Spekulatius

That's par for the course of what you get out of doctor Trump. How many doctors prescribed hydroxychloroquine just cause they were afraid they would get sued by trumpers if they didn't because the dude shot his mouth? Without control for who was prescribed which drug, the study is meaningless. I wonder if the bright bulbs who were arguing against controlled studies because it was unethical to withhold hydroxychloroquine will suddenly agree that this study is meaningless because there it is no random control? Or the MAGA crowd who fell in love with a small, uncontrolled French study? Also, should be noted that the remdisivir study that caused the market to spike was not controlled. Maybe we should just listen to Fauci? Too many conclusions are drawn right now based on quick and dirty study results. Some feel like Hail Mary‘s and get egos attached to them. Not much good comes out of those situations, especially when lives are at stake.

If a million people die (regardless of age) the economy would be trash anyways. Probably worse than it is right now (if that’s possible).

You better hedge the currency though . Some of the oily currencies like NOK, MXN or the Ruble lost ~20% against the USD and trade with the volatility of equity

Bought back some RHM.DE (German industrial conglomerate with interesting defense and automobile supplier). It’s a bit similar to General Dynamics, but cheaper. I also bought a starter in RE (reinsurance).

Contact tracing only works well when you have a small number of cases. When you exceed about 100 cases, it can‘t be done comprehensively and then the only way to works this is to prioritize the contacts (work, family, vulnerable persons who came in contact etc) and hopefully get them quickly quarantined and tested (with rapid feedback). I know for fact that it’s done in Germany and I think they are trying in Massachusetts.

Seems risky to trade this at all, unless you actually can take delivery, as these contracts are worse than hot potatoes. This will take liquidity from the crude future markets

I wonder if we see the day when they start to flare it.

https://www.boston.com/news/health/2020/04/19/an-overlooked-possibly-fatal-coronavirus-crisis-a-dire-need-for-kidney-dialysis Unforeseen knock on effect from COVID-19.

It’s the prelude for a Coen Brothers movie about the epidemic.

This is an article about the increased Chinese influence on the WHO (in German): https://www.spiegel.de/politik/ausland/coronavirus-who-weltkrankheitsorganisation-a-29c74432-aea1-4f9a-b1ff-fcc4bb43cc4e Seems like some critique here is justified. Ousting some of WHO’s leadership would be a better way than withholding funding right now, imo.

https://www.nytimes.com/2020/04/19/us/coronavirus-antibody-tests.html Testing for serological tests for antibodies is one of the hardest things to get right, especially with now touted finger prick (think Theranos). These are "analog" tests (as opposed to digital PCR tests for testing viral RNA to determine positive for SAR-Cov2). I have worked in this space for 15 years now and it is pretty clear that most people do not realize how difficult protein measurements are as opposed to DNA/RNA measurements. If not done right, they will have unacceptable false positive and negative rates. The article above clearly points to that risk. Given that at a lot of testing kits and materials in US are coming from China and not being vetted, I can only imagine what kind of misinformation about antibodies is being given out. Quotes - "The Food and Drug Administration has allowed about 90 companies, many based in China, to sell tests that have not gotten government vetting, saying the pandemic warrants an urgent response. But the agency has since warned that some of those businesses are making false claims about their products; health officials, like their counterparts overseas, have found others deeply flawed." "For example, Britain recently said the millions of rapid tests it had ordered from China were not sensitive enough to detect antibodies except in people who were severely ill. In Spain, the testing push turned into a fiasco last month after the initial batch of kits it received had an accuracy of 30 percent, rather than the advertised 80 percent. In Italy, local officials have begun testing even before national authorities have validated the tests." Yea, that’s one issue. Then there is a the issue if presence of antibodies constitutes immunity.

I think this is correct. Even a downgrade of the US credit rating wouldn’t do much, because it is still the best. House in a crummy neighborhood with the exception of Switzerland (too small to matter) and gold. The emerging markets may have a huge problem though.s like Mexico were just about junk and got hit by lower crude prices. They can’t borrow for nothing. The Mexican peso has already lost 20% compared to the USD. I think we will see many defaults.

Debt service after WW2 was serviceable because the US went into a period of heavy growth after WW2, which reduced the debt/GDP metric. This is likely* to repeat after the current epidemic. At some point, all this extra spending will lead to higher taxes imo. Wanted to write *unlikely

I understand that you're not into controlled experiments and use more common sense and hunches. Just for a second though, assume that we could go back in time (at the outset) and somehow the US applies your model (try to selectively protect the at-risk population and keep things going as much as possible somehow; you still need to explain how this would have been done as roughly a third of the adult population in the US is at risk). What do you think the mortality and ICU admissions would have looked like? better? same? worse? Looking at (and comparing) what other countries have been doing may help formulate an opinion? Do you believe in the memory of water concept? I think the interesting thing about how to deal with this epidemic is that so little is known from the get go and everyone learns as we go and adjust to new data coming in. It’s and iterative process not a fixed playbook. Also, none of what happens is deterministic, at the moment orders for shelter in place are givens the future path is changed and we can never know what would have happened alternatively. I think if the government had done absolutely nothing, people would have reacted and some of the things that were ordered would have occurred anyways (social distancing, sports events canceled , restaurants emptying out or being closed etc). It’s less about right or wrong from the beginning, but more how you react to data, using precautionary principles and using proven techniques used to solve similar problems (meaning other epidemics) and iterate from there. A year or two from now, we will much more about this (death rate, asymptotic rate, treatment) and even then, I suspect there will be significant disagreement about what is right or wrong and how to interpret data or deal with newer slightly different situations. People will say “how stupid that none one wore masks” when this thing broke out and future generations may laugh at us just we cringe how they treated the medieval plague epidemics back in those dark times.

This is the small bet I've made with XOM. <5% position but I would like to build to a 5% position in the next month or so. How do you value XOM? XOM doesn’t look cheap to me, except they go back to peak earnings in 2012 or so. It’s just plain overvalued. So many better options out there (not in energy though) That’s the problem, I am not sure the model works at any crude price. Even the majors had problem living within their ash flows at $80-100/brl. The costs have shown a lot of elasticity , both on the way up, as well as on the way doen. Based on FCF, the majors were never cheap. You have to assume that the future is different than the past in order to be successful and more than just a higher crude price is needed. Labor cost, day rate inflation. Marginal projects getting approved. It’s what happens in industries that like to play on the margin. Typically in the past there was a delay due to long project lead times, but when shale started to dominate, the costs and the prices track each other closer.

I would have thought that recent events have impaired NYC status as a safe haven. You can pick 1) NYC real estate with rampant zombie virus or 2) Potentially lawless emerging markets where currency may devalue I don’t think you are born to be a realtor.

Yeah be careful with ozone--O3 is highly reactive and can damage tissues, can be carcinogenic. And it may not be necessary--if you leave your garage open on a sunny day (or leave contaminated items in a car with windows that don't block UV/windows rolled down, that's probably enough UV light to do the job. The primary way of catching this is likely inhalation of droplets from someone nearby who has it, not from touching fomites anyway. Thanks, didn’t know that O3 can be carcinogenic. The problem with leaving outside is that sun is not always there in New England. Also, my wife often comes home at night, so no sun then. We will keep that in mind and minimize our exposure. the ozone smell is gone in the morning if the let it run for 20 min in the evening after coming home. I am a assuming it will kill the Virus long before it kills us. Thanks for the input.

This is the small bet I've made with XOM. <5% position but I would like to build to a 5% position in the next month or so. How do you value XOM? XOM doesn’t look cheap to me, except they go back to peak earnings in 2012 or so. It’s just plain overvalued. So many better options out there (not in energy though) That’s the problem, I am not sure the model works at any crude price. Even the majors had problem living within their ash flows at $80-100/brl. The costs have shown a lot of elasticity , both on the way up, as well as on the way doen. Based on FCF, the majors were never cheap. You have to assume that the future is different than the past in order to be successful and more than just a higher crude price is needed.

Banks looking at roughly 2 years of lost earnings (20% fair value loss with a 10 PE) and a couple of years if not permanently lower earnings power . It’s not too hard to come up with a 40% fair value loss. Maybe give back some for lower discount rates,but still. I don’t think the share price losses have been much in excess of the fair value losses. They area only a bargain when above assumptions are incorrect and we reverse to the mean quicker.

Pentagon suggests otherwise: https://futurism.com/neoscope/us-military-unlikely-covid-19-created-lab-bioweapon It’s a big enough disaster to investigate closely and maybe even go down some rabbit holes, but the way the virus got started as well as Occam’s razor and existing genetic evidence suggests that this virus got its start in nature.

I think when layoffs occur, licenses get canceled. In good times, companies often forget a out these things, but in tough times, companies turn around some stones and find these savings. I don’t know SAAS pricing well, but I think with any high gross margin product, there here are ways to negotiate. And I would think that price per seat would automatically mean less revenues when people are eliminated As for GOOG or FB.I would think about advertising total being a fixed percentage of GDP - so if GDP shrinks, the advertising TAM shrinks by a similar percentage. Now GOOG and FB may gain some market share as structural winners, but I don’t think they would be able to over come a Let say 20% GDP shrinkage without getting bit hit in revenues themselves.

When does speculation become investment? When do you decide that conviction is sufficient to put 10% of your net worth in a specific investment? ---)You need to define a threshold. I fully realize that comparing an investment decision to a life or death situation is different but you (we) need a framework. It has been suggested (from various observational and rational reasons) that remdesivir could result in better outcomes than doing nothing for CV. We don't know the answer to this question. In order to answer that question, trials that involve randomized blind trials with control groups will be essential unless several trials done in different centers with different patients clearly show an advantage (pre-defined targets). When patients are recruited for the studies now, they have a choice to accept (and potentially get drugs that are potentially useful {or not and with negative side effects}) or not. Given the difficult situation, patients may get access to remdesivir through a company-sponsored expanded access program or through a compassionate program. The results do look promising and that should speed up the process. The approach is obviously not perfect but has provided the shoulders on which future generations could see. How could you know if you don't know? The pharma cemetery is full of ideas that looked good at some point. We need a controlled study - Remdesivir for Democrats, hcq for Trump supporters.

This is the small bet I've made with XOM. <5% position but I would like to build to a 5% position in the next month or so. How do you value XOM? XOM doesn’t look cheap to me, except they go back to peak earnings in 2012 or so. It’s just plain overvalued. So many better options out there (not in energy though)

Anyone has an opinion to use an Ozone generator for desinfection? I felt it’s worth a shot and bought a~$100 unit and put it in the garage. My wife leaves her scrub, shoes there and The car doors open and we let this run for half an hour. I do the same coming home. Likewise we keep everything going in he house ( grocery, mail ) and expose it for 1/2 hour plus risk time. Subjectively the ozone smell is pretty strong and lingers for a couple hours when the unit is done. I have read some Chinese papers that seem indicate that ozone disinfection works well viruses ( small particles = large surface to volume ratio) but nothing definitive. You definitely want to be careful running this in the house because ozone can create respiratory issues, but running in the garage should be ok. Any input welcome. I looked at UV desinfection but determined that what obenan buy noncommercially most likely doesn’t have enough power to do much.