I am bunkering in Nic’s spare room, which both helps for work and because my own house is overfull of family. This is not a happy turn of events for the wonderful Nicola but I can report I’ve now been put in lockdown on two fronts, staying indoors and not talking.

This blog is going to cover a few different topics which I’ve been mulling over so apologies for the lack of a central theme.


I have been reading anything and everything related to the ongoing and truly impressive globalised efforts of Pharma and Biotech companies, to identify and validate compounds to help reduce/remove Covid 19 symptoms.

A vaccine is 12-18 months away, as the testing needed to clear it for distribution takes time. Vaccines for previous Corona strains were produced in such a time scale; the rightful concern to avoid unacceptable side effects.

Treatments identified and already in trials to reduce the severity of symptoms for the seriously ill, or to prevent symptoms becoming serious are progressing rapidly.

I particularly like Scott Gottlieb, the former head of the US FDA who speaks truthfully and knowledgably on this. On Friday he said:

1) The virus is not difficult to understand or produce drugs to combat.

2) He was impressed with the success in trials giving sufferers blood plasma (the element of blood left with the cells removed) containing antibodies from those already recovered. This is old school, it’s how a number of other viruses are treated and it’s well understood and easy to do.

3) There are already a number of other drugs being tested (including Hydroxychloroquine – the Malaria drug) of which he is hopeful.

4) He thinks it quite likely we already know how to combat this virus, we have to prove it in trials which means waiting and sheltering for a time.

Other places

The news from countries that shut down before us is pretty positive.

China and Korea are normalising without reports of spiking infections. There are traffic jams in Beijing again and consumer spending is closing in on normal online.

It’s perhaps instructive to remember this isn’t the East’s first rodeo with Corona. Its happened to them before so maybe they are slightly less freaked?

I suspect that’s the case as we just don’t do this stuff in the West. Major health crises, well that’s just other continents frankly.

Lies, damn lies and projections

As regular readers will know, I like a projection. Give me lots of numbers and interrelated causal effects and I’m a happy chap.

What readers will also know is that such calculations are only as good as the figures and assumptions used. Get these wrong at outset by selecting a sample which you think is average but isn’t, and what’s then calculated is total garbage.

This leads us to the ‘face off’ in the last week between Prof Ferguson and his team at Imperial college and a rival team from Oxford University.

Prof Ferguson you may know is a world respected voice on modelling virus spread and he was instrumental in shutting down the U.K. with a projection of hundreds of thousands of deaths if self-quarantine was not imposed.

Last week the Oxford University team produced a projection of the severity of the outbreak ‘night and day’ lower, They postulate far more have been infected than realised, but without severe symptoms.

Projecting severity depends for accuracy on three things.

1) What number you start from

2) The growth rate assumed

3) The percentage of the increase that will be severe cases

Imperial College assumed that the relatively small number of reported cases in the UK a few weeks ago, constituted a high percentage of those who had been infected. This resulted in an estimation of high severity. If correct, the medical implications would indeed be staggeringly bad if no action was taken.

Low number of infections, significant percentage of those needing hospitalisation.

Extrapolate percentages to rapidly rising infection rates.

Huge numbers at risk, overwhelm of the health system imminent.

Oxford have said:

Lots more people have had it, the numbers used by Imperial assumed far fewer. Severe cases were a far smaller fraction of the total infections. We are a lot further along in progression and the population gaining herd immunity. This could, if broadly correct, explain why China and Korea are not currently experiencing spiking infections as they normalise. It’s too early to tell but Korea test a lot (more than China) so this should be known shortly.

The lack of clarity was then compounded (after the Oxford study had been released) by Prof Ferguson testifying to Parliament late last week that the projection for the U.K. of Imperial College was now not 500,000 at risk but 20,000. This was however, taken out of context by US right-wing commentators. Prof Ferguson had always maintained that the figure of 500,000 deaths would be the case if NO action was taken. He had also always stated that the number would be much lower at around 20,000 if social distancing and lockdowns et al were put in place and followed. There was no retraction of his previous statement, but a clarification from him was given in a tweet to avoid confusion as his first announcement was misinterpreted. What he did not clarify was the length of time he had used in this model for the quarantine staying in place.

One is more right, time will tell who.

Early doors, bouncebackability, lollipops and golden balls

I was reading an article from a psychologist who was comparing people’s emotional reactions currently to the process of grief (denial, depression, anger, acceptance etc).

It was helpful but a bit cumbersome and not wholly applicable, so I started thinking about it as a purely investment related process.

As there is no sport at present the title of each stage is an infamous football quote. If you would like to name the person who uttered each, we will donate £1000 from the LWM charitable trust to the charity of the winner’s choice.

Phase 1 : ‘It’s a game of two halves’

Western markets pretty much assumed the Coronavirus was like the ones before, which were Eastern country issues in the main. This was denial.

We are through this.

Phase 2 : ‘Do I not like that’

This is really the depression part, which includes thinking:

Will this ever end?

What will it be like after?

Can it ever be as good again?

We are slap bang in this now, highly emotional and the toughest part.

This is why markets are whip-sawing around so much.

Phase 3: ‘An unstoppable shot he should have saved’

This is the combined phases of anger and acceptance.

It will start during Phase 2 but keep going longer.

It relates to the wish to understand what’s happened, the desire for greater (than whatever is done) protection from the financial effects from Governments and looking for someone/thing to blame it all on.

Phase 4 : ‘ They think it’s all over, it is now’

There will come a day when we have what we need medically to feel safe again.

There will be a time sooner however, when markets decide they understand this is coming and prices will rise strongly from then onwards.

Note: This is written in a personal capacity and reflects the view of the author. It does not necessarily reflect the view of LWM Consultants. The post has been checked and approved to ensure that it is both accurate and not misleading. However, this is a blog and the reader should accept that by its very nature many of the points are subjective and opinions of the author. Individuals wishing to buy any product or service as a result of this blog must seek advice or carry out their own research before making any decision, the author will not be held liable for decisions made as a result of this blog (particularly where no advice has been sought). Investors should also note that past performance is not a guide to future performance and investments can fall as well as rise.