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Coronavirus: why is eastern Europe’s second wave so much worse than its first?

Eastern European countries are making the same mistakes now as western European countries did in the spring.

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Eastern Europe was praised for being exceptional during the first wave of the pandemic. By introducing very strict prevention measures early on, countries in the region had significantly fewer COVID-related deaths than their western European counterparts.

Some argued that this was because of economics: that eastern European countries locked down early because they feared their economies would not be able to handle many people getting sick. Others suggested this eastern European exceptionalism could be explained by culture, with success in limiting the first wave being down to a mentality of fear and readiness to follow harsh rules stemming from the communist era.

But if these factors were at play in the first wave, they haven’t had the same effect in the second. Eastern Europe’s pandemic experience has been dramatically different this autumn. All countries in the region have seen significant increases in cases and deaths. Here, we take a look at why this has happened.

A head start in the first wave

One thing is clear: eastern Europe exited the first wave at the end of June in much better shape than western Europe. Adjusting for population size, both cases and deaths were substantially lower in the east, as shown in this comparison of the COVID-19 death rate in the two regions.

Graph showing that during March-June 2020, COVID-19 deaths per head of population spiked in western Europe but remained low in eastern Europe.
Daily new COVID-19 deaths per million inhabitants, eastern and western Europe. Our World in Data COVID-19 Dataset. Authors’ compilation.

We can also compare how restrictive the two regions’ disease-prevention measures were during the first wave using the Oxford COVID-19 government response tracker (OxCGRT). This tool measures the stringency of efforts to control the virus on a scale of 0-100, with 100 being the most restrictive. We can see from the next graph that, at the same time in the spring, the two regions introduced measures that were similarly strict.

However, if we look back at the death rates of the two regions in the graph above, it’s clear that eastern European countries introduced restrictions when experiencing far fewer cases and deaths. Therefore, the simplest explanation for why eastern Europe initially fared much better is that it had a head start. Countries in the region imposed strict measures while being relatively mildly affected, whereas western countries waited until things got bad.

Graph showing how eastern Europe's COVID-19 control measures were initially as stringent as western Europe's, but since the summer have been more relaxed.
Stringency of COVID-19 control measures in eastern and western Europe. OxCGRT. Authors’ compilation.

This shows that eastern European countries took the opportunity to act quickly.

Squandering the spring gains

When we turn to the second wave (starting around September and ongoing), we’re faced with the opposite question: why did eastern European countries not act in spite of rapidly rising infections and deaths?

Eastern European death rates overtook those in the west in early October, but restrictions in the region – which had eased after the first wave – still lagged behind controls reintroduced in the west. Look again at the second graph above. It shows that in between the two waves, the east relaxed its measures further than the west, and was then less eager in reimposing them. Eastern Europe squandered its spring gains and then repeated the mistakes made by the west in spring: waiting until cases and deaths are out of control before imposing controls.

What explains this reluctance to reintroduce restrictions? One explanation might be that these countries are victims of their own success. Eastern Europe contained the virus so successfully in spring, it didn’t experience the horrific hospital scenes seen in northern Italy, for example. This may have produced scepticism about the severity of the pandemic. Pandemic fatigue is present across the entire continent, and may be especially present in the east, where some people may have felt that they went into a lockdown for nothing.

Not all in the same boat

Importantly, however, there have been major differences within eastern Europe too. Up until the beginning of November, the spike in the death rate was largely driven by the Czech Republic. Cases and deaths have not been spread evenly across the region.

Graph showing COVID deaths per head of population in eastern European countries from September 15 to November 1, with the Czech Republic faring significantly worse than others.
Daily new COVID-19 deaths per million inhabitants, second wave, eastern Europe. Our World in Data COVID-19 Dataset. Authors’ compilation.

If we look at the stringency of control measures, we can also see that not all countries acted in the same way. The Czech Republic acted very late, for example, imposing stricter measures at the end of October, even though cases and deaths had been soaring upwards during the month. Neighbouring Slovakia, on the other hand, imposed stricter measures despite having far fewer cases and deaths. It seems that at least some countries in the region have learned their lessons.

Graph showing how the stringency of some eastern European countries' COVID-19 control measures increased between September 15 and November 1.
Stringency of COVID-19 restrictions, second wave, eastern Europe. OxCGRT. Authors’ compilation.

Understanding why eastern European countries chose to respond differently during the second wave is complicated, though.

For example, differences in economic strength could explain why the relatively richer Czech Republic waited to reintroduce restrictions (thinking it could bear the brunt of a high number of infections), but this doesn’t account for the relatively poorer Romania’s decision to do the same.

Politics might provide a hint: the Czech Republic held regional elections in October, while Romania voted in local elections in September and is about to vote in national elections in December. Electoral politics could explain the reluctance of the two countries to enter another lockdown – with politicians seeing it as an unpopular measure that would also delay elections.

But one explanation that can probably be ditched is the culture argument mentioned previously. Even in countries where governments reintroduced relatively strong restrictions in October, such as Slovenia and Lithuania, infections and deaths have remained high throughout November – suggesting low compliance with the rules.

Tamara Popic and Alexandru D Moise are collaborators on the project "Responding to COVID-19: Government Action, Government Rhetoric, and Public Trust", which is funded by the European University Institute (EUI) in Florence.

Tamara Popic and Alexandru D Moise do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointments.

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Spread & Containment

How to Use Dividends to Find the Best Tech Stock

Investors Alley
How to Use Dividends to Find the Best Tech Stock
When we talk about tech stock investing, we hear discussions of all sorts about different…

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Investors Alley
How to Use Dividends to Find the Best Tech Stock

When we talk about tech stock investing, we hear discussions of all sorts about different measures used for picking stocks.

For example, some tech investors use year-over-year revenue growth. Others subscribe to a theory that has been floating around for many years, that the secret to picking tech stocks was looking at the percentage of cash flows spent on research and development.

All too often, tech stock analysis consists of storytelling and searching for ideas that will change the world, something I’ve heard thousands of times during my career. The number of companies that actually did change the world probably totals up to a few dozen over three decades.

Some of those beat the market. Others did not.

I have found a variable that can help tech investors spot promising opportunities to identify technology companies that have higher probabilities of providing market-beating returns: dividends.

Note a stock’s dividend yield: investors who want higher dividends with an overall total return would be smart to look into high-yield tech stocks as part of their income strategy. The key to using dividends to find market-beating tech stocks is to look at the rate of their dividend growth. It doesn’t matter how high the dividend is at any given time. We want to see companies that are consistently growing their dividends.

A tech company that pays a dividend is making a statement. It tells the world: “We are generating enough cash to pay the bills, hire great people, and fund our future growth plans as well as R&D. In fact, we are generating so much cash we have some left over to pay out to our investors.”

Ideally, we want to limit our universe of companies to those who are increasing their payout by at least 20% annually. Growing a dividend at that high a rate says that things are just continuing to get better.

Once we have a universe of tech companies that are growing their payouts at high levels, we want to make sure we only own those that really do have a wonderful business that just keeps getting better. We want to use a financial checklist to make sure our companies are in excellent financial shape and have what it takes to keep growing the business.

I prefer the nine-point checklist developed by Professor Joseph Piotroski when he was at the University of Chicago – known as the “Piotroski F-Score”. This is a list of nine criteria of profitability, leverage, and efficiency. On each criterion, a firm can either get one or zero points – pass or fail.

I limit my universe of tech stocks with paid dividend growth to just two to three with the highest scores on the Piotroski checklist.

Using this simple method for picking tech stock winners has crushed the S&P 500 over the past decade and even edged at the tech-heavy NASDAQ 100.

Texas Instruments (TXN) makes the current list of technology companies with high dividend growth and outstanding fundamentals and prospects. The company makes most of its revenues from semiconductors, but it does still have some revenues from its calculators and other business machines. (I have had one of these, a Texas BAII calculator, within arm’s reach for most of my career.)

Texas Instruments had a solid second quarter and increased its guidance for the third quarter. The company has not suffered the China slowdown problems that have plagued some of their competitors so far. The brightest spot in the recent report was semiconductors being sold to the automobile industry, which were up 20%.

Although we have seen some slowdown in semiconductors due to the supply chain issues created by the pandemic, Texas Instruments has powerful tailwinds from all the developments we see in technology over the next decade.

Every one of the hottest trends in the economy—from renewable energy to artificial intelligence and everything in between—is going to increase demand for semiconductor chips. There are thousands of semiconductors in every electric vehicle, which will be another massive source of demand for the industry.

Texas Instruments has a yield of 2.5% right now, and has been growing that payout by 20.5% annually.

Another semiconductor company, Broadcom (AVGO) has the fastest-growing payout on our list right now. The company makes chips for smartphones, networking, broadband, and wireless connectivity. Broadcom’s recent purchase of Symantec’s Enterprise Business also puts it in the cybersecurity business.

Broadcom’s shares currently yield 2.97% and the payment has risen by an average of 49% annually for the past five years.

Most investors will never think of using dividends as part of the stock selection process. Rigorous testing shows that dividend growth is actually an important part of identifying companies with the potential to be huge winners.

My favorite way to invest in those companies isn’t to buy their stock, though. Instead, I like to use a special, little-known investment that lets me invest in these companies for up to 18% less than what others pay…

While collecting twice or more the dividend yield!

All without any more risk. I’m tracking 5 opportunities like that right now, and I lay them all out right here.

Only 3% of investors even know these funds exist

But using them, I can beat the market 2-to-1 while collecting 2-10X MORE yield from regular dividend stocks.

I learned this trick while I was rubbing elbows with some of the biggest fund managers in US history.

They too are buying these little known funds, cashing in huge discounts and collecting income while they do it.

Click here to learn the secret yourself.

 

How to Use Dividends to Find the Best Tech Stock
Tim Melvin

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Government

Where Carnival, Norwegian, Royal Caribbean Sit on Covid Vaccines

Do You still need to be vaccinated to go on a Royal Caribbean, Carnival, or Norwegian Cruise?

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Do You still need to be vaccinated to go on a Royal Caribbean, Carnival, or Norwegian Cruise?

Cruise line covid-19 vaccination and testing rules, which were imposed by the Centers for Disease Control and Prevention at the beginning of the pandemic, have been stricter than most. After the pandemic started in early 2020, the CDC signed a No Sail Order on March 14, 2020, which was finally lifted after nearly eight months on Oct. 30, 2020.

After the No Sail Order was lifted, the CDC enacted extremely restrictive rules and regulations to help keep passengers safe with the covid pandemic still raging throughout the world. The rules and regulations were set forth to begin to return cruise lines to operational status.

The cruise lines first had to be staffed accordingly and set up with the ability to test, treat and quarantine for covid medical emergencies. Testing for crew and passengers before embarkment and before dis-embarkment was required. The testing at pre-embarkment was a measure to protect those boarding, while the post-trip testing was for determining if an infection started on the cruise line itself. Being able to track the virus was very important in the prevention of spreading the virus and protecting patrons.

Image source: Shutterstock

Vaccination Still Not a Free Pass to Board

Once the vaccination was developed and approved, it became part of the CDC guidelines for cruise line adult passengers to have their vaccination before boarding. Even with a vaccination, guests still needed to test before they boarded the cruise lines. As the vaccine was approved for younger age groups, those age groups were then also required to have the vaccine to travel. Passengers were required to be fully vaccinated unless they are exempt by some status.

Before boarding, cruise line passengers who tested positive, as well as their travel companions, were not allowed to board, depending on the cruise line and how long the cruise may be. Some passengers were allowed to board and then isolate, others would have to reschedule their trip. Trip insurance is a good buy these days.

Cruise Lines Letting Loose on Vaccine Policies

Carnival Cruise Line  (CCL) - Get Carnival Corporation Report has now removed pre-cruise testing for vaccinated guests and also welcomes unvaccinated guests to travel. Fully vaccinated guests traveling less than 16 nights with the cruise line will no longer be subjected to testing, but still must provide proof of their vaccination status. Unvaccinated travelers will only need to provide a negative covid test result to board the ships. All rules and regulations are still subject to the destination country’s guidelines.

According to the Healthy Sail Center for Royal Caribbean  (RCL) - Get Royal Caribbean Group Report, the cruise line has updated its covid vaccination protocol. The cruise line will now allow passengers regardless of vaccination status to board in some ports if the travelers meet the testing requirements. Testing requirements vary by cruise departure and destination. Check the cruise lines port departure for updated information on requirements.

There is, however, a major exception, at least for now, which is obvious when you look at the specific wording shared by the cruise line:

"Starting with September 5 departures, all travelers regardless of vaccination status can cruise on the following itineraries, as long as they meet any testing requirements to board.

  • Cruises from Los Angeles, California.
  • Cruises from Galveston, Texas.
  • Cruises from New Orleans, Louisiana.
  • Cruises from a European homeport.

Notice that Florida, a major port for the cruise line, is not currently on the list.

In the U.S. aside from Florida, any guest with a valid negative covid test within the last three days will be able to board. These guests will also not be required to take a second test at the boarding terminal. Fully vaccinated guests do not need to provide proof of a negative covid test for shorter cruises. See the cruise line website for all updated information as it is subject to change.

Beginning Sept. 3, Norwegian Cruise Line  (NCLH) - Get Norwegian Cruise Line Holdings Ltd. Report is dropping its covid vaccine requirements for all its cruises. The cruise line stated that it is continuing to follow requirements for all destination countries, so guests traveling will want to check on destination vaccine and testing requirements. All guests 12 and older regardless of vaccination need to show proof of a negative test within 72 hours. Check NCL online for further instructions prior to travel.

The CDC has taken the stance that travelers are now well informed enough to make their own decisions when it comes to traveling on cruise lines. The travelers are taking their own assumed risk for their health and well-being. Cruise lines are now welcoming this new freedom for their passengers. 

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Government

Here’s Where Carnival, Norwegian, Royal Caribbean Stand on Covid Vax Rules

The three major cruise line have all made big changes to their vaccine policies and some passengers may be very happy (while some won’t.)

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The three major cruise line have all made big changes to their vaccine policies and some passengers may be very happy (while some won't.)

Cruise line covid-19 vaccination and testing rules, which were imposed by the Centers for Disease Control and Prevention at the beginning of the pandemic, have been stricter than most. After the pandemic started in early 2020, the CDC signed a No Sail Order on March 14, 2020, which was finally lifted after nearly eight months on Oct. 30, 2020.

After the No Sail Order was lifted, the CDC enacted extremely restrictive rules and regulations to help keep passengers safe with the covid pandemic still raging throughout the world. The rules and regulations were set forth to begin to return cruise lines to operational status.

The cruise lines first had to be staffed accordingly and set up with the ability to test, treat and quarantine for covid medical emergencies. Testing for crew and passengers before embarkment and before dis-embarkment was required. The testing at pre-embarkment was a measure to protect those boarding, while the post-trip testing was for determining if an infection started on the cruise line itself. Being able to track the virus was very important in the prevention of spreading the virus and protecting patrons.

Image source: Shutterstock

Vaccination Still Not a Free Pass to Board

Once the vaccination was developed and approved, it became part of the CDC guidelines for cruise line adult passengers to have their vaccination before boarding. Even with a vaccination, guests still needed to test before they boarded the cruise lines. As the vaccine was approved for younger age groups, those age groups were then also required to have the vaccine to travel. Passengers were required to be fully vaccinated unless they are exempt by some status.

Before boarding, cruise line passengers who tested positive, as well as their travel companions, were not allowed to board, depending on the cruise line and how long the cruise may be. Some passengers were allowed to board and then isolate, others would have to reschedule their trip. Trip insurance is a good buy these days.

Brittany Murray/MediaNews Group/Long Beach Press-Telegram via Getty Images

Cruise Lines Letting Loose on Vaccine Policies

Carnival Cruise Line  (CCL) - Get Carnival Corporation Report has now removed pre-cruise testing for vaccinated guests and also welcomes unvaccinated guests to travel. Fully vaccinated guests traveling less than 16 nights with the cruise line will no longer be subjected to testing, but still must provide proof of their vaccination status. Unvaccinated travelers will only need to provide a negative covid test result to board the ships. All rules and regulations are still subject to the destination country’s guidelines.

According to the Healthy Sail Center for Royal Caribbean  (RCL) - Get Royal Caribbean Group Report, the cruise line has updated its covid vaccination protocol. The cruise line will now allow passengers regardless of vaccination status to board if the travelers meet the testing requirements. Testing requirements vary by cruise departure and destination. Check the cruise lines port departure for updated information on requirements.

In the U.S., any guest with a valid negative covid test within the last three days will be able to board. These guests will also not be required to take a second test at the boarding terminal. Fully vaccinated guests do not need to provide proof of a negative covid tests for shorter cruises. See the cruise line website for all updated information as it is subject to change.

Beginning Sept. 3, Norwegian Cruise Line  (NCLH) - Get Norwegian Cruise Line Holdings Ltd. Report is dropping its covid vaccine requirements for all its cruises. The cruise line stated that it is continuing to follow requirements for all destination countries, so guests travelling will want to check on destination vaccine and testing requirements. All guests 12 and older regardless of vaccination need to show proof of a negative test within 72 hours. Check NCL online for further instructions prior to travel.

The CDC has taken the stance that travelers are now well informed enough to make their own decisions when it comes to travelling on cruise lines. The travelers are taking their own assumed risk for their health and well-being. Cruise lines are now welcoming this new freedom for their passengers. 

Read More

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