Spekulatius

I think an application of the punch card method will lead to more thumb sucking, not less.

The counter argument to the 15-20% immunity is that high infection rates of 80% have been seen in some settings ( prisons and a Korean psych ward if I remember correctly) Anyways the herd immunity threshold depends on the R0 from a pure mathematically perspective, which is a highly volatile and setting dependent number.

I own a bit of AMBEV (I actually added a hit last week). My thinking is that folks will drink beer again way before they fly. Nevertheless, the Mexican airports are attractive because they have good balance sheets. They will make it too the other side without dilution. The worst of the currency devaluation for the Latam currencies seems to be over already because the USD is silently devaluing too against most major currencies.

My wife drew this picture describing how she felt about a colleague at work during the Coronavirus surge. Very fitting when you see some of the postings here:

Thanks for your thoughts Spek. There are definitely some good frameworks for thinking about the issue in your comments. Here are a couple of questions. Wouldn't a 0.1% position still likely lead to regret? And how is that different from thumb sucking? Would a tracking position mainly differ by scale (0.1% vs 0%?) and the benefits of having a position might come at the cost of diworsification and increased tracking costs. Should we be looking to improve the odds of fully committing to the correct decision? I like the idea of using pepper oils to prevent thumbsucking, but I see a couple of issues: -First, have you already made the mistake by the time you are sucking your thumb, or is the thumbsucking itself the problem? -Second, we really want to encourage the right decision which is to take an action in the real world and take a risk on other people or a company, which is more akin to sucking someone else's thumb. Putting pepper oil on someone else's thumb might prevent you from sucking that thumb, but that would mainly be of use when it would be inappropriate to suck on someone else's thumb, and what we are looking for is the rare opportunity when you should encourage yourself to act in scale when an opportunity presents itself. Plus, it is a little socially complicated to try to go around putting pepper oil on other people's thumbs. So maybe we should be looking for positive reinforcement, rather than negative reinforcement? I find that putting 20-30bps into a position forces me to look at it and pay attention. Lots of time, I don't add to it After 18 months or so, if the fundamentals aren't improving, I sell it. If the fundamentals are working out, I'll add to it. It helps. CEO of Markel talks about this. I see it the same way. It forces you to get involved and pay attention. If it doesn’t work out or you bought you too expensive, the loss is manageable. For me, the biggest issue to pass on opportunities is valuation. I think some stocks/business looked good, but were too expensive At that time. i these cases, I should probably should still buy some. If the business is good, but the starting point was unfortunate, I might be a chance to buy more at a lower price. If I don’t have a bit of skin in the game, I often forget about this entirely and end up doing nothing. It’s a mental crutch, but I think it works for a lot of people.

Same here. Looks pretty solid. Their trust business revenue and AUM keeps rising at a decent clip.

I recommend buying a tracking position (0.1% perhaps) when the valuation is in doubt. Those tend to be my largest regrets. So far, I have never regretted investing in lousy companies and fraudulent stocks, even when they do end up going up. As for the real thing, try rubbing your thumbs or finger tips with Ghost Chile’s or habaneros. It sure will at least remind you that you are sucking thumbs, which typically is 80% of the battle ;D

Why is that? Currency devaluations , inflation , or something else? In my opinion, it is a higher country risk premium. Or look at the central bank interest rate (I wouldn’t call it risk free), it is currently at 4.5%. Brazil is in a very similar situation. https://countryeconomy.com/key-rates/mexico FWIW, these countries stock markets are interesting, because those rates are coming down. That should boost equity valuation, but may also weaken the currency.

Thankfully there's no libido in there. There's no questioning of personal tastes but somehow the combination of Orthodox Jews and libido doesn't really do it for me. If interested in the topic with time restraint, here are two useful references: http://faithandworklife.org/wp-content/uploads/2010/12/faith_and_fortune.pdf https://financialpost.com/opinion/a-hard-look-at-paul-reichmanns-long-goodbye Paul Reichmann was a true genius but was also a gambler. In the end, this was about financial libido. A potential problem occurred when the collateral that banks relied on was substantially related to the reputation of a single individual. The best ways to 'kill' a man is to prevent him from working or to give him unlimited credit. They also mentioned Dome Petroleum. Oh, the memories.

Of course there are many variables, but still, it's a data point that doesn't help support the approach. Also, since about May, many European peer states are just as open than Sweden. Schools for example opened in late April or May in Germany and Denmark. I don’t know about France though. One of the issue that caused the recent outbreak was travel during the summer. There were issue with crowds in Mallorca (around the infamous Schinkenstrasse etc) and contact tracing showed 25% of thr confirmed cases due to travel and the real number is likely much higher. On the same note, I think father day and 4th of July likely caused the recent surge in the surge that seems to be ebbing no. I expect another surge when schools reopen and on thanksgiving. @Castanza- the protests certainly didn’t help, but most protests were in blue states and that’s not where the surge happened. So, I don’t think the protests were the main reason for the surge.

It's the almost-G7 countries. I didn't make the list. I think it shows a pretty stark difference in success in containing the epidemic, don't you? I think I saw that the US had more daily deaths right now than Germany had daily cases (Germany is smaller, but still has 80 million people). You may not be able to vacation in France, but if I had a choice between vacationing in France or in Florida right now, I know where I'd go. Certainly there have been different approaches and different outcomes so far from one country to another. Europe had an aggressive outbreak and then countries like Italy, France and Spain locked down for 9 or 10 weeks to get things under control. Looking at the daily numbers, I question whether France and Spain won't be back in that exact situation by mid-September. Italy's numbers are bit better, but they are trending up too. So, will it be another 10 week lock-down from mid-September to mid-November across a large swath of Europe? It does call into question the sustainability of some of the management strategies if it ultimately ends up being a situation where they lock down for 10 weeks, open up for 16 weeks and then lock down for another prolonged period. If I had to guess, I'd say that we'll see a less agressive set of measures and a greater tolerance for the spread of the virus in Europe (time will tell). FWIW, my concern about vacationing in France is not about the risk of actually contracting covid. The larger concern is the risk of travel restrictions being imposed by other countries (the UK has already put in place measures against travellers from Spain), and the risk that the French could once again impose restrictions on travelling within the country (during their lock-down, the French imposed the use of a sort of self-signed ausweis for their citizens when they needed to leave their home for any reason). In short, there is a small-ish risk that it could become very difficult to find a flight home. In contrast, I would have no such concerns about getting home from Florida, but the risk of catching covid is likely considerably higher. SJ I definitely wouldn’t travel to Europe right now. I do agree there is a risk of getting stranded or in a lockdown situation. Most of the lockdowns in Europe now are local. Germany has a protocol where this goes county by county based on local infection rates based on a 7 day average, for example. I also think that if you fly in from the US, you need to quarantine for 2 weeks anyways. It is actually similar in the US in some states (VT, Maine) where you need to quarantine based on the local infection rate in your county. Coming from FLA would certainly have to. Whether they enforce it is a different question. With my wife being a nurse, ignoring these regulations is not an option.

Well, if you truly want to go passive, you can also go throw crowdsourcing platforms or become LP in a RE partnership through other means. Example are crowdstreet, Realestatemogul. Often, you need be accredited investor, but you can invest in smaller chunks from 20-100k in most cases. Compared to public REITs, you are only invested in one property (Apartment complex’s) , the leverage is higher (debt/equity 2:1) and there mostly is a planned exit after 5 years. No affiliation with anyone, but crowdstreet seems to have a decent flow on Apartment housing deals. https://www.crowdstreet.com/ I am sure others have more experience with these sort of investments. I am just in the learning phase...

RKT is an interesting case. It’s a mortgage originator with a growing market share. IPO stumbled out of the gate @$18/ share. They seem to have negative equity due to a ~3.8B dividend recap prior to the IPO. The structure seems optimized for the founders tax and to keep total control. https://www.sec.gov/Archives/edgar/data/1805284/000104746920004448/a2242208z424b4.htm No position. Closest public peer is PFSI.

Many countries have flare ups in Europe. France, Spain, Germany and the UK have all flare ups, as has Israel. Israel got problems once they opened schools I think.

https://www.zawya.com/mena/en/economy/story/Hurricane_Isaias_may_claim_at_least_one_CEO_scalp-TR20200810nL1N2FC0HXX1/ “Hurricane Isaias may claim at least one chief executive’s scalp. Connecticut legislators want the head of James Judge, the CEO of $30 billion New England utility Eversource Energy, on a pike as blackouts linger in the Nutmeg State. “ Stock is down 2% today. I am not emotional about this stock. I just think investors are not realizing how bad the situation is for this company. ED, PEG and NGG (all of them are East coast utes) are all down today in the same 2% ballpark. Likely cause is rising treasury yields, imo. May the power be with you soon.

Sold my BRKB shares. My most Index like position and close enough to fair value to me.

Cutting corners on the science is dangerous both because it can lead to people getting exposed and dying when they think they're protected and aren't, and because if there are safety or efficacy issues, it can cause long-lasting backlash against vaccines in general, leading to more deaths and suffering over decades. You already have crackpots making stuff up about vaccines, if you give them something real because you don't do things right, it'll be bad. From what I've seen, Russia is talking about a phase 1 vaccine that has been tested on hundreds of people... That's pretty bad science. Is the concern with the Russian vaccine: 1. Safety? 2. effectiveness? Safety: If the virus kills 0.6% people and the vaccine has dangerous side effects 0.6% of the time, you haven't really gained much at the population level. Effectiveness: OTOH, if its not truly effective, you will start being spikes in cases as people get infected. Its a loss of resources and credibility, but for a poor country it might be worth the shot that it does actually work well. Agreed it's not unto the usual standards, but in the current scenario everything is now a risk-reward decision in real time with limited information. Safety would probably worry me the most here. So Putin's injected his daughter to allay those fears. Not the right way to look at it. You don't gamble with whole populations by injecting them with unproven medicines. This kind of callous thinking is what got the US and Russia in their messes in the first place. Not supporting Putin's decision here, which s probably more driven by the propaganda value and his domestic political needs. I do hope the planning for the next pandemic considers questions like the following. I certainly haven't seen them discussed anywhere. If this virus had an IFR of 50% (Ebola like) with huge infectiousness, and you offered me a vaccine which had a 1% side-effect of death. I would be sorely tempted to take that "side-effect" risk as the lesser of two evils. The current IFR is much lower, making that vaccine much less tempting. I would want way more safety and effectiveness, but not sure how much more. Surely not at the usual standards where things take 10 years. So how much less can one settle for as an individual or as a country? Looking at risk vs benefit is fair. It does matter if the IFR rate is 50% vs 0.6%. My concern with having politics messing with the process is the risk and benefits arnt’t really known of the numbers presented are fudged. Then people might make wrong decisions based on faulty/compromised data.

It’s pretty sure that in terms of fatalities per 1M , the US ( currently at 502/ 1M) will exceed Italy (currently at 582/1M) in a about month. Who would have thought this in March? Also, while we are at it, Italy’s population density is 532 people/ mi^2.

You can read the prior posts about T cell immunity that already exist in 40-60% of population, so 20% infection of COVID should get us to herd immunity. But let's just say this: If GA reopens schools and no one seems to be wearing masks in the schools, and if the new daily cases continues to drop into the end of August, is that proof that daily cases of 4-5k per 10M population for a month is sufficient to get us to herd immunity? NY, NJ, FL, TX, GA all have reached this ratio. CA and WA are still way off. Another data point supporting this view is that Iran recently said they probably have 24M people infected. They have 100M people in total. If 24M people are infected, it only takes 1-2 weeks before reaching all 100M people, but it seems to have stopped there. How do you conclude that it takes only 1-2 weeks to get from 24m to 100M people without knowing the Ro? Also, how does Iran come up with the 24M number for the total cumulative infected? I guess I am skeptical of anything from Iran.

They may ust get it to themselves first, like Herman Cain did for the cause. These golf club members skew older, unlike the protesters.

It seems to me that Berkshire just recycled capital in low risk bets. They sold airlines and WFC and bought higher quality BAC and their own shares.

The PCP purchase was a dud before COVID-19 so I am not surprised by the write down. I would like to see a post mortem from Warren or Munger would be interesting.

I recall when I moved to the US in 1997, I made photos (and wasted film) of sagging power poles and haphazard strung electricity wires especially in San Francsico because I honestly have never seen such a mess, except on a trip to Cuba. I still should have pics somewhere. My current nervy company is National Grid and when I moved to MA and rented an apparent back then, the power went out in March 2018 twice due to snow storms, the second time for almost a week. In March 2018 it was pretty cold and having no power and heat isn’t fun at all. When I bought my house here in The same area, a selling point for me is that the power connection is with an underground power wire coming from a main line. Also and interesting fact is that a town next to me (Groton, MA) bought back their distribution network from national Grid a while ago and currently, their electricity rates are some of the lowest in MA. Also, the grid seems we’ll make tainted and never experienced the outages that Nation Grid experienced during the same 2018 Episode. in fact, realtors use this as a selling point for houses there. In a world of low interest rates and apparent failure of good stewardship, I think it is an option for local communities to apply pressure to regulated utilities and buy back networks where intakes sense, imo. One can call this socialism, but in my opinion, with “great power comes great responsibility” and when a monopoly doesn’t meet the needs of the communities it serves , than I think it should be fair to take it back for a reasonable compensation of course. Now the Groton model may not work everywhere and there isn’t risk theta town mired in “power” politics will do even worse than a privately owned regulated utility. FWIW, I have no opinion on Eversource or NGG as an investment and don’t recommend shorting something for emotional reasons as well.

Also this: FWIW, the speed of testing seems to vary a lot from state to state. In MA, my wife went to a testing station and got the results back in less than 24h. There are also CVS rapid test stations around that are even quicker.

Imagine running a pension fund in this scenario. Liabilities increasing by 15% annually and bonds get zip interest. There is no alternative but to yolo.