Practical math on coronavirus (remember I am a medical professional and molecular biologist by training).
Although the current mortality rate is 3% it is almost certainly much less than that - only bad cases are even getting tested in China. So in my assumptions I figure that the recognized cases are perhaps only 10% of the total cases, since we know there are mild and asymptomatic cases documented.
That would put the mortality rate at 0.3%. This is spreading at a doubling rate of 6.4 days, so basically doubling every week. Current cases, recognized and not recognized, are probably around 100,000 to 150,000 (rather than the almost 30,000 documented cases. There is a severe shortage of testing ability in China so these are not unreasonable estimates given the reports on the ground. It may be much worse already.). 100,000 doubling every week leads to 1.6 million people infected in another month. This is not likely to be able to be contained even with the quarantine of Wuhan because of the relatively long incubation period and infectivity of mild and asymptomatic cases.
Since no one has immunity to this new virus, and it spreads rapidly, it's not unreasonable to suppose 20% of our population could end up infected (the Spanish flu infected a third of the world's population). 0.3% of 20% of 331 million US people would be 200,000 deaths - about five times a typical "moderately bad" flu year. Hospitals would be flooded with 2 million extra pneumonia cases in a relatively short period of time, straining our entire medical system. (Already it's not uncommon for my local hospitals to cancel elective surgeries in January during flu season due to lack of beds). It's not zombie apocalypse numbers but very disruptive. More disruptive if the germophobe-in-chief keeps going all-in on quarantine measures not recommended by the WHO.
If on the other hand my estimate is too generous, and the asymptomatic and mild cases are half the cases instead of 90% of the cases, the number of deaths in the US would be about one million.
This coronavirus is actually much more dangerous than the more lethal SARS or MERS precisely because of the larger number of mild or asymptomatic cases. They will cause it to be spread much more easily and make identifying cases much more difficult. 0.3% of 20% of the world's population is many more deaths than 30% of 5,000 people.
Now nothing may come of it - we are approaching spring, and this virus may die out in the summer as cold viruses do. That would give us some more time to work on treatments before it returns in the winter. China might actually be able to contain it after all if we keep putting out the fires and it doesn't get a foothold in countries like the Philippines of Cambodia or on the African continent. It could mutate and become weaker (or stronger!) as it spreads.
But in the current setting of a stock market that is already overvalued, the clear disruption of China's economy that is going to result in the short term, and the possibility of a major stock market drop if we are sitting here in a couple of months with numerous outbreaks in the US and people starting to panic, I want to have some of my investment in cash so that if there is that major drop, I can buy back in on the drop. My retirement will be within 3-7 years so I want a hedge against having to wait years for my investments to come back up like they did after the last recession. I'm willing to give up 50% of my possible gains over the next couple of months for the security of knowing I've locked in some of my current gains and could possibly make some real money if the worst occurs. I wouldn't bother if I was 10 or 20 years from retirement. And I don't usually market-time, this just happens to be an extraordinary situation.
BTW, when you read "oh, it's ok because they have a treatment now" - not so fast. There is some - very weak - evidence that maybe some combination of antivirals may work. But with a lot of Chinese pharmaceutical manufacturing at risk, who is going to make all those drugs? And is it feasible to make enough to treat everybody who needs them within a few months time? (Answer - no).
On the bright side, I did find an article on another, weaker coronavirus that indicated that caffeic acid (not caffeine) - a component in coffee - might have an effect on it, so drink your coffee if it shows up here!