The business media is missing this: The rise of the immune

Summary

- The fastest growing “demographic” in the world today are those who are immune to COVID-19.

- This is bullish for equities, because those who are immune to COVID-19 are likely less hindered as consumers than those who are not.

- The equities that should benefit the most are those for companies at the epicenter of the pandemic.

- Why is the non-immune view the prevalent one in the business media? Probably because of the average age of those speaking and writing.

- The rising immune population so far is predominantly young.

The fastest growing demographic

The fastest growing “demographic” in the world today are those who are immune to COVID-19. At the time of this writing, there were 3.3 million confirmed cases in the US alone. Assuming that the actual cases are around 10 times the confirmed cases, we have 33 million cases in US.

If we consider the death rate to be 1 percent, this means that we will have about 30 million people with immunity to COVID-19 in the US very soon. Many are already immune. Even without a vaccine and some mitigation (e.g., masks), by the end of the year the number of immune people in the US could be 100 million. In the world, this number could be 500 million.

People want the immune around them

Herd immunity is seen as a desirable goal because of the idea that the immune form a protective barrier around the non-immune (). In this sense, immune people are a better barrier than social distance. For example, if you have an immune person in between two non-immune people, that may be better than six feet of empty space. The immune person is much more lethal to the virus.

High-risk individuals, such as the elderly, are advised to isolate themselves. However, social and physical isolation could negatively affect their health in various ways unrelated to COVID-19. The real problem is interaction with the non-immune, because of the risk of infection. Interaction with the immune is fine. Maybe more than fine, because of the benefits of social interaction, not to mention needed care. People will want the immune around them.

Media naturalness theory

With current commercial technology, virtual meetings are simply not a viable alternative for a species that evolved over millions of years communicating face-to-face. The naturalness of a communication medium (i.e., how similar it is to the face-to-face medium) leads to a number of effects. For example, low naturalness reduces physiological arousal. Also, low naturalness leads to more confusion, particularly when knowledge is being communicated ().

So, face-to-face meetings will be needed, particularly when knowledge-intensive tasks must be carried out. Imagine a non-immune person being asked to attend a face-to-face meeting with 5 other people, all using masks. Would that person like the idea of the meeting more if she knows that all of the 5 other people are immune? Probably yes. Maybe not 5, but 3. The more the better. Again, people will want the immune around them.

Businesses will want the immune

Airlines are being asked to keep middle seats empty. Imagine you getting on an airplane and going to your window seat, just to find out that someone is sitting next to you, in the middle seat. You do not like it, even though the person is wearing a mask. He tells you that he is immune, and shows you the results of an immunity test. Will that make you feel better? Probably yes.

Companies that are at the epicenter of the pandemic are airlines, bars, restaurants, amusement parks, and ride-sharing companies. All of these companies have a strong incentive to have the immune as their employees, partners, and customers. Would a non-immune person favor a bar where most customers are immune? Probably yes.

Is this bullish for equities? If yes, what equities?

Arguably this is bullish for equities, because those who are immune to COVID-19 will probably be less hindered as consumers than those who are not. It stands to reason that the equities that should benefit the most from this are those for companies at the epicenter of the pandemic. Essentially, the ones that suffered the most so far.

Virtually all of the discussion in the business media nowadays is from the standpoint of the non-immune. One hears things like: “… the consumer will be cautious going forward … the risk of infection …”, “… parks will never have the same sales again …”, “… the economy will never be the same …” etc. Think about these statements assuming that you are immune – they make little sense.

And the numbers of the immune are growing fast, even without a vaccine. They will grow a lot faster with one or more effective vaccines. Also, keep in mind that the immune are not only consumers themselves, but also enablers of consumption. For the economic recovery, they are worth their weight in gold!

Why is the non-immune view the prevalent one in the business media? This may be due to the average age of those speaking and writing.

The rising immune population now is predominantly young.