Investing in Next Week's News

[MustacheAndaHalf]

Retire-Canada - Well, we don't know... maybe MMM did get banned - we don't see him post...

I think your reading of my comments is fair, but I'd like to modify what I said, and use your example.  Sure, one person applying a face punch can help someone learn what they did wrong.  But a bunch of people all piling on is just a beating.

The comments that followed had nothing to do with the current topic, and nothing to do with educating the earlier poster on why they were wrong.  Maybe sarcasm is allowed - that doesn't mean it's on topic.

----

Warren Buffet held a shareholders meeting where he announced he was not buying stocks during this crisis, which surprised many people (including me).  When I was timing the market in March, I figured Buffet had to be buying - it's a crisis with stocks at deep discounts.  Markets are probably trying to incorporate what Buffet said, and decide how negative to go based on it (while many companies are also reporting earnings at the same time - which has an impact).

From what I've read, Buffet believes it's possible - not a certainty, but possible - that U.S. stocks are facing a decade or two without profits, without a recovery.  Until he can eliminate that possibility, I think he plans to have a large cash pile.  Very grim scenario.

The way I view things now, is that governments are helping the world deny reality.  Reality is few businesses are open, limited consumer spending, and extraordinarily high unemployment.  Almost everyone agrees to that short term denial of reality as a prevention measure against COVID-19 deaths.  But at what point does denying reality become unsustainable?

The U.S. already lags behind in daily per-capita testing.  Back in March, I predicted the market bottom based on testing surpassing the rate at which the virus spread.  Testing drove uncertainty and panic out of the markets.  I hope testing will become a priority, since it provides one pathway towards reopening some activities.

I don't know where medial trials will lead.  Remdesivir has been approved for compassionate use by the FDA, but it seems to reduce hospital stays by 1/3rd - not a cure.  Maybe in combination with other treatments, it can reduce the danger of COVID-19.  But at this time, that's unclear.

Finally, vaccines.  Roche CEO suggested a 2 year time frame, and in general I hear that it's too soon to expect a vaccine this year.  Drug trials to try and find a vaccine, sure - but no drug prove safe and effective by the end of 2020.  Bloomberg had a 30 min special where several drug and vaccine company CEOs shared their views.

Best case scenario, some existing drugs are found to have a massive impact on COVID-19, reducing it to being far less dangerous.  A quick treatment without a long hospital stay, ideally.  Or the vaccine trials that are furthest along are accelerated based on related trials showing safety, and we are surprised by a vaccine in 2020 Q4.

Average scenario, early vaccine trials have problems and require additional testing to either find an effective dose, or to mitigate safety concerns.  Drugs are only useful in combination, and provide a benefit but not enough to reopen public events.

Bad but likely scenario, opening up seems to go well, but the virus starts spreading from a much higher number of initial cases.  The death rate soars far above prior numbers, and we might be able to open the economy - but one shattered by loss.

Worst case scenario, no cure and governments can't sustain relief indefinitely.  Governments start withdrawing aid to companies, since they can't afford it.  Bankruptcies soar in poorer countries, and eventually the U.S. can't sustain relief efforts indefinitely.  Very high unemployment, without relief efforts, could stir up mass protests...   It sounds like Buffet's possible scenario is closest to my worst case scenario.

I'm hopeful the worst case doesn't play out - the world's medical researchers are working to shorten the crisis as much as possible.  In terms of data, that's more difficult.  I'm racing hedge funds or high frequency trading firms to discover information about drugs and COVID-19.  Currently, I'm simply being slowly optimistic - without data, I should predict markets tend to go up over the long term.

[mrmoonymartian]

49-50% is a laughably narrow range for a hand-wavy prediction. If we can't share a laugh about that, then what's the point of living? I thought it was likely that they actually meant to type 40-50%, so would see the funny side.

[waltworks]

Generally speaking, we try to make sure new folks don't see market timing threads and think they should do that. There is a mountain of evidence that market timing/predicting the future doesn't work, so you'll get a lot of snark and mockery on any market timing thread, for good reason. We are trying to make sure new investors get the message.

Plus come on, a lot of that was funny. 49-50% of Fake Jews agree!

-W

[Jamese20]

Retire-Canada - Well, we don't know... maybe MMM did get banned - we don't see him post...

I think your reading of my comments is fair, but I'd like to modify what I said, and use your example.  Sure, one person applying a face punch can help someone learn what they did wrong.  But a bunch of people all piling on is just a beating.

The comments that followed had nothing to do with the current topic, and nothing to do with educating the earlier poster on why they were wrong.  Maybe sarcasm is allowed - that doesn't mean it's on topic.

----


Warren Buffet held a shareholders meeting where he announced he was not buying stocks during this crisis, which surprised many people (including me).  When I was timing the market in March, I figured Buffet had to be buying - it's a crisis with stocks at deep discounts.  Markets are probably trying to incorporate what Buffet said, and decide how negative to go based on it (while many companies are also reporting earnings at the same time - which has an impact).

From what I've read, Buffet believes it's possible - not a certainty, but possible - that U.S. stocks are facing a decade or two without profits, without a recovery.  Until he can eliminate that possibility, I think he plans to have a large cash pile.  Very grim scenario.

The way I view things now, is that governments are helping the world deny reality.  Reality is few businesses are open, limited consumer spending, and extraordinarily high unemployment.  Almost everyone agrees to that short term denial of reality as a prevention measure against COVID-19 deaths.  But at what point does denying reality become unsustainable?

The U.S. already lags behind in daily per-capita testing.  Back in March, I predicted the market bottom based on testing surpassing the rate at which the virus spread.  Testing drove uncertainty and panic out of the markets.  I hope testing will become a priority, since it provides one pathway towards reopening some activities.

I don't know where medial trials will lead.  Remdesivir has been approved for compassionate use by the FDA, but it seems to reduce hospital stays by 1/3rd - not a cure.  Maybe in combination with other treatments, it can reduce the danger of COVID-19.  But at this time, that's unclear.

Finally, vaccines.  Roche CEO suggested a 2 year time frame, and in general I hear that it's too soon to expect a vaccine this year.  Drug trials to try and find a vaccine, sure - but no drug prove safe and effective by the end of 2020.  Bloomberg had a 30 min special where several drug and vaccine company CEOs shared their views.

Best case scenario, some existing drugs are found to have a massive impact on COVID-19, reducing it to being far less dangerous.  A quick treatment without a long hospital stay, ideally.  Or the vaccine trials that are furthest along are accelerated based on related trials showing safety, and we are surprised by a vaccine in 2020 Q4.

Average scenario, early vaccine trials have problems and require additional testing to either find an effective dose, or to mitigate safety concerns.  Drugs are only useful in combination, and provide a benefit but not enough to reopen public events.

Bad but likely scenario, opening up seems to go well, but the virus starts spreading from a much higher number of initial cases.  The death rate soars far above prior numbers, and we might be able to open the economy - but one shattered by loss.

Worst case scenario, no cure and governments can't sustain relief indefinitely.  Governments start withdrawing aid to companies, since they can't afford it.  Bankruptcies soar in poorer countries, and eventually the U.S. can't sustain relief efforts indefinitely.  Very high unemployment, without relief efforts, could stir up mass protests...   It sounds like Buffet's possible scenario is closest to my worst case scenario.

I'm hopeful the worst case doesn't play out - the world's medical researchers are working to shorten the crisis as much as possible.  In terms of data, that's more difficult.  I'm racing hedge funds or high frequency trading firms to discover information about drugs and COVID-19.  Currently, I'm simply being slowly optimistic - without data, I should predict markets tend to go up over the long term.

So on this forum warren buffett would be getting face punched by a bunch of folks who think they know better than him at this moment in time? fascinating indeed... personally to get someone to change their potential behaviour in a positive light is not really to make fun of them and make them feel daft in any situation.  by the way on my thread before mine got closed down people went straight into that mode of thinking and my view before WB spoke about it in detail is more in line with his thinking based on this current event. Indexing long term is best way to go but if you have just received big lumps and or are in cash for whatever reason... I do not think it is wise to just blindly throw it into the market and more than likely handicap yourself. If your invested heavily already dont change a thing.... that is what i have decided i will do.. already heavily invested pension wise and will make no changes at all - my second stage of investing into an ISA is a slightly different matter i will see how this thing unfolds abit longer first

[waltworks]

Maybe what you should do is investigate Warren Buffett's actual advice to investors. Which he has provided many times...here's are a couple of the thousands of links you can find on this topic. Note that he doesn't mention anything about picking stocks, market timing (in fact he advises strongly against it), etc - just DCA into the market, stay the course.

https://www.businessinsider.com/personal-finance/warren-buffett-recommends-index-funds-for-most-investors
https://finance.yahoo.com/news/why-warren-buffett-thinks-timing-195318169.html

You can't successfully imitate Warren Buffett investing any more than you can successfully imitate Lebron James on a basketball court, and trying is likely to hurt you.

-W

[Jamese20]

Maybe what you should do is investigate Warren Buffett's actual advice to investors. Which he has provided many times...here's are a couple of the thousands of links you can find on this topic. Note that he doesn't mention anything about picking stocks, market timing (in fact he advises strongly against it), etc - just DCA into the market, stay the course.

https://www.businessinsider.com/personal-finance/warren-buffett-recommends-index-funds-for-most-investors
https://finance.yahoo.com/news/why-warren-buffett-thinks-timing-195318169.html

You can't successfully imitate Warren Buffett investing any more than you can successfully imitate Lebron James on a basketball court, and trying is likely to hurt you.

-W

dont see the relevant of this to what i said to be honest.. Warren has also said previously that he has a dual answer to what individuals should do.. he has a bigger platform now and speaks to millions of people, so he sensibly sticks with the safest for the masses, but dont fool yourself into thinking an individual cannot take advantage of current events like this one. I have family members that are doing this right now and have doubled their money already which would not have been possible in an index. Even as i look now thee are large stable businesses that are heavily discounted that can double your money if you wait it out. The major drawback here is that these events come around not very often - so indexing most of the time will always make the most sense to me

[waltworks]

LOL. We're back to the "that's not what I wrote" thing again?

This should be fun.

-W

[Jamese20]

LOL. We're back to the "that's not what I wrote" thing again?

This should be fun.

-W

just because you dont read what i say properly and dismiss it, that is not my problem

[MustacheAndaHalf]

Generally speaking, we try to make sure new folks don't see market timing threads and think they should do that. There is a mountain of evidence that market timing/predicting the future doesn't work, so you'll get a lot of snark and mockery on any market timing thread, for good reason. We are trying to make sure new investors get the message.

Passive indexing beats most active funds over most time periods.  The data I've seen shows the longer the time period, the fewer active funds beat their benchmark.  It's also important not to give new investors a false belief that passive indexing always beats all active funds, since that belief can easily be punctured.  Back in 2008, about 46% of large cap funds beat the S&P 500.
https://us.spindices.com/documents/spiva/spiva-us-year-end-2008.pdf#page=3

So on this forum warren buffett would be getting face punched by a bunch of folks who think they know better than him at this moment in time? fascinating indeed...

Hard to know why you think that, since you quoted my entire post instead of parts of it.

Buffett's advice to individual investors is already well known:

"Berkshire Hathaway Chairman and CEO Warren Buffett has long said that owning an S&P 500 stock market index fund is the best bet long-term investors can make."
https://www.cnbc.com/2020/05/04/buffett-isnt-buying-but-says-one-stock-market-bet-still-makes-sense.html

[J Boogie]

I have family members that are doing this right now and have doubled their money already which would not have been possible in an index. Even as i look now thee are large stable businesses that are heavily discounted that can double your money if you wait it out.

You probably also have people in your personal network that went to most or all cash over a month ago and are still down ~30% waiting for the "real" bottom stressing about the past few weeks of massive gains they're missing out on.

You probably also have people in your network that tried to call the oil bottom a month ago and lost their shirt on it, doubling down every 10% drop.

We often just hear about the successes.

[MustacheAndaHalf]

I'm currently trusting news coverage, rather than doing my own footwork, which leaves me optimistic.  But my theory to justify pessimism just didn't pan out.

About a month ago, Denmark opened schools and I predicted disaster.  I watched the number of cases closely... and it remained the same... 1 week... 2 weeks.  It's been a month, and they have the same number of daily new cases recently as they did a month ago.  Denmark's testing is far above the number of new cases, so testing is not the issue.  It just plain looks like my expectation of an outbreak was wrong, based on the data.

Denmark has ~150 cases/day, and a goal of 20k tests/day (I can't find an update on when that goal is reached, or if it's been replaced by 32k or 100k per day).  So Denmark has 133 tests/day for each new COVID-19 case.  Meanwhile, taking the median level of testing over the past 6 days, the U.S. has 250k tests/day and 24k new cases/day.  That means the U.S. has about 10 tests/day for each new COVID-19 case.  So the U.S. is on a more fragile foundation if anything goes wrong.  But it looks more optimistic than I expected, overall.

There's about 4 drug trials attempting to find a vaccine.  I read the most about the Oxford approach, which biases my thinking towards their drug being first and most promising.  But another company is starting a phase 2 trial sooner, which involves 500-600 people.  Each stage of development and testing has pressed ahead at record speeds, so prior estimates of 2 years for a vaccine may be outdated.  There's also some promising treatments involving antibodies from people who survived COVID-19, but I'm unclear on the details - or how far that can scale up.

During a reopening, most restaurants will be closed, and most restaurant workers unemployed.  I think that bad news might be masked by news reporting, which is likely to focus on long lines of cars at fast food drive thru restaurants.  Some restaurants might even reopen and lose money, while others will stay closed.  But I think the novelty of seeing long lines of cars at drive thru restaurants will probably draw the most news attention, and distract people from the negative news.
https://smallbusiness.chron.com/percentage-sales-drive-through-windows-fast-food-restaurants-75713.html

My best guess at negative news is Congress.  The CEO of Paychex said on CNBC that about half of small businesses applied for loans, and either 1/2 or 1/4 have received their money.  A large number of small businesses are very close to bankruptcy, and can only avoid it with help from government.  If the loan money runs out and Congress still doesn't act, bankruptcies could spread quickly.

So... will Congress act?  will there be good news about drug treatments/vaccines?  will reopening lead to outbreaks?
Overall I'm more optimistic than pessimistic, based on what I've read and what I know.

[BECABECA]

The market is still not using a realistic reopening timeframe, based on the erroneous assumption that the covid outbreak has already peaked. But since states are reopening against the advice of the epidemiologists, and before any meaningful reduction in current active cases, ability to contact trace, an effective treatment, much less a vaccine, the stock market can continue to ignore the pandemic until we get shut back down again or until enough people are missing work due to being sick, dying, or afraid.

...
We are at a crossroads:
1. The country reopens on May 1st as the stock market is assuming. Result: since we will still have hundreds of thousands of active cases, there’s no way we can manage contact tracing for all of that and we have a huge surge of new cases. That’ll lead to a big market crash.
2. The country gets real and ties its reopening to when our new cases are growing slower than our new recoveries, and the total active cases has gotten down to a low enough number that we can manage contact tracing for all of them. Result: country reopening date gets pushed way back from when the stock market is assuming and the market crashes big.

I am personally convinced, and will be reducing my stock exposure this week (already did 15% yesterday, and will do another 15% today, and another 15% later this week). I will renter when new cases fall below new recoveries. After that, it’ll only be a matter of time before total active cases drop low enough that we can try to manage contact tracing and reopen. But even after that, I’ll be continuing to monitor the case numbers and if it looks like we will have another wave that’ll require another shutdown, I may opt to jump out again.

So it looks like we are in Scenario 1: reopen and get a huge surge of new cases. But instead of hundreds of thousands of active cases in the U.S., it’s worse: we currently have over 1 million active cases. Our situation is nothing like Denmark’s.

Even though the IHME model increased its estimate of how many U.S. covid deaths we will end up with by the end of this month, it’s still ridiculously optimistic. Here’s an interesting article that outlines each of major the covid forecast models:
https://projects.fivethirtyeight.com/covid-forecasts/?ex_cid=rrpromo

Notice that none of them assume any increase of current movement levels:

assumes that people’s movement levels won’t deviate from the previous week.

assumes each state’s current social distancing policies will continue indefinitely.

assumes that every week there will be a 20 percent reduction in contact between people compared to the previous week

assumes that there will continue to be interventions such as stay-at-home orders

assumes that current policies and movement patterns will continue until new infections drop to a very small number

assumes that current interventions will continue indefinitely

None of these models assumes anything close to the increase in movement levels that we are seeing (and will continue to see in the coming weeks).

Now look at the current number of active cases in the U.S. again: 1,015,050. Taking the total worldwide covid deaths and dividing it by the total worldwide covid cases gets us 274,985 / 3,992,967 = 6.89% death rate for confirmed cases. So our current active cases * 6.89% = 69,904 new deaths from just the confirmed cases we already have as of today. Add that to our 78,248 deaths already to date, and that’s 148,152 total deaths in about a month, when all the current cases will have a chance to come to have a final outcome. That’s best case scenario, assuming we don’t get a single new case after this moment.

I’m still happy to hang out on the sidelines with around half my portfolio in cash. Nothing so far gives any indication that the pandemic is under control.

[BicycleB]

...

Now look at the current number of active cases in the U.S. again: 1,015,050. Taking the total worldwide covid deaths and dividing it by the total worldwide covid cases gets us 274,985 / 3,992,967 = 6.89% death rate for confirmed cases. So our current active cases * 6.89% = 69,904 new deaths from just the confirmed cases we already have as of today. Add that to our 78,248 deaths already to date, and that’s 148,152 total deaths in about a month, when all the current cases will have a chance to come to have a final outcome. That’s best case scenario, assuming we don’t get a single new case after this moment.

I’m still happy to hang out on the sidelines with around half my portfolio in cash. Nothing so far gives any indication that the pandemic is under control.

I agree there's not a clear indication that the pandemic is under control. Also I agree that a cash heavy position to guard against overly optimistic stock prices may be wise, if you're going to market time at all. However extending the 6.89% global death rate to US current active cases my not be accurate.

1. Where are the numbers coming from that are the basis for the 6.89%? I find somewhat different ones on worldometers, which may not be accurate either: 275,698 deaths as of this writing; 1,651,927 cases with an outcome. Sorry I haven't learned to post screen shot. That would be roughly 16.9% global death rate.

https://www.worldometers.info/coronavirus/

2. You suggest comparing deaths to date globally to current global cases, then multiply that % by US current cases. That would be a valid way to project US deaths expected if the US % is really going to be the same. But then you add more deaths to that, which overstates the expected deaths. Implicitly, you're double counting some deaths in your calculation.

3. I think a better way would be to look at the % of deaths in US closed cases, then multiply that % by active (unresolved) US cases. Then we'd be using US rates for US projections, and not double counting. For example as I write, the link above shows:

US deaths 78,498
US recovered 222,008
US active cases 1,318,686

So, calculating:
US resolved cases = deaths + recovered = 300,506
death rate in resolved cases = 78,498/300,506 = 26.12%
active cases x death % = 1,318,686 x .2612 = 344,166

4. However, proposal 3 still assumes future death rates will be the same. That may not be true. For example, as the US tests more often, our active cases could include more people who are unlikely to die. The result would be that the future death % is lower than the death % to date. (Or it could be higher, if more hospitals get more overwhelmed. Hard to know. In the near term, I suspect the testing effect will be more powerful.)

5. For a long time the number of recoveries in USA was barely more than the number of deaths. That changed in the last few weeks, perhaps as recoveries started being recorded and tested people in decent health were included. My guess from that trend is that US deaths in the next few weeks will be much lower than the 344,166. Maybe even lower than your calculation too.

I'm not sure our calculations yet are getting accurate enough to be reliably predictive even if we are guessing correctly about the results.

[BECABECA]

...
However extending the 6.89% global death rate to US current active cases my not be accurate.

1. Where are the numbers coming from that are the basis for the 6.89%? I find somewhat different ones on worldometers, which may not be accurate either: 275,698 deaths as of this writing; 1,651,927 cases with an outcome. Sorry I haven't learned to post screen shot. That would be roughly 16.9% global death rate.

https://www.worldometers.info/coronavirus/

That is the same site I’m getting my numbers from. I am using the WHO’s method of calculating death rate as total deaths to date divided by total cases to date. I’m using this, as opposed to the death rate of the smaller subset of cases with an outcome because it will give us a best case scenario, since many of the cases haven’t had time to die yet. To date, this aggregate death rate has been going up, whereas the death rate of the smaller subset with an outcome has been going down. I’m trying to get at the lower bound: what’s the least number of deaths we could possibly expect from the active cases we currently have, so that’s why I’m using the best case death rate. I agree that this is likely to prove far too optimistic. But it’s to show that the forecast models are even more optimistic than that, which is bonkers.

2. You suggest comparing deaths to date globally to current global cases, then multiply that % by US current cases. That would be a valid way to project US deaths expected if the US % is really going to be the same. But then you add more deaths to that, which overstates the expected deaths. Implicitly, you're double counting some deaths in your calculation.

I’m comparing deaths to date globally to total global cases, not just active global cases. I’m not double counting, because I’m only multiplying the US active cases with this death rate, as opposed to the US total cases. So it’s excluding the deaths and recoveries that we have had to date. I don’t need to estimate the death rate for the US cases that have already had an outcome, I can just use the actual number of deaths we have had, so I add those.

3. I think a better way would be to look at the % of deaths in US closed cases, then multiply that % by active (unresolved) US cases. Then we'd be using US rates for US projections, and not double counting. For example as I write, the link above shows:

US deaths 78,498
US recovered 222,008
US active cases 1,318,686

So, calculating:
US resolved cases = deaths + recovered = 300,506
death rate in resolved cases = 78,498/300,506 = 26.12%
active cases x death % = 1,318,686 x .2612 = 344,166

Again, I’m trying to get at the lower bound. Also, I think this might be some of the source of the confusion: you labeled 1,318,686 as US active cases, but this is US total cases. US active cases, which is the number I’m using, is 1,015,050 which excludes the cases that have had a conclusion (death or recovered).

4. However, proposal 3 still assumes future death rates will be the same. That may not be true. For example, as the US tests more often, our active cases could include more people who are unlikely to die. The result would be that the future death % is lower than the death % to date. (Or it could be higher, if more hospitals get more overwhelmed. Hard to know. In the near term, I suspect the testing effect will be more powerful.)

Exactly, which is why I was trying to bound the problem by identifying the best case scenario. Future death rates won’t be the same, but by using the aggregate death rate that has been increasing over time, as opposed to the outcome death rate that has been decreasing over time, we can be sure we’re underestimating the true number.

5. For a long time the number of recoveries in USA was barely more than the number of deaths. That changed in the last few weeks, perhaps as recoveries started being recorded and tested people in decent health were included. My guess from that trend is that US deaths in the next few weeks will be much lower than the 344,166. Maybe even lower than your calculation too.

Yes, which is why the outcomes death rate is pessimistic and it decreases over time and with more testing. It’d be a good one to use for the upper bound, but then I’d have to calculate an upper bound R0 given the expected reopening, and that is way too up in the air.

I'm not sure our calculations yet are getting accurate enough to be reliably predictive even if we are guessing correctly about the results.

I’m pretty confident that the actual deaths will be more than my lower bound estimate of 148,152 by a month from now, given I used the best case death rate and assumed no more new cases past the cases we currently have today. Using those assumptions results in this  ludicrously low number, but I was just putting it out there to point out that all the major forecast models are estimating lower than that, which doesn’t add up.

[BicycleB]

^ @BECABECA, thanks - that helps a lot.

There's some glitch in my brain that doesn't follow the part 2, but maybe I'll get after re-reading. Anyway, I hope it does come out near the lower bound.

[MustacheAndaHalf]

I'll put my optimism on hold while I dig into the data, but I would argue it's far more complex than treating the U.S. as a monolith that all opens on the same day.

Governors Cuomo (NY) and Newsom (CA) control two out of the three states with the highest GDP, and their daily briefings make clear each state is acting with it's own data and guidelines.  Regarding GDP, I assume it's an okay proxy for stock market impact, so here's the top 10 states by GDP, and their week over week growth in cases on 5/6 - 5/8:

California   24.35%   23.97%   22.59%
Texas   28.14%   25.44%   25.44%
New York   8.10%   7.59%   7.17%
Florida   14.49%   15.25%   12.87%
Illinois   35.49%   33.93%   31.59%
Pennsylvania   18.29%   16.65%   15.72%
New Jersey   13.34%   12.93%   12.09%
Ohio   24.70%   22.77%   22.80%
North Carolina   28.22%   25.91%   26.52%
Georgia   19.27%   20.39%   17.07%

My guess is they aren't comparable to Europe, but let me show Europe's highest GDP countries, plus a couple others I'd like to highlight.

Germany   4.10%   3.94%   3.97%
France   4.61%   4.55%   5.32%
United Kingdom   21.58%   20.58%   19.00%
Italy   5.34%   5.06%   4.70%
Spain   3.48%   3.75%   4.41%
...
Sweden   17.81%   16.74%   17.40%
...
Denmark   10.10%   9.89%   9.54%


Of these countries, the UK seems like the closest match to most (high GDP) U.S. states.  I believe the UK is waiting until the end of this month to start reopening.  When Georgia's governor announced reopening plans, he received criticism from above (President Trump) and below (Atlanta's Mayor).  That awkward political position criticized by both parties might not be tenable.  I don't know the individual plans of most states.

I've been tracking Denmark, where schools reopened and after 4 weeks and counting, no outbreak.  That data ruined my pessimistic view, leaving me optimistic.  Denmark's growth in new cases is much lower than the U.S. states shown above.  Denmark also has over 100 tests per day per new COVID-19 case, and plans on using tests to do random population testing.  The U.S. is closer to 10 tests per day per new COVID-19 case.  The U.S. has much less room for mistakes until either cases drop significantly or testing ramps up significantly.

I also included Sweden, which has opted to keep it's economy mostly open and put responsibility on social distancing on individual citizens (rather than enforced by law).  That points to a possible trade off between the risk of harm from COVID-19 and the risk of harm from closing the economy.  Unfortunately similarities end there - in Sweden, you take the day off work if you feel sick in the slightest way, and you get your full pay, with universal health care if it's needed.  Many U.S. cities, by contrast, offer no sick pay for being off work, and any doctor / hospital visit can be quite expensive.  Sweden's incentives assist social distancing, while U.S. incentives reward spreading the virus (sick people working and avoiding doctors) for a significant amount of the population.

I suppose my homework is roughly:
* what are the plans of each of the ten highest GDP states?
* what situations made a second wave of outbreaks more likely in other countries?  Less likely?
* do U.S. states look more like "second wave" countries, or those who avoided a second wave?

I'm currently optimistic.  Owing to daily 3X leveraged ETFs, my portfolio acts like it's 105% equities while holding 8% cash.  I'm going to review that situation before markets open Monday, at which point it could change.

[MustacheAndaHalf]

CNN has summarized the reopening plans of each state here:
https://edition.cnn.com/interactive/2020/us/states-reopen-coronavirus-trnd/
Besides each state's name, I'm listing the weekly growth in total cases.  Since I divide this Saturday cases by last Saturday, the number is a bit more stable.  I take the median of the past 3 growth rates.


California (+24% week/week)
"Also May 4 the state announced some retailers -- clothing stores, florists, and bookshops — will be allowed to reopen with curbside pickup and physical distancing."
Curbside pickup is a good alternative to reopening confined spaces.

Texas (+25% week/week)
"All retail stores, restaurants, movie theaters, malls, museums, and libraries were permitted to reopen on Friday, May 1, but must limit their capacity to 25% of their listed occupancy."
These measures seem aggressive to me, especially reopening movie theaters at 25% capacity.  Texas has roughly 14 tests/day per new COVID-19 case.

New York (+8% week/week)
From various new articles, I believe New York is still under lock down.  Their next step would be allowing curb side pickup.  I think New York, in sticking to the data, looks less aggressive than most states.

Florida (+14% week/week)
"Starting May 4, restaurants may offer outdoor seating with six-foot space between tables and indoor seating at 25% capacity. Retail can operate at 25% of indoor capacity."
Looks appropriate.  I wonder if restaurants will actually operate at 25% of capacity, at a loss.

Illinois (+34% week/week)
"Gov. J.B. Pritzker issued a modified stay-at-home order that went into effect on May 1 and extends through the end of the month ... a face covering will be required."
Still closed, which matches their data.  The only one of these states where I saw CNN mention face coverings,


I'm stopping there owing to how tricky it is to understand CNN's information.  That list is 41% of U.S. GDP, so it's a sizable chunk of the country's production.  Of the group, the reopening of movie theaters (at 1/4th capacity) seems the most aggressive action, and suggests I should watch Texas carefully for signs of an outbreak.

[Buffaloski Boris]

Here's a problem I see with this analysis: to what extent does it reflect actual behavior?  We have businesses opening as a legal matter on the one hand, but what does that mean in measuring how people react to that?  Just because a business is going to open doesn't mean that customers are going to line up to come back or even visit. It's almost as if we expect people to disregard a roughly 15-20% unemployment rate, the potential risk that they face in interacting to go shopping or purchase services, and the long term affects of a generally successful "stay home and avoid death" messaging campaign over the last few months.   

There's a good article on this in the Economist entitled "The 90% economy that lockdowns will leave behind."  One thing the article didn't note though is that a 10% drop in real GDP is a depression and is roughly twice the drop we saw during the GFC. 

[js82]

Here's a problem I see with this analysis: to what extent does it reflect actual behavior?  We have businesses opening as a legal matter on the one hand, but what does that mean in measuring how people react to that?  Just because a business is going to open doesn't mean that customers are going to line up to come back or even visit. It's almost as if we expect people to disregard a roughly 15-20% unemployment rate, the potential risk that they face in interacting to go shopping or purchase services, and the long term affects of a generally successful "stay home and avoid death" messaging campaign over the last few months.   

Agreed.  People will hold off on luxury/discretionary purchases if they're not comfortable with their financial situation, and they'll hold off on these same activities if there's a perceived risk of infection if they're worried about infecting mom/dad/grandma/grandpa.  Lots of people are still going to opt for Amazon over physical retail, and be very cautions when it comes to high-density/high-traffic places such as museums, concerts, stadiums, and gyms.  And that's not even accounting for that fact that companies can't restart their supply chains instantly.  Getting supply chains fully back up to speed will take months, in many instances.

I do think that a few types of businesses will bounce back very quickly but for the economy at large it'll be a long, slow climb.  Some sectors(retail) will likely never be the same.

That said, the stock markets don't move on what happens, unless that event changes the forward-looking trajectory. I think a lot of this is priced in already.  Anyone stating that they expected a fast/ "V-shaped" recovery was either delusional or a liar, and most successful investors(who control the bulk of the money) are not delusional.

[Buffaloski Boris]

Here's a problem I see with this analysis: to what extent does it reflect actual behavior?  We have businesses opening as a legal matter on the one hand, but what does that mean in measuring how people react to that?  Just because a business is going to open doesn't mean that customers are going to line up to come back or even visit. It's almost as if we expect people to disregard a roughly 15-20% unemployment rate, the potential risk that they face in interacting to go shopping or purchase services, and the long term affects of a generally successful "stay home and avoid death" messaging campaign over the last few months.   

Agreed.  People will hold off on luxury/discretionary purchases if they're not comfortable with their financial situation, and they'll hold off on these same activities if there's a perceived risk of infection if they're worried about infecting mom/dad/grandma/grandpa.  Lots of people are still going to opt for Amazon over physical retail, and be very cautions when it comes to high-density/high-traffic places such as museums, concerts, stadiums, and gyms.  And that's not even accounting for that fact that companies can't restart their supply chains instantly.  Getting supply chains fully back up to speed will take months, in many instances.

I do think that a few types of businesses will bounce back very quickly but for the economy at large it'll be a long, slow climb.  Some sectors(retail) will likely never be the same.

That said, the stock markets don't move on what happens, unless that event changes the forward-looking trajectory. I think a lot of this is priced in already.  Anyone stating that they expected a fast/ "V-shaped" recovery was either delusional or a liar, and most successful investors(who control the bulk of the money) are not delusional.

Well let’s play that out a little bit. If what we’re saying then is that a hard recession or depression has been priced in, then what does that say that the market expects in the way of returns heading forward? Keeping mind that we’re paying the present value of anticipated  earnings streams?  Seems to me that the market is OK with an awful low risk premium. I’m not a fan of the EMH but let’s say it’s correct for a moment. It seems that the news is even worse than saying the markets are delusional. They’re essentially pricing risk at a very, very low premium.

[waltworks]

I think both institutional and retail investors don't see an alternative, honestly. We might be looking at higher P/E ratios forever (they've been drifting up for decades as it is).

I mean, there's a numerator and a denominator. If most investors aren't interested in selling, earnings can go as low, and P/E as high, as you want and it doesn't mean anything for stock prices. Maybe earning 4 cents for your dollar in earnings is the new normal. C'est la vie.

-W

[Buffaloski Boris]

I think both institutional and retail investors don't see an alternative, honestly. We might be looking at higher P/E ratios forever (they've been drifting up for decades as it is).

I mean, there's a numerator and a denominator. If most investors aren't interested in selling, earnings can go as low, and P/E as high, as you want and it doesn't mean anything for stock prices. Maybe earning 4 cents for your dollar in earnings is the new normal. C'est la vie.

-W

Yep. Being willing to take an expected 4% nominal return for risk-on assets to me is just crazy. With cash you get flexibility without the volatility. Try this one on for size: the future of FIRE is less investment and more just raw savings than what we’ve been used to.

[MustacheAndaHalf]

Buffaloski Boris - The article was interesting for it's descriptions of consumer behavior and two countries with a second wave.  But it presumes COVID-19 can't be treated or cured - fear goes away if the treatments become effective, or if a vaccine is available.  I think the best case for optimism is this wikipedia article:

https://en.wikipedia.org/wiki/COVID-19_drug_development
"By late April, some 330 clinical trials were in progress worldwide to evaluate potential therapies against COVID-19."
...
"By May, several potential post-infection therapies, including favipiravir, remdesivir, lopinavir and hydroxychloroquine (or chloroquine) used in the international Solidarity trial, were in the final stage of human testing[2][5][18][25] – Phase III-IV clinical trials – and five vaccine candidates had entered the second stage of human safety, dosing, and efficacy evaluation, Phase II."

The article mentions an 84% failure rate for vaccines, and 5 vaccines currently in testing.  Some drugs fail at stage I trials, which isn't relevant to vaccines already at stage II.  So the failure rate is probably slightly lower.  In a global pandemic, demand for a vaccine means there's no financial reason to abandon development.  But ignoring both of those factors, about 60% of the time one or more vaccines should get all the way through testing.

The wikipedia article shows stage I trials take about 18 months, which is also the time frame quoted for Moderna's vaccine:

https://clinicaltrials.gov/ct2/show/NCT04283461
"Actual Study Start Date  :   March 16, 2020
Estimated Primary Completion Date  :   September 20, 2021"

Wikipedia and the original application both agree: the normal time for a phase I trial is 1.5 years (78 weeks).


https://www.timesnownews.com/health/article/moderna-covid-19-vaccine-mrna-1273-gets-fda-approval-for-phase-2-trial/588729
"Moderna Inc said on Thursday that its novel coronavirus vaccine candidate ‘mRNA-1273’ has been cleared by the US Food and Drug Administration (FDA) for phase 2 study."
"The Cambridge-based company is now finalising the protocol for the  pivotal phase 3 trial, which is expected to begin early this summer if all goes well as planned. Moderna said it is now preparing to potentially have its first biologics license application approved as soon as 2021."


This vaccine didn't take 78 weeks for phase I trials, it took 7.5 weeks (Mar 16 - May 7).  The drug may fail in either phase II or phase III testing, but the time frame is still relevant even if it fails.  Phase III is expected to start by "early this summer", where normally phase II takes about a year, not months.


A large number of treatments and vaccines are moving at record speed through drug trials.  Any given drug may not prove safe and effective, but as a group there's no chance(*) that all 330 attempts are failures.
("no chance": A failure rate of 90% raised to the 330th power suggests all 330 fail 1 time in 1 million billion)

Anyone stating that they expected a fast/ "V-shaped" recovery was either delusional or a liar, and most successful investors(who control the bulk of the money) are not delusional.

The idea of this thread is supporting views with factual evidence, not pre-emptive insults ("liar", "delusional").
Do you have evidence or articles suggesting nobody thinks a "V" shaped recovery is possible?
How do you explain stock market performance in March/April?

[ChpBstrd]

I think both institutional and retail investors don't see an alternative, honestly. We might be looking at higher P/E ratios forever (they've been drifting up for decades as it is).

I mean, there's a numerator and a denominator. If most investors aren't interested in selling, earnings can go as low, and P/E as high, as you want and it doesn't mean anything for stock prices. Maybe earning 4 cents for your dollar in earnings is the new normal. C'est la vie.

-W

When I hear this rationale, I think this is taking the present value equation to extremes. I've made enough Excel errors to know a GIGO error when I see it. At a discount rate of nada, a stream of future earnings is worth the sum of the future earnings. But even if the PV formula says it's a fair price, why would it be reasonable to put $2,000 at risk to buy a 20-year expected earnings stream of $100/year? Why not (a) pay yourself from your own cash, risk-free, or (b) sit in cash and wait to buy in when higher returns are offered, also essentially risk-free?

Yes, I know fund managers who need to keep billions of dollars perfectly liquid can't just put it in an FDIC-insured savings account. I also know that inflation tends to run 2-3% per year in typical times (although we will likely have deflation this year). From the perspective of a retail investor, the benefits do not seem to justify the risks because we are in no way short-squeezed or forced into buying no matter the price. That was true six months ago, but the low cost of risk is even more stark now that rates have fallen, people are speculating about depression or not, and the forward PE ratio is 22 and rising.

https://www.marketwatch.com/story/the-stock-market-is-pricier-than-its-been-since-the-dot-com-bubble-even-as-earnings-forecasts-continue-to-plunge-2020-05-06?mod=markets

[waltworks]

Oh, I'm not saying I think stocks are fairly valued. If you made me stake out a position I'd say they're 25-50% overvalued.

But I've also been around long enough to realize that I've thought that for almost 2 decades now (my entire investing life). It's a good thing I didn't wait for CAPE <15 (way back average, now 17ish I guess) to invest my money, because I was in freaking grade school in the 80s the last time that happened, other than a month or two in 2009.

30+ years of not mean reverting is a long time. I'd be pretty sorry if I refused to invest over that whole time because I thought (based on legit metrics!) that stocks were overvalued.

So I don't let my investing decisions be swayed by my lizard brain that thinks it sees patterns. I just plug money in and go enjoy my life.

-W

[beltim]

A large number of treatments and vaccines are moving at record speed through drug trials.  Any given drug may not prove safe and effective, but as a group there's no chance(*) that all 330 attempts are failures.
("no chance": A failure rate of 90% raised to the 330th power suggests all 330 fail 1 time in 1 million billion)

I don't disagree with your overall message, but there are some important caveats that reduce the chances of what I'll characterize as your characterizing a safe, effective drug as inevitable.  First, there are a huge number of duplicates in those 330 attempts - there's at least half a dozen clinical trials of remdesivir, for example.  This makes sense considering the urgency of the need, but it reduces the independence significantly.  So there's probably more like 50 different chemical entities under investigation now.  Second, the urgency means that most of the drugs going into these trials would never go into trials under normal circumstances, with fewer in vitro and animal experiment models.  This will increase the failure rate from the normal averages.  Third, there is a wide range of what counts as a "successful" drug.  Remdesivir has been approved for emergency use - but from the clinical data we have, it looks like it reduces the hospitalization time by 5 days or so, with no difference in survival rates.  People won't change their behavior – and markets won't change their behavior – because of an approval of a drug that cuts 5 days from a 1-2 week hospital stay, without improving survivability.

[MustacheAndaHalf]

A large number of treatments and vaccines are moving at record speed through drug trials.  Any given drug may not prove safe and effective, but as a group there's no chance(*) that all 330 attempts are failures.
("no chance": A failure rate of 90% raised to the 330th power suggests all 330 fail 1 time in 1 million billion)

I don't disagree with your overall message, but there are some important caveats that reduce the chances of what I'll characterize as your characterizing a safe, effective drug as inevitable.  First, there are a huge number of duplicates in those 330 attempts - there's at least half a dozen clinical trials of remdesivir, for example.  This makes sense considering the urgency of the need, but it reduces the independence significantly.  So there's probably more like 50 different chemical entities under investigation now.  Second, the urgency means that most of the drugs going into these trials would never go into trials under normal circumstances, with fewer in vitro and animal experiment models.  This will increase the failure rate from the normal averages.  Third, there is a wide range of what counts as a "successful" drug.  Remdesivir has been approved for emergency use - but from the clinical data we have, it looks like it reduces the hospitalization time by 5 days or so, with no difference in survival rates.  People won't change their behavior – and markets won't change their behavior – because of an approval of a drug that cuts 5 days from a 1-2 week hospital stay, without improving survivability.

That's true, I did assume all 330 clinical trials were independent, but I would question "there's probably more like 50 different chemical entities under investigation now".  There appears to be hundreds of unique "products" based on this listing (#3 reference from the wikipedia article) - but you're right to point out not all will be effective (like Remdesivir)
https://www.bioworld.com/COVID19products

An April 8 article "The COVID-19 vaccine development landscape" stated "Of the 78 confirmed active projects, 73 are currently at exploratory or preclinical stages".  That's the first reference in the wikipedia article I mentioned.
https://www.nature.com/articles/d41573-020-00073-5

According to this article of May 4, there's 8-10 products being tested (apologies for the lingo, I feel "vaccine candidate" is a very misleading term that ignores the high probability of failure for any given drug):
https://www.gavi.org/vaccineswork/covid-19-vaccine-race

If those are 10 independent products, and only 16% of attempts result in a vaccine, that suggests a 1 in 6 chance for all to fail.  But behind those are literally dozens more, with government funding and dramatically reduced time to approval.  I think original estimates of mid-2021 are probably too pessimistic, given how years have become months in testing and approval so far.

[MustacheAndaHalf]

Oh, I'm not saying I think stocks are fairly valued. If you made me stake out a position I'd say they're 25-50% overvalued.

But I've also been around long enough to realize that I've thought that for almost 2 decades now (my entire investing life). It's a good thing I didn't wait for CAPE <15 (way back average, now 17ish I guess) to invest my money, because I was in freaking grade school in the 80s the last time that happened, other than a month or two in 2009.

30+ years of not mean reverting is a long time. I'd be pretty sorry if I refused to invest over that whole time because I thought (based on legit metrics!) that stocks were overvalued.

So I don't let my investing decisions be swayed by my lizard brain that thinks it sees patterns. I just plug money in and go enjoy my life.

I agree with not waiting for low CAPE values to start investing.

To those comparing CAPE 10 or P/E to historical averages, Larry Swedroe believes that ignores key regulatory and accounting changes from the past 20 years: "The bottom line is that once those adjustments are considered, there’s a case to be made that the market no longer looks overvalued."
https://finance.yahoo.com/news/swedroe-cape-10-ratio-context-135700520.html

There's also Vanguard's white paper, showing a 0.4 correlation between P/E and future returns:
http://fairwaywealth.com/wp-content/uploads/Vanguard-Research-11-30-2014.pdf#page=7

[beltim]

A large number of treatments and vaccines are moving at record speed through drug trials.  Any given drug may not prove safe and effective, but as a group there's no chance(*) that all 330 attempts are failures.
("no chance": A failure rate of 90% raised to the 330th power suggests all 330 fail 1 time in 1 million billion)

I don't disagree with your overall message, but there are some important caveats that reduce the chances of what I'll characterize as your characterizing a safe, effective drug as inevitable.  First, there are a huge number of duplicates in those 330 attempts - there's at least half a dozen clinical trials of remdesivir, for example.  This makes sense considering the urgency of the need, but it reduces the independence significantly.  So there's probably more like 50 different chemical entities under investigation now.  Second, the urgency means that most of the drugs going into these trials would never go into trials under normal circumstances, with fewer in vitro and animal experiment models.  This will increase the failure rate from the normal averages.  Third, there is a wide range of what counts as a "successful" drug.  Remdesivir has been approved for emergency use - but from the clinical data we have, it looks like it reduces the hospitalization time by 5 days or so, with no difference in survival rates.  People won't change their behavior – and markets won't change their behavior – because of an approval of a drug that cuts 5 days from a 1-2 week hospital stay, without improving survivability.

That's true, I did assume all 330 clinical trials were independent, but I would question "there's probably more like 50 different chemical entities under investigation now".  There appears to be hundreds of unique "products" based on this listing (#3 reference from the wikipedia article) - but you're right to point out not all will be effective (like Remdesivir)
https://www.bioworld.com/COVID19products

The vast majority of the chemical entities in this link are in preclinical or discovery stages, which have even lower success rates getting to market.

An April 8 article "The COVID-19 vaccine development landscape" stated "Of the 78 confirmed active projects, 73 are currently at exploratory or preclinical stages".  That's the first reference in the wikipedia article I mentioned.
https://www.nature.com/articles/d41573-020-00073-5

This is a good example of my earlier point: more than 90% of those are not yet in clinical trials.

According to this article of May 4, there's 8-10 products being tested (apologies for the lingo, I feel "vaccine candidate" is a very misleading term that ignores the high probability of failure for any given drug):
https://www.gavi.org/vaccineswork/covid-19-vaccine-race

If those are 10 independent products, and only 16% of attempts result in a vaccine, that suggests a 1 in 6 chance for all to fail.  But behind those are literally dozens more, with government funding and dramatically reduced time to approval.  I think original estimates of mid-2021 are probably too pessimistic, given how years have become months in testing and approval so far.

Again, I think the use of historical success rates here overestimates the probability of success of any individual.  A huge number of these strategies are going forward under conditions that would never get the green light for normal indications.  That means the failure rate is going to be much higher.

Also: there are 0 vaccines shown effective in humans against any coronavirus, despite the history of SARS, MERS, and the ~30% of respiratory infections caused by coronaviruses in typical years.  If it were easy to have a vaccine against a coronavirus, we would have one - or many - already.

[MustacheAndaHalf]

Also: there are 0 vaccines shown effective in humans against any coronavirus, despite the history of SARS, MERS, and the ~30% of respiratory infections caused by coronaviruses in typical years.  If it were easy to have a vaccine against a coronavirus, we would have one - or many - already.

I'm quoting this separately, because I think it's a much weaker point.  According to the WHO, 8k people had SARS from 2003-2004 and 774 died.
https://www.who.int/csr/sars/country/table2004_04_21/en/

Since 2012, 2.5k people caught MERS and 858 died.
https://www.who.int/emergencies/mers-cov/en/

Neither outbreak killed more than a thousand people, while drug trials cost hundreds of millions of dollars.  There wasn't enough profit in vaccines for those diseases.  A global pandemic is different.  Contrast those numbers with COVID-19, with 4.2 million confirmed cases and 284,204 deaths.  Outbreaks in nearly every country in the world - a vaccine could be sold to billions of people, with governments competing to be first to buy it. 
https://www.worldometers.info/coronavirus/

According to this article of May 4, there's 8-10 products being tested (apologies for the lingo, I feel "vaccine candidate" is a very misleading term that ignores the high probability of failure for any given drug):
https://www.gavi.org/vaccineswork/covid-19-vaccine-race

If those are 10 independent products, and only 16% of attempts result in a vaccine, that suggests a 1 in 6 chance for all to fail.  But behind those are literally dozens more, with government funding and dramatically reduced time to approval.  I think original estimates of mid-2021 are probably too pessimistic, given how years have become months in testing and approval so far.

Again, I think the use of historical success rates here overestimates the probability of success of any individual.  A huge number of these strategies are going forward under conditions that would never get the green light for normal indications.  That means the failure rate is going to be much higher.

I'm genuinely interested in finding out more about this.  Are there specific articles or data that informed your view?

I'll dig up articles about failure rates of phase I, II, III trials (I seem to recall phase I has a 30% failure rate, while phase II is the bigger obstacle at roughly 65-70% failure rate) so we can compare notes.

In my lay person view, this is the drug most likely to be successful:

"UNIVERSITY OF OXFORD’S VIRAL VECTOR VACCINE, UK
The ChAdOx1 vaccine, developed by the University of Oxford, has started to be tested in human clinical trials. The team undertook animal trials in April at the Public Health England (PHE) laboratory in the UK. Ferrets and macaques were injected with the vaccine, and then given an intranasal dose of the virus – these trials were promising as all six animals given the vaccine did not become infected with the virus."
https://www.gavi.org/vaccineswork/covid-19-vaccine-race

On a corona virus, the "crown" like spikes are "spike proteins" that act like crowbars to open cells to infect.  This professor's approach was to take a non-human disease that is harmless to people, and swap in the spike protein of MERS.  She was already in clinical trials when COVID-19 broke out, so she applied the same technique for COVID-19 (the virus being Sars-cov-2) to start clinical trials there.

[beltim]

Also: there are 0 vaccines shown effective in humans against any coronavirus, despite the history of SARS, MERS, and the ~30% of respiratory infections caused by coronaviruses in typical years.  If it were easy to have a vaccine against a coronavirus, we would have one - or many - already.

I'm quoting this separately, because I think it's a much weaker point.  According to the WHO, 8k people had SARS from 2003-2004 and 774 died.
https://www.who.int/csr/sars/country/table2004_04_21/en/

Since 2012, 2.5k people caught MERS and 858 died.
https://www.who.int/emergencies/mers-cov/en/

Neither outbreak killed more than a thousand people, while drug trials cost hundreds of millions of dollars.  There wasn't enough profit in vaccines for those diseases.  A global pandemic is different.  Contrast those numbers with COVID-19, with 4.2 million confirmed cases and 284,204 deaths.  Outbreaks in nearly every country in the world - a vaccine could be sold to billions of people, with governments competing to be first to buy it. 
https://www.worldometers.info/coronavirus/

The relatively smaller numbers from SARS and MERS didn't stop people from trying to develop a vaccine, and running multiple clinical trials, all of which failed.

And you're ignoring my point about other coronaviruses, which are endemic and for which a vaccine would be most useful (even if, like the flu, you would need annual shots).

According to this article of May 4, there's 8-10 products being tested (apologies for the lingo, I feel "vaccine candidate" is a very misleading term that ignores the high probability of failure for any given drug):
https://www.gavi.org/vaccineswork/covid-19-vaccine-race

If those are 10 independent products, and only 16% of attempts result in a vaccine, that suggests a 1 in 6 chance for all to fail.  But behind those are literally dozens more, with government funding and dramatically reduced time to approval.  I think original estimates of mid-2021 are probably too pessimistic, given how years have become months in testing and approval so far.

Again, I think the use of historical success rates here overestimates the probability of success of any individual.  A huge number of these strategies are going forward under conditions that would never get the green light for normal indications.  That means the failure rate is going to be much higher.

I'm genuinely interested in finding out more about this.  Are there specific articles or data that informed your view?

I'll dig up articles about failure rates of phase I, II, III trials (I seem to recall phase I has a 30% failure rate, while phase II is the bigger obstacle at roughly 65-70% failure rate) so we can compare notes.

General knowledge from people in the industry.  Just look at the number of drugs being tried out that have horrible side effects or safety profiles (chloroquine).  These would never have gotten trials against, say, flu.  I've heard that the success rate of any particular compound in preclinical testing making it to market is about 1%, but that number is really squishy because there's a huge range in what counts as "preclinical."

In my lay person view, this is the drug most likely to be successful:

"UNIVERSITY OF OXFORD’S VIRAL VECTOR VACCINE, UK
The ChAdOx1 vaccine, developed by the University of Oxford, has started to be tested in human clinical trials. The team undertook animal trials in April at the Public Health England (PHE) laboratory in the UK. Ferrets and macaques were injected with the vaccine, and then given an intranasal dose of the virus – these trials were promising as all six animals given the vaccine did not become infected with the virus."
https://www.gavi.org/vaccineswork/covid-19-vaccine-race

On a corona virus, the "crown" like spikes are "spike proteins" that act like crowbars to open cells to infect.  This professor's approach was to take a non-human disease that is harmless to people, and swap in the spike protein of MERS.  She was already in clinical trials when COVID-19 broke out, so she applied the same technique for COVID-19 (the virus being Sars-cov-2) to start clinical trials there.

Yes, there are multiple delivery methods that all use variations of this strategy.  Whether you deliver the spike protein by a chimeric virus like the Oxford trial, by inactivated virus, by recombinant protein, or by mRNA hardly matters, as we don't know if these strategies will elicit protective antibodies in humans.  Again, this strategy has not been proven effective in humans against any coronavirus.  Hopefully it works, but there are plenty of viruses for which this strategy does not work.

One good sign is that ~70% of hospitalized patients in a study in China developed neutralizing antibodies (which are presumed to provide protection against reinfection), showing that the human immune system can produce neutralizing antibodies.  However, 70% is not very good, and these patients were exposed to much higher spike protein levels than you would get from a vaccine.
Ref: https://www.medrxiv.org/content/10.1101/2020.03.30.20047365v2

[MustacheAndaHalf]

Also: there are 0 vaccines shown effective in humans against any coronavirus, despite the history of SARS, MERS, and the ~30% of respiratory infections caused by coronaviruses in typical years.  If it were easy to have a vaccine against a coronavirus, we would have one - or many - already.

I'm quoting this separately, because I think it's a much weaker point.  According to the WHO, 8k people had SARS from 2003-2004 and 774 died.
https://www.who.int/csr/sars/country/table2004_04_21/en/

Since 2012, 2.5k people caught MERS and 858 died.
https://www.who.int/emergencies/mers-cov/en/

Neither outbreak killed more than a thousand people, while drug trials cost hundreds of millions of dollars.  There wasn't enough profit in vaccines for those diseases.  A global pandemic is different.  Contrast those numbers with COVID-19, with 4.2 million confirmed cases and 284,204 deaths.  Outbreaks in nearly every country in the world - a vaccine could be sold to billions of people, with governments competing to be first to buy it. 
https://www.worldometers.info/coronavirus/

The relatively smaller numbers from SARS and MERS didn't stop people from trying to develop a vaccine, and running multiple clinical trials, all of which failed.

And you're ignoring my point about other coronaviruses, which are endemic and for which a vaccine would be most useful (even if, like the flu, you would need annual shots).

When you said "any coronavirus" I didn't know what that meant, so I addressed the two you named: MERS and SARS.  In this follow up post, you said both had "multiple clinical trials", but what I'm seeing is one abandoned clinical trial for SARS.  I know MERS trials are ongoing, but couldn't find a count.

"The first human trial of a possible Sars vaccine was conducted in Beijing in December 2004, but by that time the epidemic was over, and research into other diseases was given priority so it was shelved."
https://www.scmp.com/news/china/science/article/3051853/there-was-no-vaccine-sars-or-mers-will-there-be-one-new

According to this article of May 4, there's 8-10 products being tested (apologies for the lingo, I feel "vaccine candidate" is a very misleading term that ignores the high probability of failure for any given drug):
https://www.gavi.org/vaccineswork/covid-19-vaccine-race

If those are 10 independent products, and only 16% of attempts result in a vaccine, that suggests a 1 in 6 chance for all to fail.  But behind those are literally dozens more, with government funding and dramatically reduced time to approval.  I think original estimates of mid-2021 are probably too pessimistic, given how years have become months in testing and approval so far.

Again, I think the use of historical success rates here overestimates the probability of success of any individual.  A huge number of these strategies are going forward under conditions that would never get the green light for normal indications.  That means the failure rate is going to be much higher.

I'm genuinely interested in finding out more about this.  Are there specific articles or data that informed your view?

I'll dig up articles about failure rates of phase I, II, III trials (I seem to recall phase I has a 30% failure rate, while phase II is the bigger obstacle at roughly 65-70% failure rate) so we can compare notes.

General knowledge from people in the industry.  Just look at the number of drugs being tried out that have horrible side effects or safety profiles (chloroquine).  These would never have gotten trials against, say, flu.  I've heard that the success rate of any particular compound in preclinical testing making it to market is about 1%, but that number is really squishy because there's a huge range in what counts as "preclinical."

"The FDA is aware of reports of serious heart rhythm problems in patients with COVID-19 treated with hydroxychloroquine or chloroquine, often in combination with azithromycin and other QT prolonging medicines."
https://www.fda.gov/drugs/drug-safety-and-availability/fda-cautions-against-use-hydroxychloroquine-or-chloroquine-covid-19-outside-hospital-setting-or

Maybe that's a good note of caution to sound: something used to treat malaria wasn't safe enough to re-use against COVID-19.  I started to mention remdesivir in an earlier post, but deleted it to save space.  Here's a key point from a study that appeared in The Lancet:
"... restrictions on hospital bed availability resulted in most patients being enrolled later in the course of disease. Consequently, we could not adequately assess whether earlier remdesivir treatment might have provided clinical benefit. However, among patients who were treated within 10 days of symptom onset, remdesivir was not a significant factor but was associated with a numerical reduction of 5 days in median time to clinical improvement."
https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(20)31022-9/fulltext

To your claim of general knowledge, I can'y rely on that in pursuing data driven investing.  Every time I read an investor pundit or see one on TV recently, they quote vague language they used near the bottom as proving they called it.  That's irritating, because I actually did call the bottom in these forums, and pushed to 100% equities.  To do that, I needed to have the data on my side while other people relied on something else.  I hope there's some way for me to gain the same insights you've got about the pipeline of drug treatments and vaccine trials.

I dug up a study (in Oxford Biometrics?) about the possibility of success covering 2000 - 2015.
What I see is a drug in phase I trials has a 1 in 7 chance of reaching the market.  The transition to each stage:
1->2:  2/3rd succeed
2->3: 1/2 succeed
3->use: 3/5 succeed
https://academic.oup.com/biostatistics/article/20/2/273/4817524#200808417

In my lay person view, this is the drug most likely to be successful:

"UNIVERSITY OF OXFORD’S VIRAL VECTOR VACCINE, UK
The ChAdOx1 vaccine, developed by the University of Oxford, has started to be tested in human clinical trials. The team undertook animal trials in April at the Public Health England (PHE) laboratory in the UK. Ferrets and macaques were injected with the vaccine, and then given an intranasal dose of the virus – these trials were promising as all six animals given the vaccine did not become infected with the virus."
https://www.gavi.org/vaccineswork/covid-19-vaccine-race

On a corona virus, the "crown" like spikes are "spike proteins" that act like crowbars to open cells to infect.  This professor's approach was to take a non-human disease that is harmless to people, and swap in the spike protein of MERS.  She was already in clinical trials when COVID-19 broke out, so she applied the same technique for COVID-19 (the virus being Sars-cov-2) to start clinical trials there.

Yes, there are multiple delivery methods that all use variations of this strategy.  Whether you deliver the spike protein by a chimeric virus like the Oxford trial, by inactivated virus, by recombinant protein, or by mRNA hardly matters, as we don't know if these strategies will elicit protective antibodies in humans.  Again, this strategy has not been proven effective in humans against any coronavirus.  Hopefully it works, but there are plenty of viruses for which this strategy does not work.

One good sign is that ~70% of hospitalized patients in a study in China developed neutralizing antibodies (which are presumed to provide protection against reinfection), showing that the human immune system can produce neutralizing antibodies.  However, 70% is not very good, and these patients were exposed to much higher spike protein levels than you would get from a vaccine.
Ref: https://www.medrxiv.org/content/10.1101/2020.03.30.20047365v2

I agree it's a good sign for the hope of antibodies, and a bad sign for the duration of a vaccine.  I hope they follow the same patients over time, tracking their remaining antibodies.  Maybe other studies can also discover to what extent antibody production is correlated with severity of disease.  If 100% of patients on ventilators developed an antibody response, compared to say 50% of hospitalized patients who weren't admitted to ICU, that would be slightly more promising.

[beltim]

Also: there are 0 vaccines shown effective in humans against any coronavirus, despite the history of SARS, MERS, and the ~30% of respiratory infections caused by coronaviruses in typical years.  If it were easy to have a vaccine against a coronavirus, we would have one - or many - already.

I'm quoting this separately, because I think it's a much weaker point.  According to the WHO, 8k people had SARS from 2003-2004 and 774 died.
https://www.who.int/csr/sars/country/table2004_04_21/en/

Since 2012, 2.5k people caught MERS and 858 died.
https://www.who.int/emergencies/mers-cov/en/

Neither outbreak killed more than a thousand people, while drug trials cost hundreds of millions of dollars.  There wasn't enough profit in vaccines for those diseases.  A global pandemic is different.  Contrast those numbers with COVID-19, with 4.2 million confirmed cases and 284,204 deaths.  Outbreaks in nearly every country in the world - a vaccine could be sold to billions of people, with governments competing to be first to buy it. 
https://www.worldometers.info/coronavirus/

The relatively smaller numbers from SARS and MERS didn't stop people from trying to develop a vaccine, and running multiple clinical trials, all of which failed.

And you're ignoring my point about other coronaviruses, which are endemic and for which a vaccine would be most useful (even if, like the flu, you would need annual shots).

When you said "any coronavirus" I didn't know what that meant, so I addressed the two you named: MERS and SARS.  In this follow up post, you said both had "multiple clinical trials", but what I'm seeing is one abandoned clinical trial for SARS.  I know MERS trials are ongoing, but couldn't find a count.

"The first human trial of a possible Sars vaccine was conducted in Beijing in December 2004, but by that time the epidemic was over, and research into other diseases was given priority so it was shelved."
https://www.scmp.com/news/china/science/article/3051853/there-was-no-vaccine-sars-or-mers-will-there-be-one-new

There are a number of coronaviruses that circulate in the human population.  Coronaviruses are one of viruses (although not the most prevalent) that are responsible for the common cold.  OC43 and 229E are two other coronaviruses, and together account for up to 30% of acute respiratory disease: https://www.sciencedirect.com/topics/neuroscience/human-coronavirus-229e

SARS Vaccine trials in the US: https://www.clinicaltrials.gov/ct2/results?cond=SARS+vaccine&term=&cntry=&state=&city=&dist=&Search=Search&recrs=e&recrs=g&recrs=h&recrs=i

[beltim]

According to this article of May 4, there's 8-10 products being tested (apologies for the lingo, I feel "vaccine candidate" is a very misleading term that ignores the high probability of failure for any given drug):
https://www.gavi.org/vaccineswork/covid-19-vaccine-race

If those are 10 independent products, and only 16% of attempts result in a vaccine, that suggests a 1 in 6 chance for all to fail.  But behind those are literally dozens more, with government funding and dramatically reduced time to approval.  I think original estimates of mid-2021 are probably too pessimistic, given how years have become months in testing and approval so far.

Again, I think the use of historical success rates here overestimates the probability of success of any individual.  A huge number of these strategies are going forward under conditions that would never get the green light for normal indications.  That means the failure rate is going to be much higher.

I'm genuinely interested in finding out more about this.  Are there specific articles or data that informed your view?

I'll dig up articles about failure rates of phase I, II, III trials (I seem to recall phase I has a 30% failure rate, while phase II is the bigger obstacle at roughly 65-70% failure rate) so we can compare notes.

General knowledge from people in the industry.  Just look at the number of drugs being tried out that have horrible side effects or safety profiles (chloroquine).  These would never have gotten trials against, say, flu.  I've heard that the success rate of any particular compound in preclinical testing making it to market is about 1%, but that number is really squishy because there's a huge range in what counts as "preclinical."

"The FDA is aware of reports of serious heart rhythm problems in patients with COVID-19 treated with hydroxychloroquine or chloroquine, often in combination with azithromycin and other QT prolonging medicines."
https://www.fda.gov/drugs/drug-safety-and-availability/fda-cautions-against-use-hydroxychloroquine-or-chloroquine-covid-19-outside-hospital-setting-or

Maybe that's a good note of caution to sound: something used to treat malaria wasn't safe enough to re-use against COVID-19.  I started to mention remdesivir in an earlier post, but deleted it to save space.  Here's a key point from a study that appeared in The Lancet:
"... restrictions on hospital bed availability resulted in most patients being enrolled later in the course of disease. Consequently, we could not adequately assess whether earlier remdesivir treatment might have provided clinical benefit. However, among patients who were treated within 10 days of symptom onset, remdesivir was not a significant factor but was associated with a numerical reduction of 5 days in median time to clinical improvement."
https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(20)31022-9/fulltext

To your claim of general knowledge, I can'y rely on that in pursuing data driven investing.  Every time I read an investor pundit or see one on TV recently, they quote vague language they used near the bottom as proving they called it.  That's irritating, because I actually did call the bottom in these forums, and pushed to 100% equities.  To do that, I needed to have the data on my side while other people relied on something else.  I hope there's some way for me to gain the same insights you've got about the pipeline of drug treatments and vaccine trials.

I dug up a study (in Oxford Biometrics?) about the possibility of success covering 2000 - 2015.
What I see is a drug in phase I trials has a 1 in 7 chance of reaching the market.  The transition to each stage:
1->2:  2/3rd succeed
2->3: 1/2 succeed
3->use: 3/5 succeed
https://academic.oup.com/biostatistics/article/20/2/273/4817524#200808417

There's nothing wrong with that data, but in the links you sent before it showed mostly preclinical studies.  Most compounds in preclinical studies do not enter clinical trials.  However, because most of that research is done in companies, there isn't much published on failures.  Here's one study from academic drug discovery pipelines:
https://ascpt.onlinelibrary.wiley.com/doi/pdf/10.1111/cts.12577

On a fundamental, level, though, consider: these studies are being rushed.  Everyone is trying to show that their drug will be effective exactly because of the huge demand you mentioned earlier.  No one is taking the same care to put compounds into trials as usual.  Why do you think using historical success rates is appropriate, when those trials had much more careful, and much more extensive, research backing them before entering clinical trials?

[ChpBstrd]

We still have no vaccine for HIV or the common cold, but I’ve been reading hopeful headlines for decades.

[Buffaloski Boris]

We still have no vaccine for HIV or the common cold, but I’ve been reading hopeful headlines for decades.

There are zero Coronavirus vaccines available. I hope there will be. Why do we take it as a given that a successful vaccine will be developed in the relevant future?

[EvenSteven]

We still have no vaccine for HIV or the common cold, but I’ve been reading hopeful headlines for decades.

There are zero Coronavirus vaccines available. I hope there will be. Why do we take it as a given that a successful vaccine will be developed in the relevant future?

I keep hearing this claim but don’t know where it comes from. There are definitely vaccines that work for corona viruses.

[beltim]

We still have no vaccine for HIV or the common cold, but I’ve been reading hopeful headlines for decades.

There are zero Coronavirus vaccines available. I hope there will be. Why do we take it as a given that a successful vaccine will be developed in the relevant future?

I keep hearing this claim but don’t know where it comes from. There are definitely vaccines that work for corona viruses.

In humans? Against which Coronavirus?

[EvenSteven]

We still have no vaccine for HIV or the common cold, but I’ve been reading hopeful headlines for decades.

There are zero Coronavirus vaccines available. I hope there will be. Why do we take it as a given that a successful vaccine will be developed in the relevant future?

I don’t work in medicine, so I only know about vaccines for corona viruses in livestock.

I keep hearing this claim but don’t know where it comes from. There are definitely vaccines that work for corona viruses.

In humans? Against which Coronavirus?

[MustacheAndaHalf]

@beltim - Both replies here.

We still have no vaccine for HIV or the common cold, but I’ve been reading hopeful headlines for decades.

A common misconception is the common cold is caused by a single virus.  A vaccine would need to target every strain:
"Well over 200 virus strains are implicated in causing the common cold, with rhinoviruses being the most common."
https://en.wikipedia.org/wiki/Common_cold

Current HIV treatment provides a normal life expectancy, living with HIV:
"In 1996, the total life expectancy for a 20-year-old person with HIV was 39 years. In 2011, the total life expectancy bumped up to about 70 years."
https://www.healthline.com/health/hiv-aids/life-expectancy
(You can also read about it on the CDC website, but I didn't see a specific mention of life expectancy there)

[MustacheAndaHalf]

We still have no vaccine for HIV or the common cold, but I’ve been reading hopeful headlines for decades.

There are zero Coronavirus vaccines available. I hope there will be. Why do we take it as a given that a successful vaccine will be developed in the relevant future?

I keep hearing this claim but don’t know where it comes from. There are definitely vaccines that work for corona viruses.

The idea in this thread is to take theories and see how the data proves/disproves the theory.  Although your statement isn't really an investment thesis, I searched for "past coronavirus vaccine" and this is the first result:

"No vaccine has ever been approved for use against previous forms of coronavirus."
https://www.businessinsider.com/coronavirus-vaccine-may-be-impossible-to-produce-scientists-covid-2020-4

@beltim - I'm seeing a bit more of your viewpoint, now.  Also from the above article:
"The UK's Chief Medical Officer, Christopher Whitty, told a Parliamentary committee on Friday that there was "concerning" evidence suggesting that it may not be possible to stimulate immunity to the virus."

[FrugalSaver]

All this talk is interesting but what’s most important money-wise is the Treasury announced
Tonight they would begin buying ETFs. Be very careful where your long term money is and how
It’s being manipulated and for
How long can it be manipulated

[SAR]

Sounds a little ominous . . . care to elaborate?

[EvenSteven]

We still have no vaccine for HIV or the common cold, but I’ve been reading hopeful headlines for decades.

There are zero Coronavirus vaccines available. I hope there will be. Why do we take it as a given that a successful vaccine will be developed in the relevant future?

I keep hearing this claim but don’t know where it comes from. There are definitely vaccines that work for corona viruses.

The idea in this thread is to take theories and see how the data proves/disproves the theory.  Although your statement isn't really an investment thesis, I searched for "past coronavirus vaccine" and this is the first result:

"No vaccine has ever been approved for use against previous forms of coronavirus."
https://www.businessinsider.com/coronavirus-vaccine-may-be-impossible-to-produce-scientists-covid-2020-4

@beltim - I'm seeing a bit more of your viewpoint, now.  Also from the above article:
"The UK's Chief Medical Officer, Christopher Whitty, told a Parliamentary committee on Friday that there was "concerning" evidence suggesting that it may not be possible to stimulate immunity to the virus."

One example is the swine infecting porcine epidemic diarrhea virus. It is a corona virus that has had a vaccine successfully developed and deployed. I am optimistic for a vaccine for SARScov2 in humans because we have vaccines that work for corona viruses in closely related vertebrates.

[MustacheAndaHalf]

We still have no vaccine for HIV or the common cold, but I’ve been reading hopeful headlines for decades.

There are zero Coronavirus vaccines available. I hope there will be. Why do we take it as a given that a successful vaccine will be developed in the relevant future?

I keep hearing this claim but don’t know where it comes from. There are definitely vaccines that work for corona viruses.

The idea in this thread is to take theories and see how the data proves/disproves the theory.  Although your statement isn't really an investment thesis, I searched for "past coronavirus vaccine" and this is the first result:

"No vaccine has ever been approved for use against previous forms of coronavirus."
https://www.businessinsider.com/coronavirus-vaccine-may-be-impossible-to-produce-scientists-covid-2020-4

@beltim - I'm seeing a bit more of your viewpoint, now.  Also from the above article:
"The UK's Chief Medical Officer, Christopher Whitty, told a Parliamentary committee on Friday that there was "concerning" evidence suggesting that it may not be possible to stimulate immunity to the virus."

One example is the swine infecting porcine epidemic diarrhea virus. It is a corona virus that has had a vaccine successfully developed and deployed. I am optimistic for a vaccine for SARScov2 in humans because we have vaccines that work for corona viruses in closely related vertebrates.

I assumed we were talking about vaccinating people, not animals.  Still, PEDV is a cautionary tale, isn't it?
"The emergence and re-emergence of PEDV indicates that the virus is able to evade current vaccine strategies."
https://ecevr.org/Synapse/Data/PDFData/9995CEVR/cevr-4-166.pdf

All this talk is interesting but what’s most important money-wise is the Treasury announced
Tonight they would begin buying ETFs. Be very careful where your long term money is and how
It’s being manipulated and for
How long can it be manipulated

Are you trying to invent some kind of conspiracy about the Federal Reserve?
That's what it sounds like to me, when you warn people against being "manipulated".

The Federal Reserve announced a program over a month ago, so this is not a surprise to the markets.  The Fed will purchase corporate bond ETFs as a means to buy corporate bonds.  For further reading, the NY Times article:

"The Federal Reserve will purchase corporate bonds for the first time in its 107-year history."
"It has already had the desired effect, as the mere promise of such a large and determined buyer reopened credit markets frozen by fear."
https://www.nytimes.com/2020/05/12/business/dealbook/fed-bond-etf.html

[ice_beard]

Doctors who have worked on both coasts (east, west) treating C-19 patients are suspicious there are different strains of C-19.  The "east coast" version is much like the one in Italy, is devastating.  The "west coast" is more like Wuhan's and is more survivable. 

People really, really need to stop thinking like there will be any effective vaccine any time soon.  That is a hopeless cause.  And remdesavir doesn't really do anything.   The early scientific evidence does not provide any significant support that it is an effective treatment. 

I'm convinced it's being given green lights for treatment simply because the current administration is pushing for it.   Really they are pushing for anything positive in terms of dealing with this situation and I can't blame them.  If they can point at a drug and say it works that takes some of the pressure off, even though it doesn't really work.

I'm waiting for the next leg down and am putting stop losses on some of my purchases since March.   

[MustacheAndaHalf]

Doctors who have worked on both coasts (east, west) treating C-19 patients are suspicious there are different strains of C-19.  The "east coast" version is much like the one in Italy, is devastating.  The "west coast" is more like Wuhan's and is more survivable.

"We have evidence for one strain,” says Brian Wasik at Cornell University.
“I would say there’s just one,” says Nathan Grubaugh at Yale School of Medicine.
“I think the majority of people studying [coronavirus genetics] wouldn’t recognize more than one strain right now,” says Charlotte Houldcroft at the University of Cambridge.
https://www.theatlantic.com/health/archive/2020/05/coronavirus-strains-transmissible/611239/

Most people rate the severity by dividing deaths by confirmed cases.  While I've been using confirmed cases to make predictions, I now believe confirmed cases is a random number.  Some people with symptoms don't get tested.  A well controlled randomized trial found 4% of the people sampled in Los Angeles had antibodies, versus far fewer cases, which is a significant multiple of the confirmed cases at the time.  Italy and China both gave up on testing at some point - with China being accused of under reporting both cases and deaths (as part of their censorship campaign to make the government look good).  All of which makes dividing deaths by confirmed cases problematic (in my view, which is not the prevalent view right now).

Something reliable is needed, but I can't find the data.  I'm still looking for hospitalizations vs hospital deaths for both CA and NY.  Hospitalizations are more reliable, since a nurse or doctor makes an evaluation that a patient has a certain severity of COVID-19.  What I can't find, is deaths split up into "within hospital" or elsewhere.  That would allow me to divide LA hospitalizations by LA hospital deaths, and the same for NY.  I could then divide the hospitalization versus death, as a ratio, and compare different states or countries.  If the numbers are similar, that argues for a single strain (as the news article above also argues).  But I don't have the data for that at this time.

People really, really need to stop thinking like there will be any effective vaccine any time soon.  That is a hopeless cause.  And remdesavir doesn't really do anything.   The early scientific evidence does not provide any significant support that it is an effective treatment. 

I'm convinced it's being given green lights for treatment simply because the current administration is pushing for it.   Really they are pushing for anything positive in terms of dealing with this situation and I can't blame them.  If they can point at a drug and say it works that takes some of the pressure off, even though it doesn't really work.

I'm waiting for the next leg down and am putting stop losses on some of my purchases since March.

The history of vaccines for coronaviruses isn't good.  I personally pin my hopes on the Oxford UK drug, and plan to be fully invested until it's results are known (maybe Sept, guessing results will be leaked earlier).  If none of the initial wave of 4-8 vaccines succeed, that would be normal but probably deflating to most people's hopes.

While the urgency clears away red tape, look at medical trials in China.  Some have ended early for lack of cases there.  Similarly, the usual situation is waiting years to gather enough patients to study.  In the current global pandemic, tens of thousands of people are confirmed to have COVID-19 every day in the U.S., and millions more are scared and more willing to help with testing.  The prevalence of disease is the main factor speeding up clinical trials.

[ChpBstrd]

In terms of Next Week's News, we finally have the luxury of knowing exactly what will happen as more states in the US drop their public health measures and as public fatigue leads to scenes of crowded stores and restaurants.

In Germany, new infections have tripled a week after some restrictions were lifted:
https://www.express.co.uk/news/world/1281241/germany-coronavirus-cases-jump-lockdown-lift-tougher-lockdown-rules-angela-merkel

And then there are the public health officials who are aghast at plans to reopen restaurants, movie theaters, transportation, factories, etc. They are predicting exactly what we will see.

I wonder if the April short squeeze and momentum trade can carry on another month, when it becomes clear the crisis has only begun?

[MustacheAndaHalf]

That article might be overreacting to a 3 day spike in new cases.  Here's John Hopkins data from May 4 to May 12:
daily new cases in Germany:  488   855   1155   1268   1158   736   555   697   595

I agree with you that movie theaters sound unsafe:
"The May 30 target date for cinemas also goes for theaters, operas and concert halls ... Safety measures include a minimum distance of 1.5 meters (5 feet) between patrons while entries and exits need to be carefully planned"
https://deadline.com/2020/05/cinemas-to-re-open-in-germany-cinemas-reopening-north-rhine-westphalia-coronavirus-1202928449/

Corona virus spread is caused by sharing air over a period of time, which is a problem with restaurant dining.  Now double that time frame, and shut the doors so almost nobody disturbs the air, and you have a movie theater.


I currently view things as multiple situations operating on different time frames:

Treatments - could arrive any month, making the disease less deadly.  Currently 2 out of 2 ineffective in isolation.
Vaccine - During summer a few vaccines should enter stage III trials, with news in the fall.  Historically, vaccines haven't worked well on coronaviruses.
Reopening - Damage mitigation by partially reopening the economy.  Some trial and error, with markets bouncing along for the ride.
Congress removes relief - I believe Ray Dalio / Warren Buffet are focused on this aspect, but I can't predict the time frame of Congress.  My guess is that Congress wants to be re-elected, and will keep this in place through the 2020 election.

[BicycleB]

I guess I should acknowledge here my inchoate market timing. Sold VASGX (roughly 80% stock 20% bonds) today to cover expenses of late summer/early fall barring cost surprises.

This was 2 or 3 months earlier than the sale usually would have been. I feel like I made the sale before some investors recognize that reopening will be patchy and slow. Truly uncertain whether this thesis is accurate, so acting on feeling. End of confession.