Chris’ note: Cable news is good at bombarding us with scary numbers about COVID-19. But it’s short on insight… and practically devoid of solutions.
That makes the ideas and insights we share with you at The Daily Cut more important than ever. We show you how to protect your wealth… take advantage of speculations… and stay rational as others succumb to panic.
I want you to pay special attention to today’s insight. It’s from our tech expert, Jeff Brown. It’s about a major blind spot in mainstream reporting. As you’ll see, it means the future is a lot brighter than most folks think.
And stay tuned to the end of today’s dispatch. There’s a debate in the mailbag you’ll want to catch up on.
I first started tracking COVID-19 in late December.
I was a tech executive in Asia during the SARS outbreak of 2002-03. So I knew how serious this could get.
There are more than 1.2 million confirmed cases of COVID-19. About 200 countries or territories have confirmed cases.
This is truly a global pandemic.
But here’s what most people don’t realize: The number of actual cases is higher.
Much higher.
But don’t worry. Today, I’ll show you why that isn’t a bad thing. As you’ll see, it’s actually good news.
The basic reproduction number of a virus is the number of additional cases every new case generates.
This is usually called the “R naught” or R0.
It measures how fast a virus spreads. If the R0 is less than one, it doesn’t spread well and dies out pretty quickly.
An R0 of 2 or more means every infected person infects two more people… those two people infect four more… those four infect eight more… and so on.
This is the classic doubling we see in exponential growth.
Research from the University of Bern in Switzerland suggests the R0 of COVID-19 in Wuhan, China was between 1.4 and 3.8.
We know now that its R0 is nowhere near 1. We are clearly experiencing exponential growth. It’s likely every person infected with COVID-19 will pass it to two to three other people. In other words, it will have an R0 of between 2 and 3.
We know the virus first appeared in late 2019. And we can safely assume that hundreds of, if not more than a thousand, infected people arrived in densely populated cities such as New York, San Francisco, and Seattle in early January.
From there, the virus spread unhindered for nearly a month.
With an R0 of 3, here is what exponential growth in the spread of COVID-19 looks like:
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Day 5: 81 new people infected
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Day 10: Nearly 20,000 more people infected
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Day 15: Another 5 million infected
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Day 18: Another 129 million infected
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Day 20: Another 1.1 billion infected
Here is the problem with determining the spread of COVID-19: Most people have no idea they have it.
Strong research out of Iceland shows that about 50% of those who tested positive are asymptomatic. They have none of the symptoms associated with COVID-19.
Most of the remaining people who have tested positive have only mild or moderate symptoms that don’t lead to hospitalization.
How did Iceland get these numbers?
It did something smart. It tested about 5% of its entire population… whether individuals were sick or not.
The results are incredibly valuable for understanding COVID-19 and the actual mortality rate.
The World Health Organization (WHO) did not recognize the situation as a public health emergency until January 30.
That means the world was actively and unknowingly spreading COVID-19 at an exponential rate up to that point.
New research out of the University of Oxford in Britain supports the idea that COVID-19 is already well dispersed among the population.
Its research models determined that COVID-19 has already infected somewhere between 36% and 68% of the British population.
That’s not a typo.
For context, the population of Britain is about 67 million. That implies that as many as 45 million people there are already infected.
It’s also likely most of them don’t know it because they are asymptomatic or have very mild symptoms.
We have every reason to believe similar infection rates exist in the U.S.
I know that may sound terrifying. But here is where the good news comes in. The mortality rate is a lot lower than most people think…
The mortality rate is the number of deaths relative to the infected population.
The mortality rate for COVID-19 is typically cited as 2-3%.
But this rate is based on the number of confirmed cases, not on the total infected population.
These numbers do not account for the number of people who have contracted the virus but have either no symptoms or mild symptoms that don’t require medical care and a test.
The real mortality rate may be far lower… perhaps even lower than 0.1%. That’s close to the mortality rate from influenza in the 2017-18 season (0.14%).
Research from other countries supports this.
Iceland tested about 5% of its entire population for COVID-19. To date, 1,486 people have tested positive. There have been 5 deaths, as of this writing. And there are currently 38 people receiving medical attention in hospital, 11 of whom are in an intensive care unit (ICU).
As the U.S. collects more data on infection rates, a fuller picture of COVID-19 will emerge. That time is coming soon.
Illinois-based medical device company Abbott Laboratories has released a new rapid test for COVID-19. It can deliver positive results in just five minutes. Negative results take only 13 minutes.
Abbott announced it will deliver 50,000 of these tests a day.
This is on top of Abbott’s previous announcement that it plans to ship 1 million COVID-19 tests a week. Abbott is on track to deliver 5 million COVID-19 tests in April alone.
This is fantastic news. It will lead to a flood of infection-rate data. Now that the Food and Drug Administration (FDA) has released its stranglehold on COVID-19 tests, there is an abundance of them.
I hope to see a trial that tests the general population. Then we can start to understand how many asymptomatic and mild cases are out there.
The number of confirmed cases will climb sharply in the weeks ahead. The first half of April will be harrowing. But we’re going to stay rational and focus on the numbers.
The exponential growth of COVID-19 means a large percentage of the global population will build up immunity before the summer.
This is great news. As the warmer, more humid weather comes, it will be more difficult for COVID-19 to spread in the northern hemisphere. New cases will likely fall dramatically.
When the second wave comes in the fall, we’ll be better prepared to handle a lower number of cases… perhaps even less than half of what we’re seeing in this wave.
Let’s stay rational and focus on the numbers. We can look for a turning point in the next few weeks.
Chris here – As Jeff makes clear, if you’re still looking to TV’s talking heads for rational guidance during this crisis, you need to break the habit.
The same goes for 90% of social media. There’s so much misinformation and fake news, it’s impossible to get a read on what’s going on.
And getting a read on what’s going on is absolutely crucial right now.
As we’ve been showing you, right now, it’s critical you play defense in part of your portfolio and own plenty of cash and gold.
But you want to play offense, too. That’s because crises like the one we’re living through today put quality stocks “on sale.”
And the less you pay to buy shares in the first place, the higher your profits will be when you go to sell.
So if you haven’t already, make sure to sign up for Jeff’s upcoming briefing on 5G stocks. On Wednesday at 8 p.m. ET, he’ll be revealing why the coronavirus is actually good news for 5G stocks… and why a series of small stocks could soar 10x or more during this next phase…
Now, on to today’s reader mailbag…
On Thursday, I revealed a new threat from the virus.
Governments around the world – including the U.S. – are using the pandemic to ramp up their surveillance abilities.
Take this digital rights tracker. It reveals how governments in 20 countries around the world are now accessing citizens’ cellphone GPS (satellite-based geolocation) data to track the spread of the virus.
In the U.S., for instance, the $2 trillion economic stimulus bill includes $500 million for the Centers for Disease Control and Prevention (CDC) to launch a new surveillance and data-collection system to monitor the spread of COVID-19.
And according to my old employer, Reuters, Europe’s telecom companies are sharing location data with health authorities in Italy, Germany, and Austria.
Governments there are checking whether folks are staying at home. The data is aggregated and anonymous.
And in Taiwan, the feds are using cellphone-based “geo-fences” to force infected people to self-isolate. If the patient leaves his home address or turns off his smartphone, the cops will be knocking on his door 15 minutes later.
As the U.S. goes into lockdown, the potential loss of your liberty is a hot-button issue among your fellow readers.
Some of them disagree with us. They reckon surveillance is a price worth paying – if it helps fight crime…
Who fears and hates the public security cameras the most? That’s the terrorists and criminals! You don’t want to help them! You want security but don’t want to trade off your trivial privacy? Then the government has excuses for not being able to protect you effectively. So many criminal cases can get solved only with the help of the security cameras and advanced software. Security is much more important than privacy!
– Longyuan M.
Others are on our side. They find the potential loss of liberty as a result of all this digital tracking, monitoring, and recording frightening…
I love how honest y’all are. I initially started reading [Legacy Research cofounder] Bill Bonner’s work several years ago for economic and market insight. I quickly realized that it was more than that. It looks at the bigger picture. It’s not just what stock or industry will go up or down. It’s the bigger implications from all of it.
A police state in America is a very real possibility and threat. As you said tonight, are we really even the “Land of the Free” anymore? We have become so complacent that we don’t even notice our freedoms being pushed to the curb. All for “safety.”
– Trevor F.
Chris, I’m concerned by the threat of U.S. surveillance. When I go to the bathroom, I don’t send out an invitation to have others join me. I don’t leave my blinds open. I don’t have anything to hide, but I do not like my privacy invaded. And I do not like the fact that I’m watched and monitored without my permission.
I’m supposed to be living in the land of the free. But how can I be free if there’s an invisible chain around my neck, wrists, and ankles?
This must end!
– Sharon S.
I am more afraid of losing privacy and my traditional American freedoms than I am of terrorism! This tracking of Americans through their phones is unacceptable and extremely frightening!
– Kay F.
In Thursday’s dispatch, I gave you four tips to protect yourself from unwanted data-harvesting by the feds.
Doug wrote us from Canada with some more…
It is unbelievable how people are complicit in their surveillance.
I recommend saying “no” to: Location… Notifications… Auto-updates. Also, everyone should check their cell phone and delete any unused apps. The free ones are the worst offenders.
Turn off location and any other reporting functions, except as absolutely necessary. Check the privacy settings on all apps and turn off cellular connectivity of any not crucial to daily use. Turn off background updating and location except while the app is in use.
Benefits: increased battery life, decreased data usage, increased peace of mind.
In Canada, we have the Emergencies Act. If invoked, which has only happened once outside of World War II, civil liberties are suspended.
We have troops in the street, and the boob currently at the wheel has nearly unlimited power… I am hoping enough people will obey the Stay Home directive so that this won’t be necessary.
Thanks Chris. Stay safe.
– Doug B.
I believe in giving power to the people. That means I should benefit from my own data financially. I believe in less power for the big tech companies. I’ve invested in decentralized social media platforms, currencies, and internet 3.0. It’s time for a lot of us to put our mouths where our money is. De-google, de-Facebook.
– Jonathan M.
What do you think? Are you happy to have the CDC track you by the GPS in your phone if it helps stop the spread of the coronavirus? Do you think they’ll stop this practice after the pandemic?
Let us know your thoughts at [email protected].
Regards,
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Chris Lowe
April 6, 2020
Dublin, Ireland
P.S. I’ve made it home to my folks’ house in Dublin, Ireland (where I’m originally from). As I wrote to you about here, I spent about half of March in Barcelona, Spain. It’s one of the worst-hit cities in the world right now. So after getting back to Dublin a couple of weeks ago, I hightailed it to a bolthole in County Kilkenny, about two hours from Dublin. I spent two weeks self-isolating there to make sure I wasn’t infected.
My father is 76. And my mother is 74. They’re both in good health. And they’re now “cocooning” at home. Those are the guidelines from the Irish government: social distancing for the under 70s… stricter cocooning for the over 70s.
We live on the outskirts of the city, near the Dublin Mountains. We get fresh food delivered from a local store. And my folks have a garden, which they spend their days in when the weather is sunny.
Fortunately, today is one of those days. Dad is getting ready to plant some seeds. Here’s a quick snap I took earlier…
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Dad’s wheelbarrow is ready for the day’s work
How are you coping in lockdown? Do you have tips for your fellow readers?
Write me and the rest of The Daily Cut team at [email protected].