10.25. Thought about trading the swings, but let’s face it, as...

10.25. Thought about trading the swings, but let’s face it, as far as I am concerned the swings are only obvious looking back. I will stick to what I think I know. Which is doom and gloom at the moment. And although I wasn’t going to bang on about it, I can’t help myself so I will a little bit, and then I will let it be. Maybe.

V is not the influenza virus. It’s more like the Spanish flu. Consider this. In 2017 influenza had a penetration rate of infection of less than 1% of the population, and a death rate of around 0.05%. The Spanish flu, over roughly one year in 1918, had a penetration rate of 25-30% and a death rate of around 10%. V appears to have a death rate of 1-3% and I am thinking it will have a penetration rate of at least 10%, in all countries except China (and China hasn’t gone back to work yet, so the jury is still out on that one). I think the V penetration rate in some countries will be as high as 50%. So you see, on the epidemiology side of it, there’s orders of magnitude in difference between the influenza numbers and V numbers. I am not fear mongering. I am stating the epidemiology facts as observed.

When you track the V infected numbers, the natural spread of the disease seems similar at all sites. I can provide WHO figures, but I don’t think you are that interested so I will summarise. The number infected grumbles along for a few weeks until it reaches a critical mass of around 100. It then grows at roughly 20% per day. The magic of compounding means 100 turns into 40k in about a month. With their draconian approach China turned the tide at around 40k, and the infection rate slowed significantly. No other country will be able to do this imo, certainly not in Africa, South America, Middle East, India, etc and it seems Italy. The US has around 100 cases now, so by this time next month, they should be up to the 40k mark. We are not far behind, a week at the most I estimate. It will not take long for this to play out. The only hope is a vaccine, which is not impossible, but unlikely in the next month.

The effects of all this of course is open to wide interpretation, from a small blip in the system that will pass quickly to a catalyst for a world recession. I don’t have a strong opinion on this, but I do think it’s not good in the short term and during the next month or so fear will make Mrs Market so anxious she will get diarrhoea. And now she will not have any toilet paper, and that will make her pretty mad. And you know what happens when Mrs Market gets mad. CODB!!

Here’s a question for you. If, and I am not saying it will happen, but if BOQ falls to 6.50, or lower, will you still be holding on?