Spekulatius

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

Same here at the MA/ NH border. My wife works as a specialty nurse (dialysis) in several hospitals and they are all,pretty much empty and preparing for a flood of new patient by rearranging the hospital rooms and opening “droplet control?” areas. So far only one COVID-19 Patient that my wife knows about (but not in her care).

No comment: https://www.cnn.com/2020/03/20/media/trump-rant-at-nbc-news-peter-alexander/index.html

I hope you are well. LAforeverHall (formerly known as ScottHall) mentioned it on twitter and it’s interesting. The Billboards business certainly will be affected in the near term, but mid/long term I can see this bouncing back quickly.

I doubt there is much of a private market right now.

In tiny dribs : BRKB, MA and CMCSA.

That’s not the health insurers problem though. Health insurance is a good business and short tail too. Rates gets negotiated every year and costs just passed through. There is some risk of a catastrophic surge in claims I guess, but I think if such a thing happens, they get bailed out too.

Anyone concerned they the health insurers may run into financial issues as well? People getting laid of in drives reduces their membership and those that stay may get their money’s worth if this epidemic goes out of control. Of course right now with everything elective being on hold and many practices only taking emergencies, the cost trends may be really great. The chart looks like they caught the flu already.

TIKR.COM is the best, imo. They handle foreign stocks. Transcripts are included as well. None of the or the platforms does, at least not in the freemium version.

All the initial economic estimates for China were way too optimistic; virus caused much larger economic contraction than expected. And the re-start has also been slower to materialize. The challenge in the West is we are taking a very different approach to managing the virus than China, South Korea, Taiwan and Singapore. Our approach is the blunt ‘flatten the curve’ (social distancing followed by lock down) but without all the other measures implemented in the asian countries. I am starting to think that our blunt strategy is going to need to be in place for longer (2-3 months). Recession is coming. If this lasts months then likely a severe recession. If it stretches into 12-18 months then what is worse than a severe recession? Recession is already there. In Trumps words, the unemployment numbers will probably increase by the greatest rate ever. I live in the US for more than 20 years and it constantly surprised me how quickly everything can unravel. The renters that our friend from town rents to are hardworking folks (he selects them carefully and has done this for decades), but they have nothing to fall back so he literally collect the rents weekly. That’s why they are already out of means because this crisis started 3 weeks ago. I don’t think any of them has health insurance either. Even if their employer would offer cobra, they can’t afford it anyways. In Germany, workers get out on “Kurzarbeit” for many month for partial pay and they keep the health insurance which then is free without much income, so they can last a long time. That’s why the Great Recession in Germany wasn’t that big of deal for the most folks there. Perhaps the $1000 checks for everyone are a partial solution in this situation.

It's worth noting that Japan has one of if not the oldest population yet have seen pretty good numbers without extreme measures. I'd say the odds are high it's somewhat correlated to smoking. Doesn't the Middle East have really high smoking rates as well? I think the odds are related to testing frequency. There is suspicion that virus was undetected in Italy for weeks , so the number of undetected cases is high increasing the mortality rate because mortality rate is number of death/detected cases. Germany’s morbidity rate is low right now 0.3%, but is sure to rise. Germany did way more testing than Italy at the same stage of progression, but is also behind the curve so the time lag between infection and the morbidity is almost guaranteeing that the mortality rates will go up.

Economic impacts - This moves with breakneck speed: Brother in law got laid of in CA. He worked (in accounting) in a hotel in SF, which went from full occupancy to almost zero. A friend from my town rents apartments to lower income people in our area. He is already seeing defaults on rent payments. Many work in restaurants etc. He will work with renters and probably needs to forgive a few month of rent (he thinks).

It is still calm where ai live (MA/ NH) border. No known cases in my town yet. Hospitals are empty (my wife works in a couple) as they cleared out patients that don’t have to there and procedures elective or can wait are delayed. In one hospital, they have crated an extra ICU an “droplet Control” zones. It will come, but it’s not there yet. Based in my Nextdoor local feed, I still estimate that at least a third of the local population thinks it’s media induced hysteria.