Richard Kerr wrote at The Points Guy that he is going to live his life and keep traveling, in spite of coronavirus risk.

He argues that we’ve overreacted to past public health scares (West Nile, SARS, Swine Flue, Ebola etc) and that frames his view of coronavirus. If mortality rates are low (and by the way, centered on people older than Kerr and his family). We’re past containment, So he’s going to keep on keepin’ on.

It’s possible that he’s right. There are generally two perspectives on the virus.

• Status quo bias. The world stays the way the world has been. Past scares haven’t materialized, why will this one be different? That was my view of the 2016 election – that Donald Trump would underperform Mitt Romney with women and minorities, and you don’t become President by underperforming Mitt Romney. The world stays the same until it doesn’t. It’s a useful frame most of the time, it’s usually right, but fails to account for long tail risk / black swan events.

• Math. Plot out infection rates, we have no reason to believe at this point that each person will be infecting fewer than one other person for awhile. The CDC has performed poorly. So plot out a geometric progression of infection and anything near the mid- or high-end of the mortality range gets to be pretty bad. There’s much we don’t know still and we may not get there, but this view focuses on worst case scenarios. ‘Precautionary principle’ is actually usually the wrong approach, but coronavirus isn’t controllable at this point in any case.

Overall I’m in the ‘math’ camp. I not only don’t want to get affected (I’m desperate to avoid the flu to begin with) I don’t want to get it and infect others. On the other hand maybe it wouldn’t be such a bad idea to get it now rather than later, from a purely selfish perspective. Medical resources are far more abundant now and could be overwhelmed later (assuming some form of immunity after recovery). This would be a terrible strategy if everyone tried it…

Here are my 10 mental models for what to expect from, and how to approach, coronavirus.

1. Keep planning trips. Airline change fee waivers help for those buying their own tickets. If you’re buying for other people that’s no help, they retain the credit you don’t get a refund. This is a useful perspective only for those who would use the credit naturally anyway within a year. Nonetheless I have trips on the books for March, April, and May.

2. There will be great deals into the future. Mileage redemptions especially are usually very cancellable with little penalty. So book the guts of a trip, air and hotel on points, taking advantage of extra good award availability where it exists. Book hard to find seats and accommodations. Lock in the option to travel later.

3. It’s a bad idea to make unchangeable plans. Continue to live your life but recognize that each day, based on the best new available information, you may need to change your plans. So don’t make bookings that come with big deposits, that aren’t cancellable or refundable. The key to life right now is contingency and flexibility. Expect the price of cancel for any reason travel insurance to go up, and for some insurers to exclude coronavirus from ‘any’.

   I do not know for certain that I will take all of the trips that I have booked. But the cost to cancel mileage bookings is low. The cost to cancel Southwest bookings is zero (I just have to use travel funds within a year). And my hotels are cancellable. I’ll make decisions about each upcoming trip based on best available information at the time.

4. Coronavirus will get worse before it gets better. New cases of coronavirus are outside China. China is trying to get back to business, subsidizing international flights even. It’s hopeful that more people with confirmed cases have recovered from coronavirus than are currently confirmed to have it. But there’s been very little testing in the United States, that’s changing, and we’re seeing more confirmed cases. We’re seeing spread elsewhere. Will it return to China, even, from passengers flying there who have it?

5. The economy will get worse before it gets better. The economic consequences are going to be harsh. My own view is that a recession has started. That’s far from the consensus. A month ago a U.S. recession in 2020 was unthinkable. As I write this betting markets have it at 50-50. However the biased sample of conversations I’m having and what I’m seeing is business slow down to halt, taking a ‘wait and see’ attitude on investments and projects – and that’s even outside the travel space. And lack of travel means lack of deals getting done (teleconferencing isn’t the same). Businesses will pull back not getting deals, not getting visitors, not serving restaurant meals. That pullback will have a knock on effect.

6. We’ll see some amazing travel deals, far better than what we see today. Right now there’s very little a travel brand can do to goose business. That’s because price isn’t what’s keeping people away, it’s fear and uncertainty. Once we get past that stage it’ll be possible to generate incremental trips at the margin through discounting and other offers. Then we’ll start to see real deals.

7. We’ll see airline failures. The first sign will be credit card processors holding back funds. Norwegian was supposed to earn a ton of cash this summer that would sustain them over next winter. Where’s next winter’s cash going to come from? Without coronavirus they might have made it. Now I wonder what their future looks like. It won’t just be Norwegian that struggles.

8. We could see more airline consolidation (even with a new President). My belief had been that if a Democrat won the White House there’d be more aggressive anti-trust enforcement and that would turn off the possibility of U.S. airline mergers. Coronavirus is the sort of black swan event that makes a change in control of the executive branch more likely, but struggling airlines are hard to say no to when they look to merge. American doesn’t have the cash to buy Alaska, but if AAL keeps falling could Alaska take over American? Or could Warren Buffett who owns around 10% of each of the large airlines already buy a couple and put them together?

9. Financial markets will probably go lower but I’m not selling. The investments I have are for the long term. I’m nowhere near retirement. I still be the world is going to be a better, more productive place in the future than it is today. Even full-time experts on the market get killed half the time, and I’m not a full-time expert so I’m not going to try to time this. If I knew when the market would bottom and when it would start to rise it would be a different matter. I saw too many individuals and institutions sell close to the bottom a decade ago and not get back in until the market had risen substantially.

10. Make preparations. This was a good reminder to improve my practices, to be better about washing my hands, to keep certain supplies on hand – not because of what’s coming with coronavirus but because there are always risks and we don’t always get advance warning. Since I have a home with storage space and a bit of discretionary income with which to buy more of what I need, I’ve done so, so that I’m ready if I need to stay at home for a couple of weeks.

At the end of the day the most important thing is to keep living life, while being flexible to adapt to new information. Remember when you used to rinse your hands for a few seconds and call it good? That was just last week.

If I can offer just one bonus – and maybe most important – piece of advice as this progresses? Be a person, don’t let this become an excuse for being a jerk.

In Texas. pic.twitter.com/0Q3wp1dge5

— Fun Signs & Graffiti (@SignsFun) March 6, 2020