Global equity markets may have underestimated the economic effects of a potential COVID-19 pandemic because the only historical parallel to it is the 1918 flu pandemic (which is likely worse than COVID-19 due to a higher fatality rate) and stock markets didn't drop that much. But maybe traders haven't taken into account (and I just realized this) that there was war-time censorship in effect which strongly downplayed the pandemic and kept workers going to factories, which is a big disanalogy between the two cases, so markets could drop a lot more this time

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1yangshuo101512dHave you sold those put options by now? Looks like the Fed and Treasury 6 trillion stimulation package boosted the market a lot. I had similar put position which dropped significantly during the past 2 days of Market rally. Do you think it is still good to hold the put options?

I did sell some of the puts, but not enough of them and not near enough to the bottom to not leave regrets. I definitely underestimated how fast and strong the monetary and fiscal responses were, and paid too much attention to epidemiological discussions relative to developments on those policy fronts. (The general lesson here seems to be that governments can learn to react fast on something they have direct experience with, e.g., Asian countries with SARS, the US with the 2008 financial crisis.) I sold 1/3 of remaining puts this morning at a big loss (rel

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Open & Welcome Thread - February 2020

by ryan_b 1 min read4th Feb 2020107 comments


If it’s worth saying, but not worth its own post, here's a place to put it. (You can also make a shortform post)

And, if you are new to LessWrong, here's the place to introduce yourself. Personal stories, anecdotes, or just general comments on how you found us and what you hope to get from the site and community are welcome.

If you want to explore the community more, I recommend reading the Library, checking recent Curated posts, seeing if there are any meetups in your area, and checking out the Getting Started section of the LessWrong FAQ.

The Open Thread sequence is here.