RichardGibbons

Well, Ohio says if you can identify two cases where you can't identify the cause then it means you have 100,000 cases. That may be true, but it could also mean that the 2017 Morbidity and Mortality Weekly report doesn't actually know what it's talking about, or that it's being misunderstood. To me, to extrapolate 2 to 100,000 for any disease seems like a huge leap, and I'd have trouble designing an experiment to prove that hypothesis, so that makes me skeptical. It would be interesting to know the reasoning behind that conclusion. Regardless, if it's true, I agree with you, Orthopa, that it's a reason to be extremely optimistic. So I've been trying to answer my own question, thinking about scenarios where there would be low fatalities in the USA, and high fatalities in Iran/China/Italy. I wonder if it could be the intersection of COVID-19 with the flu or some other disease. Like, suppose there's another disease that has greatly weakened the immune systems of people in specific geographic regions, but not easily contagious across broader geographies. I have no idea if that's possible, but it would explain the discrepancy. The hypothesis I've seen on the low death rate in Korea is that patient 31 attended a massive gathering of a Christian group that focused all its recruitment on a young demographic. That resulted in the infections of thousands in the group. So, there was massive testing of a large group of young people, ensuring that positive tests came from a population where the mean age was far younger than the general population, a population where the death rate is close to negligible. It's worth noting that, if your hypothesis is accurate, Orthopa, there is probably a fast 5-10 bagger to be made in call options with an expiration about 3 weeks from now.

Orthopa, the problem is that what you're saying doesn't seem to align with evidence. It seems fairly clear that a bunch of people have died in Italy, Iran, and China as a result of COVID-19. You seem to be claim is that millions in the USA have been infected a long enough time ago that we'd already be seeing lots of deaths if COVID-19 were a big deal. But USA has not seen lots of deaths. So, to be credible, you need to make it simple for us to understand this disconnect. Are Americans just more robust than the Italians, Iran, or Chinese? Do Americans have some sort of herd immunity that makes them less likely to die? Are Italy, Iran, and China simply pretending to have all these deaths, when really, they don't? Is there something about American culture that allows millions to catch COVID-19, but nobody to die? If you don't have some explanation for this disconnect between your hypothesis of millions infected but nobody dying, the most reasonable thing for people to believe is that your hypothesis is wrong. Particularly considering that there doesn't actually appear to be any evidence for your hypothesis except "some people got sick this flu season and didn't die, and it's conceivable that those people had COVID-19". (That said, I don't think you're ignorant. I think you've got the "I'm smart and know a lot about the topic, so my hypothesis unsupported by evidence must be right, and I'll defend it unto death" thing going. Pretty well all smart people make that mistake occasionally.)

I don't. I just assume if the quantity I have invested in dividend-paying investments is greater than the amount I have in margin that I'll be fine. (That said, it's never even close to being an issue, since I rarely use margin and when I do, it's easily less than the 5% of my portfolio range.)

Pushing the infection rate curve down could make a big difference if seasonality matters for this disease. Viruses tend to not like warm summer weather. If that's true of Covid19, delaying infection be even a few weeks could make a massive difference if the disease effectively becomes far less infectious during the summer. It would mean less strain on healthcare resources and would provide much longer runway to work out treatments/vaccines. I wonder if the people who don't see value in preventative measures simply don't understand exponential growth (compared to little growth in healthcare capacity). But maybe I'm wrong, because that would be an odd thing for people on investment site not to understand.

I can't! I think both countries should be limiting travel internationally for at least a few weeks. Citizens returning from overseas (particularly problem areas) should be quarantined and tested. Yeah, me too. They should be blocking international travel. BC has had better testing than the USA, but the federal government doesn't seem to be able to walk (deal with blockades) and chew gum at the same time (implement anti-coronavirus strategies). I think the problem is that Trudeau generally cares much more about people's perceptions of him than concrete solutions to real problems. No_free_lunch, you believing that criticism of the US response indicates support for the Canadian response is most likely a result of your bias.

Yeah. It isn't. In the Canadian system, it's all about getting diagnosed, going to your appointments, and getting the help you need as you need it without being bankrupted. That said, the parking at hospitals can be pricey--like $15 a day!

I'd say that America at this point has one of the best western cultures for encouraging the spread of the disease. Large structural barriers in place to prevent testing Monetary incentive not to be tested Potentially massive personal costs/bankruptcy should one be hospitalized "Continue working while sick" culture Leaders who will spread disinformation about the disease, and be believed by a significant percentage of the population Once individual cases are identified, I'd expect a solid medical response in those cases, but I suspect the factors above mean that the USA is pretty likely to get something like Wuhan where hospitals are overwhelmed. And then I think from there, second-order effects will cause bad things to happen to the economy. From an investment perspective, the thing to worry about isn't a loss of a quarter or a year's discounted cash flow. It's the second-order effects like debt rollovers, supply chain disruption, and layoffs due to the slowing economy leading to unemployment spikes, consumer fear, and demand disintegration.

I'm curious if the researchers realized that this wasn't risk-neutral because of opportunity costs, or if the writer just wanted to make things "simple". If you're in a company with a high ROE, then a 25% chance of a 300% return after 3 years (or 75% of nothing after one year) isn't even close to a break even proposition.

I did Andrew Ng's machine learning courses at Coursera. It was well worth it. I went in with little knowledge about the topic, and, after doing the courses, I feel like I have enough knowledge of the topic to muck around on my own. So, it was basically exactly what I was hoping for. The main thing that it was lacking--compared to a regular course--would've been a large project. Pretty well all the "homework" could be done in an hour or so, but was so targeted toward individual lessons. There wasn't really a big project to bind it all together.

Yeah, it seems pretty clear to me that AI companies have worse economics that SaaS, but SaaS have better economics than any other business. That said, I think there's a chance that an AI company evolves that has a stronger moat and better economics than any SaaS business, but I'd expect the average SaaS business to have way better economics than the average AI business.

It seems likely that what happened was an honest error on RNO's part in calculating returns because he doesn't actually want to spend a bunch of time calculating returns, and an honest attempt by writser to figure out what RNO was doing differently to get fantastic 5-year returns. This is all fine, but at this point, there seems to be little value in continuing to drill into this sub-thread.

It's possible, but remember that back in 2004, when Morningstar named him Fund Manager of the Decade, he had a nice 27-year track record of 11.5% annually. That's a long time. So, I guess the most likely things that could explain the discrepancy are: [*]He got lucky for 27 years, and unlucky afterward [*]He got brain damaged and nobody said anything [*]He changed what he does [*]His value investing style is really out of favour, leading to bad returns [*]The world has changed and what worked for 27 years no longer works My best guess is it's mostly #4 with a spattering of #1.

Interactive Brokers does have a real-time API. It's been probably a decade since I used it, but back then, Trader Workstation had to be open to access the API, so I think it basically is an API interface to Trader Workstation.

I would think Coupa Software (tangled up in business processes) and Mongo DB (their Atlas offering--unlikely to be worthwhile changing your database provider?)

I think the issue here is predictability. In a more competitive market, one cannot assume that all participants will price rationally. So, if you buy a company without a moat, who's to say that profits will even be there in a year? Plus, companies have natural operating leverage, so if you have low margins, a minor reduction in expenses by a competitor leading to a minor reduction in pricing could completely wipe out all your profit, leavin you in a loss position. Or, they could take away enough of your economies of scale to cause a death spiral. There's just a lot more variance in the future results. So, if you value the company based on discounted cash flow over, say, a decade or two, but can't have any confidence in that cash flow beyond the next year, how do you value that company? Plus, I think historically, an inefficiency of securities pricing is that investors were willing to pay more for present day earnings than a strong moat that enables future earnings, so strong moat companies were often undervalued. The way you can see this is to compare the value of a company with a moat, where future earnings might need to be discounted at 15% with the value of a company with a strong moat where future earnings might need to be 5%. Often, the difference in those discount rates won't actually be reflected in the security prices. What's more, even if the securities are priced fairly, the 15% case is likely to have much higher variance in outcomes meaning more diversification (i.e. smaller position sizes, more research, and more expenses) is necessary. All this implies that one should generally prefer superior companies.

If it's literally the time that you spend that's bothering you, you could potentially change your process to take less time. For instance, as I've gotten older, I've cared much less about details and much more about competitive advantage. I'd guess that transition has reduced my time by two-thirds or something. If you immediately eliminate all businesses that don't have an obvious long term competitive advantage--irrespective of all other criteria--you dramatically reduce both the number of businesses you need to look at and the amount of time required to analyse each business. Then, once you've discovered a business with competitive advantage, you just need to decide if the price is fair or cheap, and that's pretty quick to do as well. What's more, if you've bought a business with a sustainable competitive advantage, you probably don't have to think about selling it for a long time which reduces the amount of time you have to spend as well. (Particularly since a business with a sustainable competitive advantage has to get quite overvalued before it's worthwhile selling and triggering taxes on the capital gains.)

I bet you can, but most honest people wouldn't do that. Keep in mind though that you're effectively charging back Air BNB. Just because you charge it back doesn't mean that you don't owe money anymore. There's nothing dishonest about doing a charge back if someone agrees to provide a service and then doesn't provide the service as promised. Even if Airbnb eats the charge-back, it's not dishonest, since they've also failed to provide the service they promised (i.e. connect the buyer who provides the room listed on the site.)

Yep. This is why one shouldn't vote for the current BC NDP--they're not driven by reason, but rather ideology and party loyalty.

This is my favorite thing about climate change arguments. The minute a carbon tax is mentioned, passionate free-market capitalists somehow believe that demand for goods is completely independent of the prices of those goods. It's fascinating. Cardboard, you should buy a bunch of KO, then suggest that they increase the price of a serving of Coke to $1000. The company sells 1.8 billion servings a year, so that's $1.8 trillion at over 99% margin! You'll be massively wealthy overnight! Also worthwhile mentioning is that in Canada, the Liberal's carbon tax is being returned to Canadians. I think this is quite elegant, since it's increasing the price of CO2 to impact price signals without actually taking away much money from people (essentially only losing a bit to friction).

Longhaul, to answer your question, it's pretty easy to know that it's a problem and that it will likely have massive effects because there are a huge number of brilliant scientists looking at this issue with a widespread consensus that it is true. (If you want to leave some room for doubt, you can act as if there's only a 99.99995% chance of the theory being true, rather than a 100% chance of it being true. It won't affect most of your actions or decisions.) People like to pretend things are way more complicated than they are, but climate change is basically proven at this point. Deniers are roughly equivalent to anti-vaxxers, anti-evolutionists, and flat-earthers.

Yeah, I think that some people care a fair amount about integrity and other people don't at all and will do what they can get away with. What's more, I think it's hard for both types of people to believe in their hearts that the other side truly exists. (You can see this in the comments here: "I don't believe that the shrewdest investor of all time would pass up on an opportunity for such a stupid reason." Similarly, I have a hard time believing anyone would even consider selling their integrity when they have literally no need for the money.) As for the argument "who cares what people think--it doesn't have anything to do with responsibilities to people and shareholders", I find the argument pretty weak. First, Buffett isn't Berkshire shareholders' bitch. He has no responsibility to destroy his own reputation--or compromise his integrity--to make money for shareholders. To me, this point is sufficient to refute the argument. Second, displaying a lack of integrity could hurt his business. One reason people sell private companies to Buffett is because they believe he'll act with integrity in his dealings. Not everyone's trying to maximize their own profit, particularly when they're thinking more about their own legacy and the outcome for their company and it's employees. If Buffett were viewed as someone lacking integrity, some people might decide not to sell to him the company they've spent decades building. That would hurt Berkshire. (Chrispy, the difference with Microsoft is that Buffett is good friends with Gates, but not good friends with Bezos or Dimon.)

Complaining about Berkshire not buying Microsoft is pretty silly considering that Buffett's made it very clear why he didn't do so. Considering his close relationship with Gates, Buffett doesn't want anyone to get the perception of any improprieties like insider trading. If anyone doesn't understand this basic thing about Buffett after holding Berkshire for a couple decades, I'd be pretty skeptical about their understanding of both Berkshire and Buffett.

I'll answer this. Most of the politics discussions on CoB&F are grounded in ideology rather than reason and science, and therefore not very interesting. Take global warming. It's been settled for science for decades, but many on CoB&F pretend that it's a disputed issue. So, I treat the politics section in the same way that I'd treat anti-vax or flat-earther forums. If one's time has any value whatsoever, there's not many reasons to spend time talking to anti-vaxers or flat-earthers. On other forums I do talk about politics, but there I'm mostly trying to push left-wingers to the right. That's more interesting because the left (excluding communists) mostly believes that their positions should be grounded in evidence, reason, and science which means that those positions can be challenged on that basis.

One of my friends bought Beyond Meat a week or two ago. He's new to investing. I think his reasoning is that the stock is going up, it's a great story, it's comparable to a tech stock, and he's confident he can get out when it starts to go down. Personally, I think he has no clue how terrible the likely outcomes are of owning a stock in an industry with tiny gross margins at a P/S ratio of 80. For a tech stock with a moat, recurring revenue, 80% gross margins, and 80%+ growth rate for several years, P/S ratios in the 20-30 range can make sense. But not in a food stock.

Also worth noting that the performance fee isn't 20%, but rather 20% of the amount above a 5% hurdle per annum growth in NAV. Because the performance fee is based on NAV, I think, in effect, it comes out after the management fee. So, for your 8% example, I think the return would actually be (8%-1.5%) - (8% - 1.5% - 5% * 0.2), or 6.2%, not 4.9%.