11 ms·

My Thoughts About the Coronavirus: Ray Dalio

120 points by rubayeet 7y ago

Apocryphon 7y ago
> this is one of those once in 100 years catastrophic events that annihilates those who provide insurance against it and those who don’t take insurance to protect themselves against it because they treat it as the exposed bet that they can take because it virtually never happens. They said 2008 was a once in a lifetime event, too. So what’s the next black swan that will unsettle the market in 2032? The Big One finally hits California? Mount Rainier erupts? The Yellowstone Caldera? > The markets are being, and will continue to be, affected by these sorts of market players getting squeezed and forced to make market moves because of cash-flow issues rather than because of thoughtful fundamental analysis. So it sounds like we didn’t learn much from 2008. Will we learn from 2020?
- js8 7y ago
  > So it sounds like we didn’t learn much from 2008. Will we learn from 2020? I am busy, right now I am trying to learn that humans will never learn from history. I vaguely remember somebody mentioning that to me in the past, but I dismissed it as a nonsense. (But I am not really that pessimistic. Somebody mentioned that the Spanish flu was a big impulse for providing national health care services. I think it can have a similar effect, somewhere.)
  - duaoebg 7y ago
    The cynic in me believes this was ensure there was a ready supply of healthy men for war fighting. Now that wars are mechanized and we have nuclear weapons this is less of an impetus. There might be a different effect here as preditary health care in the US is unpalatable in the best of times.
  - pengaru 7y ago
    > right now I am trying to learn that humans will never learn from history. I vaguely remember somebody mentioning that to me in the past, but I dismissed it as a nonsense. Perhaps it was in reference to the famous Aldous Huxley quote: “That men do not learn very much from the lessons of history is the most important of all the lessons that history has to teach.”
  - bcrosby95 7y ago
    They have learned: privatize gains, socialize losses. The government is so fearful of meaningful corrections they will do whatever is necessary to make the people at the top whole instead of letting them suffer catastrophic losses. So party on. There are ways to go about this and wipe out investors without causing complete economic collapse (e.g. nationalization and orderly dismantling) but "we've" already decided not to go that route.
  - airstrike 7y ago
    I think the analogous effect this time is to revisit the healthcare supply chain
  - QuantumGood 7y ago
    Propagandists and similar types learn the lessons of history excellently. They work to prevent others from learning anything, but their work is not hard: People not only adopt the characteristic customs and conventions of whatever communit(ies) they identify with, they actively seek groups to identify with.
- QuantumGood 7y ago
  Argument by "they said" should really only be used when it is the same "they" speaking now and then. Otherwise, especially when no reference is given, the "they" can be no one, a general sense the writer remembers, a low-quality they (talking points for manipulation purposes), etc.
  - Apocryphon 7y ago
    Funnily enough, I asked about this two years ago: https://news.ycombinator.com/item?id=16315334 https://news.ycombinator.com/item?id=16315334
    - QuantumGood 7y ago
      Mainly, "they" are of no significance, no matter what "they" say. The information is what matters, not the "they". If information cannot be extracted from their statements (source references / description of logical statement / premise / etc) , there is no data to analyze.
- katmannthree 7y ago
  I think this is a terrific example of normalcy bias, a "tendency for people to believe that things will always function the way they normally have functioned and therefore to underestimate both the likelihood of a disaster and its possible effects"[0]. China has provided roughly a month's advance warning on how this virus plays out in terms of infectivity and severity (~20% of cases are serious / require medical attention, ~5% are critical, and ~2% are fatal). People prefer to believe that media coverage of the effects in China are fearmongering or even a political "hoax"[1], that it will peter out with warmer weather (it's spread quite quickly in Singapore which is hot and humid at the moment), and that because it's possible to misuse masks and because they don't provide complete protection by themselves they're useless and should be left for healthcare workers[2]. The kind of critical thinking that helps you prepare for things like this seems to be in short supply. Last week people thought I was silly for stocking up on dried goods and essentials, this week every store around me is sold out of hand sanitizer, clorox wipes, and isopropanol. [0]: Wikipedia, right now [1]: The US president, at a rally a couple of days ago [2]: The US surgeon general's twitter page, a couple of days ago
  - airstrike 7y ago
    Trump did not call COVID-19 a hoax. https://www.snopes.com/fact-check/trump-coronavirus-rally-remark/ https://www.snopes.com/fact-check/trump-coronavirus-rally-re...
    - katmannthree 7y ago
      Did you read the article you linked? He inferred that the media coverage is fearmongering and an attempt to hurt him. He specifically used the word hoax. He didn't call the virus a hoax, he called the coverage and criticism of the US's handling and response to the outbreak a hoax. From the page you linked: "During a Feb. 28, 2020, campaign rally in South Carolina, President Donald Trump likened the Democrats' criticism of his administration's response to the new coronavirus outbreak to their efforts to impeach him, saying "this is their new hoax." During the speech he also seemed to downplay the severity of the outbreak, comparing it to the common flu." A transcript of his exact words at the rally: "Now the Democrats are politicizing the coronavirus. You know that, right? Coronavirus. They’re politicizing it. We did one of the great jobs. You say, ‘How’s President Trump doing?’ They go, ‘Oh, not good, not good.’ They have no clue. They don’t have any clue. They can’t even count their votes in Iowa, they can’t even count. No they can’t. They can’t count their votes. One of my people came up to me and said, ‘Mr. President, they tried to beat you on Russia, Russia, Russia. That didn’t work out too well. They couldn’t do it. They tried the impeachment hoax. That was on a perfect conversation. They tried anything, they tried it over and over, they’ve been doing it since you got in. It’s all turning, they lost, it’s all turning. Think of it. Think of it. And this is their new hoax."
- justinzollars 7y ago
  > So it sounds like we didn’t learn much from 2008. Will we learn from 2020? We learned a lot from 2008. This is a different ball game. There is plenty of credit today. This is a supply shock. There are not applicable lessons from a credit crunch to a panic/virus induced supply shortage.
  - Apocryphon 7y ago
    Aren’t there at least applicable lessons for dealing with an economic crisis regardless of the direct causes? Or preventative measures to take during a boom time? Because it sounds like once again irrational exuberance has caught up with us and we’re about to reap the whirlwind of lack of protection.
    - filoleg 7y ago
      There are none, because “economic crisis” is too large of a category to have a one-size-fits-all universal solution for dealing with it. Every type of “economic crisis” has its own cure, like a virus in a way. And the kind birthed by 2008 is as far as possible from what we are dealing with right now.
    - justinzollars 7y ago
      I think this is different than irrational exuberance. Maybe one could look to the 1970's oil embargo for clues on how this will play out. I really do not know. But I do know 2008 is not a good comparison because the circumstances are just so different.
  - throwaway88483 7y ago
    It’s possibly about to be a demand shortage soon as well.
- tunesmith 7y ago
  He used to say that 2008 was the end of the big long term debt cycle. Now he's saying it hasn't happened yet.
- czbond 7y ago
  We will not learn from this. The Fed knows they HAVE to keep the market going for 3 reasons: 1) big institutions pressure them to 2) They must keep pensions from tanking, or we have severe issues with retirement rate 3) Most importantly, it is easier to print money forever than to actually create jobs and real growth Edit: on #2, it is 'cheaper' to print money to prop pensions up than to have millions of retirees eating dog food
- mynegation 7y ago
  I work in finance. We learned a ton from 2008. The amount of new regulation and oversight that came as a result is insane. We will learn from 2020 too.
  - eachro 7y ago
    Does the added regulation, oversight help prevent the problems that led to the 08 crisis? Also curious to know what/how these learnings manifest themselves outside of goverment imposed regulations.
    - mynegation 7y ago
      Yes, that is kind of a point. Outside of regulation the learnings manifest themselves in models that better capture tail, correlation, and liquidity risks.
  - TacoToni 7y ago
    I'm in finance as well. The regulation is overwhelming. i always feel like i'm working on something for external auditors instead of driving value and savings for the company. It is tiresome.
gist 7y ago
> The fact of the matter is that history has shown that even big death tolls have been much bigger emotional affairs than sustained economic and market affairs. My look into the Spanish flu case, which I’m treating as our worst-case scenario, conveys this view; so do the other cases. The world was a vastly different place when the Spanish Flu happened. Think of all the things we have today that we depend on to operate flawlessly that didn't exist back in 1918. I guess the comparison I would make might be an airplane that is largely analog and manual back then vs. now stuffed with electronics. Take away those electronics and it can't fly manually. So much of our life depends on people to keep the electronics working that any impact to those and their functions (say the electric grid) would cause an immense amount of interconnected havoc.
- MikeHolman 7y ago
  Also, I don't know all the market pressures of 1918, but it seems reasonable that the market was helped by the US winning the biggest war in the history of the world.
- ptah 7y ago
  good point, everything is too optimised and there's no slack anymore
djohnston 7y ago
I am interested in seeing how much more effective China's current system will be at addressing the outbreak vs highly developed western democracies. If there's one thing a technologically advanced dictatorship like the CCP should excel at, it's this.
- fierarul 7y ago
  Based on the data the ongoing cases have been decreasing for the past two weeks: http://covid.410go.net http://covid.410go.net In another two weeks they might have less cases than other regions!
- eloisius 7y ago
  > will be Sounds like you have your conclusion without needing to wait for the results.
- pengaru 7y ago
  Making such a comparison is non-trivial; does any highly developed western democracy share China's population size and density? I'm more curious about how this will affect India, where the population situation is more similar to China's. I haven't seen any mention of the virus there in the news, yet.
  - Apocryphon 7y ago
    Supposedly the climate may impede the virus’ ability to spread. https://www.click2houston.com/weather/2020/02/26/will-houstons-hot-and-humid-weather-protect-against-coronavirus/ https://www.click2houston.com/weather/2020/02/26/will-housto...
    - jcadam 7y ago
      Part of the reason I had been hoping this virus wouldn't hit Florida (where I live) until summertime. It's miserably hot and humid down here from about June to September. Also, school would be out.
yodsanklai 7y ago
It's very hard to have an informed opinion on the virus. Different actors have different incentives. Medias try to sell ads, politicians want to be elected (or not held responsible), institutions like WHO are political (I don't really trust them after seeing their treatment of Taiwan) and have their own agendd, even experts have their own biases and are selected by medias. And we are all deeply biased, and tend to look up exactly what we want to hear. After reading a lot of information, my bet is that the virus itself is in the same league as a bad seasonal flu (I heard that from at least two experts, and from my MD), and we'll suffer more from our bad handling of the situation, rather than from the virus itself. We should deal with this virus exactly how we deal with seasonal flu. Stay home and wear a surgical mask when we're sick, go to see our MD (wearing a mask) if we have mild symptoms, and go to hospital if we have severe symptoms. Generally, avoid close contacts, don't shake hands and so on. That being said, better be safe than sorry. I personally will work remotely and avoid public transportations for the following month until we have more information.
- gdubs 7y ago
  Just to be clear people, don’t just go to the doctor if you think you might have coronavirus — call first and seek their professional recommendation. They may want to come to you to do a swab, rather than have people randomly walking in and possibly infecting others.
  - yodsanklai 7y ago
    > if you think you might have coronavirus Actually, very few people have reasons to think they have the coronavirus now. Of course, if you come back from an infected area, you should be extra careful and follow standard procedures defined by your local government. Right now most people with flu symptoms simply have a cold or the flu, and not the wuhan virus. I've just listened to an interview of a French doctor and what is happening now is that hospitals are getting overwhelmed with regular people who want to be tested for the coronavirus. The coronavirus isn't that different from a regular flu virus in terms of care. Mostly, you just need to stay home waiting for it to pass (and of course avoid infecting others). Only people with severe symptoms should go to the hospital.
crystaldev 7y ago
Coronavirus has been circulating for months now. Many of us have already beaten it. That's why spread is linear and not gripping the world like it should be at this point: The "spread" is a measurement of panic and vigilant diagnosis. This is most carefully observed cold of all time. I was stocking up on dry goods and such like everybody else. After the past few days I feel like a panicked fool. Almost every single death report: "Had underlying health conditions."
- elicash 7y ago
  Vigilant diagnosis? Isn't the biggest issue for the U.S. right now that we're not able to test nearly enough people? As far as stocking up, my understanding was that the reason for picking up an extra couple items each time you go to the store was in case eventually certain areas are rec'd to work from home and such. Maybe that won't happen, but it's not like that stuff would go to waste.
  - crystaldev 7y ago
    We're testing people who would ordinarily not be tested already. That doesn't mean the diagnosis is wrong, or that COVID-19 isn't widespread.
    - elicash 7y ago
      I know it's widespread. The extent to which that's the case, unfortunately, we have no idea because there hasn't been enough testing. Not sure what you mean by "ordinarily" tested. This pandemic is quite a unique situation.
- bob33212 7y ago
  If the death rate was 10% across the board we would know how far it has spread. But this cold may have a 0.001% hospitalization or death rate for people in great health. There could already be 100,000 people infected in the states. We may be close to the point of saying "fuck it. False alarm this is just a cold. Carry on". Hard to know for sure though until a couple weeks go by
tomerico 7y ago
Looking at countries with wide community spread[1] the spread is very clearly tied to cold weather (Europe, Korea, and Iran). This pattern is similar to other air transmitted viruses such as the Flu. Warmer countries seem to be resilient despite some having higher density and lower hygiene standards (e.g. India). Given that the default assumption should be the COVID-19 will follow the flu pattern of diminishing rapidly in March up to barely any case in April [2]. This by no means try to diminish actions to be cautious, or the risk it imposes. However, if you are asked to put money on a certain direction, betting on warming up weather reducing the R value of the virus enough to stop it is what I would do. [1] https://www.worldometers.info/coronavirus/ https://www.worldometers.info/coronavirus/ (Sort by new cases) [2] https://www.cdc.gov/flu/weekly/index.htm https://www.cdc.gov/flu/weekly/index.htm
- rmolin88 7y ago
  Very true! But the second wave, when winter returns in October, hit even harder [0] See Deadly second wave section in the Spanish Flu [0]: https://en.m.wikipedia.org/wiki/Spanish_flu https://en.m.wikipedia.org/wiki/Spanish_flu
  - tomerico 7y ago
    This is obviously a possibility. The longer term is harder to predict.
  - creaghpatr 7y ago
    More time to prepare and possibly ship a vaccine for a second wave.
  - koheripbal 7y ago
    This time, though, we will see it in advance as it tears through the Southern Hemisphere.
- downerending 7y ago
  When I see a log plot bending up, my default assumption is stunning growth for a considerable period. https://www.worldometers.info/coronavirus/coronavirus-cases/#case-tot-outchina https://www.worldometers.info/coronavirus/coronavirus-cases/...
lbj 7y ago
Only thing interesting about this virus is 1) It fully stopped all the PR coverage of the Hong Kong protests, and 2) We learned how poorly we are prepared for a pandemic
- n4r9 7y ago
  Agreed. However, was with some Hongkongers a week ago and it seems very likely that the protests will start straight back up once the virus has died down.
- vsareto 7y ago
  >We learned how poorly we are prepared for a pandemic I've heard mixed things about China's reporting on it. It's more difficult to trust authoritarian regimes by default, but even good preparation can falter if there isn't honest information. Everything sort of followed China's information in the initial stages. Everyday citizen preparation could be affected by social media manipulation (political manipulation tactics repurposed), but democratic government agencies wouldn't likely trust those sources, although they have to make sure their voice is the authority for citizens and not social media. So can you effectively prepare for an outbreak when communication is deceptive/less effective/manipulated? I think it's very difficult.
  - lbj 7y ago
    If you rely on the information they publish? Then no
  - Leary 7y ago
    "So can you effectively prepare for an outbreak when communication is deceptive/less effective/manipulated? I think it's very difficult. " By getting enough testing kits ready so you are not in a situation where hundreds/thousands of possible infections have occurred in Washington state while you've only diagnosed ~100 people.
- gruez 7y ago
  >1) It fully stopped all the PR coverage of the Hong Kong protests Did they stop protesting? Going into protest (crowded spaces, close contact with others) seems like a bad idea during a pandemic.
rayshan 7y ago
Good insides on what companies can and cannot withstand a once-in-a-lifetime event. My look into the 2008 Great Recession was very helpful with my pattern matching. 98 out of 100 stocks lost money during that recession, but most of them did super well during the longest recovery period in U.S. history. Even AIG made people a bunch of money. Here's the full dataset of 1363 mid cap + stocks that traded during the 2008 recession, and their performances: https://shan.io/writing/learnings-from-the-2008-great-recession/ https://shan.io/writing/learnings-from-the-2008-great-recess...
- tomerico 7y ago
  That is super interesting. You should probably submit it as a separate submission!
  - rayshan 7y ago
    Thank you! I did a while back, will see if HN lets me do it again. Feel free to AMA!
thedudeabides5 7y ago
" 2) a population that follows orders" maybe
ptah 7y ago
> containing the economic damage requires coordinated monetary and fiscal policy targeted more at specific cases of debt/liquidity-constrained entities rather than more blanket cuts in rates and broad increases in liquidity. more bailouts? how about letting them take the consequences of their actions? they would have taken the upside so should accept the downside too instead of shifting it to taxpayers. how else will markets stay healthy if evolution is thwarted
ptah 7y ago
side note: all of the comments on linkedin are basically high fiving him. possibly as negative comments on linkedin could be career limiting
chippy 7y ago
so if the way to make money in a gold rush is to sell shovels, what should we do during a pandemic?
- mighty_plant 7y ago
  I guess invest in anything that "treats" social distancing like medication, video games, VR, collaboration technology, etc.

120 points by rubayeet 7y ago

> this is one of those once in 100 years catastrophic events that annihilates those who provide insurance against it and those who don’t take insurance to protect themselves against it because they treat it as the exposed bet that they can take because it virtually never happens. They said 2008 was a once in a lifetime event, too. So what’s the next black swan that will unsettle the market in 2032? The Big One finally hits California? Mount Rainier erupts? The Yellowstone Caldera? > The markets are being, and will continue to be, affected by these sorts of market players getting squeezed and forced to make market moves because of cash-flow issues rather than because of thoughtful fundamental analysis. So it sounds like we didn’t learn much from 2008. Will we learn from 2020?

js8 7y ago
> So it sounds like we didn’t learn much from 2008. Will we learn from 2020? I am busy, right now I am trying to learn that humans will never learn from history. I vaguely remember somebody mentioning that to me in the past, but I dismissed it as a nonsense. (But I am not really that pessimistic. Somebody mentioned that the Spanish flu was a big impulse for providing national health care services. I think it can have a similar effect, somewhere.)
- duaoebg 7y ago
  The cynic in me believes this was ensure there was a ready supply of healthy men for war fighting. Now that wars are mechanized and we have nuclear weapons this is less of an impetus. There might be a different effect here as preditary health care in the US is unpalatable in the best of times.
- pengaru 7y ago
  > right now I am trying to learn that humans will never learn from history. I vaguely remember somebody mentioning that to me in the past, but I dismissed it as a nonsense. Perhaps it was in reference to the famous Aldous Huxley quote: “That men do not learn very much from the lessons of history is the most important of all the lessons that history has to teach.”
- bcrosby95 7y ago
  They have learned: privatize gains, socialize losses. The government is so fearful of meaningful corrections they will do whatever is necessary to make the people at the top whole instead of letting them suffer catastrophic losses. So party on. There are ways to go about this and wipe out investors without causing complete economic collapse (e.g. nationalization and orderly dismantling) but "we've" already decided not to go that route.
- airstrike 7y ago
  I think the analogous effect this time is to revisit the healthcare supply chain
- QuantumGood 7y ago
  Propagandists and similar types learn the lessons of history excellently. They work to prevent others from learning anything, but their work is not hard: People not only adopt the characteristic customs and conventions of whatever communit(ies) they identify with, they actively seek groups to identify with.
QuantumGood 7y ago
Argument by "they said" should really only be used when it is the same "they" speaking now and then. Otherwise, especially when no reference is given, the "they" can be no one, a general sense the writer remembers, a low-quality they (talking points for manipulation purposes), etc.
- Apocryphon 7y ago
  Funnily enough, I asked about this two years ago: https://news.ycombinator.com/item?id=16315334 https://news.ycombinator.com/item?id=16315334
  - QuantumGood 7y ago
    Mainly, "they" are of no significance, no matter what "they" say. The information is what matters, not the "they". If information cannot be extracted from their statements (source references / description of logical statement / premise / etc) , there is no data to analyze.
katmannthree 7y ago
I think this is a terrific example of normalcy bias, a "tendency for people to believe that things will always function the way they normally have functioned and therefore to underestimate both the likelihood of a disaster and its possible effects"[0]. China has provided roughly a month's advance warning on how this virus plays out in terms of infectivity and severity (~20% of cases are serious / require medical attention, ~5% are critical, and ~2% are fatal). People prefer to believe that media coverage of the effects in China are fearmongering or even a political "hoax"[1], that it will peter out with warmer weather (it's spread quite quickly in Singapore which is hot and humid at the moment), and that because it's possible to misuse masks and because they don't provide complete protection by themselves they're useless and should be left for healthcare workers[2]. The kind of critical thinking that helps you prepare for things like this seems to be in short supply. Last week people thought I was silly for stocking up on dried goods and essentials, this week every store around me is sold out of hand sanitizer, clorox wipes, and isopropanol. [0]: Wikipedia, right now [1]: The US president, at a rally a couple of days ago [2]: The US surgeon general's twitter page, a couple of days ago
- airstrike 7y ago
  Trump did not call COVID-19 a hoax. https://www.snopes.com/fact-check/trump-coronavirus-rally-remark/ https://www.snopes.com/fact-check/trump-coronavirus-rally-re...
  - katmannthree 7y ago
    Did you read the article you linked? He inferred that the media coverage is fearmongering and an attempt to hurt him. He specifically used the word hoax. He didn't call the virus a hoax, he called the coverage and criticism of the US's handling and response to the outbreak a hoax. From the page you linked: "During a Feb. 28, 2020, campaign rally in South Carolina, President Donald Trump likened the Democrats' criticism of his administration's response to the new coronavirus outbreak to their efforts to impeach him, saying "this is their new hoax." During the speech he also seemed to downplay the severity of the outbreak, comparing it to the common flu." A transcript of his exact words at the rally: "Now the Democrats are politicizing the coronavirus. You know that, right? Coronavirus. They’re politicizing it. We did one of the great jobs. You say, ‘How’s President Trump doing?’ They go, ‘Oh, not good, not good.’ They have no clue. They don’t have any clue. They can’t even count their votes in Iowa, they can’t even count. No they can’t. They can’t count their votes. One of my people came up to me and said, ‘Mr. President, they tried to beat you on Russia, Russia, Russia. That didn’t work out too well. They couldn’t do it. They tried the impeachment hoax. That was on a perfect conversation. They tried anything, they tried it over and over, they’ve been doing it since you got in. It’s all turning, they lost, it’s all turning. Think of it. Think of it. And this is their new hoax."
justinzollars 7y ago
> So it sounds like we didn’t learn much from 2008. Will we learn from 2020? We learned a lot from 2008. This is a different ball game. There is plenty of credit today. This is a supply shock. There are not applicable lessons from a credit crunch to a panic/virus induced supply shortage.
- Apocryphon 7y ago
  Aren’t there at least applicable lessons for dealing with an economic crisis regardless of the direct causes? Or preventative measures to take during a boom time? Because it sounds like once again irrational exuberance has caught up with us and we’re about to reap the whirlwind of lack of protection.
  - filoleg 7y ago
    There are none, because “economic crisis” is too large of a category to have a one-size-fits-all universal solution for dealing with it. Every type of “economic crisis” has its own cure, like a virus in a way. And the kind birthed by 2008 is as far as possible from what we are dealing with right now.
  - justinzollars 7y ago
    I think this is different than irrational exuberance. Maybe one could look to the 1970's oil embargo for clues on how this will play out. I really do not know. But I do know 2008 is not a good comparison because the circumstances are just so different.
- throwaway88483 7y ago
  It’s possibly about to be a demand shortage soon as well.
tunesmith 7y ago
He used to say that 2008 was the end of the big long term debt cycle. Now he's saying it hasn't happened yet.
czbond 7y ago
We will not learn from this. The Fed knows they HAVE to keep the market going for 3 reasons: 1) big institutions pressure them to 2) They must keep pensions from tanking, or we have severe issues with retirement rate 3) Most importantly, it is easier to print money forever than to actually create jobs and real growth Edit: on #2, it is 'cheaper' to print money to prop pensions up than to have millions of retirees eating dog food
mynegation 7y ago
I work in finance. We learned a ton from 2008. The amount of new regulation and oversight that came as a result is insane. We will learn from 2020 too.
- eachro 7y ago
  Does the added regulation, oversight help prevent the problems that led to the 08 crisis? Also curious to know what/how these learnings manifest themselves outside of goverment imposed regulations.
  - mynegation 7y ago
    Yes, that is kind of a point. Outside of regulation the learnings manifest themselves in models that better capture tail, correlation, and liquidity risks.
- TacoToni 7y ago
  I'm in finance as well. The regulation is overwhelming. i always feel like i'm working on something for external auditors instead of driving value and savings for the company. It is tiresome.

gist 7y ago

> The fact of the matter is that history has shown that even big death tolls have been much bigger emotional affairs than sustained economic and market affairs. My look into the Spanish flu case, which I’m treating as our worst-case scenario, conveys this view; so do the other cases. The world was a vastly different place when the Spanish Flu happened. Think of all the things we have today that we depend on to operate flawlessly that didn't exist back in 1918. I guess the comparison I would make might be an airplane that is largely analog and manual back then vs. now stuffed with electronics. Take away those electronics and it can't fly manually. So much of our life depends on people to keep the electronics working that any impact to those and their functions (say the electric grid) would cause an immense amount of interconnected havoc.

MikeHolman 7y ago
Also, I don't know all the market pressures of 1918, but it seems reasonable that the market was helped by the US winning the biggest war in the history of the world.
ptah 7y ago
good point, everything is too optimised and there's no slack anymore

djohnston 7y ago

I am interested in seeing how much more effective China's current system will be at addressing the outbreak vs highly developed western democracies. If there's one thing a technologically advanced dictatorship like the CCP should excel at, it's this.

fierarul 7y ago
Based on the data the ongoing cases have been decreasing for the past two weeks: http://covid.410go.net http://covid.410go.net In another two weeks they might have less cases than other regions!
eloisius 7y ago
> will be Sounds like you have your conclusion without needing to wait for the results.
pengaru 7y ago
Making such a comparison is non-trivial; does any highly developed western democracy share China's population size and density? I'm more curious about how this will affect India, where the population situation is more similar to China's. I haven't seen any mention of the virus there in the news, yet.
- Apocryphon 7y ago
  Supposedly the climate may impede the virus’ ability to spread. https://www.click2houston.com/weather/2020/02/26/will-houstons-hot-and-humid-weather-protect-against-coronavirus/ https://www.click2houston.com/weather/2020/02/26/will-housto...
  - jcadam 7y ago
    Part of the reason I had been hoping this virus wouldn't hit Florida (where I live) until summertime. It's miserably hot and humid down here from about June to September. Also, school would be out.

yodsanklai 7y ago

It's very hard to have an informed opinion on the virus. Different actors have different incentives. Medias try to sell ads, politicians want to be elected (or not held responsible), institutions like WHO are political (I don't really trust them after seeing their treatment of Taiwan) and have their own agendd, even experts have their own biases and are selected by medias. And we are all deeply biased, and tend to look up exactly what we want to hear. After reading a lot of information, my bet is that the virus itself is in the same league as a bad seasonal flu (I heard that from at least two experts, and from my MD), and we'll suffer more from our bad handling of the situation, rather than from the virus itself. We should deal with this virus exactly how we deal with seasonal flu. Stay home and wear a surgical mask when we're sick, go to see our MD (wearing a mask) if we have mild symptoms, and go to hospital if we have severe symptoms. Generally, avoid close contacts, don't shake hands and so on. That being said, better be safe than sorry. I personally will work remotely and avoid public transportations for the following month until we have more information.

gdubs 7y ago
Just to be clear people, don’t just go to the doctor if you think you might have coronavirus — call first and seek their professional recommendation. They may want to come to you to do a swab, rather than have people randomly walking in and possibly infecting others.
- yodsanklai 7y ago
  > if you think you might have coronavirus Actually, very few people have reasons to think they have the coronavirus now. Of course, if you come back from an infected area, you should be extra careful and follow standard procedures defined by your local government. Right now most people with flu symptoms simply have a cold or the flu, and not the wuhan virus. I've just listened to an interview of a French doctor and what is happening now is that hospitals are getting overwhelmed with regular people who want to be tested for the coronavirus. The coronavirus isn't that different from a regular flu virus in terms of care. Mostly, you just need to stay home waiting for it to pass (and of course avoid infecting others). Only people with severe symptoms should go to the hospital.

crystaldev 7y ago

Coronavirus has been circulating for months now. Many of us have already beaten it. That's why spread is linear and not gripping the world like it should be at this point: The "spread" is a measurement of panic and vigilant diagnosis. This is most carefully observed cold of all time. I was stocking up on dry goods and such like everybody else. After the past few days I feel like a panicked fool. Almost every single death report: "Had underlying health conditions."

elicash 7y ago
Vigilant diagnosis? Isn't the biggest issue for the U.S. right now that we're not able to test nearly enough people? As far as stocking up, my understanding was that the reason for picking up an extra couple items each time you go to the store was in case eventually certain areas are rec'd to work from home and such. Maybe that won't happen, but it's not like that stuff would go to waste.
- crystaldev 7y ago
  We're testing people who would ordinarily not be tested already. That doesn't mean the diagnosis is wrong, or that COVID-19 isn't widespread.
  - elicash 7y ago
    I know it's widespread. The extent to which that's the case, unfortunately, we have no idea because there hasn't been enough testing. Not sure what you mean by "ordinarily" tested. This pandemic is quite a unique situation.
bob33212 7y ago
If the death rate was 10% across the board we would know how far it has spread. But this cold may have a 0.001% hospitalization or death rate for people in great health. There could already be 100,000 people infected in the states. We may be close to the point of saying "fuck it. False alarm this is just a cold. Carry on". Hard to know for sure though until a couple weeks go by

tomerico 7y ago

Looking at countries with wide community spread[1] the spread is very clearly tied to cold weather (Europe, Korea, and Iran). This pattern is similar to other air transmitted viruses such as the Flu. Warmer countries seem to be resilient despite some having higher density and lower hygiene standards (e.g. India). Given that the default assumption should be the COVID-19 will follow the flu pattern of diminishing rapidly in March up to barely any case in April [2]. This by no means try to diminish actions to be cautious, or the risk it imposes. However, if you are asked to put money on a certain direction, betting on warming up weather reducing the R value of the virus enough to stop it is what I would do. [1] https://www.worldometers.info/coronavirus/ https://www.worldometers.info/coronavirus/ (Sort by new cases) [2] https://www.cdc.gov/flu/weekly/index.htm https://www.cdc.gov/flu/weekly/index.htm

rmolin88 7y ago
Very true! But the second wave, when winter returns in October, hit even harder [0] See Deadly second wave section in the Spanish Flu [0]: https://en.m.wikipedia.org/wiki/Spanish_flu https://en.m.wikipedia.org/wiki/Spanish_flu
- tomerico 7y ago
  This is obviously a possibility. The longer term is harder to predict.
- creaghpatr 7y ago
  More time to prepare and possibly ship a vaccine for a second wave.
- koheripbal 7y ago
  This time, though, we will see it in advance as it tears through the Southern Hemisphere.
downerending 7y ago
When I see a log plot bending up, my default assumption is stunning growth for a considerable period. https://www.worldometers.info/coronavirus/coronavirus-cases/#case-tot-outchina https://www.worldometers.info/coronavirus/coronavirus-cases/...

lbj 7y ago

Only thing interesting about this virus is 1) It fully stopped all the PR coverage of the Hong Kong protests, and 2) We learned how poorly we are prepared for a pandemic

n4r9 7y ago
Agreed. However, was with some Hongkongers a week ago and it seems very likely that the protests will start straight back up once the virus has died down.
vsareto 7y ago
>We learned how poorly we are prepared for a pandemic I've heard mixed things about China's reporting on it. It's more difficult to trust authoritarian regimes by default, but even good preparation can falter if there isn't honest information. Everything sort of followed China's information in the initial stages. Everyday citizen preparation could be affected by social media manipulation (political manipulation tactics repurposed), but democratic government agencies wouldn't likely trust those sources, although they have to make sure their voice is the authority for citizens and not social media. So can you effectively prepare for an outbreak when communication is deceptive/less effective/manipulated? I think it's very difficult.
- lbj 7y ago
  If you rely on the information they publish? Then no
- Leary 7y ago
  "So can you effectively prepare for an outbreak when communication is deceptive/less effective/manipulated? I think it's very difficult. " By getting enough testing kits ready so you are not in a situation where hundreds/thousands of possible infections have occurred in Washington state while you've only diagnosed ~100 people.
gruez 7y ago
>1) It fully stopped all the PR coverage of the Hong Kong protests Did they stop protesting? Going into protest (crowded spaces, close contact with others) seems like a bad idea during a pandemic.

rayshan 7y ago

Good insides on what companies can and cannot withstand a once-in-a-lifetime event. My look into the 2008 Great Recession was very helpful with my pattern matching. 98 out of 100 stocks lost money during that recession, but most of them did super well during the longest recovery period in U.S. history. Even AIG made people a bunch of money. Here's the full dataset of 1363 mid cap + stocks that traded during the 2008 recession, and their performances: https://shan.io/writing/learnings-from-the-2008-great-recession/ https://shan.io/writing/learnings-from-the-2008-great-recess...

tomerico 7y ago
That is super interesting. You should probably submit it as a separate submission!
- rayshan 7y ago
  Thank you! I did a while back, will see if HN lets me do it again. Feel free to AMA!

thedudeabides5 7y ago

" 2) a population that follows orders" maybe

ptah 7y ago

> containing the economic damage requires coordinated monetary and fiscal policy targeted more at specific cases of debt/liquidity-constrained entities rather than more blanket cuts in rates and broad increases in liquidity. more bailouts? how about letting them take the consequences of their actions? they would have taken the upside so should accept the downside too instead of shifting it to taxpayers. how else will markets stay healthy if evolution is thwarted

ptah 7y ago

side note: all of the comments on linkedin are basically high fiving him. possibly as negative comments on linkedin could be career limiting

chippy 7y ago

so if the way to make money in a gold rush is to sell shovels, what should we do during a pandemic?

mighty_plant 7y ago
I guess invest in anything that "treats" social distancing like medication, video games, VR, collaboration technology, etc.