David Capital On Sweden vs Finland: Fighting The Coronavirus

David Capital On Sweden vs Finland: Fighting The Coronavirus
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Whitney Tilson’s email to investors discussing Finland vs. Sweden in fighting the coronavirus.

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Q2 2020 hedge fund letters, conferences and more

Sweden's Approach To Fighting The Coronavirus

6) Sweden's approach to fighting the coronavirus continues to be highly controversial. This chart from the Financial Times shows that Finland seems to have done a much better job, with fewer deaths and less economic decline:

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Sweden Coronavirus

However, David Capital's Adam Patinkin replies:

Neither of those things are true.

First, if you look at "all-cause" mortality, not just the coronavirus, Sweden has negative all-cause mortality this year vs. Finland having positive all-cause mortality. More people have died this year in Finland than in a normal year and fewer have died in Sweden than in a normal year, full stop. Sweden has outperformed from a health perspective.

Second, there is a massive definitional issue. You literally cannot compare coronavirus deaths in Sweden to Finland. In Sweden, it's marked as a coronavirus death if the person had COVID at any time within the 30 days [prior to their] death... regardless of the actual proximate cause (car accident, suicide, murder, etc.). In Finland, COVID deaths in nursing homes were not counted for a substantial portion of the crisis. In nursing homes! Now, Finland has gone back and added some of those, but it is pretty clear that Finland's death count is substantially under what most other nations would count, and especially relative to Sweden.

Third, remember that Sweden had an extremely light flu season in 2019. There is a meaningful correlation between the severity of flu seasons in 2019 and the impact of COVID in 2020. Sweden was already fighting with one hand behind its back, and it still came out ahead of Finland in all-cause mortality.

Fourth, remember that Finland was one of the "lightest touch" lockdowns in the EU. It looks far more like Sweden than the U.K. So it locked down, but relative to the rest of the world it was a short and light lockdown.

The School Lockdown In Finland

Fifth, one area of key difference is that Finland closed its schools. That is a terrible strategy. One study showed that the school lockdown in Finland did not reduce infections vs. having no school lockdown in Sweden. It was a wasteful, bad policy choice.

Sixth, the economy. Sweden is a heavily export-dependent economy (Saab cars, forestry, etc.) whereas Finland has a much more stable, services-oriented economy. Sweden should have done far worse. I had my analyst pull H1 GDP, and he had Sweden at -3.5% in H1 2020 vs. Finland at -3.8% in H1 2020. Finland should have blown Sweden out of the water, but instead Sweden edged ahead. That is a massive win.

A better economy. Fewer deaths. Schools open full-time. Sweden crushed Finland... and Finland had only a moderate lockdown. If you compare Sweden to countries that locked down harder (and/or that remain locked down, even as the disease is effectively over in Sweden and life is mostly back to normal), it's a total blow-out.

Thank you, Adam!

Sweden is doing so well that even the New York Times is writing about it: Vilified Early Over Lax Virus Strategy, Sweden Seems to Have Scourge Controlled.

Best regards,


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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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