Las Vegas – cigar lounges, video poker, betting on the first round of the NCAA basket tournament. And placing futures bets for the Masters!
Then San Diego – walking the beach, playing Torrey Pines, enjoying fish tacos, and watching the Sweet 16!
All cancelled.
On Saturday morning March 14th, 2020; I cancelled my flights, hotels, everything. Not only that, the actual sporting events were cancelled.
All casinos in Las Vegas were shuttered March 18th.
Schools closed. Church service moved online. People are lined up waiting for grocery delivery trucks to arrive. Public gatherings are limited to 50. Bars, restaurants, gyms are all closed.
New York City considered a mandatory quarantine.
Disney closed theme parks and ceased production on filming movies. Airlines experienced negative net bookings and projected 40% decreases in air travel (as of now).
The World Health Organization (WHO) declared COVID-19 (coronavirus) a pandemic. And the President declared a National State of Emergency.
The stock market crashed. Gold fell. And bitcoin tanked.
This past week, bonds fell too. Historically, bonds move uncorrelated (the opposite direction) with stocks.
Turmoil exists everywhere in the world.
I have no medical background. I’m only relaying my understanding of what I’ve uncovered regarding the coronavirus spread. And my opinion on how the pandemic could play out, if we …
Overreact!
Panics are Always Overblown
Growing up in rural PA, I became trained to dismiss health pandemics. The diseases wouldn’t impact me.
A disease that originated in China and spreads through contact with travelers, won’t reach an isolated, rural town.
My mentality somewhat remains even though I now live in suburban Dallas. I’m an introvert. I work from home. I don’t go out much, so little contact with other people.
I heard the panic buying of toiler paper (which I still don’t understand), hand sanitizer, and then food. I thought everyone was nuts.
I started planning a longer vacation. I got excited as hotel prices dropped. I gleamed on the opportunity for a longer, cheaper trip.
I didn’t solidify anything though. I still wanted to see how things progressed. I was an accountant for 16 years. And that made me more risk adverse.
Overnight My Worry Soared
Then a positive case was reported in my county. I decided I needed to pay attention.
I noticed something I don’t believe was explained properly early enough. Saturday March 14, White House Coronavirus Task Force Member, Dr. Deborah Birx said it well:
“Is there a whole group, under 20, that really doesn’t get significant symptoms, yet we don’t believe, that uniquely people under 20 are naturally protected from the virus, so are they a group that are potentially asymptomatic and spreading the virus.”
THIS MEANS THEY MAY NOT SHOW SYMPTOMS. IT DOESN’T MEAN THEY DON’T HAVE THE VIRUS.
Since 20-year-olds are not showing symptoms, they’ll act completely normal. They won’t stay away from others or those at risk. And widely spread the disease.
That’s the concern. Young, active people carry and spread coronavirus and don’t know. Because they don’t show symptoms.
If 20-year-olds are carrying coronavirus not knowing it, the virus is widespread now. The at risk just haven’t shown symptoms. And a large group of people won’t ever show symptoms. Because they’re asymptomatic.
If you’re one of the folks saying everyone’s overreacting – I’m not necessarily disagreeing with you.
I’m arguing – if you carry and spread coronavirus not knowing – overreacting may solve the pandemic.
Overreacting now may be the only way to look back and say we overreacted.
There’s no investing information in this report. But the report has important views on coronavirus. And comes from an investing resource of mine that I trust.
https://healthandwealthbulletin.com/special-report-doc-eifrigs-coronavirus-care-kit/
The Panic Will Grow
The numbers on how many people tested positive for coronavirus in the US change daily. We’ve not tested many people. And test availability continues to increase, which creates massive volatility in the case count.
But Sunday morning, March 15th, Fox News Sunday Morning reported 13,000 tests were administered. And approximately 3,000 were positive. That’s 23%.
Major laboratories are now prepared to test upwards of 10,000 samples per day. And Wal-Mart, Target, CVS agreed to open their parking lots for drive through testing.
Ramping the testing will take time. But 100,000 tests could occur over the next two weeks.
Assuming over 20% continue to test positive, infections will soar to 20,000. And testing could scale much faster than 100,000 over the next two weeks.
Once one million people are tested – at only 10% testing positive – we’ll have 100,000 cases in the U.S.
As the number of cases soars from 2,000 to 100,000, the panic will skyrocket.
Returning to Normal Quickly
But the panic will end. Rather quickly, I believe.
Assuming one thing. Everyone overreacted early.
By the end of the weekend (March 15th), it appeared most people have taken the virus seriously. And started self-distancing.
The disease takes up to 14 days to show symptoms. Let’s assume most people started self-distancing Monday, March 16th. Everyone who currently has the disease will have shown symptoms by Monday, March 30th. And gone for treatment, if necessary.
With no new contact for those already infected for two weeks (whether they know it or not), no new cases would originate. The infections would cease with those currently having the virus.
Now, I know that’s not reality.
Some people won’t self-distance and continue to spread the disease. And unfortunately, infections will spread to healthcare workers by sick people going for testing.
So I know spread will occur over the next two weeks. We already hear of college students still partying on spring break (I probably would too). And healthcare workers in Washington testing positive.
But with proper testing in place over the next two weeks. And as cases rise past 100,000, the max panic will bring harsher restrictions.
The doubters will self-distance. Testing protocols will improve, preventing spread to healthcare workers.
But we’ll need two additional weeks for the new infections to show.
From the mass panic around March 23rd to March 30th, through April 13th, new cases will crest. Weather will improve (experts believe virus doesn’t like the sun) and everyone will begin returning to normal.
By May you won’t think about the Coronavirus. You’ll focus on your Memorial Day plans. And how excited you are for vacation.
The CDC recommended postponing gatherings larger than 50 people for eight weeks. That aligns with my view of the timeline.
Everyone begins returning to normal around week five. But it takes eight weeks for full restoration of normalcy everywhere.
Learn an Important Lesson
We’ll look back and say this was an overreaction. But only if we overreact now.
Once the pandemic ends, look back and see how overblown we appeared to make things. But don’t let that fool you into complacency going forward.
I’m don’t suggest never taking risk and not living your life.
I preach, prepare for anything and don’t expect to depend on anyone.
Be always prepared.
Why’s there so much panic right now?
Individuals, small businesses, large corporations, investors, governments – nobody was prepared for a one-month economic shuttering. Everyone depends on the government to bail them out.
And for right now …
I’m at home working. I’m not going on vacation for a few weeks. Because my staying home could prevent people from dying. And that may make the next 10 years exponentially more fruitful.
How do I know?
I don’t.
But I’d rather take that road. And hope you do too.