The Black Swan is Here

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TravelGeek
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Re: The Black Swan is Here

Post by TravelGeek »

indian86 wrote: Mon Mar 16, 2020 3:58 pm Yeah I get the "flatten the curve thing" but really, why don't we worry about flattening the curve each year when we have 30-50k plus deaths from the common flu?
I don't think you are getting the "flatten the curve thing".

The seasonal flu doesn't bring the US healthcare system down. The whole point of flattening the curve is to prevent that (see Wuhan or Italy for what happens when the healthcare system collapses). There will still be plenty of deaths even with a flattened curve when all is said and done, I am afraid.

https://www.flattenthecurve.com/
indian86
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Re: The Black Swan is Here

Post by indian86 »

TravelGeek wrote: Mon Mar 16, 2020 4:13 pm
indian86 wrote: Mon Mar 16, 2020 3:58 pm Yeah I get the "flatten the curve thing" but really, why don't we worry about flattening the curve each year when we have 30-50k plus deaths from the common flu?
I don't think you are getting the "flatten the curve thing".

The seasonal flu doesn't bring the US healthcare system down. The whole point of flattening the curve is to prevent that (see Wuhan or Italy for what happens when the healthcare system collapses). There will still be plenty of deaths even with a flattened curve when all is said and done, I am afraid.

https://www.flattenthecurve.com/
Ok, but please remember so far it appears 98.5% of those infected either never know it (beyond thinking they just have a cold) or are symptomatic to the point that they don't need hospitalization. This is not what the medical community call a "highly acute" disease. This isn't like getting typhoid or lymphoma. Now I understand that that means that they can still spread it, but it doesn't change the 98% number.


And why is everybody so freaked out about hospital beds? Can't we turn university dormitories or office buildings into clinics basically overnight? We do have a military not currently at war.
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watchnerd
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Re: The Black Swan is Here

Post by watchnerd »

indian86 wrote: Mon Mar 16, 2020 4:27 pm
And why is everybody so freaked out about hospital beds? Can't we turn university dormitories or office buildings into clinics basically overnight? We do have a military not currently at war.
No, not in the modern sense of the word 'ICU hospital bed'.

It's not just a cot and a blanket.

Not to mention respirators, oxygenation, intubation, and all the other things that would be needed to save you from respiratory failure.

And staff.
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ianferrel
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Re: The Black Swan is Here

Post by ianferrel »

indian86 wrote: Mon Mar 16, 2020 4:27 pmOk, but please remember so far it appears 98.5% of those infected either never know it (beyond thinking they just have a cold) or are symptomatic to the point that they don't need hospitalization. This is not what the medical community call a "highly acute" disease. This isn't like getting typhoid or lymphoma. Now I understand that that means that they can still spread it, but it doesn't change the 98% number.
Where did you get those numbers?

The best numbers are coming out of Korea, which has done exhaustive testing and contact tracing, and thus looks like they have found closer to the full extent of the spread, as opposed to countries like the US that are basically only testing very sick people to confirm diagnosis. Korea's had a total death rate slightly under 0.1% (so far: 73 deaths out of 8000ish infected).

Then look at Italy. Their death rate matched other countries' at around 1% until they ran out of ICU capacity and had to start wartime triage. It caused their death rate to go from 1% to 5%. If we assume that the 1% Italy was measuring is actually 0.1% due to undertesting (and based on Korea's data), then the *real* death rate if we overwhelm hospitals is maybe 0.5%.

So we now think that maybe 40-70% of Americans are going to get this. If we don't make a really big deal about slowing it down, that's going to be 327m * 40-70% * 0.5% = 600k-1m Americans dead of this thing in the next few months. The flu kills far far less than that.

And that's before all the knock-on effects. It's a bad thing when your medical system is overflowing with viral epidemic patients. Better hope no one hasany other medical issue for the next year that might be minor with excellent medical care but critical without. Because there won't be any spare capacity. And the risk of getting the virus through the medical system will be very high as well.
And why is everybody so freaked out about hospital beds? Can't we turn university dormitories or office buildings into clinics basically overnight? We do have a military not currently at war.
A measurement of hospital beds is kind of a shorthand for "quality intensive medical care". Yes, we can turn dormitories into clinics overnight, but we can't turn people into nurses or doctors overnight, nor can we supply those dormitories with ventilators because there aren't ventilators. There aren't any restorative properties to occupying a bed in a dormitory that's been hastily converted to a hospital.
quantAndHold
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Re: The Black Swan is Here

Post by quantAndHold »

indian86 wrote: Mon Mar 16, 2020 3:58 pm
TravelforFun wrote: Mon Mar 16, 2020 9:54 am We've been talking about it forever on this forum but I think it's here. The stock market is crashing, public places are closed, stores ran out of stuff, people will soon lose their jobs, and no antidote for the plague yet.

In time like this, this retired person is glad that I have 10 years of annual expenses in cash and bonds and don't have to worry about losing my job.

What are your defense strategies?

TravelforFun
And in more than a month, probably as much as 3 months, that the virus has been here, we have a total of less than 200 deaths in the US, or about 0.15% of the total deaths we have each year from the common flu. Yeah I get the "flatten the curve thing" but really, why don't we worry about flattening the curve each year when we have 30-50k plus deaths from the common flu? There is more fear being created by the reaction of the markets, then the reality of the disease itself. Think about it, are you more worried about losing all your money or contracting and dying of the disease? Exactly....its the stock market panicking you and making you feel you should be panicking about the disease. I am not saying it is a hoax. Just that is there was no stock market, and money wasn't out god, then we would hardly notice this as much more than a "nasty" flu season. Sorry, its the truth. I will say this, as noted above American's would rather die than give up their consumerism. Our god is spending and eating out and going to the gym. We will give it 4-6 weeks and we will be sending out kids back to school and going back to work unless the disease truly becomes a plague. And the stock market will be in panic buy mode!!!! The market may have made this a Black Swan, but it is really just a menacing looking crow.
You may understand flattening the curve, but you clearly don't understand *why* the curve needs to be flattened. "The flu" spreads slowly enough that it won't overwhelm our healthcare system. This isn't the flu.
Yes, I’m really that pedantic.
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VictoriaF
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Re: The Black Swan is Here

Post by VictoriaF »

It is a Black Swan.

It's not over yet, and people are already concocting explanations of why Covid-19 is "normal." These rationalizations are the 3rd feature of Black Swans.

My credentials:
- I published a paper"COOP Hardening Against Black Swans" that Taleb referenced on his site https://www.fooledbyrandomness.com/DerivTBS.htm . COOP stands Continuity of (government) Operations.
- Last year, I gave presentations about Black Swans, Antifragility and Taleb at gatherings of a group I belong to.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)
keyfort
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Re: The Black Swan is Here

Post by keyfort »

VictoriaF wrote: Mon Mar 16, 2020 4:59 pm It is a Black Swan.

It's not over yet, and people are already concocting explanations of why Covid-19 is "normal." These rationalizations are the 3rd feature of Black Swans.

My credentials:
- I published a paper"COOP Hardening Against Black Swans" that Taleb referenced on his site https://www.fooledbyrandomness.com/DerivTBS.htm . COOP stands Continuity of (government) Operations.
- Last year, I gave presentations about Black Swans, Antifragility and Taleb at gatherings of a group I belong to.

Victoria
What do you believe will be the outcome in this black swan event in that case?

Or in other words, if you believe this is a black swan, what are the consequences of that?
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watchnerd
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Re: The Black Swan is Here

Post by watchnerd »

VictoriaF wrote: Mon Mar 16, 2020 4:59 pm It is a Black Swan.

It's not over yet, and people are already concocting explanations of why Covid-19 is "normal." These rationalizations are the 3rd feature of Black Swans.

My credentials:
- I published a paper"COOP Hardening Against Black Swans" that Taleb referenced on his site https://www.fooledbyrandomness.com/DerivTBS.htm . COOP stands Continuity of (government) Operations.
- Last year, I gave presentations about Black Swans, Antifragility and Taleb at gatherings of a group I belong to.

Victoria
I disagree.

It's a grey rhino.

https://www.amazon.com/Gray-Rhino-Recog ... 125005382X
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GoldenFinch
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Re: The Black Swan is Here

Post by GoldenFinch »

CnC wrote: Mon Mar 16, 2020 10:41 am
TravelforFun wrote: Mon Mar 16, 2020 9:54 am We've been talking about it forever on this forum but I think it's here. The stock market is crashing, public places are closed, stores ran out of stuff, people will soon lose their jobs, and no antidote for the plague yet.

In time like this, this retired person is glad that I have 10 years of annual expenses in cash and bonds and don't have to worry about losing my job.

What are your defense strategies?

TravelforFun
As per my thread on the matter I sold down to 50/50 in January when the market was at an all-time high.

I'm slowly buying back in 10k a day.
All that luck we wished you may pay off! :beer
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VictoriaF
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Re: The Black Swan is Here

Post by VictoriaF »

keyfort wrote: Mon Mar 16, 2020 5:01 pm
VictoriaF wrote: Mon Mar 16, 2020 4:59 pm It is a Black Swan.

It's not over yet, and people are already concocting explanations of why Covid-19 is "normal." These rationalizations are the 3rd feature of Black Swans.

My credentials:
- I published a paper"COOP Hardening Against Black Swans" that Taleb referenced on his site https://www.fooledbyrandomness.com/DerivTBS.htm . COOP stands Continuity of (government) Operations.
- Last year, I gave presentations about Black Swans, Antifragility and Taleb at gatherings of a group I belong to.

Victoria
What do you believe will be the outcome in this black swan event in that case?

Or in other words, if you believe this is a black swan, what are the consequences of that?
Covid-19 is a high-impact event today:
- people are dying
- people are not getting needed medical care
- supply chain is broken
- travel is curtailed
- people are quarantined
- economies are at the stand-still
- markets are falling.

In the past, we survived negative Black Swans such as world wars and 9/11. Whether, when, and how we'll survive this Black Swan is anybody's guess.

My main recommendation is to learn this Black Swan's lessons:
- diversify economies, i.e., do not allow country-based specializations
- keep yourself in the best possible physical form, aim for high immunity
- don't live on the edge: have cash and other liquid resources
- become familiar with non-linear functions and anticipate them.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)
keyfort
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Re: The Black Swan is Here

Post by keyfort »

VictoriaF wrote: Mon Mar 16, 2020 5:12 pm
keyfort wrote: Mon Mar 16, 2020 5:01 pm
VictoriaF wrote: Mon Mar 16, 2020 4:59 pm It is a Black Swan.

It's not over yet, and people are already concocting explanations of why Covid-19 is "normal." These rationalizations are the 3rd feature of Black Swans.

My credentials:
- I published a paper"COOP Hardening Against Black Swans" that Taleb referenced on his site https://www.fooledbyrandomness.com/DerivTBS.htm . COOP stands Continuity of (government) Operations.
- Last year, I gave presentations about Black Swans, Antifragility and Taleb at gatherings of a group I belong to.

Victoria
What do you believe will be the outcome in this black swan event in that case?

Or in other words, if you believe this is a black swan, what are the consequences of that?
Covid-19 is a high-impact event today:
- people are dying
- people are not getting needed medical care
- supply chain is broken
- travel is curtailed
- people are quarantined
- economies are at the stand-still
- markets are falling.

In the past, we survived negative Black Swans such as world wars and 9/11. Whether, when, and how we'll survive this Black Swan is anybody's guess.

My main recommendation is to learn this Black Swan's lessons:
- diversify economies, i.e., do not allow country-based specializations
- keep yourself in the best possible physical form, aim for high immunity
- don't live on the edge: have cash and other liquid resources
- become familiar with non-linear functions and anticipate them.

Victoria
Obviously all good advice in general and I don't doubt this is a major event, with the potential to overwhelm healthcare and cause many deaths and impact the economy. But, and this is what the naysayers in our family are saying when we try to explain that they should take precautions: "so far not that many people have died, and I can still buy food at the market, and my faucet still runs, and I can still buy a laptop at BestBuy, and I'm not out shooting game for dinner or dealing with roving gangs of murderers".

When you say "whether" we'll survive this black swan event, what are you suggesting? I just want to understand. That the US economy will drop by 50% and never recover? Or that everyone will die? Or that 2%/10%/50% of the world's population will die? I'm not sure I see what you mean.

As for how to survive it, surely this is:

Containment to flatten curve
Vaccine and treatment research (with the latter potentially being much sooner to yield results)
Gradual lifting of containment to revitalize economy etc
technovelist
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Re: The Black Swan is Here

Post by technovelist »

ianferrel wrote: Mon Mar 16, 2020 4:50 pm
indian86 wrote: Mon Mar 16, 2020 4:27 pmOk, but please remember so far it appears 98.5% of those infected either never know it (beyond thinking they just have a cold) or are symptomatic to the point that they don't need hospitalization. This is not what the medical community call a "highly acute" disease. This isn't like getting typhoid or lymphoma. Now I understand that that means that they can still spread it, but it doesn't change the 98% number.
Where did you get those numbers?

The best numbers are coming out of Korea, which has done exhaustive testing and contact tracing, and thus looks like they have found closer to the full extent of the spread, as opposed to countries like the US that are basically only testing very sick people to confirm diagnosis. Korea's had a total death rate slightly under 0.1% (so far: 73 deaths out of 8000ish infected).

Then look at Italy. Their death rate matched other countries' at around 1% until they ran out of ICU capacity and had to start wartime triage. It caused their death rate to go from 1% to 5%. If we assume that the 1% Italy was measuring is actually 0.1% due to undertesting (and based on Korea's data), then the *real* death rate if we overwhelm hospitals is maybe 0.5%.

So we now think that maybe 40-70% of Americans are going to get this. If we don't make a really big deal about slowing it down, that's going to be 327m * 40-70% * 0.5% = 600k-1m Americans dead of this thing in the next few months. The flu kills far far less than that.

And that's before all the knock-on effects. It's a bad thing when your medical system is overflowing with viral epidemic patients. Better hope no one hasany other medical issue for the next year that might be minor with excellent medical care but critical without. Because there won't be any spare capacity. And the risk of getting the virus through the medical system will be very high as well.
And why is everybody so freaked out about hospital beds? Can't we turn university dormitories or office buildings into clinics basically overnight? We do have a military not currently at war.
A measurement of hospital beds is kind of a shorthand for "quality intensive medical care". Yes, we can turn dormitories into clinics overnight, but we can't turn people into nurses or doctors overnight, nor can we supply those dormitories with ventilators because there aren't ventilators. There aren't any restorative properties to occupying a bed in a dormitory that's been hastily converted to a hospital.
Thanks. I don't understand why otherwise sensible people like those on this board can't understand how serious this is.
In theory, theory and practice are identical. In practice, they often differ.
jrbdmb
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Re: The Black Swan is Here

Post by jrbdmb »

TravelforFun wrote: Mon Mar 16, 2020 9:54 am We've been talking about it forever on this forum but I think it's here. The stock market is crashing, public places are closed, stores ran out of stuff, people will soon lose their jobs, and no antidote for the plague yet.

In time like this, this retired person is glad that I have 10 years of annual expenses in cash and bonds and don't have to worry about losing my job.

What are your defense strategies?

TravelforFun
Reading about other Bogleheads who have 10 years of annual expenses in cash and bonds :D
technovelist
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Re: The Black Swan is Here

Post by technovelist »

VictoriaF wrote: Mon Mar 16, 2020 5:12 pm
keyfort wrote: Mon Mar 16, 2020 5:01 pm
VictoriaF wrote: Mon Mar 16, 2020 4:59 pm It is a Black Swan.

It's not over yet, and people are already concocting explanations of why Covid-19 is "normal." These rationalizations are the 3rd feature of Black Swans.

My credentials:
- I published a paper"COOP Hardening Against Black Swans" that Taleb referenced on his site https://www.fooledbyrandomness.com/DerivTBS.htm . COOP stands Continuity of (government) Operations.
- Last year, I gave presentations about Black Swans, Antifragility and Taleb at gatherings of a group I belong to.

Victoria
What do you believe will be the outcome in this black swan event in that case?

Or in other words, if you believe this is a black swan, what are the consequences of that?
Covid-19 is a high-impact event today:
- people are dying
- people are not getting needed medical care
- supply chain is broken
- travel is curtailed
- people are quarantined
- economies are at the stand-still
- markets are falling.

In the past, we survived negative Black Swans such as world wars and 9/11. Whether, when, and how we'll survive this Black Swan is anybody's guess.

My main recommendation is to learn this Black Swan's lessons:
- diversify economies, i.e., do not allow country-based specializations
- keep yourself in the best possible physical form, aim for high immunity
- don't live on the edge: have cash and other liquid resources
- become familiar with non-linear functions and anticipate them.

Victoria
The last of these is apparently the hardest. Exponential growth is so non-intuitive that almost no one understands it other that those who are mathematically minded (a small proportion of society).
In theory, theory and practice are identical. In practice, they often differ.
keyfort
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Re: The Black Swan is Here

Post by keyfort »

technovelist wrote: Mon Mar 16, 2020 5:27 pm
VictoriaF wrote: Mon Mar 16, 2020 5:12 pm
keyfort wrote: Mon Mar 16, 2020 5:01 pm
VictoriaF wrote: Mon Mar 16, 2020 4:59 pm It is a Black Swan.

It's not over yet, and people are already concocting explanations of why Covid-19 is "normal." These rationalizations are the 3rd feature of Black Swans.

My credentials:
- I published a paper"COOP Hardening Against Black Swans" that Taleb referenced on his site https://www.fooledbyrandomness.com/DerivTBS.htm . COOP stands Continuity of (government) Operations.
- Last year, I gave presentations about Black Swans, Antifragility and Taleb at gatherings of a group I belong to.

Victoria
What do you believe will be the outcome in this black swan event in that case?

Or in other words, if you believe this is a black swan, what are the consequences of that?
Covid-19 is a high-impact event today:
- people are dying
- people are not getting needed medical care
- supply chain is broken
- travel is curtailed
- people are quarantined
- economies are at the stand-still
- markets are falling.

In the past, we survived negative Black Swans such as world wars and 9/11. Whether, when, and how we'll survive this Black Swan is anybody's guess.

My main recommendation is to learn this Black Swan's lessons:
- diversify economies, i.e., do not allow country-based specializations
- keep yourself in the best possible physical form, aim for high immunity
- don't live on the edge: have cash and other liquid resources
- become familiar with non-linear functions and anticipate them.

Victoria
The last of these is apparently the hardest. Exponential growth is so non-intuitive that almost no one understands it other that those who are mathematically minded (a small proportion of society).
Among my friends and family I am one of the most concerned about this, but I think to ask whether we will survive Coronavirus is quite dramatic.
CnC
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Re: The Black Swan is Here

Post by CnC »

GoldenFinch wrote: Mon Mar 16, 2020 5:08 pm
CnC wrote: Mon Mar 16, 2020 10:41 am
TravelforFun wrote: Mon Mar 16, 2020 9:54 am We've been talking about it forever on this forum but I think it's here. The stock market is crashing, public places are closed, stores ran out of stuff, people will soon lose their jobs, and no antidote for the plague yet.

In time like this, this retired person is glad that I have 10 years of annual expenses in cash and bonds and don't have to worry about losing my job.

What are your defense strategies?

TravelforFun
As per my thread on the matter I sold down to 50/50 in January when the market was at an all-time high.

I'm slowly buying back in 10k a day.
All that luck we wished you may pay off! :beer
Thanks!
Rosencrantz1
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Re: The Black Swan is Here

Post by Rosencrantz1 »

Broken Man 1999 wrote: Mon Mar 16, 2020 3:41 pm Many years ago the whole family was at Bok Tower having a picnic in the gardens. Beautiful, serene place.

One of the daughters was just a toddler at the time, and she got too close to a swan and the swan started chasing her. Poor daughter was scared to death, though the rest of the family members were all laughing.

Gotta watch those beautiful birds and respect their personal space. Probably scarred the poor child for life. :D

We talk about that experience to this day, though DD still doesn't find it very funny.

Broken Man 1999
I had the same thing happen many years ago when I had my (at the time) 3yo daughter at one of the city parks. At the time, I 'intercepted' the swan/goose before it managed to get to my little girl. I was 'hero' for the day :happy Those swans/geese can be mean!

On topic: I think this pandemic absolutely qualifies as "black swan" event. And, I suspect that things are going to get worse before we turn the corner. I bought/rebalanced into stocks (VOO) on the way down fairly early on. I've "paused" that over the last week, though. Soon, I'm going to have to start buying/rebalancing again.
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F150HD
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Re: The Black Swan is Here

Post by F150HD »

Ged wrote: Mon Mar 16, 2020 2:59 pm A Black Swan to me is an event outside the historical range of expected variations that invalidates the current theories in a field.

For example: All swans are white is the expected range of colors of a swan until you see a black one.

I don't think the current stock market fluctuations are a Black Swan, at least yet. It is a large variation, a shock that is likely to cause a recession. Yet we have had these sorts of events before. Example: Hong Kong Flu (1968-69).
Image

:confused
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VictoriaF
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Re: The Black Swan is Here

Post by VictoriaF »

keyfort wrote: Mon Mar 16, 2020 5:22 pm
VictoriaF wrote: Mon Mar 16, 2020 5:12 pm
keyfort wrote: Mon Mar 16, 2020 5:01 pm
VictoriaF wrote: Mon Mar 16, 2020 4:59 pm It is a Black Swan.

It's not over yet, and people are already concocting explanations of why Covid-19 is "normal." These rationalizations are the 3rd feature of Black Swans.

My credentials:
- I published a paper"COOP Hardening Against Black Swans" that Taleb referenced on his site https://www.fooledbyrandomness.com/DerivTBS.htm . COOP stands Continuity of (government) Operations.
- Last year, I gave presentations about Black Swans, Antifragility and Taleb at gatherings of a group I belong to.

Victoria
What do you believe will be the outcome in this black swan event in that case?

Or in other words, if you believe this is a black swan, what are the consequences of that?
Covid-19 is a high-impact event today:
- people are dying
- people are not getting needed medical care
- supply chain is broken
- travel is curtailed
- people are quarantined
- economies are at the stand-still
- markets are falling.

In the past, we survived negative Black Swans such as world wars and 9/11. Whether, when, and how we'll survive this Black Swan is anybody's guess.

My main recommendation is to learn this Black Swan's lessons:
- diversify economies, i.e., do not allow country-based specializations
- keep yourself in the best possible physical form, aim for high immunity
- don't live on the edge: have cash and other liquid resources
- become familiar with non-linear functions and anticipate them.

Victoria
Obviously all good advice in general and I don't doubt this is a major event, with the potential to overwhelm healthcare and cause many deaths and impact the economy. But, and this is what the naysayers in our family are saying when we try to explain that they should take precautions: "so far not that many people have died, and I can still buy food at the market, and my faucet still runs, and I can still buy a laptop at BestBuy, and I'm not out shooting game for dinner or dealing with roving gangs of murderers".

When you say "whether" we'll survive this black swan event, what are you suggesting? I just want to understand. That the US economy will drop by 50% and never recover? Or that everyone will die? Or that 2%/10%/50% of the world's population will die? I'm not sure I see what you mean.

As for how to survive it, surely this is:

Containment to flatten curve
Vaccine and treatment research (with the latter potentially being much sooner to yield results)
Gradual lifting of containment to revitalize economy etc
With respect to the highlighted comment:

I am not making predictions or forecasting any numeric outcomes. I am interpreting the philosophy of the Black Swans and Taleb's examples.

Taleb's examples include:
- "The war to end all wars" i.e., World War 1 (1914-1918), has not ended all wars.
- The Lebanese Civil War (1975-1990) started spontaneously in a previously prosperous country and dragged much longer than anyone could foresee in 1975.
- Palestinian refugees fled to Lebanon in 1948 and expected to go back home shortly.

Covid-19 may last longer than we hope. The Guardian wrote about a leaked NHS memo that it may last until the Spring of 2021. The virus may mutate and deny us immunity. An unrelated virus may appear while we are dealing with this one. Even in those who were asymptomatic, these viruses may create long-term health damage.

All of these are within the realm of possibility. The probability of any devastating scenario is very small, but it's non-zero. Under certain--very low probability--circumstances we may not survive this, or have substantial loss of human life. Under other--less deadly but more realistic--circumstances we may ruin our economy to the level from which it would be very difficult to recover.

I used the word "whether" we'll survive to address these types of scenarios. Clearly, they all have very low probabilities. Most likely, we'll survive and rebuild normal lives.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)
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watchnerd
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Re: The Black Swan is Here

Post by watchnerd »

Some of this is just ignoring some basic biological boundary conditions.

Even 'first contact' situations with disease (e.g. pre-Columbian Native Americans) ends up with a surviving cohort if the population size is large enough.

A virus can become endemic and troublesome, and yet allow economies to continue grow. Example: polio.

From what we've seen of Covid so far, children and young adults do pretty well. Humanity existed for a long portion of its history with age 45 being at the upper end of lifespan.

Understanding biological variables are one the reasons why epidemiologists are not just statisticians.
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Re: The Black Swan is Here

Post by JonnyDVM »

technovelist wrote: Mon Mar 16, 2020 5:25 pm
ianferrel wrote: Mon Mar 16, 2020 4:50 pm
indian86 wrote: Mon Mar 16, 2020 4:27 pmOk, but please remember so far it appears 98.5% of those infected either never know it (beyond thinking they just have a cold) or are symptomatic to the point that they don't need hospitalization. This is not what the medical community call a "highly acute" disease. This isn't like getting typhoid or lymphoma. Now I understand that that means that they can still spread it, but it doesn't change the 98% number.
Where did you get those numbers?

The best numbers are coming out of Korea, which has done exhaustive testing and contact tracing, and thus looks like they have found closer to the full extent of the spread, as opposed to countries like the US that are basically only testing very sick people to confirm diagnosis. Korea's had a total death rate slightly under 0.1% (so far: 73 deaths out of 8000ish infected).

Then look at Italy. Their death rate matched other countries' at around 1% until they ran out of ICU capacity and had to start wartime triage. It caused their death rate to go from 1% to 5%. If we assume that the 1% Italy was measuring is actually 0.1% due to undertesting (and based on Korea's data), then the *real* death rate if we overwhelm hospitals is maybe 0.5%.

So we now think that maybe 40-70% of Americans are going to get this. If we don't make a really big deal about slowing it down, that's going to be 327m * 40-70% * 0.5% = 600k-1m Americans dead of this thing in the next few months. The flu kills far far less than that.

And that's before all the knock-on effects. It's a bad thing when your medical system is overflowing with viral epidemic patients. Better hope no one hasany other medical issue for the next year that might be minor with excellent medical care but critical without. Because there won't be any spare capacity. And the risk of getting the virus through the medical system will be very high as well.
And why is everybody so freaked out about hospital beds? Can't we turn university dormitories or office buildings into clinics basically overnight? We do have a military not currently at war.
A measurement of hospital beds is kind of a shorthand for "quality intensive medical care". Yes, we can turn dormitories into clinics overnight, but we can't turn people into nurses or doctors overnight, nor can we supply those dormitories with ventilators because there aren't ventilators. There aren't any restorative properties to occupying a bed in a dormitory that's been hastily converted to a hospital.
Thanks. I don't understand why otherwise sensible people like those on this board can't understand how serious this is.
Give up before you give yourself an aneurism. There’s literally no convincing some people. It appears some want to argue exactly what type of swan to classify this event as. We can’t even agree on that!
Last edited by JonnyDVM on Mon Mar 16, 2020 10:20 pm, edited 1 time in total.
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watchnerd
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Re: The Black Swan is Here

Post by watchnerd »

JonnyDVM wrote: Mon Mar 16, 2020 10:18 pm
technovelist wrote: Mon Mar 16, 2020 5:25 pm
ianferrel wrote: Mon Mar 16, 2020 4:50 pm
indian86 wrote: Mon Mar 16, 2020 4:27 pmOk, but please remember so far it appears 98.5% of those infected either never know it (beyond thinking they just have a cold) or are symptomatic to the point that they don't need hospitalization. This is not what the medical community call a "highly acute" disease. This isn't like getting typhoid or lymphoma. Now I understand that that means that they can still spread it, but it doesn't change the 98% number.
Where did you get those numbers?

The best numbers are coming out of Korea, which has done exhaustive testing and contact tracing, and thus looks like they have found closer to the full extent of the spread, as opposed to countries like the US that are basically only testing very sick people to confirm diagnosis. Korea's had a total death rate slightly under 0.1% (so far: 73 deaths out of 8000ish infected).

Then look at Italy. Their death rate matched other countries' at around 1% until they ran out of ICU capacity and had to start wartime triage. It caused their death rate to go from 1% to 5%. If we assume that the 1% Italy was measuring is actually 0.1% due to undertesting (and based on Korea's data), then the *real* death rate if we overwhelm hospitals is maybe 0.5%.

So we now think that maybe 40-70% of Americans are going to get this. If we don't make a really big deal about slowing it down, that's going to be 327m * 40-70% * 0.5% = 600k-1m Americans dead of this thing in the next few months. The flu kills far far less than that.

And that's before all the knock-on effects. It's a bad thing when your medical system is overflowing with viral epidemic patients. Better hope no one hasany other medical issue for the next year that might be minor with excellent medical care but critical without. Because there won't be any spare capacity. And the risk of getting the virus through the medical system will be very high as well.
And why is everybody so freaked out about hospital beds? Can't we turn university dormitories or office buildings into clinics basically overnight? We do have a military not currently at war.
A measurement of hospital beds is kind of a shorthand for "quality intensive medical care". Yes, we can turn dormitories into clinics overnight, but we can't turn people into nurses or doctors overnight, nor can we supply those dormitories with ventilators because there aren't ventilators. There aren't any restorative properties to occupying a bed in a dormitory that's been hastily converted to a hospital.
Thanks. I don't understand why otherwise sensible people like those on this board can't understand how serious this is.
Give up before you give yourself an aneurism. There’s literally no convincing some people. It appears some want to argue exactly what type of swan to classy this event as. We can’t even agree on that!
I keep telling you guys, it's not even a swan.

It's a gray rhino.

Sheesh....
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Ged
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Re: The Black Swan is Here

Post by Ged »

F150HD wrote: Mon Mar 16, 2020 7:28 pm
Ged wrote: Mon Mar 16, 2020 2:59 pm A Black Swan to me is an event outside the historical range of expected variations that invalidates the current theories in a field.

For example: All swans are white is the expected range of colors of a swan until you see a black one.

I don't think the current stock market fluctuations are a Black Swan, at least yet. It is a large variation, a shock that is likely to cause a recession. Yet we have had these sorts of events before. Example: Hong Kong Flu (1968-69).
Image

:confused

Image

16+% market drop from peak to trough.

This current circumstance is not a unique "Black Swan". It's what happens with pandemics.
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TravelforFun
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Re: The Black Swan is Here

Post by TravelforFun »

Ged wrote: Mon Mar 16, 2020 10:28 pm
16+% market drop from peak to trough.

This current circumstance is not a unique "Black Swan". It's what happens with pandemics.
How did you get 16% drop from peak to trough? DOW has dropped 30% from its peak.

TravelforFun
spidercharm01
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Re: The Black Swan is Here

Post by spidercharm01 »

keyfort wrote: Mon Mar 16, 2020 4:09 pm
TravelforFun wrote: Mon Mar 16, 2020 9:54 am We've been talking about it forever on this forum but I think it's here. The stock market is crashing, public places are closed, stores ran out of stuff, people will soon lose their jobs, and no antidote for the plague yet.

In time like this, this retired person is glad that I have 10 years of annual expenses in cash and bonds and don't have to worry about losing my job.

What are your defense strategies?

TravelforFun
I've been known to become a little hysterical in my time, but even I would say that this is not a black swan event, and I don't think it will totally crush the economy. It will be bad, and I think a lot of jobs will be lost, but I think there *might* be a quicker recovery than first thought.

This is because although there is no vaccine yet, and it has a higher death rate than flu so far, the world is now moving to contain it, and not only will eventually make a vaccine, but could in the meantime discover treatments for symptoms which lighten the healthcare load. Flattening the curve as we are now, and taking this into account gives me some confidence that we can deal with this. Sadly, it is affecting older people more severely, but on the other hand, the fatality rate or whatever it's called, is not high for most of the working age population.

Now, if there was a virus that was asymptomatic for 2 months, had a 30% fatality rate and no treatments, then I'd be extremely concerned and be saying "this time it truly is different". As it is, I think it will be very bad on the economy and very sad for those who lose loved ones, but not likely to be an all out devastating event. I sure hope it isn't anyway..

I would argue that fatality rate is much lower in reality than what's being published. This is because there are many many cases where people likely had quick recovery after going through few days of cold/flue like symptoms, which in reality was COVID-19.

Let's keep in mind 80%+ people have very mild symptoms and they recover easy without any help. People who had to run to emergency rooms or had severe symptoms is what's mostly being counted currently. As awareness increases and broader testing is available, number of cases will increase but death rate will drop. Although everyone who gets sick will never be counted unless you have tests being done on entire population as soon as someone sneezes and have cold/cough.

I bet real denominator is much higher and death rate might be closer or just a bit higher than regular flu.
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Re: The Black Swan is Here

Post by Alan S. »

spidercharm01 wrote: Mon Mar 16, 2020 10:52 pm
keyfort wrote: Mon Mar 16, 2020 4:09 pm
TravelforFun wrote: Mon Mar 16, 2020 9:54 am We've been talking about it forever on this forum but I think it's here. The stock market is crashing, public places are closed, stores ran out of stuff, people will soon lose their jobs, and no antidote for the plague yet.

In time like this, this retired person is glad that I have 10 years of annual expenses in cash and bonds and don't have to worry about losing my job.

What are your defense strategies?

TravelforFun
I've been known to become a little hysterical in my time, but even I would say that this is not a black swan event, and I don't think it will totally crush the economy. It will be bad, and I think a lot of jobs will be lost, but I think there *might* be a quicker recovery than first thought.

This is because although there is no vaccine yet, and it has a higher death rate than flu so far, the world is now moving to contain it, and not only will eventually make a vaccine, but could in the meantime discover treatments for symptoms which lighten the healthcare load. Flattening the curve as we are now, and taking this into account gives me some confidence that we can deal with this. Sadly, it is affecting older people more severely, but on the other hand, the fatality rate or whatever it's called, is not high for most of the working age population.

Now, if there was a virus that was asymptomatic for 2 months, had a 30% fatality rate and no treatments, then I'd be extremely concerned and be saying "this time it truly is different". As it is, I think it will be very bad on the economy and very sad for those who lose loved ones, but not likely to be an all out devastating event. I sure hope it isn't anyway..

I would argue that fatality rate is much lower in reality than what's being published. This is because there are many many cases where people likely had quick recovery after going through few days of cold/flue like symptoms, which in reality was COVID-19.

Let's keep in mind 80%+ people have very mild symptoms and they recover easy without any help. People who had to run to emergency rooms or had severe symptoms is what's mostly being counted currently. As awareness increases and broader testing is available, number of cases will increase but death rate will drop. Although everyone who gets sick will never be counted unless you have tests being done on entire population as soon as someone sneezes and have cold/cough.

I bet real denominator is much higher and death rate might be closer or just a bit higher than regular flu.
I agree.
And if we are to believe that millions of minimal symptom people with the virus are walking around spreading the virus, how come the number of people that were infected by the low symptom people that exhibit serious symptoms is so low? That just makes the point that the vast majority have very minor symptoms, and the death rate is that much lower.

Many of the deaths have been in nursing homes where the average life expectancy upon admittance is 6 months. If so, then the average nursing home death would be a person with about 3 months left without the virus, the virus having reduced their life by 3 months. It is also very likely that these nursing home deaths attributed to the virus were actually killed by a combination of other maladies, but their death certificate is going to show Covid 19 as the cause.
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Re: The Black Swan is Here

Post by pasadena »

I agree with most of the above, the fatality is likely to be less than we currently have. What is different with this thing, is that asymptomatic people are contagious, and even if they develop symptoms, the incubation period is very long, so they have a lot of time to spread it before they even know they have it. Then you're sick for a full two weeks, and if you develop severe pneumonia, you require advanced medical care and respiration assistance for a full week - which strains resources even more.

The flu's incubation period is a few days, and symptoms will put you in bed in a matter of hours. Not much time to spread it around. The Spanish Flu was way more lethal, and possibly way more contagious, but chances are that you would be extremely sick a couple of days after exposition, and dead in less than a week. Again, not much time to infect people, and not much time holding a hospital bed.

Let's also remember that right now, when they say "severe", they don't just mean "very sick", they mean that you need to be hooked to a machine. That's about 15% of the known cases (confirmed and symptomatic). Another 5% are "critical" and in ICU. It appears that many survivors will have lung damage, possibly permanent (only time will tell).

A lot of people are told to stay home when they show symptoms that would normally get them hospitalized, if hospital resources weren't overwhelmed or on their way there.

It's a black swan all right.
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Re: The Black Swan is Here

Post by pasadena »

Alan S. wrote: Mon Mar 16, 2020 11:51 pm Many of the deaths have been in nursing homes where the average life expectancy upon admittance is 6 months. If so, then the average nursing home death would be a person with about 3 months left without the virus, the virus having reduced their life by 3 months. It is also very likely that these nursing home deaths attributed to the virus were actually killed by a combination of other maladies, but their death certificate is going to show Covid 19 as the cause.
The most vulnerable, those who have barely any defense left, will fall first, and they will fall at a greater rate.
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Re: The Black Swan is Here

Post by Thesaints »

The real black swan would be a more lethal mutation, which we can't exclude once hundred of millions, if not billions will be infected.
smectym
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Re: The Black Swan is Here

Post by smectym »

JonnyDVM wrote: Mon Mar 16, 2020 10:09 am What annoys me about this swan is I felt like I could see it coming from a good distance away. Staying the course really led me strait into an iceberg.

My defense strategy is that I still have the benefit of time.
Jonny, a perceptive observation in that in the most general sense, without being able to predict the specific triggers, surely many investors sensed in more or less inchoate fashion that “something’s about to break.”

The problem, at least for this investor, is that I had had the same presentiment on at least several inflection points along what proved to be an enduring arc of ascent to new highs. The December 2018 drop was traumatic, and seemed at the time to presage a bear market; then along came 2019, with its 30% gain. Who would have wished to miss that?

Yes, now there has indeed been a retracement and much of that 2019 gain lies in rubble. But we can see that only in hindsight.

As I have posted elsewhere, I think any dogmatic or cultish reliance on “Stay the Course” may ultimately be harmful. But let’s face it: most of the time, ex-Black Swan conditions, a lot of investors have made a lot of money by simply, and even unreflectively, following that simple precept. And definitionally, the Black Swan is what is going to hit us upside the head without warning because it is beyond the analytical framework available to investors before it strikes.

The question for investors is really after the so-called Black Swan strikes: do we pretend nothing new has happened, and resist any attempt to analyze a fundamentally new situation, and dogmatically stick to our positions, even as losses multiply and perhaps threaten our long-term financial goals; or do we engage in a possibly painful reevaluation based on the new paradigm, and potentially make new asset allocation decisions?
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Re: The Black Swan is Here

Post by Kennedy »

Keep in mind how China categorizes "mild" cases, which are about 80% of all those diagnosed. These mild cases included anybody who didn't need supplemental oxygen or assisted ventilation, including people with pneumonia.

So that's the thing, would you want to have a "mild" case of coronavirus if that really meant you had pneumonia? A mild case doesn't always imply just the sniffles.

And as others have stated, one of the real dangers is that our health care system can become overrun whereby there are fewer resources to care for all of the normal, day-to-day cases like cardiac events and appendicitis. That's what's happening in Italy.

Finally, another major concern is care for our doctors, nurses and techs who are caring for these patients with a very limited supply of PPE (masks, face shields/goggles and gowns). Have you read the reports of the two ER physicians who are currently in critical condition due to contracting covid-19? One is only in his 40s. Scary.
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Re: The Black Swan is Here

Post by BalancedJCB19 »

I always said to myself, I will Stay the Course with my balanced index fund and I am. My way of thinking is if this is indeed the end of civilization as we know it, how much you have in stocks or bonds doesn't matter. So I might as well think this too shall pass and have a sensible asset allocation for when things get better.

Again, if they don't get better all bets are off and I will have no regrets because this was totally out all of our control.

If any healthcare workers are here, thank you for stepping up in these extraordinary times!

On a side note, I hope someone replaces Ted Turners end of times video with something happier. If you don't know what that is, look up end of times broadcast by Ted Turner. That will be a real bummer if that's the last thing we have to watch before the end.
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TravelforFun
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Re: The Black Swan is Here

Post by TravelforFun »

Alan S. wrote: Mon Mar 16, 2020 11:51 pm
spidercharm01 wrote: Mon Mar 16, 2020 10:52 pm
I bet real denominator is much higher and death rate might be closer or just a bit higher than regular flu.
I agree.
And if we are to believe that millions of minimal symptom people with the virus are walking around spreading the virus, how come the number of people that were infected by the low symptom people that exhibit serious symptoms is so low? That just makes the point that the vast majority have very minor symptoms, and the death rate is that much lower.

Many of the deaths have been in nursing homes where the average life expectancy upon admittance is 6 months. If so, then the average nursing home death would be a person with about 3 months left without the virus, the virus having reduced their life by 3 months. It is also very likely that these nursing home deaths attributed to the virus were actually killed by a combination of other maladies, but their death certificate is going to show Covid 19 as the cause.
I have to trust the experts on this. If this is like a flu, governments wouldn't have shut down borders, cancelled large gatherings, and ordered businesses to close. This is bigger than a flu.The stock market knows.

TravelforFun
smectym
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Re: The Black Swan is Here

Post by smectym »

BalancedJCB19 wrote: Tue Mar 17, 2020 1:06 am I always said to myself, I will Stay the Course with my balanced index fund and I am. My way of thinking is if this is indeed the end of civilization as we know it, how much you have in stocks or bonds doesn't matter. So I might as well think this too shall pass and have a sensible asset allocation for when things get better.

Again, if they don't get better all bets are off and I will have no regrets because this was totally out all of our control.

If any healthcare workers are here, thank you for stepping up in these extraordinary times!

On a side note, I hope someone replaces Ted Turners end of times video with something happier. If you don't know what that is, look up end of times broadcast by Ted Turner. That will be a real bummer if that's the last thing we have to watch before the end.
Balanced, you make a great point (if this is the end of civilization...etc.) On the other hand, most of us, whether directly or indirectly, have others depending on us to make the maximally prudent investment call at any point in time—with an emphasis, in the crunch, on capital preservation.

Capital preservation doesn’t receive a lot of attention on this forum. Possibly it’s a bit under-rated here as a respectable investment objective. The unprecedentedly long late bull market has put it in the shade. Maybe in a month or two we’ll be off to the races again, but if we’re in for a long slog, perhaps preserving capital should creep a bit higher up on our priority checklist.
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Re: The Black Swan is Here

Post by quantAndHold »

Kennedy wrote: Tue Mar 17, 2020 1:01 am Keep in mind how China categorizes "mild" cases, which are about 80% of all those diagnosed. These mild cases included anybody who didn't need supplemental oxygen or assisted ventilation, including people with pneumonia.

So that's the thing, would you want to have a "mild" case of coronavirus if that really meant you had pneumonia? A mild case doesn't always imply just the sniffles.
There’s a local politician here who has a “mild” case. He didn’t need to be hospitalized, and he’s okay enough that he gave an interview to a local paper. But It sounds like the most gawdawful “flu” anyone has ever had. Relentless 102 degree fevers, pneumonia, etc, for a couple of weeks so far. I’ve never had anything like that, and it’s definitely nothing I want to get. He thinks he got it from a TSA agent.
Yes, I’m really that pedantic.
BalancedJCB19
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Re: The Black Swan is Here

Post by BalancedJCB19 »

smectym wrote: Tue Mar 17, 2020 1:27 am
BalancedJCB19 wrote: Tue Mar 17, 2020 1:06 am I always said to myself, I will Stay the Course with my balanced index fund and I am. My way of thinking is if this is indeed the end of civilization as we know it, how much you have in stocks or bonds doesn't matter. So I might as well think this too shall pass and have a sensible asset allocation for when things get better.

Again, if they don't get better all bets are off and I will have no regrets because this was totally out all of our control.

If any healthcare workers are here, thank you for stepping up in these extraordinary times!

On a side note, I hope someone replaces Ted Turners end of times video with something happier. If you don't know what that is, look up end of times broadcast by Ted Turner. That will be a real bummer if that's the last thing we have to watch before the end.
Balanced, you make a great point (if this is the end of civilization...etc.) On the other hand, most of us, whether directly or indirectly, have others depending on us to make the maximally prudent investment call at any point in time—with an emphasis, in the crunch, on capital preservation.

Capital preservation doesn’t receive a lot of attention on this forum. Possibly it’s a bit under-rated here as a respectable investment objective. The unprecedentedly long late bull market has put it in the shade. Maybe in a month or two we’ll be off to the races again, but if we’re in for a long slog, perhaps preserving capital should creep a bit higher up on our priority checklist.
I'm at 60/40 so I'm not exactly what some might call aggressive. I am close enough to 50/50 which means I should be fine no matter what the weather. So far, this drop has not phased me and I lived through 9/11, Sandy, the Great Recession and now this, plus I'm a New Yorker, we are usually at our best during these times. Tough as nails!!
Novine
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Re: The Black Swan is Here

Post by Novine »

Isn't one of the big issues the fact that none of us has immunity and that the virus is spreading quite rapidly such that a much larger percentage of the population will get it? In a normal year, 8% of the US population gets the flu. Even if this virus is no more deadly than the seasonal flu, if the percentage of the population that gets it is 25 - 50%, we're talking a death toll of 3 - 5 times the seasonal flu and how many more deaths from other causes because the health care system is overwhelmed?
Novine
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Re: The Black Swan is Here

Post by Novine »

I'm at 60/40 so I'm not exactly what some might call aggressive. I am close enough to 50/50 which means I should be fine no matter what the weather. So far, this drop has not phased me and I lived through 9/11, Sandy, the Great Recession and now this, plus I'm a New Yorker, we are usually at our best during these times. Tough as nails!!
For those at 50/50, how has the downturn affected your portfolio? What percentage losses have you seen?
3504PIR
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Re: The Black Swan is Here

Post by 3504PIR »

TravelforFun wrote: Mon Mar 16, 2020 9:54 am We've been talking about it forever on this forum but I think it's here. The stock market is crashing, public places are closed, stores ran out of stuff, people will soon lose their jobs, and no antidote for the plague yet.

In time like this, this retired person is glad that I have 10 years of annual expenses in cash and bonds and don't have to worry about losing my job.

What are your defense strategies?

TravelforFun
I live in a relatively rural zip code and have plenty of 5.56. All true but honestly I retired in June at 56 and have a conservative AA. I think things will get much, much worse but cannot do much to control things. I do see the swings are wide in the market and hope for the best, but am not any more worried about this than being attuned to what is happening, all of which is out of my control. I have to admit that since 2008, I was never one to assume that things will come back as they always have which seemed to be a base assumption here among the community. This will pass over time and hopefully we will gain market advances, but I’ve never bound my hopes and dreams to the market.

I rely on stocks, bonds, dividends, interest and a balanced approach. The stock part is hurting now, but a balance of those things really matter to me, not some index value, although that does matter as part of the equation. When people here talk about retirement assets they focus on total return. In reality it is important to look at it that way to build wealth, but income streams, like from bonds, interest and dividends to a lesser extent are what are important. Benjamin Graham wrote endlessly about it. He never wrote that bonds are for safety, he wrote that bonds are for income. Perhaps people will begin to look at there assets more in that light than whatever return they hope to make as the approach and enter retirement. But hey, it’s always about return, right?
Last edited by 3504PIR on Tue Mar 17, 2020 2:01 am, edited 3 times in total.
smectym
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Re: The Black Swan is Here

Post by smectym »

Novine wrote: Tue Mar 17, 2020 1:47 am Isn't one of the big issues the fact that none of us has immunity and that the virus is spreading quite rapidly such that a much larger percentage of the population will get it? In a normal year, 8% of the US population gets the flu. Even if this virus is no more deadly than the seasonal flu, if the percentage of the population that gets it is 25 - 50%, we're talking a death toll of 3 - 5 times the seasonal flu and how many more deaths from other causes because the health care system is overwhelmed?
Novine, that probably still raises the admittedly callous necessity of calculating the cost and benefits of preventing X number of deaths, vs. facilitating a return to normal economic activity, but thereby incurring more illness and death than might have occurred in a pristine quarantine. It’s a tough call, with a lot of unknowns, a lot of squishy numbers, and few guarantees.
3504PIR
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Re: The Black Swan is Here

Post by 3504PIR »

indian86 wrote: Mon Mar 16, 2020 4:27 pm
TravelGeek wrote: Mon Mar 16, 2020 4:13 pm
indian86 wrote: Mon Mar 16, 2020 3:58 pm Yeah I get the "flatten the curve thing" but really, why don't we worry about flattening the curve each year when we have 30-50k plus deaths from the common flu?
I don't think you are getting the "flatten the curve thing".

The seasonal flu doesn't bring the US healthcare system down. The whole point of flattening the curve is to prevent that (see Wuhan or Italy for what happens when the healthcare system collapses). There will still be plenty of deaths even with a flattened curve when all is said and done, I am afraid.

https://www.flattenthecurve.com/
Ok, but please remember so far it appears 98.5% of those infected either never know it (beyond thinking they just have a cold) or are symptomatic to the point that they don't need hospitalization. This is not what the medical community call a "highly acute" disease. This isn't like getting typhoid or lymphoma. Now I understand that that means that they can still spread it, but it doesn't change the 98% number.


And why is everybody so freaked out about hospital beds? Can't we turn university dormitories or office buildings into clinics basically overnight? We do have a military not currently at war.
You fail to understand the issue and only you can fix that. This is what the medical community calls a pandemic. Look into what has and is happening in Italy to gain a better understanding.
3504PIR
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Re: The Black Swan is Here

Post by 3504PIR »

Novine wrote: Tue Mar 17, 2020 1:47 am Isn't one of the big issues the fact that none of us has immunity and that the virus is spreading quite rapidly such that a much larger percentage of the population will get it? In a normal year, 8% of the US population gets the flu. Even if this virus is no more deadly than the seasonal flu, if the percentage of the population that gets it is 25 - 50%, we're talking a death toll of 3 - 5 times the seasonal flu and how many more deaths from other causes because the health care system is overwhelmed?
They expect 70% of Germany to get it and 80% of the Uk. New York reported today that 17% of their cases require hospitalization to date. 18 million live in New York with 50,000 hospital beds.
khh
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Re: The Black Swan is Here

Post by khh »

quantAndHold wrote: Mon Mar 16, 2020 11:02 am
JonnyDVM wrote: Mon Mar 16, 2020 10:34 am Here’s the definition

The black swan theory or theory of black swan events is a metaphor that describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight.

If this isn’t it, what is ???
And Taleb goes on to describe black swan events that have happened an average of once a decade between the beginning of the 20th century and his publication date in 2007. Then 2008 occurred. And now this.

It's important to note that black swans can be positive as well. And that a black swan might be negative for one person and positive for another. Taleb's backstory is that, completely by accident, he made millions on the black Monday crash in 1987.

For epidemiologists and public health experts, this is not a black swan. They knew this was coming sometime and were planning for it. The investing community....yeah, it probably is.
"These things gotta happen every five years or so, ten years. Helps to get rid of the bad blood. Been ten years since the last one."

-Clemenza
Prahasaurus
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Re: The Black Swan is Here

Post by Prahasaurus »

Wiggums wrote: Mon Mar 16, 2020 10:35 am I don’t know what you call this. Maybe the perfect Storm for a selloff.

Two emergency fed cuts, is unusual and causing a choppy market. We have a public health and closures that make it harder yo determine the economic impact.
We are so early in this process. People have not yet grasped that. Wait until it hits Brazil, or India... People are looking at Asia and thinking it's not so bad, neglecting to understand what those countries had to do to stop this. And most countries, including America, are not equipped with the right technology or health care infrastructure to implement what is required.

Also, I think NYC is going to be the first major American city to see their hospitals collapse under the weight of this virus. That should happen in about 5-7 days or so. Exponential math is a crazy thing, really sneaks up on you.

The psychological impact of this will be devastating, especially so for the financial community, many of whom will be directly impacted.
Asset Allocation: 50% cash (USD), 30% VT, 20% Bitcoin
bitdocmd
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Re: The Black Swan is Here

Post by bitdocmd »

keyfort wrote: Mon Mar 16, 2020 5:22 pm
VictoriaF wrote: Mon Mar 16, 2020 5:12 pm
keyfort wrote: Mon Mar 16, 2020 5:01 pm
VictoriaF wrote: Mon Mar 16, 2020 4:59 pm It is a Black Swan.

It's not over yet, and people are already concocting explanations of why Covid-19 is "normal." These rationalizations are the 3rd feature of Black Swans.

My credentials:
- I published a paper"COOP Hardening Against Black Swans" that Taleb referenced on his site https://www.fooledbyrandomness.com/DerivTBS.htm . COOP stands Continuity of (government) Operations.
- Last year, I gave presentations about Black Swans, Antifragility and Taleb at gatherings of a group I belong to.

Victoria
What do you believe will be the outcome in this black swan event in that case?

Or in other words, if you believe this is a black swan, what are the consequences of that?
Covid-19 is a high-impact event today:
- people are dying
- people are not getting needed medical care
- supply chain is broken
- travel is curtailed
- people are quarantined
- economies are at the stand-still
- markets are falling.

In the past, we survived negative Black Swans such as world wars and 9/11. Whether, when, and how we'll survive this Black Swan is anybody's guess.

My main recommendation is to learn this Black Swan's lessons:
- diversify economies, i.e., do not allow country-based specializations
- keep yourself in the best possible physical form, aim for high immunity
- don't live on the edge: have cash and other liquid resources
- become familiar with non-linear functions and anticipate them.

Victoria
Obviously all good advice in general and I don't doubt this is a major event, with the potential to overwhelm healthcare and cause many deaths and impact the economy. But, and this is what the naysayers in our family are saying when we try to explain that they should take precautions: "so far not that many people have died, and I can still buy food at the market, and my faucet still runs, and I can still buy a laptop at BestBuy, and I'm not out shooting game for dinner or dealing with roving gangs of murderers".
It will happen gradually then suddenly (exponential increase)
ukbogler
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Re: The Black Swan is Here

Post by ukbogler »

JonnyDVM wrote: Mon Mar 16, 2020 10:09 am What annoys me about this swan is I felt like I could see it coming from a good distance away. Staying the course really led me strait into an iceberg.

My defense strategy is that I still have the benefit of time.
'Staying the course' = 'Ignore developments'.

A rational person changes his mind when new facts become available.
andypanda
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Location: Richmond, Virginia

Re: The Black Swan is Here

Post by andypanda »

Is it a Black Swan if it's happened before?

Was the 1918 flu epidemic a Black Swan? The 1918 flu epidemic killed 50 million people worldwide. These things do happen, although you can't say when they'll happen.

www.archives.gov/exhibits/influenza-epidemic

I remember my grandfather talking about how sick he was and how many people died. I think the number of deaths in Virginia was around 16,000. Currently we are at 2 deaths from the coronavirus.
justglassin
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Re: The Black Swan is Here

Post by justglassin »

ukbogler wrote: Tue Mar 17, 2020 4:37 am
JonnyDVM wrote: Mon Mar 16, 2020 10:09 am What annoys me about this swan is I felt like I could see it coming from a good distance away. Staying the course really led me strait into an iceberg.

My defense strategy is that I still have the benefit of time.
'Staying the course' = 'Ignore developments'.

A rational person changes his mind when new facts become available.
Well put. Staying the course eventually = deer in the headlights? I moved most of my TSP to the G fund three weeks ago and it so far has saved me 6 figures. But now I have to decide when to get back in.

When I moved it, I said I would start to move back in once we hit December 2018 levels, yet we seem to be blowing right past those and it still feels like Europe and the States are still just at the end of the beginning of our response. I get that markets are forward looking, so we may be closer to a bottom than the news and events on the ground portray.

Having confessed my sin of timing the market and reacting to an event, I welcome anyone's constructive thoughts about when to start moving back to my 90/10 position?
yoyo6713
Posts: 129
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Re: The Black Swan is Here

Post by yoyo6713 »

justglassin wrote: Tue Mar 17, 2020 5:38 am
ukbogler wrote: Tue Mar 17, 2020 4:37 am
JonnyDVM wrote: Mon Mar 16, 2020 10:09 am What annoys me about this swan is I felt like I could see it coming from a good distance away. Staying the course really led me strait into an iceberg.

My defense strategy is that I still have the benefit of time.
'Staying the course' = 'Ignore developments'.

A rational person changes his mind when new facts become available.
Well put. Staying the course eventually = deer in the headlights? I moved most of my TSP to the G fund three weeks ago and it so far has saved me 6 figures. But now I have to decide when to get back in.

When I moved it, I said I would start to move back in once we hit December 2018 levels, yet we seem to be blowing right past those and it still feels like Europe and the States are still just at the end of the beginning of our response. I get that markets are forward looking, so we may be closer to a bottom than the news and events on the ground portray.

Having confessed my sin of timing the market and reacting to an event, I welcome anyone's constructive thoughts about when to start moving back to my 90/10 position?
I think you have re-entry plan so that's perfectly fine. You are already ahead 20%+. Selling is easy, getting back in in hard. Maybe DCA in over a period of time? I didn't sell because I would be looking at a large tax bill but in hindsight I should have sold and paid the capital gains.
njdealguy
Posts: 163
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Re: The Black Swan is Here

Post by njdealguy »

justglassin wrote: Tue Mar 17, 2020 5:38 am
ukbogler wrote: Tue Mar 17, 2020 4:37 am
JonnyDVM wrote: Mon Mar 16, 2020 10:09 am What annoys me about this swan is I felt like I could see it coming from a good distance away. Staying the course really led me strait into an iceberg.

My defense strategy is that I still have the benefit of time.
'Staying the course' = 'Ignore developments'.

A rational person changes his mind when new facts become available.
Well put. Staying the course eventually = deer in the headlights? I moved most of my TSP to the G fund three weeks ago and it so far has saved me 6 figures. But now I have to decide when to get back in.

When I moved it, I said I would start to move back in once we hit December 2018 levels, yet we seem to be blowing right past those and it still feels like Europe and the States are still just at the end of the beginning of our response. I get that markets are forward looking, so we may be closer to a bottom than the news and events on the ground portray.

Having confessed my sin of timing the market and reacting to an event, I welcome anyone's constructive thoughts about when to start moving back to my 90/10 position?
I'll confess to also totally converting all my positions to total bond index funds a couple weeks ago after the dead cat bounce after the Super Tuesday primary when Dow rebounded to 27k, and yesterday took a long term gamble to use 20% of my portfolio to buy into the US Oil ETF which think may be a source of long term geopolitical diversification even though short term in may very well decline further. An extra risky strategy that could have been taken that I did not would be to buy in 100% on S&P 500 stock index funds on days like Thursday last week when there was the largest percentage drop since 1987 then to go back to 100% cash/bonds the very next day on the perceived "dead cat bounce" as happened on Friday and came out ahead by 10%. I believe today too we will have at least a 5% rebound after yesterday's carnage.

Market timing is wrong usually but this event just seemed like a no brainer in my mind to take action. My thinking is to buy back into equities as soon as its determined that the number of Covid-19 cases have peaked in the US, starting to decline.
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