According to the head of the Biosecurity Program at UNSW's Kirby Institure, Australia might need 650,000 ICU bed's in a worst-case Covid-19 scenario (which considers the 'what if' case of 25%-75% of the population eventually being infected) - although these beds would be needed "over a period of time", such as one year.
However, even if a patient only required IC treatment for two days (which is probably way too low a guesstimate, given the average ICU length of stay is 3.3 days), that corresponds to 3,560 ICU beds in continual use dedicated exclusively to Covid-19 patients. Given that Australia only has approximately 2,000 ICU beds in total (spread across public and private hospital ICU units) that would seem to be a bit of a challenge -- especially as most of the ICU beds are already fully utilized for patients with burns, trauma, heart attacks etc. So, a 'worst case' scenario would imply almost tripling the number of ICU 'beds' (which in reality means a whole load of specialized equipment and infrastructure, specialist medical staff, and associated support staff...)
If one assumes ICU beds only have 90% availability (i.e. allow some 'down time' for cleaning/disinfection between patients, maintenance, breakdowns etc.) and the LOS for Covid-19 turns out to be at least the same as the average ICU LOS (3.3 days), then the ICU bed requirement in Australia in the 'worst case' could easily hit an additional 6,500 ICU beds (a four-fold increase in the existing number of ICU beds). And its not as if Australia would be able to source additional technical and staff resources from overseas in such a situation (Australia's traditional answer to shortages in nursing staff is to poach them from the UK health system...), as other countries would be trying to boost their capacity at the same time.
BTW, the current fatality rates are skewed towards countries that have quite good health care capability (China, Korea, Japan, Iran) - and in that sample roughly 5% of Covid-19 cases have needed IC, resulting in the current fatality rate of between 1%-3%. If/when Covid-19 spreads to developing countries in Africa etc. the lack of ICUs could mean the fatality rate in those countries approaches 5% (those that 'need' ICU and can't get it would presumably not have good outcomes).
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Friday, 28 February 2020
Not losing (much) weight or money
So far this week I've avoided overeating, and have been going to the gym for weight training and doing plenty of walking, but I've also not been sticking to the 'keto' diet plan (my pre- and post- gym session 'carb loading' rapidly got out of control and devolved into snacking on packets of potato crisps!). I'll make an extra effort to stick to my 'keto' diet plan today, and during the weekend, as my cheap 'breathalyzer' device finally arrived in the post (I ordered it via banggood.com several months ago) and I want to see if it works for monitoring 'keto' status. I did a couple of test blows yesterday and it gave a reading of 0.000% BAC, which isn't surprising as a) I don't drink alcoholo and b) I've been averaging more than 50g/day of carbs for the past week, so I wouldn't expect to be in ketolysis currently. I'll resume doing a 'dip stick' test in the mornings and also do the 'breathalyzer' readings, and see how/when I shift back into 'keto' (and how the breathalyzer readings compare to the test strip results). My bathroom scales indicated my weight was around 85 kg body fat around 14.5% this morning, so I'm still 'on track' to reach my goal of ~78 kg and 12% body fat by mid to late April. I've been losing about 1.5 kg of fat for every 1.0 kg of lean mass loss while doing the 'keto' dieting and weight training regime, so the next 7.5 kg of weight loss should be roughly 3 kg of lean mass (sob) and about 4.5 kg of fat (yay), which would leave me with about 11% body fat. We'll see how things turn out in reality at the end of April when I've switch the maintenance calories for a couple of weeks and get my second DEXA scan done.
On a more positive note the movement down the risk-return curve I implemented for our SMSF investments and (most) of my geared share and fund investments was JIT. As of closing unit prices two days ago our SMSF investments (around $1.5) would have been about 4.5% down compared to when I processed our 'switch' from High Growth Index Fund into 70% Conservative Index Fund and 30% Bond Index Fund. Instead our SMSF investment had been pretty stable since the switch (the Conservative Fund was down around 0.5% and the Bond Fund was actually up a little bit, so overall our SMSF fund was only down by about 0.3% instead of 4.5%. Given that the markets have continued the sell-off during the past two trading days, we're probably down by about 1% since the 'switch' compared to ~10% if we'd stayed 'risk on'. Overall we probably preserved around $150K of our SMSF investments value by being cautious and going 'risk off' as a precautionary measure. Given the worsening global situation regarding Covid-19 (and the possibility of an upward spike in Chinese cases now that its been almost two weeks since the end of the lunar new year national 'lock-down' was eased to get industry restarted in China), I can't see market sentiment suddenly getting positive any time soon.
If global containment has been ineffective (which seems increasingly likely), and person-to-person transmission is occurring with an R0 of around 2.5, the number of cases (and deaths) globally will reach alarming proportions quite rapidly. Other than containment, there was no 'plan B' possible for mitigating the effects of Covid-19, given that the 'herd' (humanity) has NO immunity to this novel coronavirus, and any vaccine will take at least a year to be researched, tested, and then manufactured in sufficient quantities to even start rolling out an immunisation program. That's why the WHO and national government's 'by-the-book' "don't panic" reassurances were correct public policy, but there probably needed to be a LOT more containment action taken around the world. Australia's decision to ban all flights from China to Australia is looking very prudent in hindsight (perhaps the PM decided that early, decisive action regarding Covid-19 would make up for the lack of initial Federal government action during the bushfires?). Unfortunately that is only delaying the inevitable, unless Australia was to impose a quarantine on all arrivals from any countries from now on (extremely unlikely, and impractical, but who knows?)
Subscribe to Enough Wealth. Copyright 2006-2020
On a more positive note the movement down the risk-return curve I implemented for our SMSF investments and (most) of my geared share and fund investments was JIT. As of closing unit prices two days ago our SMSF investments (around $1.5) would have been about 4.5% down compared to when I processed our 'switch' from High Growth Index Fund into 70% Conservative Index Fund and 30% Bond Index Fund. Instead our SMSF investment had been pretty stable since the switch (the Conservative Fund was down around 0.5% and the Bond Fund was actually up a little bit, so overall our SMSF fund was only down by about 0.3% instead of 4.5%. Given that the markets have continued the sell-off during the past two trading days, we're probably down by about 1% since the 'switch' compared to ~10% if we'd stayed 'risk on'. Overall we probably preserved around $150K of our SMSF investments value by being cautious and going 'risk off' as a precautionary measure. Given the worsening global situation regarding Covid-19 (and the possibility of an upward spike in Chinese cases now that its been almost two weeks since the end of the lunar new year national 'lock-down' was eased to get industry restarted in China), I can't see market sentiment suddenly getting positive any time soon.
If global containment has been ineffective (which seems increasingly likely), and person-to-person transmission is occurring with an R0 of around 2.5, the number of cases (and deaths) globally will reach alarming proportions quite rapidly. Other than containment, there was no 'plan B' possible for mitigating the effects of Covid-19, given that the 'herd' (humanity) has NO immunity to this novel coronavirus, and any vaccine will take at least a year to be researched, tested, and then manufactured in sufficient quantities to even start rolling out an immunisation program. That's why the WHO and national government's 'by-the-book' "don't panic" reassurances were correct public policy, but there probably needed to be a LOT more containment action taken around the world. Australia's decision to ban all flights from China to Australia is looking very prudent in hindsight (perhaps the PM decided that early, decisive action regarding Covid-19 would make up for the lack of initial Federal government action during the bushfires?). Unfortunately that is only delaying the inevitable, unless Australia was to impose a quarantine on all arrivals from any countries from now on (extremely unlikely, and impractical, but who knows?)
Subscribe to Enough Wealth. Copyright 2006-2020
Tuesday, 25 February 2020
Time to sell my gold bullion?
It might be a good time for me to check how much physical gold bullion I have sitting in my safe (I bought a few ounces way back in the 1980s or 1990s) and think about selling it off, as the combination of a lower Aussie dollar and spike in gold price has seen the price increase to around A$2,500 an ounce. Precious metals are generally a rather poor 'investment' as they cost money to store/insure, have relatively high buy/sell spreads (more similar to real estate than equities), and don't provide any income/dividend stream - so they are basically just a 'hedge' against inflation/hyperinflation or a counter-cyclical commodity play for those with a large investment in the share markets (having 2%-5% invested in bullion can improve overall portfolio diversification). So, if I don't sell my few ounces of gold now, while the price is unusually high, I may as well leave it sitting in my safe indefinitely and keep it for bartering purposes in some post-apocalyptic scenario (but in that situation tinned food or ammunition might have greater utility!).
Subscribe to Enough Wealth. Copyright 2006-2020
Subscribe to Enough Wealth. Copyright 2006-2020
Looks like the markets might finally be reacting to the possible impact of COVID-2019
After doing some 'rebalancing' on 6 Feb in response to the developing corona virus outbreak, it appears that 'Mr Market' has finally reached the same conclusion as me - that while the economic impact of the corona virus is still uncertain, there appears to be considerably more downside risk than any upside potential, so why not play it safe and go 'risk off'? For the past two weeks I had been wondering if the bull market was going to completely ignore the corona virus outbreak, but it turns out that it had already run off a cliff and was just taking a while to notice -- a bit like Wile E Coyote in a road runner caroon!
I had managed to shift our ~$1.5MM SMSF investment in the Vanguard 'high growth' index fund to a mixture of the Bond index fund and the Conservative index fund (having to mail in a signed paper switching form meant that it took several days to implement the decision I made on 6 Feb), and I also liquidated my $250K investment in the Colonial First State (CFS) geared share fund and my $100K investment in ETFs and used the proceeds to pay down most of my 'portfolio loan' (that had been used to fund the ETF purchases early in 2019, and my $100K deposit and $42K stamp duty for the investment unit purchase at the end of last year). I'll now be able to fund a large part of the 'settlement' for the investment unit using my 'portfolio loan' when construction is finished in 2023, and will only have to take out a relatively modest mortgage (around 50% LVR).
I had also intended to sell off my ~$50K investment in the CFS and ~$100K Vanguard International Index Fund and High Growth Fund investment but as these were 'collateral' for a couple of my margin loan accounts it turned out that I also needed to mail/upload redemption forms for those requests (the phone/online redemption requests I made on 6 Feb weren't actioned). As the market is currently already down by about 5% from the recent highs, I've decided I'll now just leave these investments 'as is' and avoid the headache of having to do additional capital gains tax calculations when I do this year's tax return. In any event, having paid off my margin loan balances there at least isn't any risk of getting margin calls and being forced to sell out of these positions at an unfavourable time (at least I learned something from the GFC!).
For the next 6-12 months I'll be keeping an eye on how severely COVID-19 affects the global and Australian economies, and the next decision will be trying to pick a suitable time to shift our SMSF investments back towards a 'growth' weighting, and when/if to utilize my available margin loan facilities to make geared investments in the stock markets. These things typically seem to take at least six months to 'wash through', but it could be a lot longer if the impact turns out to be a global recession (and possibly Australia could finally break its record run of economic growth and enter its first recession of the 21st Century).
Subscribe to Enough Wealth. Copyright 2006-2020
I had managed to shift our ~$1.5MM SMSF investment in the Vanguard 'high growth' index fund to a mixture of the Bond index fund and the Conservative index fund (having to mail in a signed paper switching form meant that it took several days to implement the decision I made on 6 Feb), and I also liquidated my $250K investment in the Colonial First State (CFS) geared share fund and my $100K investment in ETFs and used the proceeds to pay down most of my 'portfolio loan' (that had been used to fund the ETF purchases early in 2019, and my $100K deposit and $42K stamp duty for the investment unit purchase at the end of last year). I'll now be able to fund a large part of the 'settlement' for the investment unit using my 'portfolio loan' when construction is finished in 2023, and will only have to take out a relatively modest mortgage (around 50% LVR).
I had also intended to sell off my ~$50K investment in the CFS and ~$100K Vanguard International Index Fund and High Growth Fund investment but as these were 'collateral' for a couple of my margin loan accounts it turned out that I also needed to mail/upload redemption forms for those requests (the phone/online redemption requests I made on 6 Feb weren't actioned). As the market is currently already down by about 5% from the recent highs, I've decided I'll now just leave these investments 'as is' and avoid the headache of having to do additional capital gains tax calculations when I do this year's tax return. In any event, having paid off my margin loan balances there at least isn't any risk of getting margin calls and being forced to sell out of these positions at an unfavourable time (at least I learned something from the GFC!).
For the next 6-12 months I'll be keeping an eye on how severely COVID-19 affects the global and Australian economies, and the next decision will be trying to pick a suitable time to shift our SMSF investments back towards a 'growth' weighting, and when/if to utilize my available margin loan facilities to make geared investments in the stock markets. These things typically seem to take at least six months to 'wash through', but it could be a lot longer if the impact turns out to be a global recession (and possibly Australia could finally break its record run of economic growth and enter its first recession of the 21st Century).
Subscribe to Enough Wealth. Copyright 2006-2020
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