Michael Burry is a lot of things most of us will never be.
For example, he’s one of the few people who can claim to have actually predicted one of the biggest financial meltdowns in modern history. “Actually”, as opposed to the scores of market participants (professional and otherwise) who purport to have some loose claim on “calling the GFC”.
Burry is also a man who was portrayed on the silver screen by Christian Bale, a distinction he shares with Patrick Bateman, Dick Cheney, Moses and Batman.
Also, Burry is an M.D. (Vanderbilt University School of Medicine).
Over the past several days, Burry has spent what appears to be quite a bit of time tweeting about coronavirus. His take seems to be an amalgamation of big data advocacy to combat the spread and a soft version of the idea that the “cure is worse than the disease”.
“[It’s] a helpful page, but this War Games map is a waking nightmare, and it does not have to be”, Burry said, of the famous Johns Hopkins COVID-19 tracker which is one of (if not the) go-to source for data on the virus.
“For perspective, influenza hospitalized 400,000-730,000 Americans this year, and killed 24,000-63,000”, Burry remarked, on Monday, adding that it’s “not as bad as 2017-2018, when the flu killed as many as 95,000, but still, sadly, 7 children died last week”.
“Note this is with a widely used and effective vaccine program”, he continued. “The numbers are 95% confidence interval numbers [and] there is no reason to believe COVID numbers are any more precise, but that is because talking in ranges is good for science but not politics or media”.
The key point from Burry, is that “denominator deflation infests COVID-19 stats”.
While doubtlessly lost on many, that’s common sense. It’s not clear he’s trying to say anything that’s overtly hyperbolic or otherwise “out of consensus”.
“In countries with more comprehensive testing, there are better estimates of the true case fatality rate of COVID-19, ~0.2-0.5%. With universal testing it would be lower”, he goes on to remark, employing the chart below.
That captures the gist of his arguments, which are being sensationalized by some media outlets.
He said as much on March 23, when he made the rather uncontroversial claim that “if COVID-19 testing were universal, the fatality rate would be less than 0.2%”.
You can quibble with the actual figure, but the point (that if we could somehow know the “true” number of cases, the mortality rate would be very small) is self-evident.
His other main claim, though, is the subject of some debate.
Commenting on the likely actual mortality rate, Burry says it’s “no justification for sweeping government policies, lacking any and all nuance, that destroy the lives, jobs, and businesses of the other 99.8%”.
Couched in those terms, it’s hard to argue with Burry, but whether he realizes it or not, he’s constructing a straw man. Specifically, the use of descriptive terminology like “lacking any and all nuance” makes it impossible to argue with the rest of his claim. That is, if you accept that government policies devoid of “any and all nuance” are generally bad (and that’s almost a tautology), then you have to accept the latter part of his claim, which is an implicit call to reopen the economy.
That kind of argumentation won’t work in a logic class, but it works on Twitter.
Burry goes a bit further, inserting himself into the domestic violence discussion. “Domestic violence [is] ‘flourishing'”, he says, citing a piece from The New York Times.
“This [is] happening right now”, Burry laments. “[It’s] infuriating that governments sacrificed these women and children with blockhead policies lacking all nuance and understanding”, he fumes. “Politicians and media ran roughshod over these victims”.
Unlike the vast majority of investors who have presumptuously weighed in on the relative merits of reopening the economy, Burry is a doctor, and therefore does have a claim on an educated medical opinion.
And yet, as ever, some of the questions he’s posing (he makes them statements, but they’re really questions) are the same vexing quandaries currently being debated by the best epidemiologists, virologists and immunologists on the planet, in conjunction with politicians who, in some cases, are desperate to restart the economy.
So, while Burry has an M.D., and has proven himself to be a formidable intellect capable of conducting analysis at a level of granularity normally reserved for computers, not humans, the suggestion (tacit or otherwise) that everyone currently working to pull off an impossibly difficult balancing act between minimizing the imminent threat to human life (the virus itself), second-order effects (e.g., domestic violence), long-term health threats (e.g., depression from lost employment) and possibly permanent loss of economic output, is somehow intellectually inferior to Burry, is laughable.
His opinion is welcome, of course. Indeed, his medical training means it’s more welcome than most when it comes to investors commenting on public health crises.
But this isn’t the housing market, and the career virologists and epidemic experts around the world aren’t Alan Greenspan. Burry may well be more right than most. But unlike the pre-2008 mortgage market, this isn’t a situation where he can claim to be totally correct while everyone else is completely wrong.