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COVID-19: The unvarnished truth from Doc G.

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Desperate times call for desperate measures. So I highjacked Doc G’s podcast. That’s him above.

There is so much nonsense swirling around COVID-19, right down to the correct name, I was starting to get lost sorting it out. What I needed was guidance from someone without an agenda. Someone who had the education and training to separate the wheat from the chaff. Someone to give it to me straight.

I needed Doc G.

Doc G is a medical doctor and he has the excellent podcast Earn & Invest (formerly What’s Up Next). He’s the perfect guy with the perfect format to share our conversation with you. He’s grilled me a few times on it; now it was my turn to do the grilling.

This past Saturday afternoon, March 21st, he agreed to let me turn the tables on him.

I was hoping he’d tell me COVID-19 was all overblown and nothing to worry about. As you’ll hear, he didn’t. Indeed, some of what he has to say is pretty grim.

But you have to accept that when you ask for the unvarnished truth.

Part of that truth, as you’ll hear, is that he doesn’t know everything or exactly how this will play out. But his are highly informed opinions and, as I say above, they come with no agenda other than helping us better understand this thing.

Do you have questions I didn’t think to ask? Doc G has graciously agreed to answer them in the comments below.

Finally, having heard this, you might be wondering if it has changed my opinions on this bear market. The answer is no.

Other than I am pretty sure I was wrong when I said come September we won’t remember it. We’ll remember this for a long time.

Stay healthy, wash your hands and make sure you are around to enjoy the market’s inevitable recovery.

***************************************************

If you want to listen to my take on Mr. Bear, here are my three most recent podcast interviews:

The Mad Fientist:

Coronavirus Market Crash

In the comments, listener Skip said

Some takeaways for me:

“We are compensated with higher rates of return in stocks because of ugly times like this.” – Gino

“Bear markets are normal events. You shouldn’t be surprised by them, you should expect them.” JL Collins

BiggerPockets:

Coronavirus changes nothing

“If you’re freaking out about the stock market, this episode can help calm your fears and keep you on the right course to give you the most chance for financial success.”

The Mindful Millionaire:

Leisa Peterson – The Mindful Millionaire – and I recorded two conversations today (March 23rd). The longer and more general one she plans to release later. This short one is about the Bear:

The 2020 Bear Market

***************************************************

 

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Comments

  1. What do you recommend for personal protective equipment for first responders. I am a wally world pharmacist seeing at least a hundred people a day. My staff and I are no good for helping the public if we become victims ourselves.

    Reply

  2. This time is different my friends. It is like the planes flying to the towers in slow motion. Would you simply rebalance your portfolio after the second one hits? Or more like beginning of WWI when they fought using 18th century tactics against machine guns. These rules of thumb do not work in a 1/100 year event. I’m on the front lines of this and I can assure you it is just starting. Normal rules do not apply and people would be best served lowering their equity position when the world becomes a fundamentally different place rather than standing in one place as things deteriorate. Call it market timing, but this is not an unpredictable slow moving economic event. This is a defining event in our century and worsening by the day. My biggest regret is staying with my plan when common sense and my scientific know how screamed otherwise one month previously.

    Reply

    • Hi Nick, regarding your biggest regret about staying with your plan – do you mean a financial/investment plan, and if so, does that mean you invested a lot (in one go) one month ago?

      Reply

      • I invested a lot last year and the year before and chronically for years prior. My plan says – per simple path to wealth – that I do not sell no matter what. That should have been amended to say that I do not sell 99% of the time, but I will consider selling when a world changing event it taking place. Then lump summing the reduced equity allocation when I feel the issue is settled or a resolution is in place. I doubt this would have reduced gain significantly in an event such as this if one has the discipline to put all monies back into market according to asset allocation. That was my biggest mistake. I favored a static plan over common sense. I’m a physician and this was common sense. I felt this was going to be a disaster over a month ago and held on according to traditional investment advice, this is not a traditional moment that advice has been constructed upon. Going forward, things will improve. Whether market ever sees these highs again this decade, possibly not.

        Reply

        • I have to admit it has been tough following JL Collins advice of being 100% in equities.

          It seems that JL Collins himself was not 100% in equities and revealed this fact after the correction in his post?

          Why do you think this is?

          Reply

          • Not sure what you are talking about here, Derek.

            I haven’t personally been 100% equities since 2011, when I started living on my portfolio and added bonds, something repeatedly discussed on this blog and in my book.

    • Maybe there’s something about what you are saying that I don’t understand. If someone invested up to, during, and after the Great Depression, Recession, Tech Bubble, etc. they were likely fine as long as they stuck to their plan. If I understand you correctly, you are saying that this is going to be different, i.e. worse than those events? That we are in the early stages of a structural change in which money invested in the stock market is going to zero? If that happens, how will it matter if I go to bonds, TIPS, cash, gold etc.? In a world where every public company goes to zero, I don’t know that anyone is going to be making much of anything or accepting U.S. currency?

      Reply

      • You are missing the point entirely. My point is, when the world around you changes, you do not stay the same like a sheep. You don’t sell all your stock and sit in the corner in fear. The market will come back, it always does. But when we are at an all time 11 year high and things fundamentally changing in the world, dialing back the risk is a totally common sense and rational thing to do. You don’t have to sell all your stock, but dialing back the risk 20% or so until this issue passes is a common sense response if one has the discipline to then reinvest when this has passed. That was my common sense last month, as I’m more educated about viruses than most lay people. I held per traditional advice, which the wealthiest people I know did not listen to or follow.
        This was a bad decision. The buy and hold people are taking this on the nose. We will be fine as we reinvest and hold for the long term.

        Reply

    • This is exactly what i’ve been saying (and getting shit on and lectured for it). Sometimes it is common sense to sell. I think it’s dangerous to say you should never sell. Call it what you want. Jl was market timing when he recently got out and he did a good job!

      Common sense shouldn’t be discounted.

      Reply

      • My point is, when the world around you changes, you do not stay the same like a sheep. You don’t sell all your stock and sit in the corner in fear. The market will come back, it always does. But when we are at an all time 11 year high and things fundamentally changing in the world, dialing back the risk is a totally common sense and rational thing to do. You don’t have to sell all your stock, but dialing back the risk 20% or so until this issue passes is a common sense response if one has the discipline to then reinvest when this has passed. That was my common sense last month, as I’m more educated about viruses than most lay people. I held per traditional advice, which the wealthiest people I know did not listen to or follow.
        This was a bad decision. The buy and hold people are taking this on the nose. We will be fine as we reinvest and hold for the long term.

        Reply

      • Scott…

        Since starting this blog I have maintained a liberal policy regarding the opinions expressed here in the comments.

        Those that disagree with me are welcome and I value the lively debates they sometimes create with other readers. Like now.

        However, you have insisted on doing something no one else has ever done:

        Repeatedly lying about my actions and position.

        In my reply to you on March 16th in the comments on this post – https://jlcollinsnh.com/2020/03/09/taking-advantage-of-mr-bear/, I took the time to explain the difference between my moves and yours. And said, “…please don’t conflate what you are doing with my moves as described in the post.”

        Yet you have continued to do exactly that in your comments since, including this latest one where you say:

        “Jl was market timing when he recently got out…”

        This is simply not true.

        What I did as described in this post left me with precisely the same amount of VTSAX as before, which was a key goal. Shifting assets is not market timing.

        Indeed, as described at the end of this post – https://jlcollinsnh.com/2020/02/27/mr-bear-podcasts-a-good-book-and-why-i-should-be-in-100-stocks/ – I have increased my VTSAX holdings during this bear.

        I have no way of knowing if you are doing this simply because you think this lie advances your arguments or because you genuinely still don’t understand the difference.

        Either way, if you continue you will force me to simply edit out those lies or delete your comments altogether. Both steps that in almost a decade and over 10s of thousands of comments I have never had to do before.

        To be clear, you are still welcome to express your opinions here and argue your points.

        Take a lesson from Nick. He disagrees with my approach and has argued his points here without resorting to lying about my position or those of the other commenters.

        Reply

        • Thanks. Just to correct myself, I agree with JL 99% of the time. And he is likely correct here to rebalance according to strict rules. It may just stay here and march back up, who knows. I will rebalance over 6-12 months as I feel this is going to get worse and economic unknown unknowns may start popping up all over the place. I may very well end up losing out on gains and my decision to hold during the downturn may turn out to be not such a bad one after all. But overall I have learned that an asset allocation is very much a decision based on risk tolerance. As the world changes, that risk tolerance can change as well (in my opinion). I don’t advocate getting all in and all out of the market, but dialing back risk when you have reached your risk tolerance I believe is reasonable. I was 60/40 and will likely move to 80/20 with this downturn. Overall I do believe the simple path to wealth is one of the best method of investing – if not THE best – I have ever read about and remains one of my favorite investment books.

          Reply

          • Thanks Nick…

            ..for the kind words and for letting me use you as an example. 🙂

        • Jl,

          Maybe Nick said it much better than me – but what he said is precisely what i’ve been trying to say all along. Words and actions. It all depends how you package it I guess but the result is the same.

          May I ask a simple question – IF what you did wasn’t market timing (ie common sense), then why didn’t you hold onto your position until the day before you bought your house? AND if that money was meant for a house, why was it invested in the first place?

          I think we are arguing semantics here. I had EXTRA money that I had invested as well that I told myself I would take out if the market dropped to a point where it was threatening my principle. Which is what I think you did as well. I’m not trying to lie about anyone but I honestly see no difference.

          I think your advice is very good and I have recommended your book to many people. I even started re-reading it again the other day. I’m not discrediting you or your advice. I am simply trying to say there are common sense moments where like Nick was saying, it makes sense to reduce your risk or actually factor in world events. I’m sorry if you have taken it any other way, it was NOT my intention. And I think your strategy for building wealth is the best one i’ve seen. But I also think it is important to have discussions about when it might not always work.

          – Scott

          Reply

          • fix*

            “But I also think it is important to have discussions about when it might not always be the best move”

            I’ll let Nick do the talking because I believe he’s saying what I have been trying to say in a much better way than I am able to. (and without pissing people off)

            Scott

          • Thanks man. I’m usually the one pissing people off lol.

            I believe Stern from Money for the rest of us covered this well last week in a podcast. He reduced his stocks 15% during the first week. Based on economic data and the fact that the world was changing in a fundamental way. But simple path likely best way for most people who don’t want to bother with paying attention at all, who are busy with family, and want to avoid costly investment fees.

            This is actually not that controversial when I really think about it. I’m a boglehead. Philosophy of bogleheads dictates that asset allocation is based on desire, ability, and need to take risk. When market is at all time highs 11 years in a row, your risk tolerance may go down. When its 50% down and your faith in capitalism remains strong, then your risk tolerance may go up. I believe this will be the case for me. I have been “market timing” in the sense that I’m not rebalancing anymore after the first week of drops. I’m only adding new month monthly, I may double or triple that amount as a compromise. I feel things are far from in control and any optimism right now is willful blindness.

  3. Hi Mr JL, Hi Doc G.

    Like the Hole In The Ozone Layer, how do we know COVID-19 wasn’t always there?

    Is it just possible deaths were being attributed to A. N. Other condition?

    Thanks!
    Vorlic

    Reply

    • Hey Vorlic,

      The CDC and WHO have and epidemiologists have ways of monitoring disease activity and suspicious infection rates are reported throughout the world.
      Coronoviruses in general have been around for a long time. SARS was one of them. COVID-19 appears to be new. Has never been isolated before.

      Reply

      • What chain of events leads to a disease becoming identified/isolated/given a name?

        Regarding reports of suspicious infection rates… seek and ye shall find.

        Reply

        • That’s a great question and an important one. Above all, doctors don’t want to be diagnosing patients with the wrong thing – they need to know that what they’re testing and treating patients for is what’s actually making them ill. If you Google “Koch’s postulates”, you’ll find the general guidelines by which scientists confirm that a virus (or other organism they’ve found) is the actual disease-causing agent. Here’s a publication showing fulfillment of the postulates for Covid-19: https://www.biorxiv.org/content/10.1101/2020.02.07.939389v1

          Reply

          • Woah, that article is way above my pay grade!

            Yes, it’s extremely important that doctors accurately identify the cause of illness – this is why it’s harder to treat older people as those are more likely to have more than one illness/condition which together present a progressively more complex and tangled picture.

            Mine was really a leading question, to make the point that our discovery of illnesses – even today – is inevitably a random and accidental process. I have suffered from many respiratory illnesses over time. I had one last year in September, it was awful, an extremely persistent dry cough which was so violent it made me vomit once or twice a day for about a week. It severely disrupted my lung capacity (I know, I am a keen cyclist and measure my performance) and took weeks to completely disappear. I was absolutely shattered, completely worn out. But I did not present at hospital for tests. For all we know, it could well have been what is now called “COVID-19”.

            On the occasions I have presented at a hospital, I was always diagnosed on symptoms alone. I certainly never had anyone conduct specific tests to isolate the specific virus I was being attacked by – therefore no one was looking and no one was able to identify anything as “new”.

            I maintain, this is hysteria. Too many experts telling everyone how to do things, and not enough people actually getting on with things.

            Meanwhile I stick to my monthly plan to keep buying the whole market for as long as I have the money to do so and shall remain steadfastly, skeptically optimistic.

            Trying to find Walden…

          • Thanks.

            “Speak through the earthquake, wind, and fire! O still, small voice of calm.”

            I am not religious. At least not of the “organised” type. Don’t like paying the tithes, among other reasons. But it pays to recognise, however, that the author of “Dear Lord and Father of Mankind” was a Quaker. Two of the people I have known personally and respected most in my life, were Quakers…

            John Greenleaf Whittier was also a resident of Hampton Falls in Jim Collin’s own state of New Hampshire. How appropriate!

      • Well well…

        https://www.bbc.co.uk/news/health-52935644

        Just one of the many articles, now even from the BBC (which has towed the official line for 90% of the time).

        The UK’s Spectator has been one of the few to sing a different tune, right from the start. Of course, none of our glorious authorities appear to recognise/admit what is now obvious to more and more people; it’s just a (bad) flu.

        Never mind. The focus is now shifting inexorably towards the mess created by the hysterical, uninformed reactions of those in power, led on by a dodgy professor in an unchecked academia, who engineered a reason to resign from his post at Imperial College London which wasn’t his dodgy maths (and even dodgier programming).

        Eppur si muove.

        Reply

    • I think the fact that hospitals are now being overwhelmed whereas they weren’t before from the regular FLU speaks volumes.

      Reply

  4. Hi Doc G,

    1) How long do you estimate COVID19 will keep people sheltering in place, in the US and around the world?

    2) Do you expect their to be severe food disruptions such that there will not be enough for all?

    3) Do you expect severe disruptions in utilities (i.e. water, electric, gas)? Are nuclear power plants at risk if the people who run them do not survive?

    Thank you in advance.

    Reply

    • Hi Bryan,

      1)I can only guess at how long the shelter in place order will be there. China, I believe, is still sheltering in place after two months of being on lockdown. I expect we will be at least that long if not longer. But as I said on the podcast, seasonality or other unforeseen circumstances could cut that short or make longer. I am going to predict 3 months.
      2)I am not an expert on our readiness when it comes to the food supply, but I think we are in pretty good shape.
      3)I think we have a good chance of slowing this virus down if we take the shelter in place strategy seriously. My ferverant hope is that we never get to the point where we lose so many people. These strategies are extremely painful, but they work. So my hope is that utilities and nuclear plants keep working the way they are.

      Reply

    • Bryan – I work at a large electric utility. Rest assured that we (and I have to assume all others) understand our ESSENTIAL role in maintaining the flow of electricity. Without it, you can pretty much kiss nearly everything else off. We take it VERY seriously.

      As such, our buildings (especially admin-type buildings) are down to only operations-essential personnel on site. Everyone else is working from home. None of us non-essential folk have any wish to do anything that might compromise the health of our essential operations people, so we’re being good and following all the evolving rules. We’re lucky in that our IT department has made great strides over the last couple of years to make this a relatively seamless transition with robust VPN’s, numerous laptops (which ironically, were put in place for storm response rather than something like this, but we’ll take it!), and useful cloud-based services like Office 360 & Microsoft Teams. I’m personally quite surprised at what I can get done at home. I am a bit of a geek and already had a robust wireless network at home, but still.

      Anyway, my main point is that these utilities and essential services completely understand their role in modern society and are doing everything we can to enable our ability to keep on delivering. If some of the essential personnel mentioned above do fall sick, the ranks of non-essentials have the skillsets necessary to step in and take over.

      Reply

      • I can confirm this. I am classified as essential infrastructure personnel in a remote work location related to energy. We have stopped all incoming personnel from coming on site, which means that the folks on site currently have been up here for more than 3 weeks and are ready to stay on site as long as necessary. It is essentially operating under a shelter in place and quarantine policy. One that is more robust than the general public is experiencing.

        Reply

  5. Hello Dr. G,

    From my reading the fundamentals of this are:

    1. On average 65-75 Yrs especially if they have underlying respiratory and autoimmune problems have high risk of severe reactions
    2. 76-higher Yrs have sever risk and have higher mortality period
    3. Even younger say mid 30s and up who have severe autoimmune histories and respiratory issues can have severe reactions with a few documented fatalities.

    2 goals of 15 day social isolation is to flatten the curve strain on medical infrastructure and begin to develop “Hurd immunity” as many already effected individuals who have no or mild symptoms recover.

    The social isolation could also establish a workforce of younger individuals of working age to get the nation back to work and supplying the necessary industries to help fight the virus.

    The Wuhan / Covid-19 is out of the box so it’s not going away, best hopes are seasonal suppression and eventual weakening of the strain as well as vaccinations.

    Hope most of that is somewhat accurate thus far.

    Major metropolitan areas will have much higher and faster infection rates due to proximity, so my simple military math would take the populations of all of those major cities and expect a significant percentage to be exposed.

    Major questions I am not sure of have been answered as of this point in time. Do you develop immunity? If so estimated time that immunity would last(my guess 1-3yrs)?

    My market side still tells me the wheels will start to churn once the 15 day social isolation subsided and industry starts to mobilize. Some areas of commerce may so, while others rapidly expand. Remote office work Ect.

    All said and done, I would expect the true mortality rate is below 0.7% based on the probable large numbers of children to young adults who never displayed symptoms or felt mild cold symptoms with no tests.

    The real current issue is the immaturity of many youth who went out partying and will cycle back to moms house where they could propagate the rapid spread diminishing the effect of the social isolation curve reduction.

    Sorry kinda rambling comment.

    I still believe economically this too shall pass, but our lives will have to adapt socially.

    Thanks for your time.

    Chad

    Reply

    • Hey Chad,

      “2. 76-higher Yrs have sever risk and have higher mortality period”

      I’m not sure what you mean by “mortality period” here – you mean if the time between infection and death is a lot quicker than in someone younger/healthier?

      Herd immunity is tricky. When everyone is infected and the sickly have died off, yeah, we have herd immunity, but at what cost? This is why we’re trying to prevent it so we can treat the sickest without overwhelming the medical community.

      As for immunity – the common cold consists of the Rhinovirus, Coronavirus and RSV, and while some antibodies can be detected for up to a few years after someone’s been infected (SARS/MERS etc.), we still end up with the common cold a lot. Basically, it seems like despite the antibodies AND that these viruses don’t mutate appreciably, we still fall victim to them repeatedly.

      That means you might get SARS-CoV2 (COVID-19) more than just once.

      The mortality rate could present in an interesting manner. If we’re looking at 2%, it doesn’t sound like a lot, but if all the 2% deaths happen in the 65+ population, it will look a lot like “all old people are dying”.

      A cynical (as many medical professionals are, haha) way to look at that is the savings to social security, the wealth transfer (by inheritance) to a younger generation, the improvements that might be made to healthcare and employer sick policies.

      The market will move on and adjust. It’ll get better. Hell, back in the day when we’d wall off the village and thrive and population would increase and everyone was safe and happy… then the Hantavirus would decimate the population. Those who for whatever reason (immunity, left for travel, etc.) survived it would then thrive. Until the Black Plague, when the process repeated. And typhus. Cholera. Smallpox. Measles. H2N2. Etc.

      If we survive, stay invested. Maybe invest a little more right now, we’ll be better off in a few years.

      Reply

      • 2. 76 and higher was referring to the mortality rate of the age group over 76 is at a substantially higher mortality risk than other groups.

        Herd immunity is definitely a short term thing as with mutations reoccurring sickness will happen. I think the hope is as it mutates the strains will become weaker.

        As far as the mortality rate, current guess is around 2% whereas South Korea with more testing and taking into account the unknown minor systems cases I believe will eventually push numbers at or below the 0.7-0.8% mortality.

        I know how resilient humans are, and ultimately everyone for the most part wants to succeed.

        Reply

        • “I know how resilient humans are, and ultimately everyone for the most part wants to succeed.”

          Amen.

          This is the optimism, coupled with a healthy dose of skepticism (read: not cynicism), which everyone needs to stay sane and keep buying.

          Let’s not overcomplicate this, folks.

          Reply

  6. I started working less than a decade ago saved ~350K$ and it was in savings until December last year. I educated myself by reading on investment and of course the great resource – “The Simple Path To Wealth”. I invested all of that in VTSAX in January and have lost nearly 1/3rd of it. I am okay with it and not selling off as I believe in the long term it will recover, however, I do regret that I do not have money to invest now.

    Reply

    • Hey Mikhail,

      It may (or may not) be a consolation to know that I did the same thing in January with $120k. It is a consolation that I am 28 and don’t need the money for another 10 years. Like you though, I wish I could have “forgotten” to invest for 2-3 months, so I had the money available to invest now…but alas…how could we have known!

      Reply

  7. I think some key information was missing in this interview about what you can do to protect yourself. Yes, stay way from sick people and keep a good physical distance between yourself and other people but it’s also critical to wash your hands a lot throughout the day — and properly, particularly when you’ve been out and about. And if you haven’t had a chance to wash your hands on a day out (or not used a hand sanitiser) then for god sake don’t touch your face. This coronavirus gains entry via the mouth, nose and eyes.

    Reply

      • So, if we perform all of the precautions above, is it safe to go to public stores? I’m curious: if an infected person sneezes in the store 30 feet away, and I walk through that spot 5 minutes later, can I become infected?

        Thanks for the generous contribution of your time on this site!

        Reply

  8. Nicely done, gentlemen. This podcast recording is an excellent public service.

    Stay home, be kind to your family and housemates, and we’ll get together again on the other side of this pandemic.

    Cheers!
    -PoF

    Reply

  9. Great conversation.

    Jim, I tend to agree with more or less all of your thinking on investment strategy. But to play devil’s advocate, I’ll take issue with one comment I’ve heard you make a few times…

    Your view is that there are only two possible outcomes worth considering: 1) this is apocalyptic and investments don’t matter, or 2) that we recover and markets keep rising much as they have done before.

    What this potentially overlooks is that this is a once-in-a-century event, and could have once-in-a-century changes on our social attitudes and economic structure. If the inequalities in our society lead to markedly worse death rates between classes, it could foreseeable lead to a sustained political shift to the left where we recover as a society just fine, but that the economic recovery is lead by the state taking a greater share of GDP rather than private companies. The relative value and recovery of stock investments in such a situation would be uncertain.

    Reply

    • The way our wise and benevolent authorities are reacting is certainly a once in a century occurrence… sorry to interrupt, over to DocG and JL!

      Reply

    • Mike,

      What are you thinking as far as changes in economic and social structure?

      We as humans are social beings. That’s why this quarantine has such a significant social and economic impact. I don’t believe that means we are going to change our socioeconomic behaviors of gathering in large groups. This is something very primal.

      I do think this means a different outlook on leverage and debt. We’re already seeing the businesses who didn’t have 1-3 months of expenses going out. There will be significant consolidation, no doubt.

      Also, rather ironically from a class standpoint, you are seeing some very essential lower jobs still operating (sanitation workers, cleaners, etc.) and you’re seeing other lower class jobs (cooks, servers, etc.) unable to work. You’re seeing the same with middle/upper class (doctors/nurses/PAs/IT Workers having to work, while event planners/sales people/pro athletes/etc are not able to work to full capacity).

      Reply

    • Hi Mike

      “What this potentially overlooks is that this is a once-in-a-century event, and could have once-in-a-century changes on our social attitudes and economic structure.”

      The key words in your statement are “potentially” and “could”.

      We don’t know that this is a once in a century event.

      I was thinking about the swine flu last week and it’s economic impact at the time. I started asking friends what they remember about it. Most of them said they didn’t remember much about it at all, let alone it’s economic impact. Pretty amazing considering the estimates for infection and death rates.

      The following is an interesting Forbes article that demonstrates how stocks reacted pandemics in the past. The most recent being the swine flu that started in 2009.

      https://www.forbes.com/sites/mikepatton/2020/02/28/how-stocks-reacted-during-past-flu-pandemics-and-steps-you-can-take-to-minimize-losses/

      The market basically shrugged off the swine flu. A key difference, I suppose, is that equities were very much undervalued, as we were just starting to pull out of the great recession.

      I’m not trying in any way to downplay the seriousness of the situation. I take it very seriously indeed. My point is your comment amounts to nothing more than speculation, just as my opinion that the markets will recover as it has always done is speculation.

      As a result, I will continue to auto invest as I have always done and rebalance as necessary.

      Call me a foolish optimist if you like, but I’m betting on the human spirit, as well as greed, to get the market rolling in a positive direction again.

      Reply

    • Hi Mike…

      You raise an interesting question.

      During the great depression there was a similar concern of the US turning to communism. This provoked some major new government policies.

      If the reaction to COVID-19 were to cause a major shift away from our capitalist system, that would likely be bad for the market. But it wouldn’t end it.

      There are many socialist and even communist countries in the world with functioning stock markets. If you own international funds, as most recommend, you already own these.

      I’m not, yet, a fan of international funds for those based in the US, but not for this reason.
      https://jlcollinsnh.com/2012/09/26/stocks-part-xi-international-funds-2/

      Reply

  10. Two comments come to mind and the people I first heard the comment from:

    “Don’t just do something. Stand there!”- Jack Bogle

    “Everyone’s got a plan till they get punched in the mouth”- Mike Tyson

    “Keep investing, wash your hands, and practice social distancing diligently. It’s really tough for someone else to punch you in the face from six feet away” – Me

    Reply

    • “Keep investing, wash your hands, and practice social distancing diligently. It’s really tough for someone else to punch you in the face from six feet away”

      Love it!

      Reply

      • Hi Mr. Collins,

        Thank you for your encouragement. I have been panicking when I see my investment keeps shrinking for the past weeks. I recently read your book “A simple path to Wealth” and dearly enjoyed it. I have been using the guidelines you told the readers to calm my nerves — to stay put and keep investing in the bear market. I have to say it’s very hard. I did similar things like you during the 2009 bear market when I sold my equity at the very bottom. This time I tried not to do similar things but the panic is still very overwhelming. I hope this time it’s no different from the previous downturn and things will get under control and the stock market will get back to its normal path shortly.

        One other question, certain people short the market to protect their portfolio, have you ever done this and what do you think about this strategy?

        Thank you very much!

        Reply

  11. I just have a question: if this disease has a transmission of 2.7 per diseased person and it spreads for around 10 days (meaning a person will pass the disease for 2,7 other in the course of those 10 days) how the hell can it grow exponentially this fast? It would never have 30-50% increments daily like it’s happening now… I truly believe WHO is lying to us from the begining. If that’s the case how can we believe anything now?

    Reply

    • Hey Medico,

      Most of the transmission is silent. There are probably a heck of mor epeople infected than we know. Most don’t show symptoms. I wouldn’t be surprised if a huge number of people in the US are already exposed. We are just seeing the small number of sick. Why would the WHO lie?

      Reply

      • Ok, Sorry for hidding some info. You guys are people I trust so we can play fair. I’m a doctor here in Brazil, and I have great concerns about the current crisis management by all governments and international associations. My first point is that you can shut down China because it’s a dictatorship, but in order to have the same effect on a free country you would need to work differently. You can’t have people staying at homes if you lie to them. WHO and governments need to come into public and say: hey, a lot of things we said wasn’t true, China hasn’t controlled anything yet, our lockdowns still have unclear results, this disease spread a lot faster than what we told you, and we still need to keep this lockdown into place because we still can’t figure a better way of dealing with it. Then it will be possible to have people follow the “necessary” measures that are coming. BTW I still think that the best course of action would be to just quarentine anyone above 50-60 years old and leave the rest running the world. We are placing our bets on a vaccine (it’s hard as hell to get a working vaccine for any time of coronavirus, actually we couldn’t build one for any virus from this family in history) or on a natural shutdown of a virus. It looks like we are playing this like we would win the lottery next week…
        I’m more favorable to letting young people get sick early and work as a imune barrier for the most sucetible in the community.
        I may be all wrong, time will tell, but I’m really worried about the economic damage we will have. If we close everything in Brazil for 3 months we will have so much uneploiment that we will have more people dead from famine than covid 19…

        Reply

        • I think this is going to be hard no matter what we do. Young people die less often…but require ventilation and hospitalization frequently. If we let the virus run rampant in the less than 60 crowd, I fear our healthcare systems will be overrun.

          Lots of hard choices to make.

          Reply

        • “BTW I still think that the best course of action would be to just quarentine anyone above 50-60 years old and leave the rest running the world.”
          It’s good to hear someone else say this out loud. It’s apparently taboo to even think that here in the USA.

          Reply

          • But aren’t you ignoring the statistics concerning how wide spread the illness will be? How many people will require hospitalization even if they survive? How many people may end up dying outside of the “over 60” because of lack of medical resources?

  12. Thank you for this interview. I do have a question and would be interested in the doctor’s thoughts on South Korea. My understanding is that SK hasn’t had a full shut down but has done a great job with testing people and that has kept the spread of the virus down. Thoughts?

    Reply

    • South Korea developed diagnostic tests and deployed them for screening incredibly fast. Once cases were found they used mobile phone tracking, credit cards, and other personal data to track positive people down and isolate them and their contacts (Stuff we wouldn’t agree to in the US).

      They did exactly what the epidemiologists would suggest to stomp out this sort of situation. We are not that agile in the US, nor do we allow the invasion of privacy.

      Reply

      • In many places in Asia the governments also used national health insurance databases along with immigration & customs information to trace potential cases.

        Reply

  13. When the food stops coming, the self-made depression will end. You would gladly choose to fight a sickness when the lights are off, the Internet isn’t working, and you are starving.

    Reply

  14. I’m reading the Sunday paper and in at least 4 different articles all repeating that most people will only have mild to moderate symptoms. And yesterday, an article quoting a man in India, who just lost his job, saying that some will get sick but many will starve. It seems to me that this is a mass panic over getting sick.

    Reply

  15. Thank you both for a very informative article.

    Have seen videos of China still disinfecting the streets today. I also heard China is no longer being as transparent in what they are doing as they were in the past. They have been locked down for a couple of months, and still are locked down. Any thoughts on what this means? I have taken the threat seriously since it first hit the news, and this worries me. To me, it means the virus is still spreading rapidly.

    Reply

  16. I’m wondering what the overall game plan is. I think of this as a nuclear reaction. Physical separation is like the control rods. So, to prevent meltdown, governments are trying to get physical separation in place. However, there is still a critical mass of fuel until it is spent, which is either ~70% of the population having exposure to the virus, or a vaccine. The vaccine is 12-18 months away. The concern I hear is not overwhelming the healthcare system, but also, we can’t necessarily afford a 12-18 month shutdown.

    What I’ve seen from reports like Imperial University in UK, is that we’re most likely seeing a repeating pattern over the next 12-18 months of 1-2 weeks of business-as-usual, followed by 6-8 weeks of lockdown. This seems like what the US is also trying to do.

    I guess I’m just frustrated because the game plan is very important to how I may plan this year. What I hear on social media is people thinking this is a month or two temporary blip. The numbers just don’t work for that. I do like the idea of trying to build up herd immunity by having business-as-usual for under 60 and lockdown for 60+, but not sure how feasible that would be. My family is taking this far more seriously than my wife’s senior parents.

    Reply

    • My strategy is, when anyone includes in their comments the words, “My” and “hunch”, I immediately dismiss what they say. That applies to internet posters and people in Washington, DC at podiums in front of cameras every day. They know nothing. I am relying on guidance from legitimate infectious disease experts and staying with my time-tested 50/50 balanced, globally-diversified portfolio, which I built well before all this happened and which has not fallen all that much…yet. That’s all I know. Good luck, everyone.

      Reply

    • I think you are correct that there will be a long term strategy. After the first main shelter in place order (maybe 2-3 months), I think there will disease monitoring and shorter shutdowns periodically will occur.

      Reply

  18. Shocked Dr. G and JLCollins that you’re suggesting following the guidance from the State of Illinois/City of Chicago – one of the most messed up (I’m being polite) areas of the country.

    Reply

  19. I was reading page 256 of your book JL and something got me very worried.
    “Super volcanoes, viruses or alien invaders… Cont. Relax it ain’t gonna happen. At least not on our watch”
    But here we are in a viruses pandemic. And you also say if this ever happens our investments won’t matter.
    That’s very scary to read in your book mister. This may be it then. Just brace for the worst and pray.

    Reply

    • Sorry to have scared you, Alice…

      …that part was meant to be calming. 😉

      There have been many pandemics over the years and none have ended civilization. This one is bad, but it is unlikely to either.

      Reply

      • I keep telling ppl this is one of those known unknowns – it’s not a black swan event. Most, if not all, governments have some sort of a plan for this, though some are more prepared than others. Most financial modeling has this factored in somewhere and while the short term is scary as $%^k, long term, things will be ok. My hope is that we re-think our current healthcare system and shore it up somehow because it’s not acceptable that we don’t have close to enough supplies to keep the ppl who take care of us safe and disease free. When we near the peak, we really need those folks to be healthy. Thanks Doc G for breaking things down for us.

        Reply

  20. Shocked Dr. G and JLCollins that you’re suggesting following the guidance from the State of Illinois/City of Chicago – one of the most messed up (I’m being polite) areas of the country.
    If you want real danger, go roam the streets of Chicago on a normal day. Shelter in place – what is Chicago and all of CA doing with the homeless population that’s set up tent cities on the streets?
    Following the advice of Chicago politicians is about the worst advice I’ve ever heard.

    Was hoping Dr. G was going to stick to the science and educate on why this virus is different, passing of the virus from animal to human, then human to human, then mutated in various stains of the human to human which is what makes a vaccine more difficult to develop.

    JL – instead of an internal medicine guy, an epidemiologist, a true expert in this field, would have been more helpful. All I heard was a lot of opinion backed up with very little science. I’m a big fan of yours, but have to say this was disappointing.

    Reply

    • Hey Karen,

      I agree Chicago is a dangerous place (although I have been roaming it’s streets my whole life). But it doesn’t change the recommendations of the CDC, WHO, or any other the other countries that are going through this.

      I agree. I am not an epidemiologist nor an ID doc. And I certainly did express a lot of opinion. Part of the reason is that we don’t know all the science yet.

      Any ID docs or epidemiologists are welcome to rebut my statements, but much of what I have gathered has also come from discussing, reading, and listening to them.

      With Respect,

      Doc G

      Reply

  22. This is one time rebalancing your portfolio makes no sense. We would all have to agree that the economic shutdown we are seeing has the potential to make our markets react as they did during the depression. So what was that drop like, 80%+. If you are 60 you will never recover. If you are 40 recovery took over 20yrs during the depression. Our upside if we recovered quickly is probably limited to 3000 on the S&P500. If you start with $1000 and we drop 80% you have $200. If we do jump to 3000 on the S&P you would have $1250. If you leave the market you keep $1000. So stable is $1000, upside is $1250 and downside is $200. Seems like an easy call to me.
    If we do drop 80% I will start buying, but by then it will be companies that have survived.

    Reply

  23. I think the main reason is that it may spread much more aggressively and have a higher overall fatality rate. Also, I also think most Flu tends to be seasonal and much easier to make new vaccines.

    Reply

  24. Thank you for excellent, analytical information, even though I think it should be emphasized stronger that at least 98 out of hundred doesn’t die of covid-19. If the black death i 1350 had a mortality rate of 100% and 50 to 60% of the population got it and died from it, and the covid-19 have a death rate of only 1 to 2% (or lower), how can anyone possibly say that the covid-19 could be the new black death? This interview may create unnecessary fear because it’s like you forget that most people will be totally fine even if they get it, and children and young people most certainty will be fine in almost all cases. I really think we should take this pandemic really serious, and do whatever we can to stop it. But don’t forget that for most people it’s not dangerous.

    Reply

    • Hi Jan..,

      I was the one who introduced the Black Death into the conversation. It was meant not to conflate the two, but rather to present the stark difference between them.

      I agree absolutely with your points.

      Reply

    • Hi Jan,

      I mostly agree with you but some salient points…
      1)Young people, especially doctors and health care workers are at increased risk and they are dying or becoming severely sick because of exposure.
      2)While young people are not dying, they are getting sick enough to be put on ventilators. This is no joke.
      3)In places like Italy, health care resources are strapped enough that there are not enough ventilators for non COVID sufferers which includes kids and young adults.

      Less doctors, less ICU beds, Less ventilators, less personal protection equipment. This effects us all. In Italy there are widespread reports of needing to triage resources away from the elderly. In other words, if you are over 65, you may not get a ventilator and just be made comfortable. These things could all come to pass in the US. It may not (I very much hope not) but is already happening in Italy.

      Reply

    • Jan, I noticed this also while I was listening to the podcast and was very puzzled when Doc G said I hope this will not be as bad as the black death. What do you mean you hope it won’t be as bad as the black death, when you know it can’t be compared to the black death, if everyone were to get the covid-19 and the death rate is 1-2% how can that be compared. It’s not in the same universe. And I do understand about the sick that need hospital care and that our healthcare might be overrun. I think it is everyone’s duty to take this very seriously but also know that over sensationalizing it creates fear and fear can be much worse than the actual event. What we have now is half the country shut down with no end in sight, major unemployment (Minnesota had 100,000 new applications last week alone, unprecendented.) people worried they might end up on the street and not know how to feed themselves and their children. When will restaurants re-open? How can they re-open while this virus is still around? Who is going to build a new house? These are realities, not estimates or guesses. I am hopeful that a vaccine is discovered or the virus burns out but as far as the economy is concerned the damage is done. Everything will return to normal but it isn’t going to happen this year. Sorry, I have nothing but respect for healthcare workers but needed to express the importance of what we say and how we act.

      Reply

      • Hey Jan,

        I was listening to this part of the podcast again this morning around minute 1305. I in fact, at that point, mentioned many reasons why this will not be like the black plague and talk about why we should be optimistic, including how advanced our medical system is. I did my best to present the current state of knowledge, as far as I know it, and not sensationalize. I’m sorry if it came across that way.

        I think the economic consequences are large to what is happening now. I think they would be just as bad, if not worse, if we don’t manage this outbreak appropriately.

        This is not good for anyone. I take solace in the fact that we have always survived before and will again.

        Either way, I’m hoping for the best.

        Reply

      • What are you thoughts on the Diamond Princess cruise ship data.
        3,711 on board
        712 tested positive
        8 have died.
        All 3711 tested from what i understand.
        So 80% never got it.
        50% who did get it showed no symptoms.
        Average age-50 plus
        That’s a .22%’death rate from people in tight quarters for a month. Plus it was prior to people understanding how severe it was.
        Can we take any hope from this or does the medical community consider this as some strange outlying event?

        Reply

        • Hey Rick. So if 712 tested positive and 8 died you have about a 1.1% fatality rate which is on par with what is expected in the US. SO if 20% of the US is infected and we have 350 million people, then that means 70 Million infections. 35 millions who show symptoms and remember a percentage of these will need ICUs and Ventilators but will live, and 770,000 deaths. Not too shabby. It is true that older population, but also quarantine was instituted on the ship and many of these people could still get sick or can be infected over the next few months. And on the ship, this happened over weeks.

          These numbers would overwhelm our medical systems and cause major economic and social strife.

          Extrapolate to the world, that would be 1.5 Billion infected, 750,000,000 symptomatic, and 16,500,000 would die.

          Reply

          • 770,000 deaths mean 770,000 dead people. It could be anyone and could be anyone near/dear to us, of course, will have distribution biased towards the senior age group. Would we be okay to go under lockdown and follow social distancing to make sure that near and dear person live more years to come? I would and I know you all would. So, please I appeal to everyone here to take it seriously and don’t think I am young, I am healthy, I wash my hands, I am rich, etc as it’s not only about you but more about protecting others. Stay the F inside!

  25. Questions to the Doc G,
    We hear the tips how to behave when outside the home. Social distancing though it’s quite hard to keep 2 meters or 6 feet distance especially for those who don’t hear that well but don’t need hearing aids yet when they speak to silently talking people. Wash your hands. Don’t touch surfaces. Sneeze/cough into a napkin or your sleeve. Wash your hands again and again and once more.

    Which of those items apply to people who attempt to stay home be it retired couples or a family working from home with school children studying online?
    If none of the family members show cold symptoms, do they still have to wash their hands more frequently than normal (most likely after using a WC and before eating)?
    Should they wash each time they take a break from their laptop? Or before they want to scratch their face or pick their nose LOL?
    Should they start disinfecting all the surfaces at home (counters, door knobs, smartphones, etc.) too? If so, how often?

    I understand that hygiene should go up a notch if one of family members gets sick, but how paranoid should we be now during this pandemic and start spraying chemicals in the house? The smell of bleach is not that aromatic I must admit.

    To JLC and/or Doc:

    With regards to the investments, nobody knows how it will play out in the future because nobody knows how long this pandemic will last. It’s certainly clear there will be a major blow to the economy worldwide.
    I think people who are cut out of optimistic material will say to invest more in equities now (after they dropped 30%) and add more if it drops more, but people who tend to be fearful will say the exact opposite. Both are speculating at this moment and the future will tell who will win. Of course, for the sake of both of them and all of us, I hope the optimist wins :-).
    If one follows 5%-band divergence plan for rebalancing purposes, should that person add to equities now or should s/he wait until a 7-10% divergence and then invest 5% to equities if s/he got scared after reading news/comments and is afraid to stick to the original plan? It’s very psychological I think.

    Reply

    • Hi Panda…

      The optimists always win in the end because bear markets and their causes always pass.

      This will be true until something comes along and ends civilization. This is not that.

      As for what to do now with investing, my advice is the same as always:

      If you are working and building your wealth with regular investments from your cash flow, keep doing that.

      If you are living on your portfolio and have an allocation of stocks and bonds, rebalance as needed to keep the percentages where you set them. This has the effect in bear markets of shifting to stock while they are low.

      Be flexible as to spending and cut back as needed.

      Reply

  26. Excellent interview and I loved the leaf/water example!

    One thing to add is that people should call their healthcare provider/hospital before just showing up and potentially exposing others.

    Reply

  27. Thank you so much for your answers, and for in a kind way telling me that my interpretation of the interview may have been a little to negative.

    My optimistic assessments may be the result of me, as a Norwegian, living in a well organized and safe society. At the same time, I notice that many people place more emphasis on anxiety than on facts, and I recognize that this interview is an attempt to sort out negative feelings from realities.

    I also have to add that Mr. Collins blog and book have been an invaluable guide for me and have really changed my life for the better. And I do not have enough knowledge to criticize your assessments, only to warn of unnecessary disaster thinking in general. The fact that the mortality rate from covid-19 is so low, and may prove to be even lower than today’s estimate, gives me much hope.

    Reply

      • So Google translate says this means…

        “To make someone a bear service.

        “You and I have ice cream in my stomach 😉”

        I still don’t understand it. 🙂

        Reply

        • The bear killed his owner with one swipe, trying only to swat a fly from his face ( the treatment is worse than the disease).

          We have ice in our stomachs (means we are calm as ice)

          Reply

    • Hi Jan…

      Thanks for your kind comments and, again, on the rest of your points, I agree with you.

      Especially on the importance of “unnecessary disaster thinking”

      We didn’t want to ‘sugar coat’ what’s happening, but perhaps we came across as too negative in the overall tone.

      Note Rick’s comment above.

      Reply

  28. I don’t mind my investments tanking to keep others (including myself) alive. Can somebody make this president realize that anyone will prefer health over investments, more people alive more the investors in the future and faster the recovery. More scared of death or their health the people more sell-off there will be. We can again innovate and re-build businesses, it is not like we have to re-invent the wheel or discover fire or science/technology we know today after a year.

    We need measures that enforce belief in our health system rather than the measures for the market. Investors would love to stay alive rather than face the trauma of triaging or anticipating if they will have access to ventilators. They will sell-off more thinking more the liquid money they have now better they will sail through the pandemic given the scarcity of beds and ventilators in hospital. Practically, we need two things to get by in this pandemic: 1.) Soap & water. 2.) Social distance.

    I am down ~100,000$ till today due to the market crash, but I don’t mind losing more if the government handles this stronghandedly like China or South Korea. If I am informed correctly by my Chinese and Korean first-generation immigrant friends here. South Korea tracked infected people using credit card transactions, mobile phones, etc to make sure they are following recommended quarantine practices. China quarantined infected people separately in makeshift stadium-size hospitals, they even recruited one person per 20-30 households to deliver groceries and food at door to minimize the interaction between households. But I would definitely panic if the government won’t take the right measures and enforce them. I live in the bay area (in CA) with nearly ~800 coronavirus cases in my county and I went outside to walk with social distance around my apartment to get some sun and saw big groups of teenagers playing football in the playing area of a shut school. After that sight, I don’t think we will slow the coronavirus as long as people including us and our president don’t take this seriously!

    Reply

    • Hi Rob,

      Question for you, which may help to calm you – are mortality rates up in general, or are many causes of deaths now being categorised as COVID-19?

      I believe the latter, but only time will tell… perhaps not even then, as the current conditions are not conducive to collecting good quality data… and the number of deaths now being attributed to COVID-19 is merely a rounding error in global death rates. Causes of death could not be categorised as COVID-19 before COVID-19 was identified, but now it has been, and can be tested for – guess what? COVID-19 is found, and blamed for everything.

      Estimates for deaths directly attributable to the Spanish Flu outbreak after WW1 range from less than 10 million to 100 million…

      Widespread panic is your friend, because it offers up bargains, while personal panic is your enemy.

      Napoleon said that military genius was being able to stand in the middle and do the average thing, while every around you is losing their heads.

      Authorities don’t give a damn about you or me. And they usually cause the problems which they then run around “fixing” to “protect” us. This is, in my humble (?!) opinion, the most important lesson history teaches us.

      Stay humble to the (very slim) possibility that this is The End of Days. But stay calm and stick to your plan.

      Wash your hands!

      All the very best,
      Vorlic

      Reply

      • I am not pretending that my back-of-the-envelope numbers matter to anyone, but humour me, for my sake, if no-one else’s.

        It should also be said that, BEFORE COVID-19 literally took control of our lives (I miss Brexit!), and taking Italy as an example, on average, 1,749 people died every day, simple calculations below:

        Death Rate (deaths per 1000 per year): 10.556
        Population: 60,478,192
        Average deaths per year: (Population/1000) * Death Rate: 638,408
        Average deaths per day: 1,749

        Daily deaths are higher in the winter time.

        Since Italy’s first fatality attributed to COVID-19 on 20th February (THIRTY-THREE days ago), Italy has reported that 6,077 people have died as a result of COVID-19. But most were, to put it bluntly, coming to their end of days, with underlying health issues and would have died within six months anyway.

        I know, I know – the exponential increase in infection rate… and now you will tell me that the daily number of tests for COVID-19 infection stayed the same throughout, I suppose?!

        Now, to someone who is better with numbers than I – please, shoot me down!

        Reply

          • Hi Janice,

            Wow. In all honesty, that’s the first time I have heard of him. He is saying exactly what I am saying. But better!

            The emperor, indeed, has no clothes.

        • Vorlic, it is good that you do your own thinking and wait for confirmed numbers to come in vs. assuming the estimated statistical models from the CDC or WHO or any other respected organization to be in any way accurate. Many people will hear these estimates and immediately assume that is what is going to happen, and then they are immediately full of fear and anxiety. One such organization had estimated that Minnesota would have over 4000 infections by March 21st. and a corresponding number of deaths shortly there after. We (I live in Minnesota) currently have 262 infections with 1 death. Based on their model and assuming many people have the virus that have not yet been tested or confirmed, I would assume a lot of people will be dying very soon, I hope not. Accurate facts are absolutely important and I believe as you, to do your own math and investigation into the facts. I have run many very similar numbers as you and have, so far, come up with similar ideas and conclusions. And even so we do not know what the future holds so we hold out reservations on that. There are too many variables too determine a simple Model for the spread of the virus and the death rate and also if the virus burns out or possibly mutates and gets worse.

          Take the basic leaf on pond idea that Doc G explained and how the exponential growth of leaves doubling on the pond will cover it quickly as time moves on. But there are of course a lot of other variables to consider, the wind may blow and some of the leaves may not land on the pond. Also where are most of the trees, will that area of the pond get covered and the other areas not. Also, what kind of trees are prevalent around that pond, Maple and Ash may drop their leaves quickly, but the Oaks really hang on for a long time, sometimes into the spring. Also, some of the leaves on the pond may become water logged and sink to the bottom and not end up covering that portion of the pond.

          Predicting the future is like predicting the stock market or predicting the weather, nobody can do it. Warren Buffett has said something to the effect to beware of geeks bearing formulas and graphs. Keep doing your own research and trust in what the facts are telling you.

          Reply

          • A little more fear being spread around.
            This from our Governor Tim Walz

            “Without any mitigation effort, the pandemic would peak in eight weeks, around May 24, Walz explained. As many as 2.4 million Minnesotan’s would likely be infected, about 60 percent of the state, with as many as 74,000 deaths, eventually. ”

            Now I am sure that someone came up with this model for the governor, but he holds the peoples attention more than anyone in the state.
            Is this helping anyone in the state by speculating on scary numbers?

            A few facts to consider as of today…

            Italy Population About 61,000,000
            Italian Coronavirus Cases 74,386
            Italian Deaths from Coronavirus 7503
            Average Italian Death Rate is 10.5 per 1000
            Italian Deaths per Year Average 2002-2018 is 640,000
            I have no Idea how many of these deaths attributed to Coronavirus were going to happen anyway, but I am sure that some would have.

            Minnesota Population 5,600,000
            Minnesota Coronavirus Cases 287
            Minnesota Deaths from Coronavirus 1
            Average Minnesota Death Rate is 7.9 per 1000
            Minnesota Deaths in 2017 44,361

            Governor Walz is not the only Governor coming up with models like this, the Governor of California came up with a similar very scary model when he shut down the state.

            Almost no one is going to check the numbers, they just watch the news and assume the worst and I think that giving out crazy models and numbers like these is very irresponsible. I am all for being safe but we need to be rational also.

          • Very good UK article.

            This from our latest Flu/Deaths update KSTP.com

            The number of flu-related deaths in Minnesota has risen by 11, bring the total number to 121, including three pediatric deaths.

            Those numbers are according to the Minnesota Department of Health’s (MDH) latest flu activity report, which was released Thursday. The average age of those who’ve died is 73.

            https://kstp.com/health/flu-related-deaths-in-minnesota-up-to-121-mdh-says/5678640/

            Nobody even bats an eye when figures like these come out. We have become desensitized to these flu/death reports and accept it as part of life. I noticed 3 of the total flu deaths were pediatric deaths. I haven’t read much about pediatric deaths for Covid-19.

            Maybe one of our great software companies can come up with a software program that will collect all preexisting conditions, along with age, race, gender, etc. of any person that dies so we can make quicker, better decisions on future actions. The program then should automatically compare this information against all other diseases and/or causes of death. All of this information should be collected when the person enters the hospital or in their medical history. It shouldn’t be that hard. Opportunity for someone to help everyone.

  29. I think what’s so interesting about the COVID-19 and I think Doc G. mentioned this earlier in the comments is that the transmission is silent. You may go 2 weeks after you get it before you even know you have it, and all that time you are potentially infecting everyone around you.

    The current plan, stay in my 582 sf. studio apartment, work remotely and spend $100 on stocks every day the market goes down.

    It’s not quite the dream, but pretty close. =)
    Andrew

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  30. This was a great listen and thanks for being so candid. It scares the crap out of me that a national quarantine may not even be considered(when writing this)especially after listening to this.

    I’m guessing it’s just a stunt to pump positive speculation in the market. I hope our federal government and current administration is going to take this seriously…….we’re on day 40…only a few more days until we may be overwhelmed.

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  31. Dear JLCollins and Doc G,

    Thank you for a great podcast. I feel reassured by the measured, straight-forward information you provided. JLCollins, thank you for your calm and reason during a turbulent time. Doc G, thank you for your service. For a non-epidemiologist, you did an excellent job explaining the current medical situation. If anything, your stance was more optimistic than professional epidemiologists! For anyone interested in going down the rabbit hole on infectious disease, the interview with epidemiologist Michael Osterholm 2 weeks ago is a more sobering picture of the unfolding pandemic https://youtu.be/E3URhJx0NSw

    A note on exponential growth: https://www.theguardian.com/commentisfree/2020/mar/20/er-doctor-coronavirus-exponential-growth

    I’ve come to realize what we’re facing isn’t a health or financial problem, but a moral one. Health-wise, we know this is a virus and how to stop it (hygiene + social distancing + quarantine while we wait for vaccine). An army of medical experts and reams of charts and spreadsheets make me feel highly confident that this doesn’t pose an existential crisis. (Climate change is an existential threat; Covid-19 not so much.) We can solve the health issue.

    Economically, we can get new jobs, open new businesses, pass stimulus packages, print money, etc. History tells us that, while painful, this too shall pass.

    The real problem is a moral one. Do we as a society decide an entire class of people (elderly, poor, asthma sufferers, other) is expendable or act collectively to protect as many in our community as possible in times of crisis? When politicians think they know better than medical experts and set public policy that will result in thousands of unnecessary deaths, that’s a moral problem. When people feel too inconvenienced to self-isolate for 8 weeks to save lives including medical workers at enormous risk working 12/24/48 hr shifts on the front lines of this crisis, that’s a moral problem. When people start touting “We can’t have the cure be worse than the disease” – breezily reducing real human lives to abstract data points like productivity and rate of unemployment, that’s a moral problem. We can solve the first two types of problems; I’m not sure about the third.

    People bang on about there has to be a balance between health and wealth. Yes, but WE CAN REVIVE THE ECONOMY, WE CAN’T REVIVE THE DEAD. So stay the eff indoors!

    Do it for an entire generation of parents, grandparents, spouses, and loved ones you can help save (or hasten to their deaths) — including our very own beloved JLCollins who, you know, we affectionately call “the grandfather of the FIRE movement.” Do it for the staggeringly courageous medical professionals who are bearing the brunt of the pandemic with their very lives (8-13% of those who are falling ill to the virus are medical workers). Finally, do it for yourself — more than half of us will ultimately come down with this virus. Stay indoors TODAY so you can save yourself a ventilator or ICU bed TOMORROW.

    BTW, if you want to read first-hand accounts of what doctors and nurses are dealing with in this pandemic: https://www.reddit.com/r/medicine/

    Reply

  32. I am an avid listener on all of the podcasts and recently finished the book (The Simple Path to Wealth). Coming from an entirely different background than that of financing (Biomedical Engineer), I had no plans at all regarding saving up and planning for early retirement. Now I definitely do. My question is what to do next, and I hope this community would be able to assist me.

    Mr. Collins’s book opened my eyes and pointed me in the direction I was hoping for. In fact, I was planning to join the Vanguard community and fund a VTSAX account with my savings of the past 3 years (i.e. 100% in stocks). However, I live in the Netherlands, and am not sure about the possibilities I have – and whether I can still follow his guidelines. Moreover, I have no clue whether I should continue with my investment after the Covid-19 debacle. I found this site https://www.vanguard.nl/portal/site/institutional/nl/en/home
    and saw something called the FTSE All-World UCITS ETF fund. Not sure if this is the way to go…

    I would appreciate any comments and advice from this community. I am clearly still a noob – but I want to change this.

    Thanks in advance!

    Reply

  33. I tend to believe that the market is efficient given all publicly available information. You may have different opinions about where the country/market will go given that publicly available info, but the stock market has it priced in given the individual risk/reward tolerances of its constituent members. That means that cashing out is more of a gamble based on my personal gut feeling about what will happen and not some sort of dispassionate evidence-based analysis of the conditions. What I do know is that my gut tends to weigh short-term risk over long-term risk, which is exactly the opposite of what I need when I’m considering saving for a 30+ year retirement.

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  34. Here is something for everyone to carefully think about as they are sheltering in place. How do we know that say 70%-80% of the population hasn’t already been directly exposed to the Covid-19. We go to the grocery store, grab a cart and then wonder who touched that cart before us, try to keep distance but in reality that doesn’t always happen at checkout, or our kids go play with neighbor kids or kids at the park and then come home into the house where we give them a hug, or touch the door handle they touched, or maybe our wives or husbands go to work and see patients, maybe 20-25 a day, with who knows what kind of germs floating around, landing on surfaces and doorknobs and we try to be careful not to touch our face but you know…..If this thing takes a week or two before you show symptoms or maybe you got it and don’t even know, how many people have you infected? And of course we can’t know if we have Covid-19 because you can’t get tested unless your health has deteriorated significantly. There are no tests for most people yet. There will be tests for everyone at some point but I’m not sure that most people won’t have been exposed by then too late to be isolated. The cat could have been already out of the bag about a month ago.

    Also, and maybe Doc G can clarify this, but I was always told that to build up our immune systems, we need to be exposed to these different germs and viruses and successfully fight them off, at least that’s what my dad used to say growing up on the farm. Maybe that’s wrong and we need to stay in a plastic bubble.

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  35. After reading a number of comments, I feel it is very necessary to clarify a few points.
    1. This is not the Flu! I repeat, this is not the Flu.
    -Flu season has been going on for months longer than COVID-19. Of course death toll will be higher. Flu also is clearly seasonal. It will go away with warmer weather.
    -Flu has been well studied and vaccines are available. We are way ahead of the curve in treating and preventing flu. Vaccinated people do not tend to get sick or spread it. It is an important stop gap. It is much harder for it to go exponential.
    -Any comparison of death rates or number of deaths when comparing flu with COVID is ridiculous! COVID shut down F-cking China, and Italy, and India, and most of the US. Of course the numbers are going to be different. If we shut down like this at the beginning of the flu season….THERE WOULD BE ALMOST NO FLU DEATHS!!!!
    -Common sense people: have you ever seen the flu overwhelm multiple countries health systems in such short a time? Have you seen flu kill and sicken so many people in such short a time that temporary hospitals were being set up, morgues being erected, and dead bodies left in houses due to structural overwhelm? Flu has never caused anything like what we are seeing in New York right now (in current history).
    -How many doctors and nurses die or get put on a ventilator for flu complications from taking care of patients every year? Not many. How many have already with COVID? The number is growing rapidly.

    There is just no comparison. Current flu seasons are just not as scary. The flu pandemic of 1918 was. But now with our vaccines and technology, common flu is much more manageable.

    A note on herd immunity. I am no expert on it. COVID-19 is spreading through our world no matter what we do. We will develop herd immunity at some point. The idea is to do that with as little loss of life as possible while not overwhelming our healthcare systems. That is the whole reasoning for social distancing and the other public health measures.

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  37. And here are the actual facts of Covid-19 vs the Flu from Johns Hopkins Medicine without the all caps THERE WOULD BE ALMOST NO FLUE DEATHS!!!! presumption. They did a comparison.

    Similarities: COVID-19 and the Flu
    Symptoms
    Both cause fever, cough, body aches and fatigue; sometimes vomiting and diarrhea.
    Can be mild or severe, even fatal in rare cases.
    Can result in pneumonia.
    Transmission
    Both can be spread from person to person through droplets in the air from an infected person coughing, sneezing or talking.
    A possible difference: COVID-19 might be spread through the airborne route (see details below under Differences).
    Both can be spread by an infected person for several days before their symptoms appear.
    Treatment
    Neither virus is treatable with antibiotics, which only work on bacterial infections.
    Both are treated by addressing symptoms, such as reducing fever. Severe cases may require hospitalization and support such as mechanical ventilation.
    Prevention
    Both may be prevented by frequent, thorough hand washing, coughing into the crook of your elbow, staying home when sick and limiting contact with people who are infected. Social distancing can limit the spread of COVID-19 in communities.

    Coronavirus at a Glance
    View infographic
    Differences: COVID-19 and the Flu
    Cause
    COVID-19: Caused by one virus, the novel 2019 coronavirus, now called severe acute respiratory syndrome coronavirus 2, or SARS-CoV-2.

    Flu: Caused by any of several different types and strains of influenza viruses.

    Transmission
    While both the flu and COVID-19 may be transmitted in similar ways (see the Similarities section above), there is also a possible difference: COVID-19 might be spread through the airborne route, meaning that tiny droplets remaining in the air could cause disease in others even after the ill person is no longer near.

    Antiviral Medications
    COVID-19: Antiviral medications and other therapies are currently being tested to see if they can address symptoms.

    Flu: Antiviral medications can address symptoms and sometimes shorten the duration of the illness.

    Vaccine
    COVID-19: No vaccine is available at this time, though it is in progress.

    Flu: A vaccine is available and effective to prevent some of the most dangerous types or to reduce the severity of the flu.

    Infections
    COVID-19: Approximately 542,788 cases worldwide; 85,996 cases in the U.S. as of Mar. 27, 2020.*

    Flu: Estimated 1 billion cases worldwide; 9.3 million to 45 million cases in the U.S. per year.

    Deaths
    COVID-19: Approximately 24,361 deaths reported worldwide; 1,300 deaths in the U.S., as of Mar. 27, 2020.*

    Flu: 291,000 to 646,000 deaths worldwide; 12,000 to 61,000 deaths in the U.S. per year.

    The COVID-19 situation is changing rapidly. Since this disease is caused by a new virus, people do not have immunity to it, and a vaccine may be many months away. Doctors and scientists are working on estimating the mortality rate of COVID-19, but at present, it is thought to be higher than that of most strains of the flu.

    *This information comes from the Coronavirus COVID-19 Global Cases map developed by the Johns Hopkins Center for Systems Science and Engineering.

    https://www.hopkinsmedicine.org/health/conditions-and-diseases/coronavirus/coronavirus-disease-2019-vs-the-flu

    Probably want to check back towards the end of the year and see the updated numbers.

    Reply

  38. I am a dept manager at a grocery store in the Milwaukee/WI market and have worked the last 18 out of 19 days at the store. I have seen the best in people and the worst. The first 10 days of this pandemic people were buying/hoarding like it was end of days. The last few days things have calmed down as people realize that they will have some more time on their hands at home and do not need to rush in to load up. I have the same feeling about the market. Many people will say the sky is falling but I truly believe there is light at the end of the tunnel. In time things will work out for the best.

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    • Hi Jamie,

      I have the same feelings as you. I’ve also noticed things have settled down the last few days. Us humans are very reactive and have short memories. I’m also noticing that people who pay attention to the news most of the time are using very strong words like great depression 2.0, unprecedented, disaster etc… I stepped away for awhile and felt a great calm. This will pass and we’ll move on. There will be pent up demand when this is over. Sure, business will fail but like you said, there is light at the end of the tunnel and the market will come back. If I’m reading a FI blog and I start seeing those strong words, I just simply stop reading it and move on. This time is not different, It’s just a different narrative.

      Reply

  39. Finally some factual statistics from New York with over 500 confirmed deaths as of March 27th. I am seeing no deaths in the 0-17 age range regardless of underlying conditions. Minnesota had 3 pediatric deaths from flu this year.

    Also the article towards the end noted this: As of Saturday, at least 82% of the New Yorkers who have died from COVID-19 had confirmed underlying conditions, including diabetes, lung disease, cancer, heart disease, high blood pressure, and asthma. I think they left out obesity and smoking, but these will probably be included in future data.

    I am trying to paste the chart but can’t get it to work.
    Here is the data in the chart, I somewhat condensed it.
    Age Total Cases Hospitalizations Deaths Death Rate
    0-17 573 47 0 0.00%
    18-44 12,590 971 22 0.17%
    45-64 10,019 1,886 125 1.25%
    65-74 3,354 1,032 120 3.58%
    75+ 2568 1,103 249 9.70%
    Cases and deaths updated as of March 27, 2020 at 10:00 A.M. ET.

    Remember 82% of people that died had underlying conditions. We have no way of knowing how many of these people would have died anyway this year of old age, or these underlying conditions or even the flu but of course some would have.

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  41. Since my mother is on her third week of ventilation for COVID I thought compelled to respond. Bob would seem to be bound and determined to convince himself that COVID is no big deal and seemed particularly offended by Doc Gs use of all caps during the banter. Bob’s comparison is mostly accurate for what it includes but the factors that make COVID-19 different from the flu are strangely absent.

    Average number of days between infection and symptoms:
    – Flu 1-4 days – COVID 2-14

    Average # of people you are likely to infect:
    – Flu 1 – 1.3 – COVID 2 – 2.5

    Hospitilization rate:
    – Flu 1-2% – COVID 10-20%

    Mortality:
    – Flu .1 – .2% – COVID 1.5 – 4.5% (depending on country)

    This is WHO, CDC and JAMA cited data. If, when considering these differences, it is not evident why COVID-19 is different than seasonal flu I am not sure what could convince you.

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  42. Due to the possibility of a large number of asymptomatic cases Dr. Johan may be correct. Dr. Johan says,

    “Covid-19 is a “mild disease” and similar to the flu, and it was the novelty of the disease that scared people.”

    Pretty general statement. I offer that it may be like the flu in a year or two once herd immunity is established. Seems like if it were similar to the flu right now we would not be impinging on 50k dead in little more than 2 months time? Dr. Johan gets kudos for his brutality saying,

    “The flattening of the curve is due to the most vulnerable dying first as much as the lockdown.”

    I will let my mom know that when and if she gets off the ventilator. Hey once we get the vulnerable out of the way we are good to go!

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  43. Josh, of the twelve points made by Dr. Johan Giesecke in the article that I referenced, point #2 states:

    “The correct policy is to protect the old and the frail only.” The emphasis is the protection of the old and frail.

    Glad that your mom is receiving the care she needs and wishing her a successful recovery.

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  46. to the skeptics – go out and take a big whiff of it and report back

    as member of the over 60 age group – I am tempted to say f-off to the plan to only quarantine old people, but I won’t.

    Reply

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