Last Updated March 7, 2020
Disclaimers/Caveats: I am not a public health expert, epidemiologists, etc. and make no claim to such. As mentioned numerous times throughout, all data is preliminary and my interpretation is amateur and should be interpreted as such. My goal here is merely to provide a helpful synthesis of existing information and a way to think about further developments. There is a google doc version of this post which I will attempt to keep updated with new information as the situation develops.
If there are any factual inaccuracies or misrepresentations, please comment in the doc (with a link to a reliable source) and I will try to keep this updated if it proves useful. For timely analysis, there are also resources with daily updates at the end of the post.
The Coronavirus outbreak (the disease is officially named COVID-19 and the virus SARS-CoV-2) is catching many people unprepared.
I have been trying to find good information around the Coronavirus to send around to friends and family.
I have found it hard to find such information that presents everything in a way that I can pass along to friends and family.
To that end, I wanted to put something together which did a few things:
- Summarized what we know so far.
- Talk about why I think it’s important for individuals to prepare and how to think about it in a way that reduces the chance of a bad outcome for you or others.
- Suggest some reasonable actions steps personally, professionally and financially.
I am coming at this primarily from the angle that even if there is only a small chance of a very bad outcome, it makes sense to be prepared and take preventative action.
It’s entirely rational to conclude both that:
- This is very likely to be mild (e.g. no worse than the flu) and the current reaction is overblown.
- One should take relatively aggressive and early precautions in the case it is more severe.
The severity of a virus is, in part, a function of how people react. If everyone reacts relatively quickly and effectively, it will likely end much better. It is to that end, that I’ve put this together.
What is the Coronavirus?
According to the World Health Organization, coronaviruses are a large family of viruses that may cause illness in animals or humans. In humans, several coronaviruses are known to cause respiratory infections ranging from the common cold to more severe diseases such as Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS). The most recently discovered coronavirus causes coronavirus disease (COVID-19). 1
It is primarily transmitted by aerosolized droplets (e.g. the droplets you release when you cough or sneeze. These droplets can travel over 6 feet if you don’t cover your mouth and nose effectively – cover with your elbow!), much like the flu or a cold. It may also be transmitted via fecal matter (even very small/invisible amounts). The virus can survive for some amount of time outside the human body, although the specific parameters are not yet known, so transmission can occur by touching a surface contaminated with the virus and then touching your eyes, nose, or mouth.
The virus primarily affects the lungs, “People become unable to breathe properly,” explains Dr. Otto Yang, an infectious disease expert at UCLA.
Even worse, the body’s efforts to fight the virus can cause inflammation in the lungs — making breathing even more difficult.
Blood vessels damaged in the war between the virus and immune system may begin leaking fluid into lung tissues, which can be visible as white spots on chest X-rays.
The fluid may drown some of the lung’s tiny air sacs, preventing them from delivering oxygen to the blood and removing carbon dioxide. It is this kind of inflammation and destruction that is called pneumonia.2
What is happening?
In December 2019, cases of COVID-19 emerged in Wuhan, a major city of over 10 million residents in the Hubei region of China. Although information on this disease was initially suppressed by the Chinese government, the World Health Organization (WHO) was contacted on December 31, 2019 and a new virus was identified on January 7th.
The first non-China cases were identified on January 13 in Thailand and January 16 in Japan. On January 23rd Wuhan was placed on lockdown by the Chinese Government.
The virus is a coronavirus, which is a family of viruses that cause SARS and MERS, but also is endemic in people. Humans have at least four coronaviruses already that cause 10-30% of all seasonal colds.
As of Friday, March 6, over 90,000 people are infected with the new COVID-19 virus and 2700 are dead (primarily in China). Some epidemiologists believe these numbers from China are underreported by up to an order of magnitude, and it may be closer to 800,000 people infected in China alone.
Following China, we’ve seen significant outbreaks in Korea, Italy (locked down 50,000 people in 12 small towns), Japan (Prime Minister asked people to work from home, and 38,000-person Tokyo marathon cancelled), and Iran (deputy health minister infected and cases spread across middle east).
It is likely other countries will follow.
What should we expect?
Most epidemiologists believe the virus has broken out and will spread around the world. Many think >20% or more of humanity will be infected due to a lack of baseline immunity.
Marc Lipsitch, an epidemiologist at Harvard University, initially predicted that between 40 to 70 percent of adults in the world will become infected with the coronavirus. On March 3, he revised that estimate to 20-60% based on a falling R0. In either case, this is a significant portion of the population.
The most common symptoms of the virus are:
- Fever – 98%
- Dyspnea / Hypoxia (trouble breathing, low oxygen) – 55%
- Dry Cough – 76%
- Muscle pain/fatigue – 44%
Based on the data it looks like it takes 7 days before critical cases (20-25% of diagnosed cases) need to be hospitalized.
- 8 days to get shortness of breath
- 9 days for Acute Respiratory Distress Syndrome
- 11 Days for ICU Admission
Data on the virus below is very preliminary and any highly specific estimates should be viewed skeptically. Please keep this in mind.
Most cases are mild and many people don’t even notice they have it
Most estimates suggest 80% of COVID-19 cases are mild and feel roughly like a flu. Here’s an Australian couple in their 20’s talking about what it was like to have COVID-19.
Feb 28 estimates from China suggest that roughly 10-15% of cases will be more significant and may necessitate hospital visits (see also) with 1-3% potentially needing an ICU.
The concern of many governments is the peak number of cases that occur in a given moment. For example, if a thousand sick people show up overnight to a hospital, that hospital would be overwhelmed.
As an example, New York City has 24,000 hospital beds, most of which are already occupied. Estimates on the number of free beds range from 1,200 to 4,000 free beds. If tens of thousands of people needed care at the same time, the health care system would be overwhelmed and unable to help.
According to the WHO report, the Case Fatality Rate (AKA death rate) in Wuhan was 5.8% versus the rest of China at 0.7% because they were overwhelmed. This was likely a result of overwhelmed health care facilities in addition to healthcare workers themselves getting sick.
Death rate
The reported death rate for people that contract COVID-19 is around 3% according to WHO but may in reality be as low as between 0.2% depending on country, healthcare system, and the still unclear character of the virus. As mentioned above, if all the cases happen at once, those in need will not be able to get sufficient medical care.
The current existing fatality rate is biased upwards by Wuhan cases dominating the mix (which had the much higher 5.8% death rate and make up many of the reported cases as of the end of February).
The death rate also varies dramatically by age. The elderly and people with preexisting conditions appear especially susceptible to disease and severity or death. It is possible the elderly are susceptible largely because they are more likely to have pre-existing conditions. In contrast, very few cases have been reported in young children.
As of the end of February, data suggested that the mortality rate for those under 40 is only 0.2% while it is 8% for those 70-79 and 14.8% for 80+.
Given the mild nature for most younger people, if you are young and have even the slightest concern you might be sick, it is probably wise to avoid visiting parents/grandparents or anyone else in your life that is older and potentially more susceptible.
Technology analyst Ben Thompson, who lives in Taiwan, has suggested that based on the behavior of Chinese officials (as opposed to the reported data), it seems likely that the number of cases was dramatically larger in China than was ever reported, both because the data is generally unreliable, and also because it seems likely that most people with mild cases were never tested (much less those without symptoms). The drastic quarantine efforts undertaken in Wuhan fit this hypothesis.
Secondly, he points out that it seems likely the fatality rate is lower than what was reported in China.
Consider the failed quarantine of the Diamond Princess cruise ship, which allowed for a controlled sample. According to the March 3 numbers from Japan, of the 3,711 passengers and crew members on board, 705 were infected; of the 705 infected, 392 were asymptomatic; six have died. That is an infection rate of 19.0% (10.6% with symptoms), a fatality rate of 0.8%, and a mortality rate of 0.2% (fatality rate is what percentage of the people who are infected die; the mortality rate is what percentage of the overall population die).
These numbers — both the number of infected and especially the numbers of deaths — are likely to rise over the next few weeks, and of course, anyone capable of going on a cruise is in better health than the elderly and those with underlying health problems that appear to be at greatest risk; still, the fatality rate appears much lower than in China while the virality appears greater.
This is mirrored in South Korea, which is experiencing the largest outbreak outside of China. The South Korean numbers, thanks to the country’s excellent infrastructure, health care, and free press, are likely to be amongst the most reliable in the world. There the fatality rate is 0.68%, even lower than the Diamond Princess. Again, these fatality numbers are going to get worse, as it takes multiple weeks for COVID-19 to become fatal.
They will also be worse in populations that skew older or areas where aggressive prevention is not used and hospitals become overwhelmed (more on that below).
R0 value
R0 (pronounced R-naught), which is an estimate of how contagious a disease is based on how many unvaccinated people a single host/person can infect. The estimates for COVID-10 seem to be between 1.5 and 3 right now.
This means for every person infected at least 1.5 to 3 more get the disease.
For comparison, seasonal flu has an R0 of 1.28, H1N1 influenza is at 1.4-1.6, the 1918 influenza pandemic was around 1.8.
An R0 greater than 1 doesn’t mean that a major epidemic is inevitable, or that the virus will spread uncontrolled. R0 is also a function of many other factors than just the disease. For example, if schools shut down, it would likely decrease R0.
Any static measure of R0 is likely to be inaccurate: cultural practices, population density and how quickly authorities educate people and enact appropriate measures will change R0. If schools close and mass gatherings are cancelled, R0 is likely to decrease. If they continue, it is likely to stay the same or increase.
For individuals, practicing social distancing, washing your hands frequently, and avoiding large gatherings may all help reduce R0.
Here’s a helpful chart from the New York Times showing current estimates for both death rate and R0.
If it is true that the number of cases in China was significantly underreported, it may be that SARS-CoV-2 (the virus) has a higher R0 than first thought, while COVID-19 (the disease caused by the virus) is less fatal than first thought.
If true, this has good and bad aspects. On the negative side, it suggests an outbreak in the rest of the world, including the United States, is very likely impossible to stop at this point.
The (more) positive news is that if the fatality rate is lower then economies probably won’t shut down in response to outbreaks; which will relieve another type of suffering for those individuals who can’t afford to take time off work or who depend on the global network of supply chains (e.g. those taking prescription medications manufactured in affected countries like China).
Incubation period
The incubation period (time from infection to symptoms) appears to be under 14 days and likely 5 to 7 days for the majority of people, though there are some reports of it potentially being as high as 27 days. People appear to be infectious rapidly after infection, potentially as soon as 12-24 hours. Many experience only mild conditions early, which increases the spread rate of the disease as people go to work or otherwise continue with life unchanged not knowing they are sick.
I want to close this section by re-emphasizing how preliminary all this data seems to be. A further potential complication may be that there could be more than one strain of COVID-19, each with significantly different R0 and death rates so the general population R0 would be mostly useless, a problem in statistics known as Simpson’s Paradox.
What to Expect and Why It Matters
Small Probabilities of Really Bad Things Are Still Worth Mitigating.
To be clear, I do not have any particularly relevant credentials to evaluate Covid-19, but I do know that:
- The consequence of being wrong is very bad (death, serious illness, increased fatality rates in the elderly or already sick).
- The cost of insuring against the risk is, in comparison, reasonable. (Wash your hands, stop touching your face, social distancing, buy a couple of extra weeks of food and water to keep at home if you need to self-quarantine, work from home if possible, stop going to large gatherings, etc. More about this at the end).
Even at very low probabilities, it makes sense to be prepared. It’s entirely rational to conclude both that:
- This is 95% likely to be mild (e.g. no worse than the flu).
- One should take relatively aggressive and early precautions.
Again, I have no idea how this will play out. But, I do think there are legitimate reasons to be cautious even if the most likely outcome is that the effects are mild.
The expected value of an unlikely but impactful thing is still very high. Most people’s homes never burn down, but it is still smart to buy home insurance.
For most people that own their own home, it represents a substantial part of their net worth and so capping the downside with insurance is a prudent thing to do which increases their long term wealth.
Health is a more precious asset and so the same logic applies here.
If you are “paranoid,” you can be wrong 1000 times & you will survive.
If you are not paranoid; wrong once, and you, your genes, & the rest of your group are done.
This, of course, means that being concerned in any one scenario where there is a small change of unlikely outcome, is likely to be an “overreaction.”
Even if we concede that point, it doesn’t change the overall calculus. If we accept that there is a very small chance of a very bad outcome, it is still prudent to react aggressively and early.
How the Cases are Distributed over Time Matters (A Lot)
An important point that isn’t recognized is that the death rate is likely to increase when one of two conditions is true:
- The population affected is older (especially 70+) or has other health complications.
- There are not sufficient hospital beds and health care resources.
There is not much we can do to change people’s age or long-term health complications, though those individuals should be extra cautious.
In the WHO report on China, the Case Fatality Rate (AKA death rate) in Wuhan was 5.8% versus the rest of China at 0.7% because the hopsitals were overwhelmed.
There are not sufficient hospital beds in the USA for a Wuhan sized outbreak. The USA has lower hospital capacity (2.9 beds/1,000 people) than China (4.2), Australia (3.8), Italy (3.4), Japan (13.4), & Korea (11.5). Reports indicate COVID-19 epidemic filled the hospitals in Wuhan and Milan regions and some parts of Korea.
As a specific example, there are 24,000 hospital beds in NYC, of which between 1,400 and 4,000 are empty. Early data suggests hospitalization rates as high as 15-20% and ICU rates as high as 5%.
If just 50,000 people in New York got the virus and 10% required hospitalization, hospitals will already be overwhelmed.
As of March 1, some hospitals in Northern Italy are already out of beds and they are attempting to rehire retired doctors and nurses.
A study in Shenzhen China suggests that the median time to recovery is 32 days which would mean individuals would need to be hospitalized for many days, making it even more important to slow the spread.
By reducing the number of people that have the disease at any one time, we can distribute those cases out over time. As was seen in Wuhan versus the rest of China, this could significantly improve health outcomes.
Early and Aggressive Prevention Helps
We have data that there are effective preventative steps.
A 2007 study in the Journal of American Medicine examined the impact of school closures and other Nonpharmaceutical Interventions, in the 1918 influenza pandemic.
The sooner action was taken (such as school closures), the lower the number of deaths. Saint Louis closed its doors before the epidemic broke out and kept them closed for longer than Pittsburgh.
The result was that the cases were more spread out over time in St. Louis and the total excess death rate was significantly lower.
This is an example of how different behavior can change the R0 and rate of spread.
The response to the 1918 Spanish Flu was made worse in many parts of the United States by slow action.
The Sedition Act passed during The First World War, made it punishable by prison to “spread pessimistic stories”.
Public health officials, determined to keep morale up, began to lie. Philadelphia had scheduled a big Liberty Loan parade for September 28. Some doctors convinced reporters to write stories about the danger. But editors refused to run them and refused to print letters from doctors. The largest parade in Philadelphia’s history proceeded on schedule.
At its worst, the epidemic in Philadelphia would kill 759 people a single day. Priests drove horse-drawn carts down city streets, calling upon residents to bring out their dead. More than 12,000 Philadelphians died in six weeks.
The early action taken by St. Louis saved thousands of lives. Countries and cities today face a similar choice.
The current data seems to suggest that returns to properly done containment can be high. China and South Korea both enacted containment measures relatively early and aggressively and death there seems to be slowing.
Based on this model, early action and large amounts of testing are likely to limit deaths to the very low tens of thousands, indeed no worse than the regular flu.
However, no serious containment could lead to high hundreds of thousands of deaths, an outcome on par with the Spanish Flu and ten or twenty times worse than the best-case scenario.
This disparity seems enormous and indeed it is. Human intuition is bad at understanding exponential spread and so we underestimate the long-term potential of contagions.
If there are 13,000 Covid-19 cases outside China, it doesn’t seem so bad. If this number doubles every 3 days, it still doesn’t seem so bad. But, at that rate, we’ll have 1.7 million cases in 3 weeks, and that seems pretty bad.
Though it was made by a scientist, the inputs into this model and the inputs should be taken with a large grain of salt. However, they show how large the potential difference in outcomes can be. Even with a huge margin of error, the difference in lives saved between early action and none is in the hundreds of thousands in the US alone.
Again, I am not suggesting that this is likely but given the high costs to human lives, even a small chance of it happening warrants early and aggressive action by institutions and proper prevention and preparation by individuals.
The curve is trending upwards in the rest of the world—and it appears few other states have the apparatus necessary to nearly completely shut down traffic and commerce in cities of the size that China and South Korea have.
By the time an exponential trajectory is obvious, it’s too late
If containment efforts fail in other parts of the world (which seems to be happening) and mitigation measures—which will necessarily include widespread travel bans, mandatory suspension of mass events, school/work shutdowns, and other crushingly expensive and politically/socially unpopular decisions—aren’t put in place very soon, a sizeable proportion of the world’s population could quickly be infected.
Those measures are most effective if done very, very early. It’s limited in one place. It’s more and more costly and less and less effective to try to contain it once it’s out of the box.
Ironically, if you do enact early measures, it will then nip the thing in the bud, nothing happens. And you will look like one of those paranoid people who made this big fuss for nothing.
I fear the US will not react quickly and aggressively enough because no one gets political points for prevention.
No awards are given out for stopping something no one ever heard about because it didn’t happen.
This analysis by the University of Washington Researcher suggests 80-1500 undiagnosed infections in Washington State as of March 1.
The estimated doubling time is 2-7 days. That suggests on March 8 there will be something in the neighborhood of 300-5000 cases in Washington alone.
The low number of official cases in the USA is almost certainly due to a lack of testing. As of March 3, “fewer than 500 people have been tested across the [USA]… Meanwhile, South Korea is doing 10,000 tests per day”
There are costs to reduce mobility in the short term, but fail to do so will eventually cost everything—if not from this event, then from one in the future. Outbreaks are inevitable, but an appropriately precautionary response can mitigate systemic risk to humanity at large. But, we must act swiftly.
Market Impact
For the last 25 years, we’ve created a globalized Just-In-Time economic system that operates at maximum efficiency but low levels of robustness. There are pockets of hidden risks everywhere if just one component in the chain stops.
COVID-19 might disrupt global supply chains enough that the disruption will spread to other world subsystems.
If you disrupt medical equipment and pharmaceutical supply chains and patients (with coronavirus or other diseases) die who would otherwise recover, while long-term healthcare costs go up. Disrupt food supply chains and food prices rise, then severe food shortages appear. These supply chains are complex and highly optimized and thus fragile and susceptible to disruption.
The biggest factor that’s not understood is the non-linearity of supply chains. A two week total shut down doesn’t mean a two-week delay in products reaching the end consumer.
A single component missing in a 500+ part product means all levels of production stop. Autos and consumer electronics may be the most obvious examples. Jaguar has publicly stated they have sub 2 weeks of operating inventory.
Just In Time (JIT) production is a form of operational leverage. And like all forms of leverage, there is a non-linear downside effect. When things are going well, it’s marginally better. When things go bad, they go really, really bad. People are not putting it together that this is a very big deal. It may be that the effects ripple through markets for the next year even if the worst is already behind us.
Take the following timeline estimate:
- Day 1: container ships from the US to China.
- Day 40: the container is stuck in China.
- Day 80: the US doesn’t receive the shipment it should have received.
It is not until 80 days after the event that the impact becomes apparent.
I expect that in the long run, companies will substantially reduce their reliance on China, both as an end consumer market as well as a manufacturing hub. Future supply chains will extend to other countries with cheap labor—India, Vietnam, Indonesia, and maybe Africa.
This will be more expensive than running every important supply chain through China, but will reduce the risk of disruption some companies are likely to experience.
Common Objections
It’s Barely in the USA [or Insert My Country] Yet
The following things seem important:
- The asymptomatic infectious period is currently unpredictable in length—most seem to show symptoms in two weeks but cases have been reported of 19 and 27 day incubation periods.
- The severity of symptoms seems to vary extremely widely among those affected—a small proportion become severely ill and die while the vast majority have mild (or no) symptoms.
- Widespread travel bans have not yet been instituted, and mass gatherings have only been cancelled or prohibited relatively recently and only in some places.
- An approved and effective vaccine is unlikely to be widely available within the year.
Taken together, the only logical conclusion is that a large and still growing population of apparently healthy but infectious people are currently out and about, and have been unknowingly infecting others for an unpredictably long time.
As we saw above, this analysis by the University of Washington Researcher suggests there are 150-1500 undiagnosed infections in Washington State as of March 1. Though official cases were less than two dozen.
For comparison: China locked down Wuhan with less than 1,000 cases. There were 61,000 cases in Hubei after that. That is considered a success.
I’m under 40 and death rates are low for that segment so why should I worry?
One, as consistent with the rest of this piece, small chances of very bad things are still worth preventing. If you are under 40 (current estimated death rate of 0.2%) then ignoring it is the equivalent of playing Russian Roulette with a 500 chamber gun. Better than with a 6 chamber gun, but probably not worth it.
It’s also selfish. As noted above, stretching the cases out over time helps reduce the mortality and so if more people get sick when it could have been avoided, that will increase their likelihood of dying if hospitals are full as well as others.
If you are a carrier but are not affected and have few symptoms, you may be spreading it to others who are more vulnerable.
The Flu has killed more people this year than COVID-19
Many commentators who brush off pandemic concerns and the idea of introducing widespread mitigation measures as paranoia or overreaction have noted that the flu kills more people every year than coronavirus has since the outbreak began.
This is true, but a bad argument.
The global population is immunologically experienced with the flu, and there is an existing infrastructure for developing, producing, and distributing a validated vaccine for every flu season. Neither is true for coronavirus.
The rate at which infected patients die from coronavirus is low now when they can receive timely and appropriate care. If there is a pandemic, the mortality rate will inevitably rise as healthcare systems reach, then exceed capacity. More concerningly, they are likely to rise nonlinearly with infection rates.
It’s entirely possible (and maybe probable) that the Flu will prove more fatal in 2020, but the flu is a “known unknown” whereas COVID-19 is more of an “unknown unknown” with a huge possible range of outcomes and so we should be extra cautious.
Possible Action Steps
Below, I’ll suggest some possible action steps for individuals, companies, and investors.
Personal
Here are some suggestions individuals can use to reduce their risk.
- NO HANDSHAKING! Use a fist bump, slight bow, elbow bump, etc.
- Use ONLY your knuckle to touch light switches, elevator buttons, etc. Lift the gasoline dispenser with a paper towel or use a disposable glove.
- Open doors with your closed fist or hip – do not grasp the handle with your hand, unless there is no other way to open the door. Especially important on bathroom and post office/commercial doors.
- Wash your hands with soap for 10-20 seconds and/or use a greater than 60% alcohol-based hand sanitizer whenever you return home from ANY activity that involves locations where other people have been.
- Keep a bottle of sanitizer available at each of your home’s entrances AND in your car for use after getting gas or touching other contaminated objects when you can’t immediately wash your hands.
- If possible, cough or sneeze into a disposable tissue and discard. Use your elbow only if you have to. The clothing on your elbow will contain the infectious virus that can be passed on for up to a week or more!
- Try not to touch your face. (We touch our nose/mouth 90X/day without knowing it!). This is the only way this virus can infect you – it is lung-specific.
- If at all possible, work from home. The benefits to social distancing are well-studied and not interacting with all your co-workers is maybe the clearest way to do that.
- Cancel any types of large group events (e.g. concerts) and reschedule them. Though this is no doubt painful, I think an abundance of caution is warranted considering the current reach.
What I have stocked in case the pandemic spreads near me:
- Latex or nitrile latex disposable gloves for use when going shopping, using the gasoline pump, and all other outside activity when you come in contact with contaminated areas.
- Hand sanitizers – must be alcohol-based and greater than 60% alcohol to be effective.
- Try to get a few months’ supply of your prescription medications.
- Stock up on commonly used medications, e.g. pain relievers, cough suppressants, antibiotic ointments and creams, and the like.
- Bleach, alcohol, and other household cleaners that will kill viruses on shared surfaces.
- 3 days of water for everyone in your household (1 gallon/person/day) – It’s very unlikely anything will happen to the water supply in most places. Even in Wuhan which has been the most severely affected area so far, the water never stopped working. However, it’s so important that it’s worth it just in case.
- A month worth of non-perishable food – just get something you’ll eat anyway. I like Ready Rice, Canned Tuna or Canned Chicken, and protein bars.
- If you think you’ll fret a lot about whether you need to go to the hospital, get a pulse oximeter ($20 on Amazon). Readings consistently below 90-94% are pretty bad and mean you should seek immediate treatment.
- Everything that makes you feel better and healthier, in general, helps your immune system too, so get good sleep, eat healthy, and take Vitamin D if you’re deficient.
- Masks and Goggles – People are coming down really hard against face masks for coronavirus. See: US Health Officials Say Americans Shouldn’t Wear Face Masks To Prevent Coronavirus – Here Are Three Other Reasons Not To Wear One. It’s true that standard-issue surgical masks may not help much, especially if you aren’t trained in their use. The coronavirus isn’t airborne; wearing a mask while walking outside is unnecessary – it’s when you’re kissing your spouse or chatting around the water cooler or touching a doorknob that you really want to worry. Any mask weak enough to stay comfortable while wearing for long periods, or even weak enough to talk through, is probably too weak to work. There’s a good NYT article about some of these issues here. If people with masks risk compensate even a few percent, that’s enough to make them a net negative. The best argument not to get masks is that if random people buy up all the masks, there won’t be enough left for health care workers or the very sick. I agree this one is a good point. However, it is true that an N, P, or R rated respirator, worn properly, in specific high-risk situations, can be an appropriate part of a safety strategy. I think an accurate treatment of the topic would admit this, while also stressing the reasons most masks might not appropriate for most people in most situations.
- Here’s a helpful checklist on what to do when you come back home from Luca Dellanna:- Drop shoes outside – Place bags near door – Wash hands till elbows – Disinfect phone – Throw all clothes to wash – Wash glasses – Shower – Disinfect laptop, mouse & chargers
Professional
What should my company do:3
- Best case: implement a work from home policy now for all those who are able. Large companies including Facebook and Microsoft have already done so.
- Encourage hand-washing. You can watch a video here for best practices. You may want to add a few purell dispensers around the office as a reminder.
- Encourage flu vaccination. This will decrease the health burden on hospitals and also prevent people from getting the flu and thinking they have COVID-19.
- Zero tolerance sick policy. Anyone who is sick, or starting to feel sick, should take a sick day or work from home.
- Curtail travel and conferences and move to video calls. Your employees may generally want to decrease travel.
- Curtail visitors to the office – A number of companies are starting to adopt a “no visitor” policy for people traveling from the countries listed above and they suggest moving such meetings to a video call.
- Plan for the remote work contingency if you can’t implement it right away. It is worth planning how your company will work if the virus takes off in your country, or in countries where your employees work. Do you adopt a work from home policy or other approaches? What is the threshold for work-from-home? Coinbase has a guide like this.
- If you have significant exposure to the supply chain in China and surrounding areas (e.g. You are an e-commerce company manufacturing in Shenzen), it’s worth thinking through what you will do if factories do not quickly return to full production capacity. China has basically turned off their whole country, and they’re going to have to turn it on again sometime. Once that happens, the coronavirus can just pick up where it left off, either from a few people in Wuhan who they missed or from foreign travelers.
Imagining something like :
Phase 1 (now)
- Get rid of all unprofitable paid advertising.
- Proactively payback any debt on the business
- Look for alternative capital sources (equity or debt) in case you need a capital injection.
Phase 2 – (Perhaps implemented if Korea is shut down and China not up and running by the end of March)
- Scale back to only the most profitable paid advertising.
- Potentially raise prices to increase margins and decrease sell-through.
- Scale back any other non-essential expenses.
Finding alternative sourcing options in unaffected areas would be ideal, but that is typically a multi-month (or more) process and so unlikely at this point.
And, of course, please prioritize the health of your family and employees.
Investment
I have no idea what is going to happen in global markets over the next few months. I do know that prudent diversification is, well, prudent.
If a 10% drop in the stock market has you freaking out, you are probably not properly diversified.
I’ve written a few articles about portfolio diversification including:
- The Dragon Portfolio: How to Preserve and Grow Your Wealth for the Next Century
- A Big Little Idea Called Ergodicity (Or The Ultimate Guide to Russian Roulette)
I’ve also launched the Mutiny Investing Podcast, an open-ended exploration of topics relating to growing and preserving your wealth including investing, markets, decision making under opacity, risk, volatility, and complexity.
To paraphrase an old saying, the best time to diversify your portfolio was 30 years ago. The second best time is today.
Resources
1. I put together a twitter list of experts to follow.
2. An Australian virologist (Ian McKay) posted suggestions on how to prepare.
3. The Prepared has been doing a good daily update post on what’s going on and has some good prepping checklists.
4. This is a helpful analysis with action steps for individuals on when to take precautionary measures based on cases in their local community.
5. Coinbase, the Bitcoin exchange, also put out their corporate response plan which seems well thought out.
6. This is a Helpful overview with implications for startups from Elad Gil. Interview: Marc Lipsitch, an epidemiologist at Harvard University, predicts that between 40 to 70 percent of adults in the world will become infected with the coronavirus.
7. Examine has made a helpful guide on the existing science.
Sources for Regular Updates:
Dashboard Overviews:
Papers on prior epidemics and social distancing include:
- https://www.pnas.org/content/101/16/6146.long
- https://www.pnas.org/content/114/15/4023
- https://www.pnas.org/content/104/18/7582.long
- https://jamanetwork.com/journals/jama/fullarticle/208354
Acknowledgments: Thanks to everyone that read early versions including Luca Dellanna and Travis Jamison.
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Last Updated on March 23, 2020 by Taylor
Footnotes
- Most of this section is just a lightly paraphrased summary of this helpful post from angel investor Elad Gil: http://blog.eladgil.com/2020/02/coronavirus-covid-19-overview-for.html. All credit goes to him for putting this together. I have lightly paraphrased for inclusion into a single source.
- This is a good explanation of how the virus acts over time: https://www.latimes.com/science/story/2020-02-29/how-this-coronavirus-kills-its-victims
- Most of this copied from http://blog.eladgil.com/2020/02/coronavirus-covid-19-overview-for.html