The personal e-mail I sent to friends and family about the coronavirus; Why this Draconian Response to COVID-19?

By Whitney Tilson

Tuesday, March 10, 2020

1) Last night, following up on yesterday’s Empire Financial Daily, I sent the e-mail below to my friends and family. Whether you agree or disagree with it, I hope you find it thought-provoking!

Dear friends and family,

Earlier today, I sent a special report to the 5,000-plus subscribers of my monthly newsletter, Empire Investment Report (which you can sign up for here), entitled “The Coronavirus Panic Is Overblown, So It’s Time to Buy.”

If you don’t have time to read it, no worries, as I can summarize it in two sentences: I think the current panic over the coronavirus is one of the most irrational things I’ve ever seen. Therefore, investors should be thinking about putting money to work, as I did this morning (in size).

I’ve already caught some flak for saying this, but somebody’s got to stand up and say that the emperor has no clothes (and present facts and data to support this view, as I do).

For the more than two decades that I’ve been in the investment business, I’ve been studying two basic things: risk and human behavior – and how they interact.

Countless studies (not to mention plenty of anecdotes) show that human beings are often terrible at rationally assessing risks because we make mental mistakes like overweighting vivid recent events. This leads to all sorts of irrational behavior.

For example, remember the people who refused to fly after 9/11, even though the risk of another terrorist attack had fallen substantially due to improved screening and security measures?

Or imagine someone who lives in Manhattan today who, rather than taking the subway due to concerns about catching the coronavirus, instead rides his bike to work. As someone who rides his bike almost every day in the city, I can assure you that no matter how contagious and deadly the virus ends up being, it’s exponentially more dangerous to ride.

Or how about all of the people who are canceling flights? Yes, this is reducing risk – but not in the way people think. I’d bet my last dollar that someone is far more likely to end up in a hospital (or worse) from a car accident on the drive to the airport than from catching the coronavirus in the airport or on the plane.

Many times throughout my career, when such irrationality has manifested itself in financial markets, leading to big sell-offs, I’ve taken advantage – and made tens of millions of dollars for my investors. Examples include the Asian and Russian financial crises, Long-Term Capital Management, the bursting of the dot-com bubble, the Great Financial Crisis, and the European sovereign debt crisis.

I’ve also profited when investors overreacted to health scares like Ebola, SARS, bird flu, and MERS.

I think the coronavirus will be another similar case, for the many reasons that I outline in my special report.

To be clear, however, if you’re 85 years old, are a lifelong smoker, have emphysema, and live in Wuhan, then you should definitely self-quarantine. Seriously, if you are elderly, in poor health, and/or located in an area in which there are many confirmed cases, I would urge you to take strong precautions.

But as for everyone else, I can find no evidence that the risk of serious illness or death from the coronavirus for the overwhelming majority of Americans is anything but infinitesimal – like one in a million. (To be clear, by this I mean it’s my judgment – a rough one, to be sure – that a person with no risk factors, who continues to live his/her life normally, has only a one in a million chance of serious illness or death from the coronavirus.)

Therefore, unless new, contradictory evidence emerges, I think that the vast majority of Americans can safely go about their lives as usual.

That’s exactly what my family and I are doing. I took three flights last week to Tampa, Chicago, and Jackson, WY. Susan and Katharine flew to London last Thursday and returned yesterday evening. They reported that everything there was completely normal. (Gotta love the stoic Brits – keep calm and carry on!) Emily flew from Newark to join me in Jackson today. I rode a dozen times on a gondola today with strangers (as Emily and I will be doing every day this week). Alison went to work as usual today.

Some may respond to this by saying, “Whitney, you may be right, but until there’s more clarity about the coronavirus, my view is ‘better safe than sorry,’ so I’ve cancelled all of my travel plans and any activities that would put me in contact with large numbers of people.”

I think that’s a perfectly reasonable point of view – but that’s not how I choose to live, upending my life because of a one-in-a-million risk.

I think very carefully about genuine risks and take many steps to avoid or mitigate them (in fact, I’ve almost finished writing a book on precisely this topic: All I Want to Know Is Where I’m Going to Die: The Five Calamities That Can Destroy Your Life and How to Avoid Them). But if you want to lead a full, happy, stress-free life, you also need to be able to identify risks that should simply be ignored.

In addition, if everyone collectively decides to “play it safe,” the resulting shutdown of our economy will have huge costs – the bankruptcy of untold numbers of people and companies, etc.

No thank you!

Best regards,


2) I think this article makes great points: Why this Draconian Response to COVID-19? Excerpt:

In six months, if we are in a recession, unemployment is up, financial markets are wrecked, and people are locked in their homes, we’ll wonder why the heck governments chose disease “containment” over disease mitigation. Then the conspiracy theorists get to work.

The containment strategy was never debated or discussed. For the first time in modern history, governments of the world have taken it upon themselves to control population flows in the hopes of stemming the spread of this disease – regardless of the cost and with scant evidence that this strategy will actually work.

More and more, the containment response is looking like global panic. What’s interesting, Psychology Today points out, is that your doctor is not panicking:

COVID-19 is a new virus in a well-known class of viruses. The coronaviruses are cold viruses. I’ve treated countless patients with coronaviruses over the years. In fact, we’ve been able to test for them on our respiratory panels for the entirety of my career.

We know how cold viruses work: They cause runny noses, sneezing, cough, and fever, and make us feel tired and achy. For almost all of us, they run their course without medication. And in the vulnerable, they can trigger a more severe illness like asthma or pneumonia.

Yes, this virus is different and worse than other coronaviruses, but it still looks very familiar. We know more about it than we don’t know.

Governments are willy-nilly making drastic decisions that profoundly affect the status of human freedom. Their decisions are going to affect our lives in profound ways. And there has thus far been no real debate on this. It’s just been presumed that containment of the spread rather than the care of the sick is the only way forward.

What’s more, we have governments all-too-willing to deploy their awesome powers to control human populations in direct response to mass public pressure based on fears that have so far not been justified by any available evidence.

Based on the Austin, Texas, precedent, any mayor of any town in America can right now declare a state of emergency, cancel events, shut malls, and close parks. Who is to stop them from shuttering stores, restaurants, schools, and churches, and quarantining whole neighborhoods?

For this reason, we have every reason to be concerned.

Are we really ready to imprison the world, wreck financial markets, destroy countless jobs, and massively disrupt life as we know it, all to forestall some uncertain fate, even as medical professionals do know the right way to deal with respiratory illness in general from a medical point of view? It’s at least worth debating.

Best regards,


Whitney Tilson

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About Whitney Tilson

Prior to creating Empire Financial Research, Whitney Tilson founded and ran Kase Capital Management, which managed three value-oriented hedge funds and two mutual funds. Starting out of his bedroom with only $1 million, Tilson grew assets under management to nearly $200 million.

Tilson graduated magna cum laude from Harvard College with a bachelor's degree in government in 1989. After college, he helped Wendy Kopp launch Teach for America and then spent two years as a consultant at the Boston Consulting Group. He earned his MBA from Harvard Business School in 1994, where he graduated in the top 5% of his class and was named a Baker Scholar.

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