I thought I’d share my thoughts on how the Coronavirus situation will be affecting the world in the coming weeks and months from different perspectives.
The key takeaway from all that is happening, in my opinion, would be this:
Don’t panic, but don’t stick your head in the ground like an Ostrich either.
Prepare properly and take it seriously. You don’t want to end up in this situation:
When you didn't prep because prepping is for the paranoid. pic.twitter.com/mO9SaVG5pq
— Jameson Lopp (@lopp) March 16, 2020
Here’s an excerpt from a Newsweek article that claims this information has been provided by a doctor in Italy. Whether or not that is true I don’t know, but it makes a lot of sense:
We are still awaiting the peak of the epidemic in Europe: probably early April for Italy, mid-April for Germany and Switzerland, somewhere around that time for the UK. In the U.S., the infection has only just begun.
But until we’re past the peak, the only solution is to impose social restrictions.
And if your government is hesitating, these restrictions are up to you. Stay put. Do not travel. Cancel that family reunion, the promotion party and the big night out. This really sucks, but these are special times. Don’t take risks. Do not go to places where you are more than 20 people in the same room. It’s not safe and it’s not worth it.
Here’s why: Fatality is the wrong yardstick. Catching the virus can mess up your life in many, many more ways than just straight-up killing you. “We are all young”—okay. “Even if we get the bug, we will survive”—fantastic. How about needing four months of physical therapy before you even feel human again. Or getting scar tissue in your lungs and having your activity level restricted for the rest of your life. Not to mention having every chance of catching another bug in hospital, while you’re being treated or waiting to get checked with an immune system distracted even by the false alarm of an ordinary flu. No travel for leisure or business is worth this risk.
Now, odds are, you might catch coronavirus and might not even get symptoms. Great. Good for you. Very bad for everyone else, from your own grandparents to the random older person who got on the subway train a stop or two after you got off. You’re fine, you’re barely even sneezing or coughing, but you’re walking around and you kill a couple of old ladies without even knowing it. Is that fair? You tell me.
My personal as well as professional view: we all have a duty to stay put, except for very special reasons, like, you go to work because you work in healthcare, or you have to save a life and bring someone to hospital, or go out to shop for food so you can survive. But when we get to this stage of a pandemic, it’s really important not to spread the bug. The only thing that helps is social restriction. Ideally, the government should issue that instruction and provide a financial fallback—compensate business owners, ease the financial load on everyone as much as possible and reduce the incentive of risking your life or the lives of others just to make ends meet. But if your government or company is slow on the uptake, don’t be that person. Take responsibility. For all but essential movement, restrict yourself.
This is epidemiology 101. It really sucks. It is extreme—but luckily, we don’t have pandemics of this violence every year. So sit it out. Stay put. Don’t travel. It is absolutely not worth it.
It’s the civic and moral duty of every person, everywhere, to take part in the global effort to reduce this threat to humanity. To postpone any movement or travel that are not vitally essential, and to spread the disease as little as possible. Have your fun in June, July and August when this—hopefully—is over. Stay safe. Good luck.
I think everyone should agree that the more we isolate the sooner we will get rid of this illness.
However, I still see too much fear and panic, and the only way to know whether it is justified or not, is to understand the facts.
Coronavirus causes the common cold. If you look for it in almost any daycare in the world, at just about any time during the year, you will find it. Now, SARS-CoV-2 is the name of this current strain that is causing problems, and the name for the disease it causes is COVID-19.
You might have heard that over time we will almost all get this virus. Perhaps you freaked out when you heard that. The truth is that 80% of us will just have a common cold when we get COVID-19. But if a large swath of people become infected in any one community, there can be a massive strain on our healthcare systems. Even the Swine Flu outbreak in 2009 resulted in full ICUs and shortages of ventilators for the illest patients.
People with pre-existing heart and lung problems, and older folks in general, are getting hit hardest by this virus. This makes sense, as it is likely the virus causes upper and lower respiratory tract infections (lower is pneumonia). Viral pneumonia can damage the lung, leading to an over-exuberant immune response (ARDS) or secondary bacterial infection. These folks want to take care of themselves and avoid busy areas.
Let’s try to take a level headed look at the negative and positive effects of this situation on the world.
I see two big negative repercussions for the situation we’re going through: health and wealth.
Illness, Public Services Overload and Deaths
Let’s get this straight out of the way. The COVID-19 is no fun at all for those who are or will be affected by it.
Chances are that the virus will continue to spread in an exponential way, and until the wave of infections shows signs of abating, we have to take all the necessary precautions.
Thousands of people are getting seriously sick and even dying. That’s the worst thing that is and can happen to us all.
I don’t think there’s anything else to explain on this point.
Perhaps we might also forget the huge workload that the public service officials are having at the moment. I am really appreciative to all those working around the clock to fight this pandemic. It must be tiring as hell and super stressful, and we can’t thank them enough.
The biggest worry that countries have is not the actual illness, as for most healthy individuals the effects are not too bad. The bigger problem is the fact that most countries’ hospitals and the surrounding infrastructure is not designed to handle a sudden influx of patients and emergency calls of this magnitude.
This means that it will be hard to get phone assistance for example. There will be casualties that are not specifically due to coronavirus, but due to the side-effects. For example, if someone gets into an accident but nobody can’t get through to the emergency line then that person might lose his life due to minutes or hours lost before the normal level of assistance could reach him.
And that is actually the number one reason why we should all be careful. By practicing common sense hygiene and avoiding crowded places etc. we will be reducing the speed of the infection, and thus help avoid the collapse of public health services. Even if we all get infected at some point, it’s better if that happens over a number of months rather than concentrated in one month.
Here in Spain we are in lockdown for 15 days, with the chances being that it will be extended further as I don’t think we’ve reached peak infection numbers yet.
People will lose jobs
The economic slowdown that the virus is causing will inevitably cause people to lose their jobs, especially if they were shaky in the first place. Companies especially those operating in heavily affected sectors like tourism, will enter into troubled waters, and one of the obvious ways to make sure they survive is to shed staff. Hopefully, if you’re in danger of losing your job, you will have prepared beforehand by having an emergency fund (6-12 months equivalent of your pay to help you ease through the transition to another job).
There are always two sides of the coin in every situation, and yes even in this case where everyone is panicking and it seems like the world will soon end, I believe that there are some important benefits that we should not ignore
It will accelerate the work-from-home culture
I’ve been working from home, coworking spaces and coffee shops for fifteen years. Every year it becomes easier to do so, as internet speeds and technology improves all over the world and more and more people adopt this way of working.
Unfortunately, although there are some big companies that adopted this strategy from the very start, many traditional ones have never believed that it’s possible for their employees to pull it off. In many cities, this means that people have to be stuck for hours in traffic jams every day when they could be with their families or doing something more productive. There are a ton of benefits to working from home or just being location-independent, and you’ll find many articles explaining the benefits, so I won’t be going into it here.
The fact of the matter is that due to the virus outbreak, the majority of office workers have been forced to work from home. This is the chance for these workers and companies to see if things work out well after all or not. My hunch is that they will realise that it’s a net positive and going forward this will become a viable option for many more workers over the world.
If you’re feeling lonely working from home or you find yourself easily distracted, try out Focusmate. It’s one of my favorite productivity tools.
A great time to learn something new
Instead of watching the news all day, you can learn about what Coronavirus is and how it spreads, and that’s just about all you need to know. Spend the rest of the time doing more useful things like learning new things. There are so many online courses these days which can be done from the comfort of your home.
Another alternative would be to learn a new language. I use Italki to learn new languages from home. All you need to do is sign up and find a teacher that you like, then schedule 1-to-1 lessons. It’s a much more efficient way to learn a language than going for a language course in a classroom environment.
Spend time with loved ones
Having everyone stuck at home means you will be spending a lot of time with your family. With people leading such busy lives these days, quality family time is not easy to get. So make the most of it. Catch up with those around you whom you might have not given enough time during the past few months.
An opportunity to step up the dad game
For all the fathers out there – we have never been expected to do more—around the house, in their children’s lives. This is wonderful. It’s also challenging and confusing because societal expectations and the actual process for preparing new dads for doing these things are not quite in alignment.
At the same time, the word “masculine” is not indelibly connected to that idea of “toxic masculinity.” So much of what it has and continues to mean to “be a man” are now denigrated and criticized.
This is our chance to renew our roles as dads and discover the joy of being around our kids and serving as a daily inspiration to them. In particular, I’ve also rediscovered my sense of play. Before this crisis, I used to spend time with my son knowing exactly what I am going to do, maybe read a book or play some particular game. Since I now have to spend more time with him, I found myself filling up the time by inventing games we could play together based on whatever objects we had around. I surprised myself with my own creativity and watched the delight on my son’s face at every new game we played. I could also observe how he picked up on my “game” and extended it further. These are amazing once-in-a-lifetime experiences that I might have foregone had I not been forced into them by the circumstances.
Cleaning up your life
I’m quite a fan of being pragmatically minimal. That means not skimping on owning stuff, but making sure that you really use what you own and enjoy them. Marie Kondo puts it very well when she says that every item you own should “spark joy”. This is the time to take inventory and toss anything that doesn’t fit that description.
This also applies to experiences and activities. I’m prone to chasing too many goals at once, so now that I am stuck inside for two weeks I’ll see how it feels to be without some of my favorite activities, and I’ll probably figure out which ones I really miss and which others I can probably do away with. I like to do this exercise every few months by going to a retreat at the nearby mountain of Montserrat, but staying in for two weeks will have the same effect for this purpose.
Some great investment opportunities
While there is no doubt that it’s no fun having this virus infecting so many people around the world, it’s also true that there is a lot of panic. And when there is panic there are opportunities for investors.
Whenever something like this happens, it’s the stock market that tends to feel the pain first. The main reason is that stock prices are based on people’s emotions and expectations about the companies and the market in general. When people panic and everything is doom and gloom, then we can expect to see reduced confidence in companies and the market, as well as people selling their stocks as they prefer to have liquidity and because they think dire times are ahead.
If you’re investing for the long haul, such fluctuations of the market are your best entry point. While it is not a great idea to time the market, if you happen to be sitting in cash at the moment when a crisis like this happens, you’ve hit the jackpot. World stocks are now on sale and the chances are that if you buy into the market now you’ll be looking at some very healthy returns in a few years’ time. This has happened over and over again if you look at the world’s history, and I don’t expect this time to be different.
Check this post if you want to read some more positive thoughts about the current market situation.
Less pollution and an alternative kind of city
All those who live in densely populated areas now have the chance to enjoy a dramatically decreased level of air and noise pollution. Wouldn’t it be awesome if we could sustain this all year round? Pollution is one of the biggest problems about living in Barcelona, and Malta is arguably worse off in this aspect.
Now we have the chance to take a break from all the noise and fumes, and perhaps we will realise how much better life would be if we created better means of public transport and started switching away from diesel engines and noisy scooters towards hybrids and electric vehicles, not to mention making more use of our own bodies by walking or using a bicycle.
Better hygiene practices
Some countries have generally poor hygiene practices. For example here in Spain I regularly see people failing to live up to basic personal hygiene protocols. No doubt this is due to a lack of education during their childhood years, and a care-free culture. Perhaps after seeing their country perform so badly in this coronavirus crisis, they will rethink how they behave and start taking care of the basics.
Precautions to take
Follow the latest information in your country and obey instructions. If your country is on lockdown don’t play the hero, and if it’s not yet on lockdown take the necessary precautions anyway.
World Health Organization advice for avoiding spread of coronavirus disease (COVID-19)
- Clean hands frequently with soap and water, or alcohol-based hand rub.
- Wash hands after coughing or sneezing; when caring for the sick; before; during and after food preparation; before eating; after using the toilet; when hands are visibly dirty; and after handling animals or waste.
- Maintain at least 1 meter (3 feet) distance from anyone who is coughing or sneezing.
- Avoid touching your hands, nose and mouth. Do not spit in public.
- Cover your mouth and nose with a tissue or bent elbow when coughing or sneezing. Discard the tissue immediately and clean your hands.
- If you feel unwell (fever, cough, difficulty breathing) seek medical care early and call local health authorities in advance.
- Stay up to date on COVID-19 developments issued by health authorities and follow their guidance.
- Healthy individuals only need to wear a mask if taking care of a sick person.
- Wear a mask if you are coughing or sneezing.
- Masks are effective when used in combination with frequent hand cleaning.
- Do not touch the mask while wearing it. Clean hands if you touch the mask.
- Learn how to properly put on, remove and dispose of masks. Clean hands after disposing of mask.
- Do not reuse single-use masks.
There are many conspiracy theories floating around, and this is normal as there are such theories for every major event or idea in the world. Here’s what the conspiracy theorists say about the supposed great plan behind the coronavirus situation.
- Blame the economic collapse on the virus.
- Relieve governments, bankers and those who caused the financial crisis of all of their debt obligations under the provisions of “force majeure”.
- Shut down all economic activity world-wide and further allow the elite to further monopolize and acquire all the resources they haven’t yet taken.
- Eliminate the very expensive pensioners, a/k/a “baby boomers”.
- Kill a planned 65,000,000 people world-wide within a few years.
- Kill 650,000,000 over the next eight years.
- Destroy certain industries such as the cattle, airlines and real estate.
- Eliminate protests and lawsuits.
- Hide or prevent the prosecution of criminals involved in human trafficking.
- Force the vaccination agenda.
- Coerce everyone in the world to depend upon government subsidies, a/k/a “basic income”.
- Hijack the news cycle, distracting, confusing further misleading people into making the wrong decisions against their own self-interests.
- Use the virus as a cover to assassinate dissidents to this and other agendas.
- Justify the abolition of all cash and force people into digital currency with a built-in progressive tax without any vote.
- Eliminate competition by small businesses competing with world-wide franchises and conglomerates.
- Cost people or survivors billions of dollars for treatment programs that never cure the purported virus.
- Use the Small Business Administration and its “rescue loan” programs to take down the remaining businesses that manage to survive this first wave of changes.
- Use the Center for Disease Control (CDC) to function as an agency of a foreign power, the World Health Organization, to dictate policy in the United States, and similar associations in other nations, thereby ignoring any democratic process already established.
- Shutdown all travel and imprison people in their homes.
- Create an opportunity to replace the labor force with automated and cybernetic systems.
Of course, you’d be forgiven for thinking that all this makes sense if you think that there is some minority ruling class that spends its days scheming and plotting how to manipulate and wring out the rest of us mere mortals. I don’t believe such theories one bit, however. The fact that the points would make sense if such a scheme would exist doesn’t mean that the scheme itself exists.
Coronavirus and Investing Action Plan
Many readers have asked me about my thoughts on coronavirus and how it will affect the markets and thus our investing practices. So let me elaborate a bit on that.
First of all, I believe that Bitcoin will be a big winner in this situation. It was designed specifically for this kind of scenario, as it was created during the last financial crisis of 2008. While everything else goes crazy, Bitcoin keeps on humming without losing a beat, independent of any human emotions. That’s the magic of it. So if you ask me for what I think the biggest opportunity for profit lies, I will tell you it’s Bitcoin. Read my full thoughts about that here.
Secondly, I don’t think the pandemic will have long-term effects on the stock market. There will be short term shortages, and delays in production, and even decreased spending for a while. Then people will forget all about this and go on with their normal lives. It’s just human nature. That is why if I think it’s best to invest when assets go on sale, because even if the prices will be suppressed for a few months, the recovery will come and with that the growth in value of your investments.
It is too early to say whether the pandemic will be a catalyst for a new financial crisis. So far, even though there was a drop (and subsequent recovery) in several asset prices, the markets are holding very well.
If you feel like the whole world is ending and all you see around you is panic, I invite you to take a look at the facts. Switch off your TV, quit Facebook and Twitter, and think. You cannot trust the media to give you reliable information. This is because their job is to sell advertising through the medium of media. Panic is good for ratings.
There is no scope for panic. There are some tough times ahead but if everyone does their bit and tries to adapt to the new reality we will get out of this quicker and be back to normal.
I would encourage you to stay safe, avoid panicking and maintaining a science-based outlook on things. This is not the end of the world. It might be the final domino that triggers a major economic slowdown, and we may be looking at a few months of disrupted travel and activities, but the world will resume it’s usual rhythm before you know it.
In this situation, your best strategy is to make sure that you and your loved ones are safe and not taking obvious risks, while also being aware that there are many other people who might be more at risk than you are, and therefore you need to think about them too and of the people who work in public services. Don’t make things worse for them and don’t try to be a hero.
Instead, focus on making the most out of the situation. I’m sure that there are many more positives than the two I came up with above, depending on each person’s circumstances. For example, in my case, I’ve been training hard for months, and an enforced slowing down of my training schedule will probably do me well and help my body recover. There are many other possible scenarios that you can think of, so try to think on the positive side of things.
These are a few good resources that you might want to checkout
Excellent as always. Here in Thailand the pea brain monkeys we have in government fail to see the gravity of the situation. Only now have they started to take some measures when the first case was reported back in January. And still while the country is obviously in stage 3. While it is becoming obvious that heat does nothing to stop the virus and indeed the spread has increased exponentially in a week since the rise of humidity ( the virus is obviously airborne and attaching to humid particles) they still refuse to do much.
So – without panic, my family stocked up with 3 weeks supplies of food, water, batteries and nuts. We are in self isolation taking all the precautions to avoid the spread. As a relatively young and healthy family we will be fine – but it’s no longer about the individual. It’s about everyone. I was sceptical before. Now I know how wrong I was. Hopefully every sceptical person starts to realize – this is no hoax. This is no flu. The R0 of this is 2 making it twice as contagious than the flu. The mortality rate is at least 10 times higher – in Italy it’s possibly 70 times higher. We all have a role and an obligation towards each other now and then we have a role after to pick up the pieces this will leave. People will be desperate in the aftermath. Jobless. Money less. In Europe the system will come together – maybe. Here, everyone is alone to fend for themselves. Have to be ready. There is only one god to appeal to – and that is the god which lives deep inside of us. Our compassion. Our humanity.
I agree with your article and have been working from home for more than a week now. Thankfully I’m in a job where that’s not a big problem, but I was wondering how you think it could affect P2P lending?
My main worry which makes me a bit hesitant to continue investing in the near future is that a lot of people and businesses that borrow from P2P platforms (or loan originators I guess) will be affected by either the loss of their job directly or their company going bankrupt. If this happens in larger quantities where people are no longer able to pay their loans back, it could lead to serious problems for lending companies and they’d go bankrupt as well, thus rendering any buybacks or guarantees useless. What do you think?
Jean Galea says
I am monitoring the situation closely and will be publishing some first thoughts either later today or in the coming days. Stay tuned.
In you opinion, is now a good time to buy into the market, or do you think things will deteriorate a little more for a while?
Jean Galea says
Nobody can predict what will happen to the market going forward, so my opinion is irrelevant. However, if you’ve been waiting for some time for a market correction, I think this may very well be it. For long-term investors, the coming weeks and months might be a good entry point. It’s too early to say if the market will recover from these days’ lows or whether it will plunge further throughout the year, so short-term I’d say there is the risk that if you buy now you might suffer some heavy losses during the rest of the year and maybe even further, but long-term it seems to me to be a good bet.
At the end of the day, you will need to consider probabilities and build your own strategy, the best advice I can give you is not to rely on anyone’s opinion as every investor’s case is highly different, what can be a good investment for one might be a tragic one for another.
Fritz @ TheRetirementManifesto says
Thanks for the shout-out to my post on the Benefits of a bear market. Scary times, but no reason to panic. Thanks again!
Jean Galea says
Welcome and great work Fritz!