Spekulatius

I think there is a kid at the bottom of this pool that isn’t in this picture. It doesn’t scream any more. Mommy doesn’t care. This would be a “deep value investor”.

Disneyland Hk closed because of 52 new COVID-19 cases. Disneyland Orlando opens with 12.5k new cases. Guess who will have more success dealing with an epidemic. https://www.cnn.com/2020/07/13/media/hong-kong-disneyland-closing/index.html

Situations similar to this may be quite close to occurring if there is a radical regime change come November. i wonder if the radical regime change theme should not trigger to question the direction of the cause and effect. Both President Hoover and Governor FDR had very similar positions on a strong dollar and a balanced budget. President Hoover in July 1932 expected recovery by the end of the year and before the election. FDR's approach accounted for the possibility of a severe and prolonged contraction. At the time of the devaluation, the US had a positive trade balance and even if the move was a global one, the overriding objective was domestic. The idea was reflation, just like now. Moving away from certain regime changes that still need to be defined: https://www.clevelandfed.org/our-research/indicators-and-data/inflation-expectations.aspx Reflation will happen somehow but it's hard to see how an economic slowdown will not meet negative rates. Lower interest rates have been mentioned a lot as a reason for higher equity multiples, but the lower tax rates are a factor too. I recall statuatory tax rates of close to 46% and they were 56% (for retained profits with cash back for dividends) in Germany. It has been a race to the bottom, but the last tax rate reductions seems to have done little for growth and much for wealth inequity. Time to try something else, I think. https://tradingeconomics.com/united-states/corporate-tax-rate

I gathered some additional info about air circulation that might be useful for some. Most heating and air circulation systems will recirculate some used air to reduce energy consumption. HEPA filters in the duct path should catch droplets, but may not catch aerosols , so that may pose some risks. in the Montreal area, there was one urging home where insufficient air circulation was suspected to be a factor in an outbreak. https://www.reuters.com/article/health-coronavirus-canada-quebec/canada-sends-army-to-quebec-care-homes-on-frontlines-of-coronavirus-outbreak-idUSL2N2C31TG I talked with a manager of a manufacturing company (which I consider very proactive with respect to COVID-19) and they Changed their heating/air conditioning setup to single use air only a while ago. This prevents recirculating, but it also increases the nerdy consumption. I had a talk with a local residential HVAC guy (because our central HVAC is 20 years old and likely to break down soon). I got a quote for a replacement system and it’s has an optional UV duct unit for about $525. This unit should get rid of the Virus if it circulates through the duct system. There should be commercial systems like this as well (costing likely much more). I will talk without facility engineer at work of what he thinks of installing them as a precautionary measure.

Maybe he realizes one day that he can’t open the schools because he chose to open things that should have remained closed given the circumstances. The ability to open schools safely is going to be driven by infection rates and particularly hospitalization rates. With the numbers that FL, AZ, GA, TX and Southern CA are putting up, I don’t think they are going to be able open the schools which pretty much guaranteed another 6 month of crappy economy in these states. It‘s not a matter of politics either, the Virus doesn’t care whether a state is red or blue. What matters is if you give him a chance to spread. A lot of countries have shown to safely safely open schools. If any state can’t open the schools, it’s not on Trump, it’s on the Gouverneurs and to some extend on the people too. You eat your own cooking with this epidemic and share them when with your neighbours.

Yes, the issue is that some managers are good in some companies, but fail nomothetic. Actually Schmitt who ran Novell (leading it to its surmise) and Google (he developed the upstart into a mature powerhouse) is a great example. This lead me to believe that many that are recognized as great managers aren’t really that great but rather lucky or perhaps great in one setting and mediocre in others.

I vote for EB simply because I know nothing about it’s business model.

Here is a good one from ours truly Keith Smith: https://podcasts.apple.com/us/podcast/value-hive-podcast/id1492171651?i=1000482333189 Another good one from Rich Howe (Spinoffinvesting): https://podcasts.apple.com/us/podcast/value-hive-podcast/id1492171651?i=1000477715866 Rich covers MSGE/MSGS and IAC.

LHX (one of my holdings) got some love in VIC recently at $182.5. Now trading at $164, I can’t help but add some shares. generally speaking, defense stocks have been weak lately, anyone have any idea why? Fear of defense cuts if Biden wins the election? In any case, I am familiar with LHX (more so with L3 than with the Harris part) and the combinatory Company looks like a good bet to me. in my opinion, this is a good GARPy stock pick. https://www.valueinvestorsclub.com/idea/L3HARRIS_TECHNOLOGIES_INC/8346441774

Depends on what's a "reasonable time frame". The time frame I see most often in the media is 12-18 months. It's hard not to be doubtful of that claim. From what I at this point we have the knowledge and capability to pretty much make any (most?) vaccine in 12-18 months. So I'm not so worried about the time frame. What I'm worried when it comes to the vaccine is: 1. Will it be any good? 2. Will the moron internet people actually get vaccinated? If you were under age 40 and in good health, would you pursue a covid vaccination? I wouldn't. The mortality rate and morbidity does not justify the time and the risk of side-effects for people of that age. If you are over 50 or 55, it starts to become a real risk and the vaccine might offer some real value. I hope we will see a vaccine developed, but I am not particularly optimistic about the adoption rate or the efficacy of the vaccine. SJ Having a vaccine with a known and well established immune response will beat getting the virus in the wild any time. I don’t know how this is even in question. In any case, count me in as getting vaccinated even if it is only 50% effective. I also get vaccinated for flue every year which wouldn’t kill me either, but having the flu isn’t fun and having COVID much less so. My wife has seen patients aged 30 year up in ICU‘s in rather sorry conditions. Right now, an acquaintance of her from CA in her forties is in the hospital and hasn’t exactly the greatest time there. If I can help it, I‘d rather avoid such a ordeal.

Not to mention even if schools manage to get solid systems and software in place for online learning there is still the issue of teachers themselves. Online teaching is a whole different ballgame. Throw in teachers over the age of 50 who have been in the classroom for 30 years and their effectiveness dwindles. Here in PA a ton of my coworkers pulled their kids from school and rushed them to PA cyber school simply because the teachers are at least trained for online learning. Our own school district is pretty good and I like most teachers, but it didn’t have the resources when the lightning struck on March and everything went remote. It took them 2 weeks to come up with an improved plan and we as parents had a hard time to make sense of what they came up with. I regard it pretty much as lost time and student engagement tanked for sure, not just with our own kids, but other parents reported the same. This remote learning may work for adults, but I think it’s worthless for smaller kids and mostly worthless for high schoolers too. Both my wife and myself are working away from home and in the evening we had a hard time to trace back what was happening during the day , what should have happened and what actually did happen. I have never seen such a mess. I think the fall Semester if it continues remotely would be a bit better, but not much. I hope that for the sake of mankind, the kids get back in the classrooms, not just for the sake of learning, but also for the social interactions. I can give up school bands, sport and all that extra stuff, but we need to get the basics done in the class room.

So Trump Tweets to open the schools ASAP, but how are the schools going to open in states that have high infection rates? Unless those rates go down, AZ, AR, FLA, GA, TX and many others won’t be open the schools at all, imo. In any case, the decision to open is made at a district level, not by the governor, much less federal level. The governor/ states gives general guidelines but that’s pretty much it. Having lived through the online schooling since March with my teenager I pretty much think it’s a disaster. If these states can’t open schools in many areas, many parents are forced to stay at home which pretty much guarantees that the local economy there is going to be crappy. I located in MA and our schools district has to create 3 plans ( online only, hybrid online/regular and regular schools with some precautions). I am hoping for the latter and I would be seriously pissed if my local government messed this up and gets hospitals and schools shut down in exchange for keeping bars, gyms and nightclubs open.

I don’t think what he is talking about (totalitarian kind of subversion) Does not apply to our current situation all that well. We now have an abundance of Information sources with rapid feedback mechanisms which gives you exactly the kind of information that you want or should I say deserve. Those things didn’t exist in the Soviet Union or other totalitarian stated in the 1980’s and before and they lead to somewhat different issues.

One thing that we have going for it is that there are a lot of test subjects to run the clinical trials in large numbers. That was one of the issues with SARS - we run out of test subjects due the SARS being ringfenced if I recall correctly. We don’t have the same issue here. :o

Resurrecting this, since I found this interesting interview with the inventor of the VIX. I didn’t know for example that index puts tend to be overvalued systematically since institutions buying them, but individual stock options are not: https://www.bloomberg.com/news/articles/2020-05-15/the-father-of-the-fear-gauge-says-he-feels-reassured-by-the-vix

I have found a IBKR simulation account useful to learn about the platform and do some trades that seems a bit more complex (foreign exchange, for sign stock). I also found a useful side benefit - you can use it to get real time quotes for foreign Exchanges For free so to speak. You just buy one share or lot of a stock in the foreign exchange and IBKR while not showing you real time quote, will show you the real time value, which is basically the same thing. Not a huge benefit, but I found it useful in some cases.

I thought about shorting it but in this market I am afraid to short even when, like on this case, on the face of it is overwhelmingly rational thing to do. The Price paid by Buffet for sure isn’t bullish for midstream companies ( OKE, WMB, EPD, ET, ENB etc). I think he paid less than any of the above is valued by the market with the possible exception of ET.

It wouldn't surprise me if D trades down a bit more. Looks like they sold decent assets cheap and they are cutting the dividend but this is for the D board. I think BRK got them this cheap because they were willing to buy the entire portfolio. There are more natural buyers for the pipelines (e.g., EPD for Questar and TC for Iroquois) but that would require a lot more work/time/regulatory hurdles. I think Dominion was will to trade this asset cheaply in return for a better ESG rating. I think BRK got these assets for a really good price (11-12x post tax earnings unlevered).

Based on Dominions roughly ~900M negative earnings revision due to the deal, Berkshire got the assets fairly cheap.

Here is some paper on the D614G mutation of the Virus, which seems to be more transmissible but not necessarily more severe in terms of how it plays out. This mutation seems to be 3-6x more transmissible (Due to higher prevalence of spike proteins on its surface) in lab experiments which should lead to a higher Ro. I think this was the mutation that Fauci was talking about recently. From an evolutionary POV, a variant of the Virus that is more transmissible will probably become dominant over time. This also may help explaining the ferocity of recent outbreaks in the US, besides the other factors that were mentioned before (holiday gatherings, opening high risk establishments like gyms, bars, lack of precautions). https://www.cell.com/cell/pdf/S0092-8674(20)30817-5.pdf

I agree with many of these above things pointed out. 1) One thing we did is have our son eat the same food we eat from a very your age (~1 year old). First mixed in and starting from year 2, he pretty much ate what we ate. Even in restaurants, we rarely ordered kids means, but rather have him eat some of thrthe adult food, sometimes diluted down if it was spicy. 2) While we aren’t health nuts, certain things like coke/soda or other sugary drinks were never in our house. He could try to when he was at a birthday sorry with other kids but ended up not really being thet fond about it. Same with sugary stuff. 3) we always had precut apple slices, strawberries , raspberries around as snack. When our son wanted something. In between meals, that’s what he got. 4) My wife involved my son in cooking activities early on, starting with age 2. He learned how to prep food, salads and add the condiments he liked (feta cheese, olives , sautéed onions or whatever the preferred flavor at thet time as) and could to some extend create his own means, like when we amd homemade pizza, he could put the stuff he liked on it (sometime weird combinations but so be it). I think eating your one cooking really helps. 5) replace salty snacks with nuts, trail mix etc. Very easy. Again, my sample size is small (n=1) and what works for one kid, may not work for another, but the above (or some variation of it) might work in your case too. The earlier you start, the easier it is from our experience.

Greg, As you perhaps already know, I'm pretty observant to facts posted here on CoBF, and by all means much-much more observant how those so-called facts are processed and handled. So, to me, you are here just such a low-life cheat fiddling with your numbers that you post here on CoBF, dividing by four, instead of dividing by four-and-something! [ : - D] I hope everything is evolving well over time for your part, and yours! Take care [ : - ) ] [The rest that we're talking about here on CoBF is "just money" [and all that].] In short - now that I actually think about it - there is no capital gain comparable to become a parent again! [ : - ) ] Haha thanks John. Yes, things are well. Just another "period of adjustment" as seems to currently be the norm in the world. I'll do one more day, and then stop posting my daily meals. Just trying to emphasize how it is possible to eat well and cheap. One thing I have found very helpful is that going to the store daily and buying only really what I need for the days meals, greatly cuts back on waste/saves money. Previously, or when I go to Costco, its very easy to fall into a "I'll have some of this, and a bit of that, and oh, throw this in the cart too" mindset. Much of that stuff either goes bad or sits in the pantry collecting dust. Breakfast Eggs Benedict: Eggs 2.49 carton Hollandaise sauce 1.29 packet English muffins 1.50 a sleeve for store brand French toast for kids 2.79 for a box that lasts a week 6 coffees(I drink too much) K cup style 80 ct is $20 Apple juice 2.99 a jug, lasts 2 weeks Lunch Pierogi 3.79 a tray Sautéed Onion 1.99 lb Fish sticks for the kids 2.99 a box (although typically I catch the walleye and wife breads them, so free, unless you want to incorporate all the boating/fishing expenses, which will be an obnoxious add on) Dinner Skate Wings 7.99 lb Asparagus 1.99 a bundle capers 1.79 a jar couscous 1.99 a box pizza bites for the kids 1.99 a bag which lasts 2 meals I wouldn’t exactly rate fish sticks, French toast, pizza bites and apple juice as healthy for kids. We try to limit our grocery shopping to 1x a week, mostly trips to Costco. Sometimes we do a second trip to the Market basket to pick up some veggies etc. We used to go to a local farm and a local higher end butcher, but not that much this year because we now limit trips. I might check out the local farm again this year.

Except the government has shut down bars, restaurants and a few other things in several states. When you look at LA the Vast number of cases have been amongst Latino’s. Also note that directly adjacent wealthy neighborhoods like Pasadena are doing much better. http://publichealth.lacounty.gov/media/Coronavirus/locations.htm This epidemic hasn’t a strong socioeconomic tilt, it prospers when it gets into the weaker parts of the underbelly in the society. That’s one reason why the US has been doing relatively poorly, besides the leadership issues. The US has a whole lot more soft underbelly than most states in Europe.

US at 33k with TX, CA and a few others still unreported for many counties. Good chance at 50k+ today. Perhaps 100k+ days coming soon given what you know will be rowdiness for 4th of July as well. Oh yea, and OK still hasn't reported the 6000 Trump attendees who undoubtedly have it. Should make for some trading opportunities. I added big time to my general market short into the close. There is almost no way the market opens green Monday, if past patterns are any indication and news flow is as expected. The guess on COVID-19 trends was correct, but the market nevertheless went up about 4% since you posted. It’s simple - if the COVID-19 numbers are bad the stay at home stocks are doing well and the market goes up. If the COVID-19 numbers are good, the economically sensitive and the “Davey Daytrader” airlines/ cruise ship stocks are up and the market is up as well.