Spekulatius

Agreed. Continuing the old thread rather than starting a new one is interesting for perspective.

Excellent article in the Atlantic about COVID-19 R0 dispersion, superspreaders and infection clusters. For one thing, it looks like Sweden actually had a strategy to target clusters much more effectively than others. Same with Japan: https://www.theatlantic.com/health/archive/2020/09/k-overlooked-variable-driving-pandemic/616548/

If you look countries who have had best in class responses to handling the virus (with the best health outcomes and least economic damage) testing was the backbone of their effort. And mask wearing and social distancing. Strong communication with consistent, unified message (lead by science / health professionals). Not rocket science. But still very difficult to execute. Gee, remember when the Surgeon General said masks weren't effective, and that Dr. Fauci guy said the same thing? This is correct and the same mistake was made elsewhere (in Germany for example). If you realize you made a mistake, you should correct it, not double down on false beliefs. It’s no different than investing. I think I posted this in this thread, but the Moment Fauci started to talk about the benefits of mask in those Coronavirus meetings, I saw people at work wearing masks the next day. Nobody ask them to do so, it just happened because at least some people were listening. Then my company started to distribute surgical masks to everyone (they were hard to get initially) and then wearing them became mandatory. No community spread at work so far , unlike what we have seen in the White House. It‘s not bulletproof protection, but together with social distancing rules, this works and stops the spread.

I expect a third wave. Current trends in hospitalization are already trending up and we know that in an epidemic, trends have momentum. Even the Northeast is seeing already and increase in hospitalization. https://covidtracking.com/data/charts/us-currently-hospitalized These cyclicality / waves we are seeing are not really separate waves, more or less the same wave hitting different states at different times. We are seeing a second wave in Europa however, in particular Spain and Britain are noteworthy, because they were hit hard by the first wave. So second waves are definitely in the cards in the US. I think thanksgiving will be a major driver from increased travel and family gatherings and together with a seasonal trend will cause another spike. How pronounced it’s going to be will be mainly be driven by people behavior.

Perhaps, the Tencent equivalent today is still Tencent. They have their Fingers in many trends highlighted above. The other prediction is that we should expect to see a few megacaps from Africa. Right now, it seems like it is a wasteland for investing But there an evolving Startup and I would expect a few companies to crack the code within thr next 10 years there. Africa Is pretty diverse, so it hard to expand from one country another even. Perhaps, the Chinese manage to colonize , womit could be chinese companies dominating this market 10 years out possibly.

Quick take on the situation in Spain, one of the worst Wortformen in this pandemic: https://www.bloomberg.com/news/articles/2020-10-04/spain-s-toxic-politics-and-health-crisis-have-got-merkel-worried

UK stocks are tax friendly for US investors - there is no withholding of dividends except for UK Reits where 20% is withheld. The Netherlands are also tax friendly in Europe and that is one reason why many Holding companies domicile there.

It's great move, Speculatius, Because HII is not a business, it's a scheme [with a ticker, though] to suck up funds from the US military budget to keep people meaningless employed. Well, I am not sure I fully agree. Should the US just outsource building these ships to Korean shipbuilders for example? it sure would be cheaper, but I don’t think it would ever happen. There is some issue with IP too, but I don’t think there is much IP in the hulls and that is actually my concern with HII in the long run. Longer term, military power is going to be driven by technology much more so than by the number of boots on the ground. that’s why I believe the likes of LMT, NOC and LHX are better bets than HII.

^ It is also puzzling that there is a group of people even here that believe that herd immunity is inevitable, yet would not take the vaccine. It seems to me they it should be clear, that catching the live virus in the wild in a totally uncontrolled setting as far as dose and delivery is concerned is the worst option of all. Getting a vaccine that is not a live virus (so it can’t replicate) in a controlled setting and with hopefully known safety data should be much better in almost any scenario, even if the vaccine isn’t perfect in terms of efficacy (catching the virus naturally sure isn’t perfect either). Getting a vaccine is surely more cost effective than an ICU stay and getting infusions of MAB and Remdesivir.

LEVI (AH) and HII. HII was a starter position and the defense play I had the least confidence in.

The stock was flat, the business wasn’t. MSFT’s revenue grew from $25.3B in 2001 to $77.8B in 2013; roughly 10% annually.

^ I have Seen a lot of questionable analysis in their thread, but this is beating almost all of it. Adding up all the percent positives to get the total cumulative positives would only work if everyone in NY would be tested every week and everyone tested positive once eliminated from the pool of subsequent testing. Of course that’s not the case, the number tested each week is only a tiny part of the total population.

Mannesmann in Germany is one example. They were in steel pipe tubes and machinery business and then were able to get the license for the second mobile phone network in Germany, which totally transformed the company.

The people leaving tend to be poorer and get replaced by immigrants. That’s why CA’s population doesn’t shrink, despite outmigration.. That’s also why the often cited cost of Uhauls outbound CA is do much higher than inbound ones because immigrants ( and richer people) don’t use Uhauls for moving.

Here are the results of the antibody study mentioned in the newspaper. It looks like the sampling is done on dialysis patients, so I wonder how biased this sample is. I would guess that dialysis patients have a higher odds of being COVID-19 positive than the general population (due to socioeconomic factors and minorities being over resented in dialysis patients) , but perhaps the authors corrected for this. https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(20)32009-2/fulltext Anyways, at less than 10% positivity rates, the herd immunity is a long way off.

^ Speaking of opening schools, our school notified us about an “ exposure case” for our son at school (meaning that a student with a seat close to him tested positive ), so now he needs to stay at home for the next 2 weeks and go to fully remote during this time. Based on how this works (4-5 classes/student and typically 4-6 surrounding students in each), it means about 20 students might be quarantined for 2 weeks for every student testing positive. I don’t think that schools are going to remain open when a second wave occurs with this setting. Luckily our state (MA) has pretty good testing setups, my son and I went to a testing station yesterday and the result came back negative this morning. It won’t change anything with respect to quarantining though. A work in progress indeed.

Thailand is also an example of a not so rich country that had managed VOVId-19 well: It is not mentioned here directly, but Thai people in the City often wear masks anyways. Thailand also has subsidized Basic health care affordable even for poor people. While I doubted some numbers, my wife is from Thailand and she told me that numbers are definitely low, based on what she is hearing from her friends living there. People have taken this seriously since February when cases from Chinese travelers propped up.

I had the same thought. I realize PCYO is concentrated in one area and the big homebuilders are much more geographically diverse, but it's strange that PCYO hasn't really budged. PCYO lost all the high margin $ from the Oil and Gas industry ( both royalty and fracking water ). That’s not a problem a home builder has.

Bought a starter in GRA (catalysts, polymers). Sort of a COVID-19 recovery play. Also a starter in SRE (utility) Small adds to ORI, ANTM, ABEV

Ok, I live near NH and the economy for all practical purposes is open. As far as restaurants, they allowed indoor dining for quite some time (I am not sure it was ever really closed) and now at 100% capacity. Pretty much else is allowed to be open too. Live free or die... When you look at the reality on what is happening though then most places running friction of their capacity. Many places are takeout out only. Hotels are pretty empty on most parts (we travelled last month). We also travelled though upstate NY and it’s pretty much the same. There are probably more restriction in upstate NY but essentially, the feel is pretty much the same. We did find that in either location, business were pretty adherent to wearing masks etc. and other precautions. Now NH in a way is a lot Sweden ex their capital Stockholm, Imo. NH also has done quite well on so far with this epidemic, which is probably due to low population density, but also due to socioeconomic factors (low percentage of minorities within population etc). We live in MA near the NH border and enjoy the relative freedom, but would the same work in NYC it areas with a totally different socioeconomic profile? I kind of doubt it and the data shows otherwise. I also think it is not really straightforward to assume what works in one country/area will just work in another with the same results.

The surge in Europe has been discussed here in this thread, now Denmark got its share too. Why do you expect partisan posts? Denmarks mortality is 110 cases/1M vs US at 617/1M so no question who is ahead here.

$ANTM and $ORI and a bit of $GOOGL

I don’t see them producing 15% returns , this would be a very low probability. 10% returns are possible and if they can generate this somewhat consistently, one would get an additional return from rerating most likely. A few thing - with record low interest rate their prowess in bonds matter much less in the future than the past. They also need to generate decent return with their equity portfolio for a change. It seems to me a bit of a crapshoot if they can do this. What matter more than anything else is good underwriting. With lack of tailwind from bond investment income the combined rates for insurers will have to come down in order for them to earn adequate returns. FFH has made progress on this and it is important that they keep at it. We likely need combined ratio to average below 90% if the interest rates fall to near zero and stay there.

At least in the US, mortality rates don’t seem that low. There are still 800-900 death daily. I would have expected this number to drop off hospitalization rates dropped since July, but this time we seem a lag that is longer than the typical 2-3 weeks and death remain stubbornly high here. 800-900 death daily translates into ~300k death in 12 month, so it’s not negligible. It would translates into a 10% increase in overall population mortality (order of magnitude). I think the mortality will drop off, but there is also a chance that we get yet another surge from thanksgiving and the winter season. As to what this means for the stock Market, I think it is priced in, plus the Market doesn’t really care much about death rates of this Order of magnitude. Lack of second stimulus package , school not opening (and thus crippling the economy) and lingering uncertainty about election are likely bigger factors.

I feel like I am in a split world where one half of the people think we should lockdown forever (to "play it safe") and the other half has been working for the past 6 months and being fully exposed to the virus, so they have gotten over it already. For the white collar office worker that can work from home indefinitely, nothing will make it safe enough. Say we have a vaccine that is 75% effective (which is probably too optimistic). If the current probability of death is too high, is cutting it down by 75% low enough for them to go rushing back onto the subways and going back to the office? Probably not. Is some not very healthy middle aged person with 1% of death going to come out at 0.25% of death? Meanwhile, on the other side, you have someone who has been working at Walmarts, supermarkets, delivery, supply chain, etc that have been working through the pandemic and they are sick of the lockdowns trashing the economy and their kids' futures. Many of them have already been infected (in big cities, probably the majority of them). They've already taken the risk and all the benefits of the lockdown all go to this protected class of white collar workers. Some people seem to be trapped into this indentured servant role where they prefer not to work at a Walmart, but they can't quit (no unemployment for voluntarily quitting), they can't change jobs because everything is closed, and they make less money working than someone sitting at home collecting enhanced unemployment, so obviously they are screaming about how the lockdowns are a violation of human rights, because they feel like they are in a slave class. I'm not really sure how we get out of this. The virus is not catastrophic, which is why most places are partially reopen. But it's also not completely safe. Maybe people didn't respect the flu before, but even if we get COVID down to the same level as the flu (i.e. we have a COVID vaccine that is about as effective as the flus), is that good enough for all the WFH crowd to come back out? If something that is 3x the flu is too dangerous, is the flu itself too dangerous to come back out? And at what point is it too unfair to the people that have been working through the pandemic that they revolt? The world isn’t black and white at all. Most people who have been working in offices, retail or as first responders haven’t been exposed at all. I know myself (working in office) and my wife (nurse) haven’t been and nobody in my wife’s team (12 nurses) has gotten sick. A few more people in my office buildings (~200 people) have gotten it, but not from exposure at the work place. Many regions in the US still have very little viral exposure. I live 35 Miles away from Boston in a pretty rural setting and the cumulative exposure rate (tested positive) is much less then 1% of the population. Working with proper precautions is actually pretty safe, imo. I am much more concerned about some restaurant settings, bars and gyms and wouldn’t go into any of those. Well I go into restaurants when traveling, but there have been a few cases where we left when we saw the setting and lack of ventilation or precautions taken. Others seem to do a good job, so it all depends. I have little concerns about going to work in my suburban office (have been going all along). I do think that some higher density settings and shared work places are more concerning. I also think that opening schools with precautions should be pretty safe, but suspect that teacher unions (which are mostly pushing for remote learning) are the driving force in most school districts.