“Davidson” submits:
Any significant threat to society’s structure as we know it always has been met with high levels of fear, pessimism and market corrections. The COVID-19 has been this type of threat heavily promoted by the media with considerable out-of-context claims that this virus was 10x a greater threat than the flu. The data never supported such claims but news was obsessed with reports skewed to publish specific cases, the lack of government response or lack of cures. The media had everyone believing that they were exposed to potential death at any moment without warning. COVID-19 was the “Boogeyman” no one could out run or out smart. We certainly have had many movies setting the stage for this paranoia of ‘walking-dead’ which even though they are mindless virus victims, they are able to track down the uninfected no matter the precautions taken at self-protection. Such has been the past couple of months globally.
Early on, China’s lack of transparency and self-serving behavior made all afraid that COVID-19 was much worse than they revealed. The better data from So Korea and other early infection sites indicated COVID-19 had not the 80% infection rate often repeated in the media but something closer to well under 1%. Worldwide the data as of this morning’s tally, April 16, 2020, shows global infection rate at less than 0.03%, not the 80% used by all the experts. This is an infection rate roughly 2,700x less than expert forecast and in line with the earliest data outside China’s less than transparent regime. The mortality for those infected globally has been 6.7%. The US which has tested more than 2million individuals to date has a higher infection rate of ~0.2% with mortality of ~5% of cases. Compare the US experience with that of Sweden, heavily criticized by the media for not shutting down its economy. Sweden’s infection rate was 0.12% with mortality rate of 10.5% for those infected. Do the math! With a lower infection rate/ higher mortality rate Sweden had the same outcome as the US or other countries which shutdown economic activity. This shutdown was a panic attack to information clearly misinterpreted. Sweden got it right at the beginning.
From the Google COVID-19 World Map: https://www.google.com/covid19-map/
COVID-19 deaths in the US are similar to seasonal influenza outcomes. Deaths of ~35,000 in the US are similar to annual flu. Much of the media seeking stories to force higher viewership had access to this data and routinely took it out of context. While the flu typically infects 30% of the population with a mortality rate of those infected of 0.01%, it is something we live with. While COIVID-19 mortality is significantly higher than the flu, its infection rate was 2,700x less. The outcome is no worse than flu. Economic activity is never shutdown for flu and the data never justified the current shutdown for COVID-19.
We will go back to work shortly. The US economy will recover as it has every time a severe contraction occurred. This time the recovery may be much faster because this contraction was imposed by false perceptions. Prior contractions come from excess financial speculation which requires time to resolve. The speed we get back to work will be the speed the economy and investment markets recover from the self-imposed halt. This was a self-imposed economic correction not one forced upon us by our own exuberance and market excesses. This time perceptions can be changed quickly by simply widely distributing the data established thus far and placing it in the correct context.
The recommendation continues to be buy equities. This was a bout of bad market perception. The economic normalization can occur quickly.
