I have been convincing myself for the last couple of weeks that there is nothing wrong in the world. Or at least that there is nothing worse about the last two weeks than the last couple of years. This was fairly easy at first, when my conversations about coronavirus focused more on the palm civet, the weasel-like animal initially thought to be the source of the new virus strain, but it’s become harder as more companies tell their employees to work from home and my knuckles dry out from over washing. At this point, in early March, corona is fully present in New York City, and it seems like only a matter of time before we start seeing an explosion of cases – if it is, in fact, as contagious as everyone says, and there are fifty to a hundred cases in Manhattan right now, it seems impossible to believe that there won’t be thousands, if not tens of thousands, in the coming weeks.
That calculus isn’t new to anyone living in this city (or anywhere else, I’d imagine). You read a headline, some cursory statistics, and your mind immediately starts to wander to the not-so-far-off implications of it all. A case of one person taking the subway from Harlem to Wall Street for work could infect dozens of passengers, all of whom snake their way through the city differently, leaving dozens of infected people in their wake. With the level of travel involved in living here, it’s hard to imagine a situation where half the city doesn’t have the virus; where the woman breathing heavily over your seat on the subway isn’t contaminating every inch of you. A woman in the elevator at work the other day spent the entire ride grimacing as a man with belabored breathing huffed and puffed onto the back of her head. The anxiety over infection is real.
Somehow, though, in the face of that calculus, in contrast to all of the logical (though flawed, and inaccurate) estimations we all make about the level of contagion and likelihood of infection, I am still left feeling as though the coronavirus is completely overblown; like we’ll all look back on this as a moment of sheer, ridiculous stupidity. How is that possible?
A common exchange I’ve experienced throughout the pandemic goes like this: two people are talking about the coronavirus when one of them tells the other about some dumbass at Costco buying all of the toilet paper and pasta, and then both descend into a raucous bout of laughter. I have been a party to a handful of these conversations over the past week, and there is something very attractive about ridiculing someone’s panicked response to the virus, as though it’s a crime to be over prepared for something. The thing is, if you have enough of those conversations, you are bound to come across someone who did something similar at their local Target this past weekend. After all, the shelves aren’t emptying themselves. People are reacting to the news and many are choosing to prepare. So it seems like, while the most vocal of us are the ones who disregard the experts and the media, an awful lot of people are listening to the news, trusting it at face value, and preparing in any way they can. If the only cost of that forward thinking is being the butt of a joke or two, then maybe it’s worth it.
At the same time as – and partially as a result of – the coronavirus outbreak, the market has taken a dive. Today the S&P 500 fell 7%, and all I could think about was the famous Warren Buffett quote: “be fearful when others are greedy and greedy only when others are fearful.” I’ve never really considered that advice in practice, most likely because I haven’t been an investor during anything other than a bull market. But it seems particularly pertinent now. Today I bought some shares of an index fund, somewhat because of the above mantra, but mostly because I felt very calm during the panic. I’m a long-term investor, and since I wasn’t planning on touching my money in a few decades anyway, the loss of 7% in a day seems trivial. It’s an unscientific response to the events of today, but I feel comfortable with my decision – I have a loose strategy and I’ll stick to it.
What I left work thinking, however, is that an investment thesis may not translate well to disease prevention. Acting boldly in the face of a massive sell-off may result in some quick gains; acting boldly in the face of a deadly outbreak could result in death. On a deeper level, I think I realize this. I see that travel plans are being cancelled, oil prices are plummeting, and the Fed is cutting rates, but I can look at those pieces of information without emotion and make a decision I’m confident in: buy buy buy. When I see stories about coronavirus, on the other hand, no matter how unemotional I try to be, I can’t help but react viscerally to the notion of an invisible infection floating around the city. My own health, and the health of my family and friends, is so different than anything the financial markets could throw at me that it requires a different set of considerations altogether.
In the market, it pays to take advantage of sensational news stories. If they are exaggerating then there is an inefficiency to exploit. I no longer feel as confident that sensational virus headlines can be treated in the same way, and maybe it wouldn’t be such a bad idea to start stocking up on toilet paper, either.