I write this thread as an investor. Someone who manages their own money, 10+ years in the game. I am not a virologist.
Second, this isn’t a bullish or bearish thread. I’m just thinking out loud. That’s how I use Twitter.
Okay, let’s dive in.
Second, this isn’t a bullish or bearish thread. I’m just thinking out loud. That’s how I use Twitter.
Okay, let’s dive in.
My first observation is the balance between overreacting and under reacting.
Personally, I would prefer to see an overreaction. Overreactions are preventive.
When there is an overreaction, it’s preparation for the absolute worst, which leaves surprise when that’s wrong.
Personally, I would prefer to see an overreaction. Overreactions are preventive.
When there is an overreaction, it’s preparation for the absolute worst, which leaves surprise when that’s wrong.
In times of overreaction, you want to be wrong. You feared for the worst and the worst did not happen. You were wrong, but that’s good.
Under reacting, however, is slightly more concerning to me.
If it turns out to be *worse* than planned, you’re left unprepared and behind.
Under reacting, however, is slightly more concerning to me.
If it turns out to be *worse* than planned, you’re left unprepared and behind.
One common theme I see among investors and traders is this idea of comparing previous viral outbreaks.
“the market recovered from Ebola?”
“SARS barely phased the market”
Yes, in each instance markets went higher.
But, viruses don’t care about history or charts.
“the market recovered from Ebola?”
“SARS barely phased the market”
Yes, in each instance markets went higher.
But, viruses don’t care about history or charts.
Each new virus is entirely independent from the last.
I think the Coronavirus will be contained. But, I am also not ignorant to the small percentage chance that it may not.
Now here’s where things get really important as an investor. You have to have clean information.
I think the Coronavirus will be contained. But, I am also not ignorant to the small percentage chance that it may not.
Now here’s where things get really important as an investor. You have to have clean information.
There is a ton of bad content out there online and in the investment world.
There’s also *a lot of fake news* going on about the virus.
Trust no video you see unless it’s been confirmed by a real source and trust no data points unless it’s also been confirmed.
There’s also *a lot of fake news* going on about the virus.
Trust no video you see unless it’s been confirmed by a real source and trust no data points unless it’s also been confirmed.
The simple fact is no one at this moment can say when or how the virus started. A team of US scientists is just setting out to study that.
In addition, no one can say whether it’s mostly contained to one region or moving it’s way around the world.
Just wash your hands.
In addition, no one can say whether it’s mostly contained to one region or moving it’s way around the world.
Just wash your hands.
The Spanish Flu, in the early 1900s, made its way around the world without any of the interconnectivity we have today.
There’s more travel today and cities are denser. It would make more sense for a virus to take off. It’s a perfect recipe.
BUT...
There’s more travel today and cities are denser. It would make more sense for a virus to take off. It’s a perfect recipe.
BUT...
Technology may just cancel that out.
Over the last few days, I’ve noticed something inspiring:
Scientists across the globe are working in real-time, on Twitter, sharing data sets, opening up research, and collaborating.
That is the best defense. Smart people working together.
Over the last few days, I’ve noticed something inspiring:
Scientists across the globe are working in real-time, on Twitter, sharing data sets, opening up research, and collaborating.
That is the best defense. Smart people working together.
As an investor, I think this is a reminder of how important data collaboration really is.
I now understand why some investors are obsessed with stocks like Alteryx or Splunk and why Salesforce bought Tableau.
It’s also why I continue to be bullish on the blue bird – Twitter.
I now understand why some investors are obsessed with stocks like Alteryx or Splunk and why Salesforce bought Tableau.
It’s also why I continue to be bullish on the blue bird – Twitter.
I personally have a tendency to lean defensive in these times.
The opportunity cost of overreacting, say having a little more cash than usual, is low compared to under reacting, and it being worse than imagined, especially when the variability of risk is so large.
The opportunity cost of overreacting, say having a little more cash than usual, is low compared to under reacting, and it being worse than imagined, especially when the variability of risk is so large.
That’s all for now.
I’m still pretty invested.
But I’m a little more defensive at the moment.
Remember, this is just *my strategy* and you are free to do you. Don’t take my advice or others without doing your own research. Everyone has different needs and risks.
I’m still pretty invested.
But I’m a little more defensive at the moment.
Remember, this is just *my strategy* and you are free to do you. Don’t take my advice or others without doing your own research. Everyone has different needs and risks.
If you want to follow the coronavirus, actually be informed about what’s going on, and see how scientists are working together, I really suggest these accounts:
@DrEricDing
@MackayIM
@ScottGottliebMD
@HelenBranswell
@mvankerkhove
@statnews
@TheLancet
@K_G_Andersen
@DrEricDing
@MackayIM
@ScottGottliebMD
@HelenBranswell
@mvankerkhove
@statnews
@TheLancet
@K_G_Andersen
