959404044090593281?s=21

[zippy1]

Taiwan seems to be very efficient in containing the outbreak, this article is in german but you can translate it via google: https://www.focus.de/perspektiven/covid-19-ausbreitung-verhindert-von-china-und-who-ignoriert-taiwan-weiss-wie-corona-ausbruch-eingedaemmt-werden-kann_id_11742992.html

This is a report from The Journal of the American Medical Association about Taiwan's efforts to slow down the Covid-19. I think it does a good job to summarize what the government has done with the support of the Taiwanese companies and Taiwanese people.

https://jamanetwork.com/journals/jama/fullarticle/2762689

 

One thing that is interesting is that the government has a daily press briefing, which is broadcast online.  The minister of health and welfare, trained as a dentist, runs this press briefing.  Other regular attendees include one medical professor/practicing doctor and one medical doctor specialized in disease control.  The briefing is further supported by deputy ministers of other ministries as needed. 

 

The presenters are civil-servants and university professors, not politicians.  As an engineer, I actually found the press briefing rather entertaining. 

 

My wife originally follows Korean drama. Now we watch together the press briefing every night.

 

Today, they had a professor from National Taiwan University to discuss the genetic sequencing of one particular patient to see whether the case is from outside of Taiwan or not.  It is quite interesting. I had never in my life thought that I would see some professor explain this topic in a joint-ministry level press conference.

::)

[Castanza]

Morgan Housel sums the whole situation up nicely.

 

 

 

[Read the Footnotes]

Morgan Housel sums the whole situation up nicely.

 

 

I thought this reply was more insightful.

 

https://twitter.com/TomGartner/status/1236421954770538507

[merkhet]

Yep, less flu deaths: https://amp.ft.com/content/ad7ae6b4-5eab-11ea-b0ab-339c2307bcd4?__twitter_impression=true

 

Same in Japan

 

https://www.wsj.com/articles/japan-sees-silver-lining-to-coronavirus-as-flu-cases-drop-11583073526?emailToken=0d0cd86f7ca4e1bb39f1260bd954dab8BpTZVLkuH9nvT+tmO+ukgiKYOvG5o23e5siUX13gKGMmcECsfkljfb7+GMpn0PcVtL0e93gP9VHPfh+4hs/tt/xiKm/yFuBV3TpuiO/WusZQaGwq+31xLhTneq3Xu552&reflink=article_copyURL_share

 

It will be interesting to see if this helps with the idea of additive capacity strain. My understanding is that the biggest bottleneck/pain point that people should be worried about is whether COVID-19 creates additional serious cases at the same time that we must deal with serious flu cases — both of which require hospital care, beds, ventilators, etc. However, public policy or awareness could help blunt the demands on the healthcare system. Whether it’s enough to keep us under the capacity threshold is ¯\_(ツ)_/¯ though.

 

Second order effects are always fascinating.

[A Dhandho Investor]

Morgan Housel sums the whole situation up nicely.

 

 

Well, I’m more in the Taleb camp on this one: https://twitter.com/nntaleb/status/1235663235573067777?s=21

[Read the Footnotes]

Northern Italy now under lockdown.

 

https://www.bbc.com/news/world-middle-east-51787238

 

Under the new measures, people are not supposed to be able to enter or leave Lombardy, where Milan is the main city.

 

The same restrictions apply to 14 provinces: Modena, Parma, Piacenza, Reggio Emilia, Rimini, Pesaro and Urbino, Alessandria, Asti, Novara, Verbano Cusio Ossola, Vercelli, Padua, Treviso and Venice.

 

"There will be no movement in or out of these areas, or within them, unless for proven, work-related reasons emergencies or health reasons," Mr Conte told reporters.

 

"We are facing an emergency, a national emergency. We have to limit the spread of the virus and prevent our hospitals from being overwhelmed."

 

So far I would rank the response of the USA's federal government's somewhere between Iran and Italy. Hopefully the USA will look more like South Korea, Taiwan, or some of the other well organized responses soon, if necessary, which I suspect it will be necessary.

 

My impression is that many people in leadership positions have given up on the Federal government in the past week or so. I have heard and seen evidence that State and Local governments and private institutions and businesses are making behind the scenes preparations to take matters in to their own hands and start making their own decisions. I have a feeling that this will be necessary and will prove to be one of our saving graces in the USA. Interestingly, in some pandemic simulations, this sort of autonomy has led to better outcomes, and I believe there are also many precedents that also indicate that assuming a failure of leadership and ability in this case will lead to better outcomes. An interesting example is Walmart during Katrina. If we face a major epidemic in the USA, it has the potential to be many times more difficult to coordinate that the Katrina response, and so far this leadership seems much worse than "Brownie" was.

 

By the way, we are very unlikely to be hear from the people who are responsible for making these preparations on this board. Trust me, the ones I know are too busy and about the most stressed I have ever seen them. They won't have downtime to post here. Hopefully their preparations will remain just preparations.

[Read the Footnotes]

Morgan Housel sums the whole situation up nicely.

 

 

Well, I’m more in the Taleb camp on this one: https://twitter.com/nntaleb/status/1235663235573067777?s=21

 

I particularly liked his comments about forecasters. He essentially said that just because you put your seat belt on does not mean you are forecasting a car crash and just because you lock your doors does not mean you are forecasting a burglary.

[Castanza]

Morgan Housel sums the whole situation up nicely.

 

 

Well, I’m more in the Taleb camp on this one: https://twitter.com/nntaleb/status/1235663235573067777?s=21

 

I particularly liked his comments about forecasters. He essentially said that just because you put your seat belt on does not mean you are forecasting a car crash and just because you lock your doors does not mean you are forecasting a burglary.

 

That statement works simply because it’s so broad. How far can you take that? Should every state have a few hospitals with 10k beds laying in wait for the next pandemic? Preparedness is different when it’s funded with tax dollars.

 

To me, that statement only applies to things that are statistically common and have a reasonable chance of happening. Pandemics aren’t common by any means. Should we all start building bomb shelters in our back yards? I mean it could happen!

[SnarkyPuppy]

Regarding skin in the game and making statements with/without bets:

 

I’d be willing to place a moderate size position (5% of portfolio - standard position size for me) directly on the fact that a full lockdown of major US cities (let’s say NYC specifically) is inevitable and will happen (hence the frustration for getting it out of the way today before unnecessary deaths/easier containment).  If you can tell me how to structure such direct exposure, let me know.  But 1 year of earnings loss has effectively been priced in to the broader market already. 

 

Regarding why I wasn’t short the market prior to this even though it was known in January?  I have this pesky problem where if the facts change, my mind changes.  The global exponential spread is blatantly obvious at this point.  If you are in the “everyone is panicking, this is people being crazy, media is hyping this up” crowd - what specifically would have to occur to change your mind? 

 

The only realistic mechanism in place that can slow this down is warm weather - otherwise the “anti-panic” crowd hasn’t provided any specific response to the question of “what specific mechanism stops the obvious exponential spread in the country?”

[Orchard]

That statement works simply because it’s so broad. How far can you take that? Should every state have a few hospitals with 10k beds laying in wait for the next pandemic? Preparedness is different when it’s funded with tax dollars.

 

To me, that statement only applies to things that are statistically common and have a reasonable chance of happening. Pandemics aren’t common by any means. Should we all start building bomb shelters in our back yards? I mean it could happen!

Did you even read what he wrote? Where does it say anything about spending money? Taxpayer money?

[Castanza]

That statement works simply because it’s so broad. How far can you take that? Should every state have a few hospitals with 10k beds laying in wait for the next pandemic? Preparedness is different when it’s funded with tax dollars.

 

To me, that statement only applies to things that are statistically common and have a reasonable chance of happening. Pandemics aren’t common by any means. Should we all start building bomb shelters in our back yards? I mean it could happen!

Did you even read what he wrote? Where does it say anything about spending money? Taxpayer money?

 

Isn’t it assumed? Maybe I read it wrong, but isn’t he saying govt SHOULD take precaution? I mean govt effort or lack of efforts seems to be the core theme in this thread.

[Read the Footnotes]

That statement works simply because it’s so broad. How far can you take that? Should every state have a few hospitals with 10k beds laying in wait for the next pandemic? Preparedness is different when it’s funded with tax dollars.

 

To me, that statement only applies to things that are statistically common and have a reasonable chance of happening. Pandemics aren’t common by any means. Should we all start building bomb shelters in our back yards? I mean it could happen!

Did you even read what he wrote? Where does it say anything about spending money? Taxpayer money?

 

Isn’t it assumed? Maybe I read it wrong, but isn’t he saying govt SHOULD take precaution? I mean govt effort or lack of efforts seems to be the core theme in this thread.

I meant nothing in this post about government at all, and I don't believe that this thread is or should be about politics. Nor do I believe that arguing about domestic politics has that been the motivation of most people here. Personally, I was thinking of Taleb's comments with respect to reducing health risk for individuals and with respect to portfolio management.

 

If there are those who would like to argue about the government response, and argue in a non-productive way as we have seen before on CoB&F, I would suggest this topic has become large enough to create a separate thread within the Politics section and potentially another thread within investment strategies to discuss portfolio management in the context of COVID-19.

 

Ultimately we are all here as investors, but let's not forget that some of us have already lost friends or family to this epidemic and more certainly will. I have many close friends on this board who I value immensely. Many of them are older and some are older with health issues that could put them right in the cross hairs of this virus. I worry for them and selfishly I fear for my loss were there something to happen to them.

 

I just found the original context of Nassim's comments, and I have to admit I don't fully understand the context, especially the disagreement:

 

 

I especially don't understand his spat with Tetlock:

 

 

Taleb's deragotory comments addressed at Tetlock seem unnecessary and I think engaging with a variety of viewpoints would be valuable in this situation. I think this board would similarly benefit from a variety of viewpoints and we could all be more welcoming by focusing on the ideas and not attacking individuals, but focusing on the specifics of an argument and responding with an argument that is even more well reasoned. From watching the interactions of several others on this board in the past couple of days I think the discussions would have been better if everyone could have refrained from the use of "you" and tried to refrain from making assumptions or at least questioned their assumptions about other people's motivations.

[Read the Footnotes]

I think at least three healthcare professionals have contributed to this discussion in the past couple of days, hopefully they and others are still with us and might be willing to respond to a couple of questions. So especially for the healthcare professionals or others well educated on the subject, would you be willing express an opinion on the following three questions?

 

1. My understanding is that "mild" in the case of COVID-19 is any case that ultimately was not hospitalized. That means that symptoms for "mild" range from almost asymptomatic, which is believed to be extremely rare, to something that survivors have described as being the worst experience of their lives and feeling that they couldn't breathe for extended periods of time, etc. I understand that other conditions that would be horrifying to experience are often graded as "mild" relative to the other outcomes, such as death, disability and coma. Could the general public be misunderstanding the medical usage of the term "mild" and that is creating a false sense that this virus is nothing to worry about?

 

2. I have heard there are concerns for the long-term outcomes and there has been some debate regarding long-term consequences for those that survive one of the worst cases of COVID-19, specifically those cases requiring hospitalization.

 

3. Finally, the triaging of patients and prioritizing patients with the greatest chance of survival would further bias the outcomes making COVID-19 look even more dangerous to older people and people with preexisting conditions and less dangerous to those who are younger and healthier. It seems this could create a sense of false confidence in some younger healthier people that they personally don't have to worry about their risk from this virus.

 

Thank you in advance for any feedback that could make this community more informed and safer.

[Castanza]

That statement works simply because it’s so broad. How far can you take that? Should every state have a few hospitals with 10k beds laying in wait for the next pandemic? Preparedness is different when it’s funded with tax dollars.

 

To me, that statement only applies to things that are statistically common and have a reasonable chance of happening. Pandemics aren’t common by any means. Should we all start building bomb shelters in our back yards? I mean it could happen!

Did you even read what he wrote? Where does it say anything about spending money? Taxpayer money?

 

Isn’t it assumed? Maybe I read it wrong, but isn’t he saying govt SHOULD take precaution? I mean govt effort or lack of efforts seems to be the core theme in this thread.

I meant nothing in this post about government at all, and I don't believe that this thread is or should be about politics. Nor do I believe that arguing about domestic politics has that been the motivation of most people here. Personally, I was thinking of Taleb's comments with respect to reducing health risk for individuals and with respect to portfolio management.

 

If there are those who would like to argue about the government response, and argue in a non-productive way as we have seen before on CoB&F, I would suggest this topic has become large enough to create a separate thread within the Politics section and potentially another thread within investment strategies to discuss portfolio management in the context of COVID-19.

 

Ultimately we are all here as investors, but let's not forget that some of us have already lost friends or family to this epidemic and more certainly will. I have many close friends on this board who I value immensely. Many of them are older and some are older with health issues that could put them right in the cross hairs of this virus. I worry for them and selfishly I fear for my loss were there something to happen to them.

 

I just found the original context of Nassim's comments, and I have to admit I don't fully understand the context, especially the disagreement:

 

 

I especially don't understand his spat with Tetlock:

 

 

Taleb's deragotory comments addressed at Tetlock seem unnecessary and I think engaging with a variety of viewpoints would be valuable in this situation. I think this board would similarly benefit from a variety of viewpoints and we could all be more welcoming by focusing on the ideas and not attacking individuals, but focusing on the specifics of an argument and responding with an argument that is even more well reasoned. From watching the interactions of several others on this board in the past couple of days I think the discussions would have been better if everyone could have refrained from the use of "you" and tried to refrain from making assumptions or at least questioned their assumptions about other people's motivations.

 

There has certainly been a mix of comments in this thread. But the government aspect of this is undoubtedly connected to the investment side. The context in which government is referred to has been both on and off track at points. Whether or not government decides to quarantine large swaths of people will most definitely have an impact on the market and the economy. Domestic politics and the political aspects of this investment thesis have been touched on by pretty much everyone in this thread.

 

 

 

 

 

 

 

[Gregmal]

That statement works simply because it’s so broad. How far can you take that? Should every state have a few hospitals with 10k beds laying in wait for the next pandemic? Preparedness is different when it’s funded with tax dollars.

 

To me, that statement only applies to things that are statistically common and have a reasonable chance of happening. Pandemics aren’t common by any means. Should we all start building bomb shelters in our back yards? I mean it could happen!

Did you even read what he wrote? Where does it say anything about spending money? Taxpayer money?

 

The only thing presumed is that if you mandate a shutdown, you have to then offer small business assistance(handouts) and find a way to guarantee peoples paychecks. The only way this can happen is from the government via the taxpayer. I am not against it, but its naive to think there is any other way.

[Gregmal]

Here's another theoretical semi-math based subject to consider. A large portion of the population, regularly take zero precautions to guard against the flu. Like not only refuse to get a flu shot annually, but also wantonly scurry along obliviously during flu season, without a care in the world. Using these loosely generalized assumptions, you then have to look at annual flu cases/deaths, in that context. And sub contexts. From there, we can also maybe integrate some assumptions about what occurred in Wuhan, with again, large gathering and nil for preventative measures. Now, in relation to here in America, introduce widespread media attention, presumably weeks of advanced warning, and hyper sensitivity by the way of precautionary measures... is it possible the best course of action is just to remain calm and take rather simple and relatively effortless steps to be more aware?

[SnarkyPuppy]

Here's another theoretical semi-math based subject to consider. A large portion of the population, regularly take zero precautions to guard against the flu. Like not only refuse to get a flu shot annually, but also wantonly scurry along obliviously during flu season, without a care in the world. Using these loosely generalized assumptions, you then have to look at annual flu cases/deaths, in that context. And sub contexts. From there, we can also maybe integrate some assumptions about what occurred in Wuhan, with again, large gathering and nil for preventative measures. Now, in relation to here in America, introduce widespread media attention, presumably weeks of advanced warning, and hyper sensitivity by the way of precautionary measures... is it possible the best course of action is just to remain calm and take rather simple and relatively effortless steps to be more aware?

 

Sorry- maybe I’ll ask again. 

- What specific mechanism is in place to stop the continued exponential spread in the United States?

- If exponential spread is not stopped, do you acknowledge that the healthcare system has extremely high operational leverage and there is a non-0% risk of downside scenarios that are multiplicative? 

- Given the very common response from large swaths of the population that this is media-hyped & “just a cold/just the flu”, coupled with the fact that the reported infected numbers are being artificially understated, is it possible that relying on the average person to wash their hands is a risky method of risk mitigation?

[Gregmal]

Here's another theoretical semi-math based subject to consider. A large portion of the population, regularly take zero precautions to guard against the flu. Like not only refuse to get a flu shot annually, but also wantonly scurry along obliviously during flu season, without a care in the world. Using these loosely generalized assumptions, you then have to look at annual flu cases/deaths, in that context. And sub contexts. From there, we can also maybe integrate some assumptions about what occurred in Wuhan, with again, large gathering and nil for preventative measures. Now, in relation to here in America, introduce widespread media attention, presumably weeks of advanced warning, and hyper sensitivity by the way of precautionary measures... is it possible the best course of action is just to remain calm and take rather simple and relatively effortless steps to be more aware?

 

Sorry- maybe I’ll ask again. 

- What specific mechanism is in place to stop the continued exponential spread in the United States?

- If exponential spread is not stopped, do you acknowledge that the healthcare system has extremely high operational leverage and there is a non-0% risk of downside scenarios that are multiplicative? 

- Given the very common response from large swaths of the population that this is media-hyped & “just a cold/just the flu”, coupled with the fact that the reported infected numbers are being artificially understated, is it possible that relying on the average person to wash their hands is a risky method of risk mitigation?

 

Sorry, maybe you arent understanding, but this thing is going to run its course. That should have been a given awhile ago, and if nothing else the market taking a shit and everybody now hating stocks is a direct result of that.

 

I have spoken to literally dozens of people in the healthcare field including a good half dozen doctors, not including the folks here, and over and over the consensus from all of these people is that the best and most effective measure or piece of advice, is to stay calm and take plenty of precaution/preventative measures. Wash your hands, avoid sick people...Thats about it. Its all you can really do.

 

I agree a large quarantine would be most effective and that the lockdown is likely a last resort, but the playbook should already be out there with what other countries are doing and not doing. So sure, if we want to keep going on, living as though there's already 100,000 people in the US in hospitals waiting for a respirator, go ahead. Thats fine but those concerns are also a derivative of fear and panic and you're silly if you dont think a lot of that is priced in when you have certain associated names down 50% plus already. Airlines are fucked. Hospitality biz is going to struggle. Theres also stuff, that won't. Many distressed retailers have already reported a huge surge in business.

 

So to directly answer your questions,

 

1. awareness

2. If exponential anything occurs, anything can occur. Always

3. I am not sure what your basis for the common response is, but both yours and mine are subjective and based on largely anecdotal evidence. Most people I see are behaving normally, just being a bit more noticeable hygienic. Several stores Ive visited lately have Clorox wipes next to the carts and bathroom attendants with disinfectant. Stuff like that.