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Well it’s bucketing rain at the moment in Old Sydney Town boys and girls.
What better way to spend our time indoors than to catch up with your favourite personal finance and development blogger!
OK, so I wanted to follow-up on my earlier post regarding the hot topic in Australia right now.
Which of course, is the Coronavirus.
I wanted to revisit this topic because I’m seeing some news headlines about an unprecedented surge in hand-sanitizer right now.
Headlines such as:
All of this demand means that hand sanitiser prices has ballooned, with prices doubling in some cases.
I say this not to trivialize the new Coronavirus, which has now caused more deaths than SARS, but because there is very limited evidence that hand-sanitizer is effective in stopping the spread of Coronavirus.
In fact, do you know what the World Health Organization (WHO) says is the most effective way to prevent the spread?
Don’t be flippant The Frugal Samurai
I know, I know.
If I sound facetious, I apologize, it is not my intention at all to make light of the situation.
In fact, it’s good we have global awareness of Coronavirus and should remain vigilant for the next global pandemic.
I feel like the panic associated with the Coronavirus has already reached pandemic proportions!
Which is where I draw on for this post.
I’m a closet student of human psychology, and think there’s quite a few insights on mania, panics and herd-behaviour on show here.
Element of Truth
All mania form from an element of truth.
The dotcom bubble of the late 90s was based on the revolutionary power of the internet.
The US housing bubble of the mid 2000’s was based on the promise of unparalleled riches through leverage.
The crypto bubble of late 2017 was based on the promise of 10x, 100x, sometimes 1000x returns in a matter of weeks if not days.
Bubbles sprout seemingly out of nowhere.
Bubbles and panics prey upon our emotional need to take action.
Even now, I am tempted to join the masses and stock up on tinned food and ammo and hand-sanitizer.
Cos it’s coronavirus one day, World War Z the next. You just don’t know.
Of course, if the Coronavirus was something like, I dunno, influenza, which is seen as more of a threat in the US.
Or maybe drink-driving – which causes more deaths.
Or smoking – which causes more deaths.
Or obesity – which causes more deaths.
Then yeah, I’d panic-the-fook-out.
But all of these things are too gradual or too common. So why worry right?
Instead, the idea that we can be dead within a week, that’s what captures our attention.
Like all manias – once panic (or FOMO) takes hold, our rational responses go out the window.
We’re wired to fight or flight, not to stop and think.
I mean, if we really think about it, there has not been a single death in Australia, the risk is still minimal and if we all just washed our hands properly, chances are we’ll be OK.
But why take a chance right?
Like rolling in a battalion of tanks to a knife-fight.
Part of the impact of the Coronavirus is the intense visual impact.
We’re seeing footage of Chinese nurses in full-body haz-mat suits.
Or people lying motionless in the middle of the street.
Because the images are so confronting, it gives us something to latch onto.
This taps into our collective psyche, that another global pandemic is only a matter of time.
I mean, it’s been a long time since the last plague, and everyone knows that the next one is just around the corner.
It’s only a matter of time, and each passing day bring us closer to D-Day.
Incidentally, that’s what commentators have been saying about the end of the decade long bull-market in US equities… since 2014.
I think yes, there will be another global plague sometime in the future. Just like there will be another bear-market in US equities sometime in the future.
That’s just a fact of life.
But, chances are it won’t happen tomorrow.
We Want it to Happen?
Controversial I know.
I mean, not in the sense we want people to die.
No, that is plain cruel and morbid.
In the sense that, as long as it happens to people we don’t know, in places we’ve never heard of – then it gives us something different in our everyday lives.
I think it explains our obsession with reality TV, or celebrities, or Youtube channels.
It’s why the media latches onto whatever story is trending the most at any given point in time, and makes it, dare-i-say, viral.
Human Beings Are Predictable
If you truly think about it.
We really are as predictable as they come.
We are hard-wired for safety in numbers and comfort zones and stability.
When something jumps out from left-field, we just can’t handle it.
Now I’ve said that I write this post not to trivialize the Coronavirus – no the virus is a pretty serious matter.
I write this to hopefully make you apply a bit of critical thinking to anything and everything that puts your equilibrium off balance.
I guess if you were really an opportunist, you would seek a way to profit from all of this right?
I mean, after the SARS outbreak – a price spike in face-masks caused a flurry of new face-mask production. And when it petered out, an over-supply of face-masks caused prices to collapse from $1 each to less than 30 cents.
Similarly, we’re seeing this with the share prices of some companies too.
Here is one I found listed on the ASX which has benefited from the Coronavirus:
Although to be honest, I wouldn’t be surprised if the price collapses again when all the dust settles down.
But in the meantime, stay vigilant people!
Wash your hands.
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