Herd Immunity

As the world struggles to identify potential solutions to Covid-19, herd immunity appears to be the most promising opportunity to mitigate some of the worst effects of the pandemic.  According to Wikipedia, “herd immunity is a form of indirect protection from infectious disease that occurs when a large percentage of a population has become immune to an infection, whether through vaccination or previous infections, thereby providing a measure of protection for individuals who are not immune.”

As more individuals become immune, either by recovering from an earlier infection or through vaccination, the odds of non-immune individuals encountering an infectious individual, are reduced.  Currently, mass vaccination appears to be the most promising approach to accelerating herd immunity.  It should be noted that opposition to vaccination poses a challenge to herd immunity and, unfortunately, can allow the return of preventable diseases in communities.  Think measles.

Investors should recognize that the path to widespread immunity and a resumption of a more normal level of business and social activity is uncertain.  The history of pandemics is encouraging.  Eventually, herd immunity leads to eradication.  However, the timing is complicated.

All comments and suggestions are welcome.

Walter J. Kirchberger, CFA