THREAD: As a PM my main task is stock selection but at times like this I must take on events. This is my attempt on understanding the virus in live fashion, mostly I will ask questions out loud in order to know what answers I seek. Most important Q how big/bad can this get?
2/ Natural Factors to consider; natural transmission rates (how easily the virus spreads or is transmitted), incubation periods (long), symptoms are hidden (latent reaction), and then mortality rates...so far early imperfect data on all of these seem to point to a big problem
3/ Transportation Networks to consider; global and local network nodes, Air travel is more global than ever and we are seeing minute by minute small number of cases turn up globally, while inner city travel in China will determine how bad things get within China
4/ would generally expect a worse global outcome than past based on growth of transportation, government reactions being equal (I'll discuss ahead) and local within China is more dependent on how much they hid initial problem and let virus carriers roam and transmit
5/ Wuhan government reaction, news seem to indicate initial suppression of news of problem and then a rapid flareup of problem, which might mean that the delay was "the" critical failure here. It might have allowed carriers to travel everywhere being unaware of symptoms
6/ That is not criticism of China, its normal flawed human behavior. The new strict quarantine reaction both confirms my concerns about thread point #2 above and is also a possible helpful signs about changing the trajectory of transmission
7/ These points interact in that harshness of quarantine measures today can dramatically impact the outcomes (transmission, mortality) two weeks from now. A critical point will be whether the reaction came too late, leaning towards thinking that it's too late but open minded.
8/ Combining all the points I've made, would expect terrible news flow over next two weeks as released data on number of sick people catches up with reality, people carrying virus emerge, then next wave, etc.
9/ That new data will shape and reconfigure our understanding of the data I outlined in #2, transmission, incubation period, mortality...meaning it could be worse or better...meaning early data are particularly imperfect and are quite lagged
10/ Behavioral dynamics would tend to the early data being understated by government, of course the virus is what it is and is not affected by scientific observation, we could hope that later more accurate data show dramatically higher rate of carriers and a much lower mortality
11/ meaning it would be a less deadly virus even as the transmission was quite rapid and numerous. So far we are still in very early part of the curve and extrapolation of imperfect data can be misleading in many ways.
12/ That's all I have so far, of course short term economic effects are guaranteed, opportunity will depend on the depth of the problem which to me is unknowable at this point, watching carefully what develops in line with my thoughts process above. MORE HERE when I have it.
13/ Newest data that have been released since my previous tweet #12 7 hours ago are all in line with what I feared, high transmission, high mortality. The early data will be imperfect and there will be catchup in reporting from more people being tested
14/ big jumps in # of sick and dead by itself does NOT mean rapid spread it could be just more testing and lag in reporting initial results, but base case still unfortunately intact and rather worrisome
15/ I should add another line of thinking, which is cure rates on medical treatment, suppose it has rapid spread and initial high mortality but then better care starts to happen in response, that could (I have no idea but let's hope and monitor) lower initial mortality rate
16/ starting to wonder about what seems to be slow moving government reaction in North America to China quarantine, knowing what we know so far (spread, mortality, latency), why not restrict incoming flights and passengers from affected areas for the time being?
17/ Don't Gov't/WHO/CDC have to pick a side and be decisive, better small short term disruptions now than potential massive problem in 2-4 weeks? Where am I wrong?
18/ I didn't notice anything major overnight, another case in Canada, but no major data points to shift my thinking, still bad, still going to get worse, it will take time play out
19/ Smart move here, US raising threat level, good call, see above thread, they are late on this
20/ Many more cases in many more places, no new insight, still the same concern levels, data is still tough to read, likely not complete or accurate, likely understated
21/ Lots of newsflow and a definite stepup in global awareness of the problem and actions taken, I don't believe there is any change in virus outlook or understanding of severity, although US markets are rallying perhaps on relief on no new US cases
22/ Watching Japan where there is lots of China tourism and a few cases and see what develops about transmission over the next few days, otherwise it's still early
23/ Not tweeting as much on this topic, I don't want to get distracted from my initial premise by small data points, but things playing out as feared, hoping/waiting for news to refute but latest gov't reactions now demonstrate serious concern as I initially had
@threadreaderapp unroll
@threadreaderapp 24/ Seeing numbers grow, and spread to other countries and areas. Also seeing some strange extrapolations of a few datapoints which are based on lagged info and maybe incomplete, understated and not actual daily numbers just what is known at that point in time.
@threadreaderapp 25/ All in all, still on the same basic trajectory as in the beginning of the thread; and it supports what I thought then based on the news flow and data. That the virus transmits easily, a worrisome mortality, that it has a high latency and that there was a delay in tackling it
@threadreaderapp 26/ Lastly, that Chinese travel rates were never this high both using high speed trains within China and International flights. This last point is critical to containment or lack of it. Meanwhile, still early to conclude from the data what will be, so the worry level is the same
@threadreaderapp 27/ After a month long break to see how things develop I'm back to grade myself on the logic of what I wrote. In thread #2 I concluded that early data pointed to a big problem, in #3 and 4 I pointed out that transportation networks would hasten the spread vs. past #coronavirus
@threadreaderapp 28 / In #8 on January 26, 2020 I pointed out that I expected terrible news flow to emerge over the next two weeks, was wrong on this, it took longer. Best guess is due to longer delay in symptoms emerging and a delay in recognizing the flare up far from epicenter
@threadreaderapp 29/ In 9,10,11 I was accurate in discussing the data parameters but it's still developing so hard to tell. Clearly from the cruise ship and other special situations the spread rate is horrific, data within China may not be accurate so all in all hard to tell yet if ever.
@threadreaderapp 30/ In #12 I said economic effects are guaranteed, that's happening now, obviously still unknown the magnitude, I'll outline some fresh thoughts at the end of this tweetstorm what I think happens next.
@threadreaderapp 31/ In #16, 17 I questioned why incoming flights are not shut down, it took a few days and then they acted. In #22 I said watch Japan "where there is lots of tourism" and see what develops on transmission, that was spot on. #coronavirus
@threadreaderapp 32/ TO SUMMARIZE: my Jan 26 assesment was rather accurate and helpful in risk management. What now? I'll first get the market perspective out of the way, clearly the market has now noticed it. Is it priced in? That would obviously depend on what happens next. #coronavirus
@threadreaderapp 33/ Three primary possibilities here: 1) Gradual Spread with global quarantines and broad shut downs 2) Small localized and sporadic outbreaks over next month (as in Italy) 3) A slow fizzle while China gets back to business. Lets logic our way through each. #coronavirus #COVID19
@threadreaderapp 34/ Possibility #1: Gradual Spread with global quarantines and broad shut downs, this is actually I think? the current trend. First, S Korea and then Italy, so why not elsewhere? and then the horrible genie can't be stuffed back in the bottle or...
@threadreaderapp 35 / Possibility #2: 2) Small localized and sporadic outbreaks over next month (as in Italy), maybe this is just going to stay local to a few hot spots, if I believe that I need to understand why this place was special that it happened there and I simply don't have any logic.
@threadreaderapp 36/ Possibility #3 A slow fizzle while China gets back to business. There is some emerging signals that they would like to get back to business and if they do that would be an enermous benefit to the narrative of global markets while for safety reasons it could backfire.
@threadreaderapp 37/ To conclude, I don't have a strong feel for which is the predominant outcome, so I'll stick with #1 where the trend is to spread, with latent symptoms taking weeks to emerge, so there is still potential danger ahead particularly for the US...
@threadreaderapp where I'm rather surprised the case count has been so low. Is it because they aren't broadly testing and the problem is festering and will emerge over the next week or two? I don't know, BUT I've set up some logic threads to monitor and let things develop. That's all for NOW.
@threadreaderapp @threadreaderapp
unroll
unroll
@threadreaderapp @threadreaderapp unroll
