Things Couldn’t Be Better

When asked why Guggenheim frequently comes up with out-of-consensus and sometimes seemingly crazy views, I remind people that our process is driven by data and not opinion which can be affected by emotion or pressures to conform to opinions of others. The consensus is often a warm and fuzzy place where others join, providing the comfort associated with agreement and a sense of community and safety. And if the consensus is wrong at least you have company with whom to lament and console. Nevertheless, none of this pays the bills.

Having opinions outside of the consensus can be a lonely and isolated place without comfort from others while exposing oneself to harsh criticism and moments of self-doubt. No one can ever be right 100 percent of the time, and there is always some probability that you can misinterpret the data.

Having just come through the worst pandemic in more than a century, I hesitate to focus on it again. But at the risk of sounding like Chicken Little (as I did in my commentaries from February and March 2020), the evolving data on the Delta variant are extremely disturbing, and dare I add similar to the data we saw last year.

Many of us are unfamiliar with the concept of the Basic Reproduction Number, or R0 (pronounced R naught) as referred to by epidemiologists. R0 is the expression of disease transmissibility that measures how many people will be infected as a result of another infected person’s human interaction. If R0 of an infectious disease is less than 1, the disease will eventually peter out, but if R0 is greater than 1 it will spread.

The R0 for the initial strain of the Coronavirus back in early 2020 was somewhere between two and three, meaning that if someone were exposed to the virus, they would, on average, infect two to three more people. Given that the incubation period for COVID once a person is exposed is about two weeks, multiplying the number of current cases by R0 projects the number of new cases to be expected at the end of the gestation period. For instance, if there were 50,000 new cases of the initial strain of COVID in a population that had never been inoculated, in two weeks one would expect 100,000 to 150,000 new cases. This is exactly the transmission pattern that the pandemic followed last year.