Jul 29, 2021
Robert & Sam Kovacs
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Is it surprising that humanity is defaulting making decisions from a place of fear? Of course not. A year and a half into a devastating pandemic, it is only normal for everyone to be on the edge.
So far the pattern has been quite straightforward:
The Delta variant has emerged as the fittest and fastest variant of the coronavirus. It is 60% more infectious than the Alpha variant, which itself was 50% more infectious than the original Wuhan strain. That's a total of 140% more infectious than the original strain.
Of course, the fear-mongering media see this as a beautiful opportunity to continue playing the same tune.
Here are a few selected headlines from major publications:
I remember reading a book years ago from Ryan Holiday titled "Trust me, I'm Lying: Confessions of a Media Manipulator".
Like most books, you forget most of it and retain one interesting idea, which made the hundreds of pages worth reading.
The big idea I took away from that book is that anger is the strongest emotion when it comes to getting page views and reactions. This has been confirmed by scientific research. When it comes to creating buzz, controversy, rage, and anger beat joy.
I don't believe I need to convince you that everything Covid related causes rage, anger, frustration, and fear, regardless of beliefs and ideology. But if I do, consider this quote from a Harvard assistant professor of psychology:
This collective anger and fear causes error in assessment.
I dig up my notes of the 1841 classic on crowd psychology, "Extraordinary Popular Delusions and the Madness of Crowds", where the author states:
This has caused bond yields to decline (and therefore bond prices to go up) which has seen money leave the reopening/value trade and go back into bonds and growth stocks.
The fear now, is that reopening will be hindered because of Delta, and growth will take a hit, which will favor the Covid theme, and hinder the reopening theme.
As this long-winded introduction comes to an end, the rest of the article will demonstrate that:
I believe the risk is being misunderstood, let's try and look at this factually.
Yes, Delta Increases infection
The variant is behind a new global wave, and caseloads have been increasing all over as it has become the dominant strain.
It all started in India, where the wave peaked at 400,000 cases per day.
It didn't take long for the strain to spread across the globe.
Indonesia is currently going through its own devastating wave.
............................................................................................
Pandemic of the unvaccinated
But here's the rub. And it's a very unfair rub.
In Indonesia for instance, the wave has been extremely deadly, with daily deaths still increasing, having recently surpassed 1,500.
The hospital system is on the brink with no beds available in Jakarta, and people dying at home, or unable to be treated with oxygen.
I'm in Bali right now, and hear weekly of acquaintances who are losing their parents, brothers, or aunts.
They are sadly succumbing to the same fate as India, when the Delta variant pushed the country to as many as 4,500 deaths per day.
The world is looking at outcomes in these countries, and fearing what is yet to come in the rest of the world.
But the world is no longer equal in the face of Covid risks (if it ever was).
Places which have relatively high rates of vaccination have seen very little death as a consequence of the surge in Delta cases.
The United Kingdom is the poster child of this. As Delta was surging, the UK opened up its economy, and so far, has been proving its critics right, as the amount of deaths are totally disconnected from past Covid waves.
....................................................
It's not a pandemic of the people, but a pandemic of the unvaccinated.
I believe the data I presented so far demonstrates this, whether looking at the differences within countries or between countries.
Regardless, I will now argue that lockdowns in countries with over 50% of vaccinations are near impossible.
seekingalpha.com
Robert & Sam Kovacs
...................................................
Is it surprising that humanity is defaulting making decisions from a place of fear? Of course not. A year and a half into a devastating pandemic, it is only normal for everyone to be on the edge.
So far the pattern has been quite straightforward:
- Wave of Covid-19 cases.
- Lockdown.
- Cases go down reopen.
- New variant, wave of Covid-19 cases.
- Lockdown.
- ad infinitum?
The Delta variant has emerged as the fittest and fastest variant of the coronavirus. It is 60% more infectious than the Alpha variant, which itself was 50% more infectious than the original Wuhan strain. That's a total of 140% more infectious than the original strain.
Of course, the fear-mongering media see this as a beautiful opportunity to continue playing the same tune.
Here are a few selected headlines from major publications:
- Delta Variant and Rise in Cases Has New Yorkers ‘Scared All Over Again’.
- For many, pandemic-related anxiety had finally let up. The delta variant changed that.
- The COVID-19 delta variant is causing worry worldwide.
I remember reading a book years ago from Ryan Holiday titled "Trust me, I'm Lying: Confessions of a Media Manipulator".
Like most books, you forget most of it and retain one interesting idea, which made the hundreds of pages worth reading.
The big idea I took away from that book is that anger is the strongest emotion when it comes to getting page views and reactions. This has been confirmed by scientific research. When it comes to creating buzz, controversy, rage, and anger beat joy.
I don't believe I need to convince you that everything Covid related causes rage, anger, frustration, and fear, regardless of beliefs and ideology. But if I do, consider this quote from a Harvard assistant professor of psychology:
Not easy times.
This collective anger and fear causes error in assessment.
I dig up my notes of the 1841 classic on crowd psychology, "Extraordinary Popular Delusions and the Madness of Crowds", where the author states:
The market thought it knew where it was going, but the Delta variant has brought a new wave of ignorance of the future, and new fears of death.
This has caused bond yields to decline (and therefore bond prices to go up) which has seen money leave the reopening/value trade and go back into bonds and growth stocks.
The fear now, is that reopening will be hindered because of Delta, and growth will take a hit, which will favor the Covid theme, and hinder the reopening theme.
As this long-winded introduction comes to an end, the rest of the article will demonstrate that:
- The risk of Delta in vaccinated nations is being misunderstood.
- Growth will continue to beat expectations on the back of excess savings.
- Inflation will continue to be high, as pricing action trickles into Q3 and Q4.
- Financials and Energy stocks are still too cheap, and the rally will resume.
I believe the risk is being misunderstood, let's try and look at this factually.
Yes, Delta Increases infection
The variant is behind a new global wave, and caseloads have been increasing all over as it has become the dominant strain.
It all started in India, where the wave peaked at 400,000 cases per day.
It didn't take long for the strain to spread across the globe.
Indonesia is currently going through its own devastating wave.
............................................................................................
Pandemic of the unvaccinated
But here's the rub. And it's a very unfair rub.
In Indonesia for instance, the wave has been extremely deadly, with daily deaths still increasing, having recently surpassed 1,500.
The hospital system is on the brink with no beds available in Jakarta, and people dying at home, or unable to be treated with oxygen.
I'm in Bali right now, and hear weekly of acquaintances who are losing their parents, brothers, or aunts.
They are sadly succumbing to the same fate as India, when the Delta variant pushed the country to as many as 4,500 deaths per day.
The world is looking at outcomes in these countries, and fearing what is yet to come in the rest of the world.
But the world is no longer equal in the face of Covid risks (if it ever was).
Places which have relatively high rates of vaccination have seen very little death as a consequence of the surge in Delta cases.
The United Kingdom is the poster child of this. As Delta was surging, the UK opened up its economy, and so far, has been proving its critics right, as the amount of deaths are totally disconnected from past Covid waves.
....................................................
It's not a pandemic of the people, but a pandemic of the unvaccinated.
I believe the data I presented so far demonstrates this, whether looking at the differences within countries or between countries.
Regardless, I will now argue that lockdowns in countries with over 50% of vaccinations are near impossible.
Delta Variant: The Market's Got It All Wrong
The Delta variant has caused outcomes which are very unequal between different communities and countries. The reopening trade faded as concerns of the variant's impact escalated.
seekingalpha.com
