The Impact of Coronavirus: People, Economy and Your Portfolio

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I cannot tell you how much displeasure I have experienced from what I am about to say. I’ll be throwing around statistics of people dying as if I am talking not about people but widgets. My six-year-old daughter Mia Sarah had a garden-variety virus a few weeks ago. When my wife told me about her – a few minutes after I had been reading about coronavirus – for a second my heart sank, as virus to me meant coronavirus.

Even if Mia Sarah had coronavirus, the chances of survival were greatly in her favor. (Coronavirus, like the flu, is exponentially deadlier to older folks than younger ones). However, when it comes to your loved ones, statistics lose their meaning, and you start magnifying tiny probabilities into high-probability outcomes. The coronavirus statistics represent people’s loved ones, but I don’t know how else to write what I am about to write.

I am going to divide this letter into three sections: health and human impact (sometimes a tragic one), economic impact and investment strategy.

Human tragedy

Let’s focus on the human factor of the virus. I’ll write about the U.S., but a similar analysis can be applied to Europe. Normal seasonal flu kills ten to sixty thousand people a year in the U.S., or about 0.05%–0.1% of those infected. The coronavirus kill rate is estimated to be about 1% to 3%, or 20 to 60 times greater than seasonal flu. As of this writing, about 86,000 people are reportedly infected and 3,000 have died from coronavirus. Most infections and deaths have occurred in China, with South Korea a distant second with 3,526 infections and 17 deaths. Italy is third, with 1,049 cases and 29 deaths.

The U.S. has fewer than 100 confirmed cases, but because people can harbor the virus for weeks without displaying symptoms, and because U.S. testing has been inadequate, there is a substantial risk that the virus is already spreading widely in our country.