Spekulatius

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.

WFCF

From zero to 50% War risk based on a fact that everyone new already. This makes no sense to me whatsoever. This was a stupid but in the end inconsequential incident. I think chances of war are very remote.

There is often a misperception that you are either a participant in the bubble and bound for doom, or you sit on the sidelines and wait to get rich after it implodes. The truth is there is very much in between, and there are many ways to dance and enjoy the party without blowing yourself up. There is also, often, quite a bit of time spent waiting/doing nothing while the party goes on. Why waste that time? As a BRK shareholder, moves like this one and RH, make my happy. If they were doing this with billions....yea that would change the profile for me. But taking shots on high probability trades is a good thing. Simply putting the Berkshire name behind something, has historically shown to be a valuation booster. I'd gander that is part of the reason this IPO is so hot. Monetize that more often! Yes, they can definitely monetize the Berkshire brand. This looks like a win and I think they can do even better participating in late round venture capital. I also see the opportunity for them to do creative deals and use Berkshires size to their advantage. If a tech startup has a promising product that is useful for Berkshire’s operating subs, make a deal and give them a contract (and hence immediate validation) and take a stake in them at the same time. Could be a win win and something other venture investors can’t do. In the end, this is a big enterprise that needs to evolve, or become a dinausaur...

Sold the remainder of my BAESY.

Added to ORI and a bit CVS

Monday’s and Fridays less productive? I would like to know what’s the difference to being in the office then?

The raised IPO price just means Todd pays 30% more. I am sure it would be a great stock to flip, but they have to hold it for 12 month, based on the filings. I don’t think there is a way to hedge this either. Well, I don’t worry too much about my son wasting his allowance either, at least not yet. It might work out just fine, after all it is just as difficult to time the top than to time the bottom.

You just need to look here to come to the conclusion that the rollout of the vaccine will be difficult: https://www.cornerofberkshireandfairfax.ca/forum/general-discussion/vovid-19-vaccine-give-it-a-shot-or-mot/ I would think that they give first dibs to first responders (nurses have many mandatory vaccinations anyways), then essential workers and have mandatory vaccinations for school (unless they choose online). I would also think about talking to economist about a good incentive program. Maybe cash incentives? There is a risk that A homeless person gets three shots for cash, but I would rather have that than many of them being superspreaders. Time to think this through, imo.

Interest rates were low in the 50’s and 60’s too, especially considering there economic growth. The spending from the Vietnam war was one factor increasing inflation and interest rates. This is a Fiat System and it is build on trust. Once trust wanes, all bets are off. The Fed will lose control of the narrative, the USD May sell off, inflation will rise. Once the cat is out of the bag, it will be very difficult to get it back in. last time this happened we needed a Volker to ale some hard decision. We will see what happens next time.

Snowflakes ticker $SNOW is a slang word for cocaine. I am sure momentum investors feel the same way.

https://www.businessinsider.com.au/fauci-takes-recommends-vitamin-d-and-c-supplements-immunity-boost-2020-9 Dr. Fauci says he takes vitamin D and C supplements and that they can lessen 'your susceptibility to infection' “If you’re deficient in vitamin D, that does have an impact on your susceptibility to infection. I would not mind recommending, and I do it myself, taking vitamin D supplements,” he said. “The other vitamin that people take is vitamin C because it’s a good antioxidant, so if people want to take a gram or so of vitamin C, that would be fine.” I do take Vitamin C and D supplements. I have been doing this pre-Covid (Vitamin D, since diagnosed with Vitamin D deficiency a couple of years ago), but In no way do I assume it is a super drug they will reduce my chance of hospital admission by 95%. In fact, I think additional Vitamin D intake likely does nothing unless you have been diagnosed with low levels of Vitamin D. There is even a debate if taking Vitamin D does anything at all if you are not deficient. spending some time outdoors in the sun is likely better, but then there is winter time. I expect a marginal impact in my case and think the risk reward is favorable. It might not be favorable if you have issues with your liver and high doses might even be toxic over time.

I would just add that from my reading of value investing literature, there is an emphasis on limiting the downside. growth investing looks with more emphasis on exposure to upside. now, how does a value investor limit the downside? you can look to all of the metrics discussed, such as low P/E, low P/B etc, look for a moat to limit competition, etc...all of these metrics can be debated as to how effective they are, but they simply are filters that value investors use to try to achieve some modicum of safety. probably the best filter is to invest in a great business, but this is in the eye of the beholder. Buffett once said that he thought Sees Candies was a great business since whenever some guy bought the product, he got a kiss from his wife/GF etc. so I suppose there are many paths.... Personally, I've noticed that it seems the way in which most people apply "value investing" philosophies, encourages continuing to stick with things that dont work. If you've held something for 3+ years and haven't made money, in a crazy blow out bull market like we've seen where almost everything under the sun is making money, you are just flat out wrong and should move on. Sure, it may "eventually" come around, but why wait for a perpetual disappointment to change its behavior, when pretty much everything else is going to reward you today? Blackberry is one that comes to mind in this category. You could have literally held anything else in that space and done well instead of sitting around, hoping and waiting for the tide to turn on a reclamation project..... Don’t all your REIT holdings fit this bill perfectly?

I decided to sell most of my position. I still have Fairfax India and willing to give that more time. Seems like they have a little more preference for quality assets in that portfolio, and I like India's 5-15 year growth potential. The irony is that Fairfax owns a good chunk of Fairfax India, and more importantly, generates really nice management fees and performance bonuses from Fairfax India. If Fairfax India does exceedingly well, Fairfax will benefit handsomely. If Fairfax India does average, Fairfax will still benefit from the fees. I would rather own the asset manager! Cheers! https://tv.getyarn.io/yarn-clip/71cf3f54-184e-4143-b723-0bdce2921b4c/gif#LfJMAgFkOU.copy

Small add to CVS and a starter in ANTM.

I read his letter and think it’s odd that he doesn’t think banks have been impaired. That doesn’t make any sense to me. Sure, we can debate If bank stocks have been overly punished, but there is little debate that they have been seriously impaired by higher loan losses and lower interest rates. This alone would question me a money manager’s judgment.

Yeah, some people are focussed on politics. Strangely, nobody on this forum is talking about France. Yesterday, France had 6,500 new cases for a country of ~65 million people. Yesterday the United States had 29k new cases for a population of ~325m people. Over the past week, looks like France took over the lead for the most significant covid outbreak amongst developed countries, relative to its population? Things seem pretty manageable in Sweden these days... So, shall we engage in a series of venomous statements about President Macron, now that France is "winning?" Is this MFGA? SJ Oh man. Prepare to be viciously attacked like the dozens of others who came before you; that dared present anything contrary to the narrative of the guy who got snubbed for debate team captain in high skool. Now back to crying about Trump. I heard yet another person who dislikes him is writing a book or prepared to make a statement about how much he sucks! Libtards....go crazy! What is happening in Europe is interesting. Again multiple factors involved but yes politics plays a role. There is significant resurgence in the aggregate in the European Union but the average hides wide disparities. There appears to be some inverse correlation between the extent of the initial wave (eg Sweden and some others) and what is happening now but 'performance' with the first wave is also correlated. There is more testing now but the positivity rate is also going up. An argument could be made that it's better to spread the spread over time but there may be a fatigue component. Time will also reveal more about the seasonal impact. Based on what I am hearing from Europe, fatigue definitely plays a role, same as it does here. The second wave in Europe has been caused to a significant part by summer travel (Spain and other countries depending on tourism opened up) and it has not gone that well.

As predicted, we have finally caught up on Italy in terms of COVID-19 death normalized over population. I am comparing country to country here: I guess Italy’s government isn’t quite as incompetent as thought. They got hit very hard early on, but then managed to contain it. We didn’t.

CVS getting some love here. I also added a tiny bit.

Interesting clinical candidate with an unmet need. It looks to me like they will need to raise cash with a secondary very soon though. Word of advice...this is a highly promoted stock at tier 4 brokerage houses and to date, the company has been very eager to use any sort of share price bump to raise capital. Note, that's what they all do, some just more regularly than others. Thanks for the color. I have no idea what a Tier 4 brokerage is, but I suspect that these are the dinky outfits that recommend and pump microcaps? Anyways, the way I see it CR P has maybe 2-3 quarter of cash left, which means that they probably raise in the next 3 month or 6 month at the very latest. Typically buying ahead of a secondary is not a winning proposition. Tier 4 example http://www.teribuhl.com/2019/03/19/honigs-broker-dealer-laidlaw-target-of-fbi-investigation/ Good warning on CRBP https://seekingalpha.com/article/4245168-corbus-ties-suspect-investors-history-failed-clinical-trials-lenabasum I have a bunch of accounts at a lot of different places either personally or for those I oversee. So occasionally the dirty wringer produces "sales leads" which I end up on. No joke I had a fellow maybe 4 years ago call me unsolicitedly and hard selling me some options strategy on....Corbus. At like $8. A few days later in went down like 50%. I have nothing to add as to whether what the actual company is doing will bear fruit. But having been almost exclusively involved in seeking out and doing deep dives and short only candidates earlier in my career, I can tell you that many times, just using guilty by association with some of these names, is all you need to do(outside of securing a borrow and timing the short entry :P) CRBP down to $2.1 ( down 76%) premarket on apparent clinical trial failure. Wheeee!

I think that’s one of the core things nowadays more so than before. Most of the money is made being correct about duration of the business, not the multiple now. You have to look further out. Being right about tanker spot rates in 3-6 month doesn’t provide much of an edge, but being right about a tech moat ten years out does.

Recently re-watched “Casino Royale” , Daniel Craig’s first Bond movie and it has aged very well. It might be the best Bond from the whole series. Now, I am watching “Chef’s Table - BBQ” in Netflix. That’s a pretty well made series for those of us who like BBQ.

There was a large push a few years ago from PPO and PBM (hard to tell who really is in charge here) to push online. most of the “savings” came from going from 30 to 90 day refills. I think this came to a halt somehow. Maybe the saving weren’t really there due to waste? It’s really hard to tell.

It is worthwhile to watch this and Masa is unlikely the only one gunning big tech stocks with options. The Sherwood Forest crowd was supposedly a factor too, but probably too small to matter. This is likely a Momo trade with several large players involved. Until Mr Market removes the plug from the bathtub and some players get into trouble we will never know.

Looks like another community outbreak in Chelsea, MA during the last few weeks. Almost 6% positivity rate - 180 cases. So much for the herd immunity crowd @15% - Chelsea had a mid thirties antibody positivity rate in a late April study (not the best study, but numbers should be correct ballpark) and Antibody positivity should be higher now. My own small town had zero cases since June - 10 cases total since outbreak with 600 tests. Population roughly 3400 people. Similar with surrounding towns. I don’t think there is any chance of Heard- immunity there. Antibody positivity rate here would be below 5% for sure, most likely much lower. https://www.boston.com/news/coronavirus/2020/09/02/latest-massachusetts-city-town-coronavirus-data