It is amazing how often we end up being afraid of the wrong things. During our COVID-19 television viewing we stumbled across a TED Talk by a gentleman named Gever Tulley. Mr. Tulley is an author and educator and the title of his talk was, “5 Dangerous Things You Should Let Your Kids Do.” According to his research, the top-five fears of parents are as follows:
1) Kidnapping, 2) School Snipers, 3) Terrorists, 4) Dangerous Strangers, 5) Drugs
The actual five top dangers to kids are:
1) Car Accidents, 2) Homicide (familiar), 3) Abuse, 4) Suicide, 5) Drowning
Kidnapping by a non-family member, the number-one fear of parents, does not rank in the top 5,000 risks to children. The problem is, buckling the seatbelt, family interventions, and swimming lessons are not going to move the needle on the evening news TV ratings, but a good kidnapping story will win Pulitzers.
We see the same thing in my business. Investors fear stock market volatility, when the biggest risk to their future is the low yield on bonds. Many who claim to be avoiding risk are actually risking the most by investing in a way that almost guarantees they will not have enough…not to mention the numerous products and schemes which lure investors by playing upon their fears, only to lock them into costly traps.
So often we are afraid of the wrong things, because our sense of fear comes from media distortions. This crisis is a case in point: Anecdotally I have heard many neighbors and friends who are terrified of getting the coronavirus. They are under the impression that it is a death sentence. I get it, the media spends all day every day counting the bodies, and that has an impact. Perhaps some perspective will help.
As of my writing, Worldometer.com reports 129,843 deaths from the COVID-19 globally. On March 23 the Brookings Institute published a paper on global causes of death. As of March 22, there had been 12 million deaths globally from causes other than COVID-19. Before the pandemic was known, people who study such things (and you think your job is morbid) estimated that there would be 60 million deaths in 2020, with 18 million people dying from heart disease, 10 million from cancer, 6.5 million from respiratory disease, 1.6 million from diarrhea, 1.5 million from car accidents, 1 million from HIV/AIDS, and 800,000 from suicides.
It is hard to know at this point how much COVID-19 will impact the total number, but understandably this new disease is getting far more attention than, say, diarrhea. Can you imagine the fear created if every case of diarrhea was followed in the same fashion? People would be storming emergency rooms every time they had a somewhat loose bowel movement.
The truth is, for the vast majority, COVID-19 is not a death sentence. If the most aggressive estimates are correct (and they do not appear to be), 97 percent of the people who get the disease will survive, and 84 percent will have mild symptoms that keep them at home. In Germany, where they have done some mass testing, those numbers are 99.6 percent survive and 96 percent have mild symptoms, with more than half having no symptoms at all.
So why are we all being told to isolate? I have said this numerous times during this crisis and will say it again, I am not a medical expert, but I do understand crunching numbers. I suspect I have spent far more time with statistical curves than the average medical doctor. “Flattening the curve” does not reduce the amount of data under the curve. The danger of COVID-19 is not the mortality rate, it is the incubation rate. It spreads so quickly that even though those with severe symptoms are a small minority, they are enough to overwhelm our medical system. Yes, flattening the curve will save lives, but only because not flattening the curve would cause some severe cases to not be able to obtain treatment. It does not save lives because fewer people get the virus. That would be creating an entirely different curve with far fewer cases. No medical official has ever suggested this even being a possibility. It saves lives by slowing the spread to a pace our hospitals can handle.
I am simply repeating what we have been told by the medical experts, but this is not how the media has spun social distancing. This may be splitting hairs, but it is an important hair to split, because at some point we have to come out of our holes. There has to be an end game, and that end game will not happen if people fear for their lives should they be exposed.
Thus far, the U.S. has actually done well in flattening the curve. I know we keep getting compared to countries like Spain and Italy, but a much more realistic comparison is the European Union. As of this writing, we have had slightly more than 26,000 deaths versus almost 80,000 for E.U. countries. Once the curve is flattened, we will have to get back to work. To do this we will need more testing, and everything else people have been calling for, but most importantly, we need a far more realistic assessment of the risk. At least that is my perspective.
Chuck Osborne, CFA