Spekulatius

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.

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?