Voices of Reason from Medicine and Finance
- by: Hank Berkowitz
- March 23, 2020
So, it got me thinking. Maybe I’m not just in the vocal minority this time. Let me share some great thinking with you from medical and financial experts on this distribution list.
Dr. Tom Hedberg, Executive Director of the International Medical Crisis Response Alliance (IMCRA), told me we’re still a long way from the Spanish Flu pandemic of 1918 that infected one-fourth of the world’s population and killed close to one million Americans. However, there’s no guarantee it can’t happen again.
“While our treatment facilities are excellent, a virulent airborne mutant contagion could prove a serious threat, and widespread infection rates could easily overwhelm such facilities,” observed Hedberg. He added that Americans are exceptionally well-informed about medical and health issues and many will be likely to take appropriate individual measures (i.e. work from home, gloves in public, disinfectant wipes in the home).
While we all have to be highly diligent about hygiene and observing shelter-in-place rules, Dr. Hedberg believes the virus in its current form poses the greatest threat to elderly persons with pre-existing health conditions. “Young children are only slightly affected and robust healthy persons are: 1) likely to get over the infection on their own and 2) Very likely to get over it with treatment,” maintained Hedberg.
“The bottom line of course will be the number of virus carriers coming into the country from high infection-rate areas. This can be limited by curtailing flights FROM such countries and encouraging flights OUT of the US. Unfortunately, the government seems to be handling this backwards if it is handling it at all,” Hedberg added.
You’re getting advice from a zillion different places, and I don’t need to add to the confusion—Josh Patrick
Josh Patrick, founder of Stage 2 Planning Partners and host of The Sustainable Business podcast told me: “Yes, the markets are plunging. Yes, we don’t have nearly enough test kits and when we do, the number of cases will skyrocket. We need testing so we know where and how bad the issue is. That’s when we can start taking actions that we know will help.”
As Patrick noted, it appears the number of cases in South Korea and China is moving down. “South Korea has been testing extensively and is likely the best model for us to use right now. I’m hoping our government figures out how to get testing done widely so we know what the real issue and numbers are in the country.”
According to Patrick, we need to have all of our news sources and political leaders tell us the truth about what’s going on. “The advice we’re getting from the science community seems to be good advice. The advice from our politicians has been mixed. The truth is with all the disinformation about the virus and its effects makes it more difficult to know what to do and what not to do. The science people are saying we are now in a phase they term community spread, so it’s now being transmitted from one human to another within our country and not from people outside the country,” noted Patrick.
Dr. Hedberg, a neuroscientist by training, had a unique take on the stock market sell-off triggered by Coronavirus.
“This was a typical Stage-1 emotional response, which is usually highly volatile. The Stage-2 response came a bit later when investors began to realize how a large-scale shutdown in Chinese industry for an indefinite period would impact their holdings financially. The Stage-3 response which is underway right now is a more sober long-term assessment of the medical realities of the disease worldwide and how it may impact international trade and finance,” added Hedberg.
“We’ve been expecting a downturn in the markets, we just didn’t know what would trigger it. Now we know,” observed Patrick. “The markets don’t like uncertainty. That’s one thing we have a ton of right now. After we start seeing real numbers and see what the impact will be on the economy, I expect the markets will adjust appropriately… either up or down.”
Dr. Hedberg expects to see some “Stage 3” market correction as investors learn more about the disease and “how low the death rate is compared to the infection rate–and which segments of the population (i.e. the elderly) are most seriously affected.”
Job One: Helping clients keep emotions in check
Uninformed emotional selloffs should be “avoided at all costs,” noted Dr. Hedberg. “While IMCRA makes no claims to be an international financial advising organization, our general advice is to avoid stampeding out of certain holdings unless careful research proves that the organization in which stock is held is primarily supported by Chinese labor in areas like Wuhan, which are unlikely to recover rapidly.”
Patrick said that when pandemics come under control, markets historically correct. “I’m hoping that’s true this time as well.” In terms of predicting a recession or further market adjustment, Dr. Hedberg said the most accurate assessment will come from “monitoring the global impact of COVID-19 as we head toward springtime in the northern hemisphere and the likely decrease in the spread of the disease late this month and on into April.”
Common sense rules the day
Our experts agreed we should abide by the common sense (not bunker) approach to taking care of ourselves and our loved ones:
1) Refrain as much as possible from crowded environments where many people are breathing and re-breathing the same air.
2) Use gloves in public whenever possible.
3) Cough and sneeze into your elbow.
4) Use facemasks in public whenever possible.
5) Increase your consumption of vitamin C through citrus fruits.
6) Avoid physiologic stress situations such as going out into the cold inappropriately dressed.
7) If you exhibit symptoms, do not just wander into an emergency room or your doctor’s office till you call.
If you want to give up and convince yourself that the world’s coming to an end, go ahead. Just don’t drag the rest of us down with you. For all of our faults, the U.S. has always been a nation of fighters. We’re generous in times of need. We adapt to change faster than most other large countries. We don’t let anyone, or anything push us around.
We’ll get through this crisis–and all the ones that follow.
# Covid-19 #stock market #Tom Hedberg #IMCRA #Josh Patrick #Sustainable Business