james22

Fair enough. What's your take on the Democrat's reluctance to support the stimulus bill? What do you expect of them?

If so, isn't this great news? Infect individuals with minimal dose, treat mild symptoms with medication cocktail (https://www.wsj.com/articles/these-drugs-are-helping-our-coronavirus-patients-11584899438), clear the virus, return to work after a week?

Does this sound like someone intellectually capable?

This isn't politics. This is a public health issue, and not a theoretical one. The person in charge is incompetent to deal with it. If you want to pretend this is politics, fine, but it isn't. I don't care he's right or left, blue or red, purple or orange. if he was acting rationally and competently in the face of the COVID19 threat, I'd applaud, but he's not, so I'm explaining why I think that is. Now stay civil or get out. LOL Let me know if you think this political: 1. Hillary's a narcissistic personality disorder and likely a sociopath. 2. Biden's not intellectually capable. They were/are the Trump alternative. Can we stick with criticizing the strategy and skip questioning the motivation?

Fuck off to the Politics section, would you?

More than interesting, no? Seems important.

Investing a borrowed lump sum today into BRK at $160 instead of DCAing over the next several years until I retire doesn't seem crazy. Just locking in an attractive entry point.

Anyone believe the opportunity today is so attractive that they are extending themselves? Usually wouldn't consider margin (or a HELOC), but wonder if I shouldn't consider taking advantage of BRK trading where it is.

Signature worthy.

Yes, please.

In that light, the proposed 50-year treasury might be attractive.

Now 10.5% Small Value, 9% Emerging Markets, 4.5% Stable Value.

In this type of market, it’s important to watch how equity prices trade all the way to market close to get a sense of how many leveraged investors need to raise collateral to satisfy their margins with their prime brokers. Often during the depths of the 2008-09 global financial crisis, the equity market would appear to stabilize 20 to 30 minutes before close, only to see the indexes drop precipitously over the last 15 minutes of trading. This happened because hedge fund managers waited until the end of the day to get the most accurate calculation of just how much cash they needed to raise before the markets closed, and then liquidated what they could to raise enough cash to meet collateral calls. This type of end-of-day market action has already occurred several times during the COVID-19 crisis. Once the leveraged funds are shaken out of their positions and forced selling begins to decrease, we expect a substantial amount of market volatility to subside. https://www.morningstar.com/articles/973164/even-safe-haven-assets-are-feeling-the-pressure

I'd guess the latter. 42% Say China Should Pay Some of World’s Coronavirus Costs https://www.rasmussenreports.com/public_content/politics/current_events/china/42_say_china_should_pay_some_of_world_s_coronavirus_costs

Grr.

Now 9% Small Value, 9% Emerging Markets, 6% Stable Value.

He's right, of course. At some point though we'll trade elderly lives to save the economy.

Nailed it!

Probably a good point. With any kind of legal cover, no one will care about the GSEs. There'll be lower hanging fruit to complain about (Boeing, etc.).

I like the idea: Companies that generate free cash flow do much better coming out of a recession than companies that don’t. And, what’s most interesting is that buying cheap and illiquid companies does massively better. So if you go into the market and say, I’m going to take advantage of this recession by buying small companies, where the stock price has just gotten puked out because people are panicking, but it’s profitable and cash flow-generative, but it’s so cheap and it’s illiquid, which means that the small change of the market was down five, this thing is so illiquid it went down ten that day – you go and buy that stuff, your returns coming out of the recession are extremely attractive. https://thereformedbroker.com/2020/03/04/what-you-should-buy-in-a-recession/ But almost by definition seems too hard to make a list? A Small Value fund seems to make more sense. I'm building up my position in Vanguard's VSIAX.

Goldman Sachs: 50% of Americans will contract the virus (150m people) as it's very communicable. This is on a par with the common cold (Rhinovirus) of which there are about 200 strains and which the majority of Americans will get 2-4 per year. 70% of Germany will contract it (58M people). This is the next most relevant industrial economy to be effected. Peak-virus is expected over the next eight weeks, declining thereafter. The virus appears to be concentrated in a band between 30-50 degrees north latitude, meaning that like the common cold and flu, it prefers cold weather. The coming summer in the northern hemisphere should help. This is to say that the virus is likely seasonal. Of those impacted 80% will be early-stage, 15% mid-stage and 5% critical-stage. Early-stage symptoms are like the common cold and mid-stage symptoms are like the flu; these are stay at home for two weeks and rest. 5% will be critical and highly weighted towards the elderly. Mortality rate on average of up to 2%, heavily weight towards the elderly and immunocompromised; meaning up to 3m people (150m*.02). In the US about 3m/yr die mostly due to old age and disease, those two being highly correlated (as a percent very few from accidents). There will be significant overlap, so this does not mean 3m new deaths from the virus, it means elderly people dying sooner due to respiratory issues. This may however stress the healthcare system. There is a debate as to how to address the virus pre-vaccine. The US is tending towards quarantine. The UK is tending towards allowing it to spread so that the population can develop a natural immunity. Quarantine is likely to be ineffective and result in significant economic damage but will slow the rate of transmission giving the healthcare system more time to deal with the case load. China’s economy has been largely impacted which has affected raw materials and the global supply chain. It may take up to six months for it to recover. Global GDP growth rate will be the lowest in 30 years at around 2%. S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall. There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the 2nd half of the year. In the past week there has been a conflating of the impact of the virus with the developing oil price war between KSA and Russia. While reduced energy prices are generally good for industrial economies, the US is now a large energy exporter, so there has been a negative impact on the valuation of the domestic energy sector. This will continue for some time as the Russians are attempting to economically squeeze the American shale producers and the Saudi’s are caught in the middle and do not want to further cede market share to Russia or the US. Technically the market generally has been looking for a reason to reset after the longest bull market in history. There is NO systemic risk. No one is even talking about that. Governments are intervening in the markets to stabilize them, and the private banking sector is very well capitalized. It feels more like 9/11 than it does like 2008. https://www.zerohedge.com/markets/half-america-will-get-sick-here-what-goldman-told-1500-clients-its-sunday-conference-call Interesting.

If Hussman though the market might lose two-thirds before reaching fair valuation (without overshooting), I'll be curious what he thinks it might lose with the pandemic. After buying today, I've now burned through half my dry powder. Probably prematurely, but the popping has been a long, long time coming. I'm afraid it's frayed my discipline (I fear Trump/Fed intervention too). When you (and others willing to chime in) make comments about being premature in buying, what timeframe do you have in mind? It seems like there’s no way to know the bottom. Personally, I’m just continuing to buy most of the same stuff I had been before the virus because I think in 5 years those businesses will be doing well. Am I being naive and underestimating this virus and its impact on the economy? I think he means because he expects the markets to continue dropping. And while I have generally been optimistic about the impacts on the economy long-term, I did have a conversation today with a local banker friend of mine who thinks SBA loans are going to get soaked and he doesn't see any banks willing to lend in this environment. A credit crunch on top of the dramatic drop in economic environment on top of the dramatic drop in oil seems like a confluence of a lot of events that are very impactful in and of themselves. This may be way worse than anything I anticipated if policy makers don't prevent a total lock up of the economic gears. Yeah, I'm just guessing as we see big numbers of cases over the next couple weeks/months the market will continue to fall. But I cannot know, so I'll continue to buy as it falls. I can't time the bottom, but I'll capture what discount from the highs I can. The only thing worse than having expected a 50% crash and buying in before then would be having the market rescued by Trump/the Fed before I get a chance to buy and be forced to wait for another popping of the bubble..

If Hussman though the market might lose two-thirds before reaching fair valuation (without overshooting), I'll be curious what he thinks it might lose with the pandemic. After buying today, I've now burned through half my dry powder. Probably prematurely, but the popping has been a long, long time coming. I'm afraid it's frayed my discipline (I fear Trump/Fed intervention too).

Now 7.5% Small Value, 7.5% Emerging Markets, 9% Stable Value.

Very possibly. I'm thinking I've probably been too early nibbling.