Spekulatius

I think Fauci is going to resign very soon.

TOU (Tourmaline was recommended in another source /podcast, but I don’t recall the source any more). Some smaller one look ridiculously valued, but if everything sells of so hard, one might just go with the best of breed. I think NG could come back regardless of crude prices. If weaker competitors get shaken out.

Another weird distortion - wholesale gasoline for 19c /gallon, down from $1.5. Weirder than the GFC. People must be driving way less and someone really needs to sell. https://twitter.com/donutshorts/status/1242173934298112006?s=21

Hotels stocks have gotten hit worse than airlines even. DRH is down from $10 to ~$3. Same with a lot of energy stocks.

It is foolish to believe that the economy can be saved by descending into something worse than a 2nd world country with hundred thousand if not millions dying. It makes no sense and is more than foolish thinking.

https://finance.yahoo.com/m/d771d4d4-47c5-324d-bd86-549347e8acce/invesco-mortgage-capital-reit.html

So he's basically aiming for doing worse than Italy... https://www.cnbc.com/2020/03/23/coronavirus-trump-says-businesses-could-reopen-soon-while-fighting-covid.html Let's hope this thing just happens to be highly seasonal and his dumb luck holds one more time. Ok, as has been stated Trump is clearly wanting to get the economy moving in the next week or two. What exactly this means is up in the air. The question of the day was something like “will this message not submarine your social distancing message”. The answer was something like “no, this message will motivate people to do a good job over the next week with social distancing so they can get back to normal shortly thereafter”. I bought a bunch of stock today thinking buy and hold. If Trump ignores the advice of his medical experts and opens up the economy my guess is we may see a relief rally in stocks. And i will likely sell everything again and sit in cash. My guess is the virus will reemerge in clusters in many more parts of the country, we will then go back to lock down, and the stock market will plunge yet again. Trump really is doing the best he can. I believe that. And it scares the hell out of me. He was talking about a big celebration, before in his first meeting. Clearly a big gamble is probably his bets chance to get re-elected, if it doesn’t work..oh well. In this crisis, we will see a huge difference between countries with strong leadership and and poor one sadly also good luck vs bad luck.

Be careful with first time home buyers. A lot of them get cold feet. In this environment, I couldn’t really blame anyone.

I agree. I think people would have a whole lot more confidence if they let those “can do“ people do the talking rather than the muppets in the Oval Office. I think at least one “hotel hospital“ in my area is being worked on for needed surge capacity right now as I learned though my wife,

SARS was a warning that Chinese Communist Party never took seriously. I know you mean "we" as a humankind, but that absolves CCP of any responsibility. No one else was in position to shut down these wet markets. Once this ordeal is over, the world should unite and hold CCP accountable. H1N1 originated in Mexico and the Spanish flu most likely in the US. It is true that the Comunist party is at fault her, but let’s face it the condition in many 2nd world countries and perhaps even 1st world countries with industrialized animal breeder make something like this likely to occur. If you watch the series Pandemic in Netflix you get idea that there are several outbreaks in several places in the world at any time. Most of them stay under control , but if not we now know happens.

In Germany the trend is flatting too, as seems to be the case in Italy as the hammer finally came doen. US still had more pain ahead in this department. The reason why everyone looks at headlines is because it is a headline and liquidity (or lack thereof) driven market. I do agree there are some unbelievable bargains out there, short of going into a real depression.

It seems like many states and the federal government are taking a wait and see approach as the number of confirmed cases grows. Based on everything I've read, a national shutdown should have started last week if there was going to be any chance of significantly slowing the spread down. It looks like we're too late. By the time the president announces a national shelter in place, the numbers are going to be off the charts. My personal expectation is the US is a week or two behind Europe. The only upside is it might be over faster. My wife works in healthcare and they are preparing for an onslaught. One large hospital in the Minneapolis area has apparently been working to convert an entire floor to ICU beds. Many countries have effectively shelter in place . Germany has is for a couple days and they have escalated compliance today. It’s too early as there seems to be some weekend reporting effect (with lower numbers on weekends) but the numbers of new infections have begun to show promising trends and so far, the Heath care system is holding up. I think people have come to realize the seriousness last week and compliance has improved, which wasn’t the case in Italy at all. US is still in the exponential growth phase so who knows how it ends.

Do you even need primers? Just study the income and foremost the cash flow statements and everything else flows from that. Primers tend to get you into rabbit holes that make you blind for collective shortcomings of an industry. Well how else to learn about competitive dynamics for instance? Not only between horizontal competitors but between upstream, mid, and downstream players. I'm sure I can buy a basket of shale producers and if oil shoots back up I can make a killing but I'd rather be able to understand nuances between different companies. I would avoid shalers altogether. If you do invest in upstream at all, stick with majors or those with long live resources like the Canadian oils Sand plays CNQ and SU or perhaps CVE if you like an option like play. The reason why long live resources can survive longer is because they don’t have to reinvest as much once the resources is operating, except for maintenance capital. Shale is a short live resource and thy constantly nerf to drill or the resources are going to run dry. But in a way, that is also obvious through the cash flow statement, if you dig enough, hence my remark. Midstream is similar in this way as are refineries. All of them are better than shale E&P‘s imo.

There is a lot of information put out there that masks don't help unless you are infected (which isn't helpful since we also are told that you can spread it and have no symptoms), and people are being asked to save them for the hospitals. So they may be doing as they've been told. I believe that masks do help, as evidence shows from Asia. Even non N95 masks may help. I don’t have the link right now handy, but a scientist from the German Robert Koch Institut hypothised that the severe cases afflicting young people may be explained by the Virus getting directly into the lung rather than getting from the upper respiratory tract and then spreading into the lung. later. The latter case allows for the body to time stage an immune defense, while the former case may not. It’s all hypothesis right now, but makes some sense to me, and if true, even a crude mask should prevent microscopes from getting into the lung. Seems to me that breathing thought the nose and avoid breathing through the mouth as well as wearing a mask is a good idea. it‘s all conjecture, but downside is limited.

Yes, every time I think about the provisions in the Patriot act, it raises my blood pressure. This thing hands the keys to Big Brother.

This is incorrect, and dangerous thinking. It is true: accurate information is a critical factor, but it is not possible for humans to obtain such early in these viral outbreaks. The pandemic response is warranted - the precautionary principle is the only guide that would ensure the survival of the species. In these situations, you don't need accurate knowledge of the probabilities in order to know what to do. Our emotions and stress are wiser guide than our intelligence in deciding how to react. Strongly agree with this. That's how the precautionary principle works. When there is wide uncertainty with a lot at stake, you err on the side of taking things seriously and overreacting. I would have thought more people on this board would be fans of the margin of safety, but ¯\_(ツ)_/¯ By the way, I haven't been paying attention to the US election. Did Andrew Yang win? I hear the US Gov't is handing out cash now. Yes Andrew Young (UBI), Liz Warren (student loan interest rates forgiven) won, Bernie (Medicare for all) is next. It’s free for all, Airlines, Cruise lines are already fed in the soup line. Shale and Energy is begging. I guess the lobbyists for all the industries are working overtime. Clearly, we have an extraordinary economic situation, but it is still surprising to see much more government intervention than in countries that are called socialist here. I’d be more in favor of something that helps individuals, if we have learned anything from the GFC it should have been that. You stole my follow on jokes that I had planned. Pretty amazing isn't it. Quite a shift Trump has always been populist and a bit socialist. It's just a right wing and flyover state version of socialism. The real outrage here is simply that better leadership and earlier action would likely have resulted in lower overall costs, less disruption, and less panic. Consistent governance might be better leadership than slashing, then growing in a panic. I think we forgot to credit AOC, because MMT is coming as well.

I suppose if they were willing to give up their Bank charter. And if they weren't a bank, it would free up Berkshire to acquire Delta without worrying about the Fed fretting over a very material commercial relationship... The government wouldn't help Delta if Berkshire already owned them. They'd tell Berkshire to help Delta. So Delta would tie up Berkshire's capital in times like this. So maybe it's worth more operating alone rather than being owned by deep pockets? Yes, that’s a pretty good argument against BRK ever to wholly own an airline. Airlines are inherently risky business, operationally levered, safety issues, labor relations, pandemics. BRK would assume a lot of tail risk.

Do you even need primers? Just study the income and foremost the cash flow statements and everything else flows from that. Primers tend to get you into rabbit holes that make you blind for collective shortcomings of an industry.

Totally unrelated to recent messages has anyone else noticed a run on ATM‘s? My wife ventured out today and noticed long lines at drive through ATM‘s. Is this now a toilet paper 2.0 hoarding run?

You are correct.... https://saraacarter.com/coronavirus-china-has-us-by-the-throat-majority-of-u-s-drugs-manufactured-off-shore/ "Dr. Oskoui, a cardiologist affiliated with Sibley Memorial Hospital, said because 95 percent of all antibiotics are manufactured in China and this poses a very real national security threat to the United States, particularly when dealing with the global pandemic COVID-19" "He said that the pandemic has spurred important discussions on the failure of the United States pharmaceutical companies to manufacture the much needed and critical medicines, including medical equipment inside the country. Dr. Oskoui warned that outsourcing the manufacturing of much needed medicine leaves Americans extremely vulnerable and dependent on China." “It’s unacceptable that the Chinese have us by the throat and make 95 percent of our antibiotics. And that’s the critical thing that’s got to change soon…actually make it a priority.” “The United States of America should never be in that position,” he said. “I think we need to turn to people we know that worked for Pfizer, worked for Merck, work for Amgen, work for Gilead, worked for Bristol-Myers Squibb the U.S. drug companies and say ‘you know we understand that you have few share obligations to your shareholders but you also have an obligation to your fellow Americans, as American citizens as an American drug companies’ you need to start making it here just because you can make huge profits abroad we shouldn’t be vulnerable to economic and political blackmail and vulnerable to the medical downside of these drugs being manufactured off our shores.” It’s the generics that are manufactured in China and India and those companies have nothing to do with this. The generic companies are internationals like TEVA and it’s a low margin business now. I do agree that this is something that concerns nation security unlike steel for example which the current administration considered as such. The way to do that would be to require production in the US and pay a bit more for generics and also to deregulate Pharma/FDA a bit because believe it or not Europe is less regulated in this area than the US and it shows in prices.

Yup, the USA is #1 producer of energy and food in the world. Totally self-sufficient. Should be the same for drugs, medical & tech. President has been correct about China all along, no doubt. The open borders and free trade crowd will never admit it. Nor will all the fools in the media that have marveled at China's economic miracle at the expense of political suppression, organ harvesting, and interment camps. No problem trusting China for our critical antibiotics, heart medicines and cancer drugs - once this is over right? Fortunately, if the US economy gets destroyed we will have plenty of cheap energy and food, since we don't depend on China for this too. I mean, why ruin China's reputation at the expense of saying DT has been correct all along? Forest Trump started the trade war with a salvo Canada targeting Canadian steel imports for national security reasons. Canada is a country that supported the US in every war for the last 29” years starting with WW1. It is a time tested tactic in any war to shoot at the allies first.

That's a very interesting take, and the ruble trade is something I haven't considered. In fact, I just watched a CNBC video this morning talking about the Russia / SA price war, and they mentioned that the ruble has been tanking. I compared it to other petro related currencies like CAD, and it's down about 20 to 25%. Looking longer term from the oil bust after GFC till $60+ oil, it looks like Ruble is down against both CAD and USD. I'll probably just go long oil via the majors. I'm thinking refinery operations will recover the fastest. VLO and CVX look good. I like BP and Shell based on their cash balance sheets. This Daniel Yergin book sounds interesting. Care to provide a TL;DR? Pretty much any foreign currency has been taking against the USD, but oil related currencies like MXN or NOk and RUB have done the worst. MXN and NOK are down 20% compared to the USD.

No idea. I got in per invite. I love it, best of the bunch imo, mostly because I love checking out underperforming foreign stocks. :o

So much for the "there's nothing that can be done" argument. Oh wait, those people will now use the "but they are Asian! So they are better prepared/used to dealing with this/more compliant with containment/etc, so there is no hope for us non-Asians!". And destroys the "let it spread and achieve herd immunity" nuts too. Sounds like an ounce of prevention was worth pounds and pounds of cure. 2 Trillion $ of cure. But $2B cut from the CDC budget in 2019 to do exactly what? Not that the CDC would have prevented this, but still. Some people just like to drive without insurance. 99.9% of the time, nothing bad happens and they are right.

I don't see Spirit on there. Interesting. They have been excluded from pretty much all coverage. It is kind of strange. I guess the other airlines can afford better lobbyists. I also think that the Delta, AAL, LUV, Alaska gang would love to see them go under. Be careful out there, it’s Calvinball time: https://www.nytimes.com/2020/01/06/crosswords/heck-calvinball-crosswords.html