The Garrulous Jay – Health Warning

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Health Warning – The US Centers for Disease Control and Prevention have found that 1 in 500,000 people who receive the AstraZeneca Covid-19 vaccine will be struck by lightning. Politicians are now advising people who have had the vaccine to stay indoors if it looks a bit stormy outside, while scientists are beginning work on ways to stop the weather…

Two weeks ago AstraZeneca published an update on the thrombotic effects of its vaccine, in which it stated that “a careful review of all available safety data of more than 17 million people vaccinated” found no evidence of any increased thrombotic symptoms. There were “15 events of DVT and 22 events of pulmonary embolism reported among those given the vaccine”. (Source: AstraZeneca, 14th March 2021)

Statistically, therefore, the incidence of thrombotic symptoms developing in those who had received the vaccine was around 1 in 460,000. The Health Warning above is, of course, nonsense: the figure of 1 in 500,000 is for the US population as a whole so, while true, its interpretation could be gravely misleading. (Source: US Centers for Disease Control & Prevention, 23rd December 2013)

What is crucially important in both cases is that there is no evidence of causality found between being given the vaccine and blood clots…or lightning strikes.

This did not stop a long list of European countries suspending the rollout of the AstraZeneca vaccine, against the advice of the European Medicines Agency, delaying people receiving protection against Covid-19 and increasing concerns about the safety of the jabs and potentially deterring others.

What’s going on here is a textbook example of an ‘availability cascade’.

In their 1999 article in the Stanford Law Review, Timur Kuran and Cass Sunstein coined this term to describe the process whereby collective beliefs first form and then become self-reinforcing as they gain wider exposure, leading an increasing number of people to believe them to be true. Figures in public office feel compelled to react, lending further credibility to the original concerns. (Source: Availability Cascades and Risk Regulation, Stanford Law Review Vol.51, April 1999)

Understanding availability cascades is important not only because they can, quite literally, be a matter of life and death, but because they can lead to errors of judgement in both business and investing, which could be bad for the health of both your company and your portfolio.

When it comes to business, a willingness to prioritise the most recently available information, particularly if others are also attaching a greater weight to it, may lead to operational and strategic mistakes. Equally, it is easy to see how availability cascades might inflate investment bubbles or lead to panic selling.

Businessowners and investors alike should therefore guard against the risks of falling prey to such cascades when making decisions.

But…whatever the vaccine you have had, or have, please don’t feel the need to stay indoors.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.