Thread by @ghoeberx

IN DEPTH: FORECASTING #Wuhan #CoronaVirus
This will be a long/deep tweet serie, but it's very important, not only for traders.
First, I'll explain why stocks in Europa and US are going up, almost ignoring 2019-nCoV, and second I'll explain what the investors are missing. (1/9)

.. All market research firms are following the #Coronavirus very closely and many of them are expecting the #Coronavirus to slow down. They do this by studying the actual reported numbers (just like I'm doing here), rather than going by R0-models:
bloomberg.com/news/articles/…
(2/9)

.. As discussed before: this is very good IMO, because using Basic Reproduction Numbers (the R0) has turned out to be unreliable (the actual transmission numbers are due to many other factors: R0 isn't a good indicator) for predicting the future numbers of #nCoV-infections. (3/9)

.. The mathematicians doing these calculations also look to the speed of daily increases (this is also just like I do), which is the derivative of the acceleration (the 'jolt'). Below I've made a new graph to show my version of the 'jolt' of Chinese reporting #nCoV data. (4/9)

.. Based on this mathematical (IMO accurate) approaches, market research firms like @Gavekal conclude (as quoted by Bloomberg) that the virus will peak early March.
However, these market research firms and institutional investors are forgetting one very important point... (5/9)

@Gavekal .. Their estimates are very useful if the 2019-nCoV would be an outbreak with homogeneous infectivity conditions. That is however certainly not the case. Thailand or India will not be able to handle the virus like China is doing (lockdowns, mass surveillance, or as below). (6/9)

@Gavekal .. If you don't take into account the heterogeneity of the infectivity conditions, exponential growth in infections in future epicenters (e.g. Thailand or India) will not be flagged, if China is able to contain it within their borders (which is currently 99% of infections). (7/9)

@Gavekal .. That's why I have been looking to growth in infections and infection rate in subsets of China and I will do so in the future (once there's enough data) for outside China. E.g. looking to growth in China, excluding the epicenter, or looking to three megacities (see below) (8/9)

@Gavekal Summarized: yes the containment of the #Coronavirus is definitely looking good in most places in China, outside the epicenter. However, new exponential growth in China-neighbouring countries is likely, in which case the virus peak will turn out to be far beyond March 2020. (9/9)