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1/ The pandemic is showing that people have a misunderstanding of risk. Of 22 million known Covid-19 cases in the world, more than 780,000 have died. That’s 3.5%. Many are elderly; tens of thousands are young.

2/ Further, a recent peer-reviewed study showed that 55% of Covid-19 patients still had health issues three months after diagnosis, namely neurological issues. And, “long haulers” still have symptoms months after infection, many debilitating.

3/ Those who caught SARS-CoV-1 and SARS-CoV-2 have significantly been shown to suffer long-term health consequences years later, as did those who got sick but survived the 1918 pandemic.

4/ In other words, Covid-19 has the potential to, of course, kill you (even if the odds are 1% or less for a healthy person, it’s still tangible), or to make your life much less enjoyable after you survive. This is exactly the type of random risk you should avoid however you can.

5/ Simply accepting these risks, and not taking easy precautions against them, is (to tie it to investing) like putting a 1% position in your portfolio that could at any moment bring the whole portfolio’s value to zero. You would never do that.

6/ There are zero instances where not taking precautions against the long-ranging Covid-19 risk makes sense. Being locked-down may not the answer. That has its own problems. But a systematic approach to reduce the risk as much as possible in every aspect of life is essential.

7/ That many can’t be bothered to reduce their risks to Covid-19 shows a fundamental misunderstanding of risk types and risk itself. Being stubbornly macho in the face of this risk is simply dumb. Many have already died for it.

8/ Too many also misunderstand risk as it relates to the stock market. Many people have an all-in or all-out approach (“Are you in the market now?”), thinking it’s all or nothing. When in actuality, historically, stocks are asymmetrically-rewarding the longer you stay invested.

9/ The stock market, even just the indexes, is exactly the type of “risk” you want growing exposure to for your entire life, historically. The risk/reward is so skewed toward reward over long periods that the idea of being out of the market statistically makes no logical sense.

10/ Risk is also defined by your optionality. A nurse who is compelled to continue their career is going to risk being exposed to the virus. A man who chooses to eat dinner inside a restaurant, compared to all the other options he has, has chosen — shall we say — poorly.

11/ For investors, the optionality they have other than stocks should play a role in money decisions, too. For many, stocks are the most available, liquid, and potentially-rewarding option.

12/For those with optionality in life, the Covid-19 risk is one you should avoid at any sensible cost. Especially if you can create a pleasant life for yourself anyway, through new approaches. And, everywhere you go, you should take simple precautions to lower your exposure risk.

13/13 https://t.co/ZQC7j5NQri
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Another warning from the 1918 flu for COVID-19: ‘Survival does not mean that individuals fully recovered’ — MarketWatch
https://apple.news/ApstlifvdSPS1O9g9QTVibg
‘We may never know the true mortality consequences of 1918 because of incomplete or inaccurate record keeping, issues that also undermine our ability to quantify the impact of COVID-19.’

14/ Earlier, I mentioned the “random risk” of Covid-19. The transmission vectors are not random; we all know how to mitigate or avoid transmission. What’s random enough is how the virus will affect you. That’s the unknown risk, and it can be awful. So, you avoid the known risk.

15/ This is Risk Management 101: Mitigate or avoid known risks, especially when the cost of failure leads to unknown risks that are potentially catastrophic. (Or, said another way: There’s smart risk and dumb risk. Choosing to flirt with Covid-19 is not a smart risk.)

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