shhughes1116

This crash is certainly faster. As far as worse, I guess we will see. I think the pain is magnified by the speed. Nothing like watching 25% of your brokerage account evaporate in less than a month. Given some of my restrictions for investment (from employer), about half my brokerage account is a basket of small community banks. All with predominantly 1-4 residential exposure. Most trade a few times per day, or at least that was the case until end of January. Over the last month, it has been astonishing to watch how quickly they are shedding value. I guess there are a lot of folks who are expecting a GFC redux. Maybe the tide is going out, and it is really me without the bathing suit. In the meantime, I will help myself to some more EPD, PBA, and some more community banks.

Or the government should stop coddling everyone and let reality play out the way it should? If this was a run-of-the-mill recession, then I would agree with your mentality/statement. We should let the market wring out the excesses via bankruptcy. However, the COVID-19 pandemic layers on an added and unique issue. In the absence of some sort of paycheck (fiscal stimulus) coming from the guarantor of last resort (e.g. the Federal Gov), one of two things will happen: 1. People are not going to stay home because they need $$$ to put food on the table, and this pandemic will be far worse. And it will crush our hospital system, leading to additional mortality from other treatable illnesses that can't find space/time at the hospital. 2. People will stay home, businesses will go bankrupt in a truly large scale (taking CRE with it), and we will end up with a depression that takes decades to dig out of. The idea of fiscal stimulus, and monetary stimulus, bothers me - I don't like it for a lot of reasons. But if some fiscal stimulus is needed, I'd much rather see that go directly into the pockets of a waitress trying to make ends meet, rather than a financial institution via a bail-out. And in this crisis, it is time to "Go Big or Go Home" with the fiscal stimulus. Trump missed the boat to manage this crisis 2 months ago, and with every passing day, the cost of mitigation grows ever larger.

FISV

Bought some PBA and EPD. I've been waiting for sometime to buy PBA. And I am re-buying EPA (sold around $28 in Summer 2019). Let's see how much I regret this buying.

I work in healthcare. The only advances that we have come up with in that time that are effective against this are 1) hand washing, 2) contact isolation, 3) mechanical ventilation (but by this point it is already way too late). Also, we severely lack # of ICU beds and resources which will become apparent soon. It is already apparent we lack resources if you look at how testing for this has rolled out. Lack of testing (thus giving visibility) and means of spread prevention are two different things in my opinion. They work together on some level for sure. But for something as infectious as this, if you miss a single person who is infected anywhere it is already too late. In fact the incubation period alone (14 days) is enough to come to the conclusion that stopping spread is pretty much impossible. Even if the US and other countries started preparing for COVID-19 the minute the heard about it, the time frame for vaccine development would still likely be 1 year. If test kits were developed in masses on the first day it still would be too late because individuals are walking around for potentially 14 days with no symptoms. Eventually would most likely show "mild" symptoms that they probably wouldn't seek testing for to begin with. This is wrong though. Basic epidemiology and how R nought works. Each person you contain prevents about 2-3 other infections. You can only contain what you can see. If you're not showing symptoms, you're not getting tested. It's compounding regardless and as you said above there are no hospitals with enough beds. I guess the question is, would testing with quarantine of individuals who test positive slow the compound rate enough to reduce the impact on hospitals? Probably not. And I'm not saying they shouldn't test. I'm just saying everyone's focus on it seems bit overcooked. For example: my wife works in the most advanced level 4 NICU east of the Mississippi. They have a whopping total of 62 beds... Are you trained in epidemiology? This stuff is not rocket science and it is certainly not new. Your argument is like saying “so what if i lose 99% of my portfolio, the remaining 1% will continue to compound and I will be rich someday”. SARS R0 varied a lot during the epidemic. It ranged from 2-15 and hen fell all the way back down to 3. I think we agree more than what you think. There is no vaccine so R0 isn't all that helpful. Testing is helpful to a degree but absent a vaccine impact is minimal. Locking down high risk individuals and limiting their exposure is probably the best. So far 81% of cases have been "mild". "The model we’ve used for our R_0 estimate is phenomenological, which means that it doesn’t aim to *explain* what’s happening on the ground but rather to *describe* it. This is a good option in information-scarce situations, like at the start of a novel viral outbreak (AKA now)." — Dr. Maia Majumder (@maiamajumder) January 24, 2020 How much does R0 matter? R0 is a useful number to understand when it comes to things like determining vaccine targets (the higher the R0, the more people you have to vaccinate to stop the disease from spreading). But the work of containing an outbreak can begin even before we have R0 nailed down. The R0 depends on a few things, including how long a person is contagious, how many susceptible people they tend to interact with, and how transmissible the infectious agent is. That means we can make an epidemic less likely to spread by attacking those particular factors. We can make fewer people susceptible to the virus; that’s what a vaccine does. (There’s no vaccine for the coronavirus yet, but perhaps there will be someday.) You can reduce the amount of time you’re able to spread the virus by staying home if you’re sick. And you can reduce transmissibility through measures like hand washing. These are all good actions to take no matter what the R0 turns out to be, and they’re good advice even for ordinary colds and flu. This interaction reflects some of the challenges with the current covid-19 situation. There are a lot of people exchanging information and opinions on a topic for which most have not received training. After a while, these "opinions" and "misconceptions" start becoming portrayed as facts, which is unfortunate. I am trained/educated as an epidemiologist (and biostatistician). With this training/education/background, and work experience to support it, you start to realize how little we (as a society) actually know about this virus. Social distancing is a means to bend the curve down. It will not prevent all infections, and that is not the point. BUT, it will reduce the rate of new infections, thereby buying time to find existing infections (provided you have a robust testing scheme in place), isolate them, and then treat them. It will also help to spread out the demand for hospital beds over a longer period of time, allowing hospitals to better cope with the epidemic. South Korea is a good example of doing this well, especially with their drive-through testing clinics. We are also lucky in the sense that this is an enclosed virus - enclosed within a lipid outer layer. This makes it especially vulnerable to basic/effective handwashing with soap and water. Put on a mask to keep yourself from touching your face, wash your hands religiously throughout the day, and don't exchange bodily fluids with random people, and you will be fine.

+1 In most instances, it is impossible to prevent the spread of a pathogen like this. So, you do what you can to slow the rate of infection. (1) Implement social distancing early on; (2) Implement widespread testing to find, isolate, and treat patients; (3) begin development of a therapeutic; and (4) Begin development of a vaccine. This is basic epidemiology 101, but the people that coordinate this work for the Federal Govt are gone, moved along/out due to the current administration. In the United States, we have the ability to do #3 and #4 quickly (relatively speaking). I'll bet there is a vaccine available in early 2021. The problem, in the meantime, is what the morbidity and mortality rates will look like in the meantime, and the extent to which our hospital system is overwhelmed by people seeking treatment. If we (US society) were intelligent, we would bite the bullet now, and: 1. Close schools for 3 weeks; 2. Close daycares for 3 weeks; 3. Close gov offices for 3 weeks; 4. Direct gov employees and private sector employees to stay home and telework for the next 3 weeks. 5. Roll-out diagnostic testing to anyone who thinks they may be sick, or have been in contact with infected individuals. 6. Cover the cost of #5 so that people are not discouraged from seeking out testing. Unfortunately, we have a president that is 100% concerned about re-election. And as a result, none of this will happen until it is to late.

X2. Great Notion has some fantastic Hazy IPAs. The last few times I’ve been to Portland, I can’t hardly remember going through TSA at the airport, courtesy of great notion beer.

Viacom, Brkb (options), Assured Guaranty (options), and some additional ammo (9mm and .556) for downside protection.

Just a couple of observations, some of which you may perceive to be political: 1. The government apparatus that was stood up to deal with epidemics and pandemics was disassembled by Trump. There were a couple of groups across the government who managed this work, monitored signals, made sure the medical system was prepared with the right information and supplies, ensured state/local/territory/tribal health depts were positioned to coordinate and implement public health response during crises, and brought together the various groups across the government (e.g. CDC, FDA) to identify and speed along vaccines, diagnostic tests, etc. While the mandate remains for this work, the people and funding to make this work happen are mostly gone. 2. The case fatality rate amongst the 70+ age group is close to 15%, based on data from China. You can and should take any data from China with a grain of salt. I don't buy their overall numbers, but, I'll bet they fudge the numerator and denominator in similar proportions, and so I suspect the CFR %'s across different age groups is reasonably accurate, even though the data is incomplete at this point (i.e. cases still in the hospital that will die, or recover). This CFR isn't hugely surprising as these folks tend to be susceptible to pneumonia, and suffer from other complications that make this illness deadly. 3. Where younger folks are dying, it is either because they are immunocompromised, or because of extreme inflammation (cytokine storm). When younger people are dying from this inflammation, it (anecdotally) appears to be people that would be in prime position to be re-infected with the virus (i.e. a doctor). This reminds me a little bit of dengue fever, where the initial infection tends to be bad, and a reinfection with a different strain tends to cause a deadly hemorrhagic fever. if the two virus operate in a similar manner, then we may see a second phase of illness as folks are re-infected (with higher case fatality rates due to the high-inflammation, and a higher burden on the hospital system as more folks present with conditions that require ventilators and other less-common equipment). I think we are in the early innings of this pandemic. I suspect we are going to end up with something that is always present, like the flu, but with different mortality and morbidity rates. Right now, it seems like the sell-off in the stock market is a function of fear of the unknown, coupled with high valuations. I personally think we are going to see a second phase of the downdraft, as we start to see forward guidance change to account for the economic disruption. My *fear* is that as the economic conditions deteriorate and earnings drop, we will end up with a liquidity event that will prompt a redux 2008-2009, as over-leveraged companies can't roll over or pay debt.

Still hospitalized after 11 days, treated for pneumonia-like symptoms during his hospital stay. And this was a “mild case” presenting to the hospital because he saw the media alerts, not because he was desperate for care. Hard to draw any positive conclusions from this, aside from CDCs EOC, and state/local departments of health got some practice dealing with this while things are still quiet. The long incubation period, reports of infectivity while the carrier is asymptomatic, and the fact that re-infection seems to be possible with this virus, should be very concerning to all governments watching this unfold.

I don't think enough people are paying attention to this. You need to look at the segment info not the consolidated info. I should keep my mouth shut as I am looking to buy more if they announce sale of the Montana refinery. I spent a lot of time following this company starting back in 2008. They have a number of high margin specialty product lines, and they operate in a space where there is plenty of potential for small bolt-acquisitions. However, their challenge, and associated destruction of shareholder value, was their foray into drilling fluids right before oil tanked, and the acquisition of refining capacity beyond what they needed to produce their specialty products. The refining capacity, in particular, was a killer for them. Low-margin, capital intensive business meant that they could never really “turn the corner” and start generating significant cash flow. I like their new CEO (started back in 2016), and he seems to be taking them back to their roots - specialty lubricants.

Right now I am at 15% cash, compared to -15% cash (i.e. on margin) in early January. I find that I am pretty poor at timing the market, so I try to stay pretty close to fully-invested, while not using margin. The last 12 months have been a bit of an exception for me, in both directions.

BNP Paribas, on Oct 4.

Early this morning, I received a message from E*Trade walking back part of the "$0 Commission" move. On the 7th, all stocks moved to the $0 commission structure. Now, they are moving OTC stocks back to the previous commission structure ($5.99 per trade, or something like that.) Most of my trading involves OTC stocks. Anyone seeing this with other brokerages like Schwab, Fidelity, or TD Ameritrade?

Generally agree with this posting. A few additional anecdotes, based on where I am. I own residential property in multiple jurisdictions within Northern Virginia. [And to clarify, I mean the *real* Northern Virginia (Fairfax County, City of Fairfax Arlington County, City of Alexandria, Falls Church). Sorry if I am snooty about this, but I am hearing people way down I-95 suggest they are "part of Northern Virginia", and this proves confusing to those from other parts of the country that are looking for homes/condos to buy. - In the more urban/dense/walkable areas, rents seem to be up 10%-15% in the last 6 months, following the Amazon announcement, and the same for property prices. Rents were generally increasing before this announcement, although at a slower pace (5%-8% per year). - In the more suburban areas (single-family homes with lower density, less walkable), it seems to be hit or miss. In my area (good public schools, very low crime, good access to Beltway, I-95, and I-66), single-family home prices seem to be up about 10% over the last year. Can't speak to rental prices for this segment of the market. A couple of other anecdotes, both personal and second-hand: - All of my property has exceeded the 2006-2007 highs, based on comparable sales, by 15%-20%. And I say that as someone who pretty much top-ticked the housing market with my purchases. Literally could not have picked a worse time, re: purchase price. - In the past month, I have received multiple cold calls from people offering to buy my property. Hard to tell how real this is, but these were real people, with actual numbers. - I have a few friends who have ventured into the housing market recently (houses for them to occupy, not rent), looking for single-family homes in the $750k-$1.25 million range. Apparently the market is so competitive at that range that people are waiving all of their contingencies (i.e. home inspection). - Anecdotally, there doesn't seem to be a whole lot of multi-family construction going on. There are a few big projects I am aware of, but not as much as I would have expected for this area given the prices and interest. There is a bunch of stuff planned near/around the Amazon project, which I think will total a few 1,000 units of multi-family. But this seems like a drop in the bucket for this area. Some of this I am sure is a function of Amazon coming to town. But the general trend has been like this for quite some time, and the Amazon announcement has just accelerated this.

Can you elvatorate on why you think their bond prices would tumble after a dividend cut? In my limited experience investing in this type of debt, it seems like the uncertainty beforehand pushes the bonds down and keeps them in the toilet, but the the dividend cut usually pulls the bonds higher, because more cash flow is retained to service debt instead of supporting dividend payments to common equity holders.

I took my bath today in the Uniti common, sold for about a 25% loss on the original investment. I am surprised that the Uniti management did not throw everything in with the kitchen sink today. Given how their shares reacted today, I think they should have dramatically cut the dividend today also. Instead, by waiting and delaying what I think is inevitable, there will be a second leg down, and lower, in the future. Either this, or I am the dummy at the poker table, and they are very confident that the three remaining OpCo/PropCo deals in the pipeline will get them to a point where the dividend is more secure. Anyways, given all of this, I moved into the Uniti bonds today, also at about a 1% allocation. Bought it at about 80, which is ~14% YTM.

This is a pretty interesting situation. When Windstream did the exchange for this debt maturity, those that exchanged the debt agreed to waive the default claim. I think a majority of the bondholders did the exchange, except Aurelius of course. Will be interesting to see how this “forced default” plays out in court, not only with Aurelius but also with the other bondholders. I suspect this situation will drag out for quite some time. Not sure if anyone here has an actual stake in either Windstream or UNITI. I took a 1% position in UNITI a while back on the belief that they will continue to diversify away from Windstream, the master lease for the fiber assets is unlikely to be rejected in court (and if it is, I have trouble believing the subsequent renogiation will be crushing to Windstream), and the belief that they will slash the dividend and use the cash flow to invest in additional assets to continue diversifying away from Windstream. Given the after hours debacle with WIN and UNITI, I hope UNITI management uses the ensuing storm to slash the dividend now, and put that money to more productive use.

Any comment why you choose MAC vs TCO? Both seem to trade at similar valuations (7-7.5% cap rate) and TCO has even higher quality malls and a better balance sheet and way better long term track record. I think they are equally likely to be acquired. First, I agree with you that Taubman has some nice properties, and somewhat superior to Macerich's properties when measured by sales per square foot. However, there are two somewhat related reasons that I chose Macerich over Taubman. These reasons illustrate why I disagree with you that both of these companies are equally likely to be acquired. First, the Macerich CEO just retired. He was at the helm of the ship when Macerich declined the SPG offer and adopted a poison pill. In conjunction with his departure, the company is splitting the CEO and Chairman roles. The Chairman role will now be occupied by the Lead independent director. Generally speaking, I see both of these as positive changes for common shareholders. More specifically, this could open the door to an acquisition. Second, Taubman has a dual-class share structure that facilitates family control. I believe this enabled them to squash an SPG offer in the early 2000's (can't remember the year off the top of my head). I'm not confident they are going to make decisions that put common shareholders first.

I should clarify that I am not suggesting utilities and malls are an apples-to-apples comparison. Just happens that the sentiment seems similar with respect to how a certain innovation or shift will impact the incumbent industry.

I’ve been thinking about this topic for a few months now, trying to figure out whether any of these Class A mall REITs may warrant a place in my portfolio. Every industry is different, and the comparison is not apples-to-apples, but the situation facing Class A mall REITs reminds me a little bit of the situation facing electric utilities a few years ago. SolarCity and similar companies were installing all sorts of rooftop solar, and every expert was shouting from the roof tops that rooftop solar was going to be the death of electric utilities. Turned out that there was a place for electric utilities and solar (utility scale solar, roof top solar, peaker plants, utility scale battery storage, and so on). Utilities have since done very well and added pretty substantial portfolios of utility scale solar facilities, rooftop solar continues to be installed, although I’m not sure the companies have been stellar equity investments. Even in light of this tailwind for utility companies, utilities that have been poorly run or that have allocated capital poorly have not done well (SCANA, PG&E, AltaGas). Thinking about retail, experts have been saying that physical retailers are going to be squashed by “Amazon-ification”. And certainly companies that have weak/absent Omni-channel businesses are not doing well, companies that are poorly run (I.e Sears, ShopKo) are also not doing well, and companies that are poorly run with a weak Omni-channel presence are getting crushed. But, companies with strong omni-channel businesses and/or strong brands are doing just fine, if not well. These companies are doing lots of business online, but their customers still expect a physical presence. I see this anecdotally with spending by my wife and family. Many, but not all, purchases are online. Most purchases are directed towards companies with nearby physical locations, to facilitate quick returns, exchanges, fittings, price adjustments and so on. Additionally, malls are starting to become populated by tenants focused on “experiences” (I.e. movie theaters, dog parks, fitness centers and gyms, bars and breweries, ice rinks, outdoor movies, concerts, office space). The well-run malls in my area (Northern Virginia) made this transition a number of years ago, in my opinion. People go for dinner/movie/etc, and stay to shop. Add full-on redevelopment for the older mall properiteS, often into town centers with a mix of residential, office, and retail, and the optionality is pretty good for the well-located mall properties. For class A malls, the two points above lead me to below that they will do just fine as more retail spending shifts online. There will certainly need to be adjustments to tenant mix, but the location of many of these properties (such as those held by Macerich) are generally in urban areas serving a substantial population, with a lot of optionality. Even as physical spending decreases, there is still a large enough population to warrant having physical retail space. In other words, location-location-location. I am not as sanguine about Class C and Class B malls. There are a lot of malls out there that serve small population centers. As the amount of online retail spending increases, there is no longer a large enough population to support the amount of physical retail spending necessary to keep these malls going, and there isn’t as much optionality for their real estate. I think this is where a lot of the pain will be in mall real estate. The exception may be those companies that started early to transition to experience- focused mall properties, and started handing the keys back to lenders for malls where the prospects are bleak at best. I took a position in Macerich (Class a malls) recently, at around 2% of my portfolio. Generally high-end and well-located portfolio, and I think it will ultimately sell itself to SPG or one of the other larger international mall operators. I also took a position in WPG Preferred D (class b malls and some strip malls) at around 1.5% of my portfolio. I think their valuation borders on rediculous. Things are not great, but they certainly aren’t apocalyptic, which is what their valuation suggests. And if they cut the common shares dividend, which I hope they do, they will have plenty of money for redevelopment and to continue to pay the preferreds. Important to note that they already have the balance sheet capacity to do the redevelopment, but cutting the common shares dividend would enable a lot of this redevelopment to occur with funds from operations. Although a bit different than malls, I also took a small position in Wheeler REIT (preferred D). They are focused on grocery-anchored strip malls. They just got rid of their scummy/moronic CEO, Stilwell is involved so I think there is a reasonable chance of turning things around, and the Wheeler Preferred D issue has a few nice features, above and beyond a normal preferred, that make it worthwhile to take a flier on this. I’d say all three are a bit hairy, especially WPG and Wheeler. But I think that the impending death of physical retail is exaggerated - there will still be a piece of the retail spending pie for physical retail space. And it is the hairy investments, the ones that made me feel a bit sick to pull the trigger and buy, that have worked out best for me in the past.

I've used E*Trade for quite some time to buy OTC stocks. In general, I haven't had any problems. Every now and again, when I place an online order for a thinly traded stock or a penny stock, the online ordering platform will prompt me to call E*Trade to speak with a broker in order to complete the order. The broker can see the order you tried to place and will complete the order for you. In these cases, the higher fee for broker-assisted orders are waived and you pay the online fee. Early on, they would ask a few questions - I think to make sure I wasn't crazy or an idiot. Now, they don't ask any questions, they just confirm what I wanted to order, and then place the order for me, which I assume is the result of seeing that I have done this in the past without losing my shirt.

Although not a veteran, I grew up around folks who had served directly in a variety of armed conflicts (i.e. a LRRP in Vietnam, a Huey MedEvac pilot from Vietnam, a Seal XO, a captain in the South Vietnamese Navy, and family members who have served in more recent conflicts such as the ongoing conflict in Afghanistan). These guys would routinely share stores from their wartime experience, but would never talk about the people they killed, their friends who died, or the people they saw die. This was consistent across all generations of veterans that I knew. For lack of a better way to put this, these stories are only shared with those in the "combat veteran club", if at all, since many of these stories are so painful. Would you retell a story that you have spent a lifetime trying to forget? Or retell a story that might lead others to think differently of you? Vietnam was brutal - your father may not want to talk about some of these things, and may have spent the last 40 years trying to forget. I wouldn't ask the question again. If/when he is ready to talk about it, he will.

Yes, things have changed that much, for a few pipelines. ADIT is essentially the difference between income taxes paid, and income tax allowance included in ratemaking (even in the absence of paying income tax, as may be the case for an MLP.) Under the proposed rule, when ADIT is a liability - in other words when the cost-of-service ratemaking includes an income tax allowance but the entity doesn't pay that income tax, the amount of that liability would be removed from the rate base, thereby reducing customer rates and therefore reducing revenue/earnings on the asset (smaller rate base with same allowed ROE). By zeroing out ADIT on the form, when the federal and/or state income tax is zero (i.e. when the entity is an MLP), the rate base remains the same, so the anticipated reduction revenue/earnings for these pipelines is averted, hence the bounce today. This is pretty significant if a pipeline included a 30% income tax allowance in their cost-of-service ratemaking, but doesn't actually pay income tax.

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