With Sweden's cases spiking, I think my initial herd immunity hypothesis is broken.
Well at least you admit it. This was not a low stakes issue which is why I questioned your level of confidence. When people become confident in such things, the danger is that precaution is thrown aside.
When leaders dismiss precaution and instead exhibit confidence that “the virus will be gone soon” or “a vaccine will be here soon”, the cost of them being wrong—economically and in terms of lives lost—is massive and will be borne by society...
The Asian countries and some others like NZ seem to get the precautionary principle. Others not so much.
Let's for a moment assume the herd immunity thesis is broken (we don't know that yet). You're not the only one holding it, there are plenty of others who will realize this as cases and hospitalizations go up, and we anticipate they could go up fast. My question is, can one make money from this understanding? If yes, where are the opportunities to make money if a significant third wave hits?
Edit: this question is based on the realization that cases and markets have not correlated much in the last 6 months
These days, the way to make money is: bad news -> stimulus -> stonks go up (and even good news as long as fed doesn’t tighten)
The virus has gotten less deadly as we’ve matured our treatment modalities: proning, remdesivir, antibody cocktails, steroids, avoiding things that don’t work (HCQ,etc) but a third wave would drive a population already conditioned to a deadlier covid to reduce consumption/activity. And having a virus that can kill your relatives and/or spending time in the ICU/hospital with a respiratory virus is not exactly enticing even if you survive.
So while stonks may go up, the fear is that the real economy will get hit.
As they say, an ounce of prevention is worth....but it’s too late now for that anyway.