If you’ve been following our twitter and general view of the virus, unfortunately COVID-19 has gotten much worse. Instead of wasting time debating people online we’re just going to outline some basic ways to make sure you’re in good shape once this virus plays out. Fortunately, you don’t need to do much beyond basic precautionary items and some additional cash. We’ll go ahead and get started!
Step 1 – The Basic Stock Up: There is no need to go overboard. If you’re buying stuff you would never actually use in the future (that’s a bad move). Simple things include: brown rice, water, some frozen foods of your choice and replenish some canned goods. Notice we’re not telling you what specific foods to buy since it doesn’t matter *that* much. If you have some grains (rice) some protein (beans) a variety of canned foods and a bunch of water… You’re pretty good to go.
Step 2 – “Act Broke”: This means you should make a few simple choices. Instead of spending money on a falling stock market, a falling bond market etc. You should go ahead and just take the amount you would normally invest and buy the following: 1) toothpaste, 2) soap, 3) toiletries, 4) basic medical supplies etc. We’re assuming that you do not have a year’s worth of these items and the chances of the products going “bad” is next to none. Why would you do this? Quite simple. By doing a bulk purchase you guarantee a price that is a bit cheaper than normal (majority reading this unlikely go to Costco very often) and you would have bought it anyway. This is effectively a guaranteed return. By buying a bunch of items you would have paid 20% more for, you’ve locked in a gain on future costs by simply taking additional precautions. Nothing crazy here. If the stock market recovers the 5-10% it lost, oh well, you saved on goods equal to the return anyway.
Step 3 – Avoid the Blame Game: Unsurprisingly, irrational humans will now blame anyone and anything for the spread of this virus. Instead of wasting time trying to place the blame somewhere, go ahead and focus all attention on what you can control. Classic “stoic response”, which means you’ll only focus on things that are within your control. Don’t blame other people for the stock market declines (no one can predict a pandemic out of the blue) and don’t blame doctors for following medical procedures. None of these things are within the control of the individual so focus on the micro tasks.
Step 4 – Simple Micro Tasks: This is quite easy! Simply decrease the areas in which you could be exposed. If you can work from home, work from home (some major companies already allow this due to the breakout). If you need to travel, cancel them unless necessary – free excuse to stay at home. If you can avoid the gym go ahead and use your own barbells and exercise outside in a more desolate area. This isn’t really a lot of change but significantly reduces your chances of being exposed if you’re worried about the potentially contracting the virus.
Other micro tasks that are extremely specific: 1) stop touching your face, 2) stop opening doors with your bare hands and 3) avoid public restroom facilities. Again, some of this is simply not possible but you get the bigger picture. You want to avoid mass gatherings and avoid physical contact with strangers. It makes a lot of logical sense because this is where the virus could easily get to you.
Now why would you do this now? Pretty simple. At this point, even the people who claimed it was “just the flu” have given up. There are too many cases, international growth is accelerating and we’ve lost the ability to predict exactly where the infection originated in some situations. What does this mean? It means that over the next 3 weeks or so we’ll finally see what the real numbers looks like. People are going to go out less, party less and congregate less at least for 3-4 weeks. Expect more cancellations of major mass gatherings. And. There is absolutely no way to know where it is (today) so basing your behavior based on current cases doesn’t make much sense. Simply take 3 weeks to be a bit more insulated: read, cook at home a bit more and public settings where germs are quickly spread.
To wrap it up, if you must go to work (majority will) just take a few simple other precautions. Try to walk up the stairs to work, don’t touch elevator buttons with your hands, don’t touch anything except items in your own office/work area. This isn’t difficult to remember and costs nothing (maybe 2-3 minutes a day) as you spend a few extra minutes making sure to wash your hands properly 2x more than usual.
Step 5 – Is this an Overreaction? Not really sure. Implementing this for a few days already hasn’t really caused any damage at all. Going for a jog and doing physical pushups to failure and sit-ups/pull ups to failure hasn’t been a big change. Having weights at home isn’t a big deal as well. In fact, not much changes. The only part that is “painful” is the not going out part. But. Most people are reducing that anyway… So not that big of a deal (yet again). It’s almost like a free vacation at this point. Business stalls a bit, you read a bit more and spend a little bit more time on your computer. The only part that is “annoying” is the going to Costco part. You have to get the basic essentials out of the way and after that there isn’t much of a change. You’ll end up saving money by bulk purchasing food anyway and it won’t cost you more than $300-500.
Step 6 – Rational Math: The main problem with the virus is not the death rate of 2%. That’s already bad. The real problem is that humans do not understand compounding AND step-function risk. If you attempted to explain step-function risk to 80% of the population, they would not understand it. Step-function risk is associated with this virus/disease. What does it mean? It means that some people get no real reaction. It feels like the common cold, nothing happens and they get over it. Other people (the 2%) are potentially dead with a high percentage in intensive care units. You do not want to be in an intensive care unit. Intensive care means your body is going through extreme pain/suffering.
The second part, the “step function”, is probably the bigger issue for us. If it travels like the flu, that’s already bad (high probability of catching it)… But… The step function is not good. Under no circumstance would we take a 2% chance on life when it can be avoided by staying indoors for a few weeks. It’s not that difficult to talk to people through video conferencing. A 2% chance of dying to a virus that will likely moderate in a few months is just not worth it. Imagine a game where you have a 98% chance of being “fine” but a 2% chance of dying completely. You’d never play that game and three weeks of your life reading and lifting weights at home to avoid it would certainly be easy.
Key Highlights: While we’re not going to tell you exactly what to buy since you may enjoy certain foods over others here’s what we’re stocked up on: 1) brown rice, 2) beans, 3) variety of frozen food items from Costco – Chicken Bakes are likely well known to most, burritos and some frozen veggies, 4) a bunch of cases of still and sparkling water and 5) a few cases of granola bars and a few large packs of organic soup.
On the other side went ahead and bulk purchased: 1) toothpaste, 2) dental floss, 3) some multi-vitamins, 4) toilet paper/paper towels and 5) soap/hand sanitizer. As you can see the list of items will last forever (practically) and you will use them eventually. So you’re not “wasting money” by stocking up in the first place. You’re simply well prepared and the money wouldn’t change your life (we doubt buying the S&P 500 on the exact dip with $500 is going to make a difference in 30 years.
What to Watch For: We said it once and we’ll say it again. Do not go to Asia. There is just no reason to go out there and we do not believe the situation in Thailand for one second. Significantly more people go to Thailand than Japan/Korea from Wuhan and other parts of China. Their infection rate is likely understated as many of them simply had “no real impact” from the virus (see step function risk). Again. None of this is going to change your life much. You simply take a step back for three weeks, let everyone else figure it out and play it safe. Also. By doing this you won’t be stressed out at all since you know you’ve reduced your chances of catching it by a wide margin and that’s all you can really do in the first place.