Panic Journal (3) – Why Expert Virologists seem to be really bad (or careless) with statistics
Disclaimer: I am an anonymous investment blogger and not a Virologist, so please be aware of this. I also think that Covid-19 is a huge threat and that everyone should contribute to public safety by staying at home and avoiding contact for some time.
As mentioned above, I am a “stock guy”, however mostly a fundamental/Behavioural type of investor. If I see a number, I want to know where it comes from and how it is derived.
The current discussion on Covid-19 is, at least in Germany, mostly about numbers. Two numbers stand out and get reported all the time and everywhere:
- Number of Covid-19 Infected persons (per day and daily change)
- Number of persons that died due to Covdid-19 (again per days and daily change)
The official source for this number is the Robert-Koch Institute (RKI) named after the German scientist who discovered the tubercolosis bacterium more than 100 years ago.
RKI publishes daily the number of infected persons that have been reported to them during the day. Most people look both, at the absolut change and the relative change from one day to the other and on every TV discussions, these numbers are the basis for whatever is discussed.
The numbers so far look dramatic, implying a huge increase in infections especially since last week.
For 18.03. at the time of writing, RKI reports 8.198 cases, a plus of 1.042 cases compared to the day before.
Eight days earlier, on 10.03. total cases were at 1.296, an increase of 157 against the 1.139 on 09.03. A significant part of the press and also politicians interprets this as proof for an explosion of infections in Germany.
The problem is that these number say actually very little. In order to be counted, a person needs to be tested first, and then test positive for the virus. There are stories everywhere that Germany doesn’t have enough test capacities. People want to get tested but get no response or are sent home. This again is seen as a further proof of a massive spread of the virus.
One thing is very clear: the number of actually infected persons is much much higher than the 8.198 reported ones, but no one knows how many.
The BIG issue: This is useless data
However the big issue in my opinion is that the RKI doesn’t know how many tests are actually performed each day. If you search for the number of test performed, there are no hard numbers available.
What is clear is that the capacity and actual test activity has increased a lot over the last few days.
One source, a public-scientific TV show published some estimates.
According to them, up until “Mid march”, Germany had a capacity to perform 12k of tests a week or ~1.7k per day. Now, the capacity seems to have increased by a factor of 12,7 to around 160K a week or 22.9k per day.
No comes something obvious but that I haven’t heard anywhere yet: The more you test, the more positive results you get, even if the infection rate stays constant or even goes down.
As there is no data on testing, everything is speculation. But if you just assume that the infection rates was constant, a 12,7x increase in tests should result in 2.124 confirmed cases, actually more than have been reported.
My conclusion is simple: The current numbers for infected persons, especially the daily changes are simply useless in order to determine if and how the infection is spreading. Nevertheless everyone is focusing on them and using them in a very wrong way.
The big scandal in my opinion is that the “expert virologists” have not thought about this at all. The RKI now tries to get this numbers, but in the mean time, Germany is flying blind on the actual spread of the Virus.
However please be careful: I am not saying that the virus is NOT spreading like crazy in Germany and that the infection rate is not increasing. I simply don’t know. But neither the expert virologists nor our Government does. We are all flying blind at the moment. And don’t belief anyone who wants to tell you how things will develop over the next week, months or years with regard to the virus. No one knows, it is all speculation. The same goes for capital markets.