rb

Yeah, at the end of the day it's indexes buying or selling. So days movements will be amplified. It's definitely dumb trading. But that's not their job. Their job is to minimize tracking error and that's how it's done. Profit at will.

I hope that guy paid his 20 bucks!

Isn't that called food panda? I got some tonight.

I don't know how to do the guy that rolls around, so just LOOOOL!!!

At this rate I'm wondering what's the probability the markets will be shut for a while. Politically I can see Trump wanting to limit the damage, and reopen in 6-8 week when things are on the upswing. I don't know the potential downstream impact would be though when trillions of dollars are tied up and can't be used. I thought about the option and need for a market closure for a few weeks, perhaps even until the crisis is over. There are no catalysts until significant progress is made. Relief rallies on lower cases maybe. But this could go on for months. What happens to people drawing on their 401k? Or just in general, how do you deprive people of their money? Just trying to think of what that would actually look like. It won't happen. Markets were open throughout the GFC. It would be the dumbest move ever. For weeks? It's insanity. The result of that would be a de-rating of EVERY single public company. Public markets exist to provide liquidity. That's all. You can't decide to allow liquidity only when the markets are going up and cut it off when the markets are going down. Moreover it's not even gonna matter. Derivative markets are gonna stay open and they're gonna trade. They're gonna create derivatives as markers for stocks and they're gonna fiddle with the settlement to make the whole thing work. You'll be surprised how quickly it'll happen. Of course the spreads are gonna blow up. To castanza's point, "regular" people with 401Ks and such will not be able to take part in the party because they will either not know what to do or won't be allowed to do it due to the nature of the instruments. They'll only have access to their money when the "regular" markets open and they're portfolio is worth significantly less. Nice work Sherlock!

Inflation is not a concern. In fact some inflation would be good. The general worry is the fed firing its bullets too quickly. Basically cutting when it would do no good. If you're not shopping cause you're scared for your life, you're not gonna go shopping cause of a 100 bps rate cut. Then the Fed has nothing to cut when it actually needs to. The specific worry here I think is that they've basically fired everything they have. Which would be interpreted as things are much worse than we think they are. Of particular worry are the swap lines which say that there's liquidity problems in a world awash with liquidity. I see what just happened akin to the Fed heading to Costco to load up on toilet paper.

too late

Well we can start taking bets on how quickly the futures hit limit down. But you better hurry or you don't get to play.

So we get 100 bp cut to zero. $700 billion QE to be executed in weeks. And USD swap lines. On a SUNDAY night, 2 days before an FMOC meeting. Either Donald Trump had the Secret Service kidnap Jay Powell and put his pecker in a meat grinder New York style or they're scared shitless and have no idea what to do. I'm leaning towards the latter because Trump wouldn't know what a swap line was if it took a dump on the front lawn at Mar-a-Lago.

I wouldn't worry too much. I'm sure that this will be a bad loss year for the insurance industry - all that business interruption insurance out there. Berkshire surely has its fair share of exposure to that. But it is a very smart underwriter and risk manager. They'll probably fare better than others. It'll benefit in some ways as well - GEICO will probably have a banner year as losses will decline. The bottom line is this though. If an event comes to pass that even remotely threatens Berkshire, the streets are lined with the corpses of insurance companies. At that point Berkshire will rip the eyes out of the insurance market on the other side. At the very least you'll see a very hard market in insurance. Guess who's gonna have an appetite for underwriting? In a worst case scenario exposure to corona risk may be toxic to keep on the books and you could see a Lloyds type deal. This is unlikely though because it's not long period risk. Epidemics tend to end. But who really knows how this thing shakes out? There were losses from 9/11 for years and years after the actual event transpired.

This is very interesting. When looking at this I would suggest also considering the work that our friend Dynamic has been doing on the real time portfolio. Based on that we see that real time P/BV just breached the 1.2 threshold. It's probably around 1.15-1.17 right now. Of course that also scales with what wabuffo has posted. During those maximum low periods P/BV in real time was higher than what the last Q would indicate. The other bit is that BRK is a much more different company today than it was in the past. Even in 2008, it didn't have BNSF, and Geico and Mid-American were much smaller so valuation should be less sensitive than BV. I fully believe that another 10% down from here, you can just buy BRK, pour yourself a glass, and enjoy life. You don't have to worry about this stuff anymore. But then of course we won't do that.

Why? Anyone who has been indexing and continues to DCA and index will do quite well. Possibly better than high percentage of people from CoBF (as we have seen with past polls). Most of them wont.

I'm not. Not the declines and not of the virus. Regarding the virus, I'm not in the demographic. Regarding the markets, I've been ready for something like this, so just executing on strategy. There's talk here of algos and stuff. They're probably part of the vol. But I think the ones in severe need of a fresh pair of pants are the superinvestors of indexville that have advanced strategies designed by robo advisers with flashy websites. The selling today was relentless and indiscriminate. Everything goes. Altria was down 10% with a covered dividend yield of 9.5%. Seriously? Like Mike Tyson said. Everyone has a plan until they get punched in the face. Sure looks like a good punch to the face just happened.

They won't buy MSFT because of Gates. But at this point they may as well buy OXY. Chump change.

Now I am concerned. :-\ Reminds me of that Paulson press conference back in 2008 where he was reassuring people about the markets while Dow was falling off a cliff.

Well BRK is now below 1.2x book with MTM.

Risk-free + risk premium. In 2016, it was around 5% at a 2% risk-free rate. Maybe it's dropped to 4% or 3% as risk-free has gone down. Or maybe higher as risk premium goes up. You can run a sensitivity. The same way negative interest rates in Europe and Japan affect equity valuation. Zilch. If rates go negative and valuations do not move, private equity will have a bonanza in the US.

If you can find hand sanitizer.

BAC, EPD

Why is SCI going down?

Well that didn't last long.

NESN

I'm less of an alarmist that Spek here. I don't think that shale is going anywhere anytime soon. A little rationalization sure, but nowhere close to extinction. The way I see it the system is very complex and has a lot of inertia. A lot of money and time has been invested to use shale production. Think of the Houston petochemical complex. That used to be fed by shipbourne oil. Now a lot of it is fed by shale product and Canadian stuff. So they actually need the shale. I don't see that complex flipping back to shipbourne feed stock. In the case of CHK/WMB that speck was talking about. CHK may very well go bankrupt. But CHK's customers are not gonna stop needing gas. Are they gonna use Quatar LNG? No they're still gonna use gas from the same old field, coming through the existing pipe that they have. Then there's also the political aspect of all of this. There are a lot of jobs in shale. These are well paying jobs too and you don't need a university degree for it. Good high paying jobs for regular folk. The kind that politicians hate to loose. And they're in red states and blue states. This basically means that there is zero political will to let the sector die. Especially is said death comes from a dick measuring contest between Russia and Saudi Arabia. Now whether the names of the companies that own the fields will be the same or different remains to be seen. But those fields will pump. Whether the ones doing the pumping will make money, that's another matter. But think of it another way. For most of its existence air travel has been an uneconomic endeavour (I'm not sure it still isn't). Yet we still had planes, and airports, and airlines, and we didn't stop flying.

I'm not leaning towards selling it. This isn't the Spanish flu which primarily targeted people in their 20s,30s,40s and largely left the children and elderly alone. The level of panic will subside once the general public comes to understand this. I am fearful for my parents who are in their 70s and 80s (my father has had pneumonia in the past 6 months) and I have two close social contacts with stage 4 cancer undergoing chemotherapy. However, I don't fear for myself, my wife or my kids . (I remarried in January). I'm more in the selling the news camp. Metaphorically of course, cause I'm not selling anything. I don't think that this, whatever this is, is done yet. We normally don't get market activity like we've seen over the past x trading days and then all of a sudden we go back to normal and everyone forgets about it. By the way, in my opinion, this is not about the coronavirus anymore but just good old fashion market dynamics where everyone is scared. If coronavirus cases and deaths spike we get more depressed market participants. If the corona thing abates though I don't think we see a big spike up in the market.

All of the above, and not only that. JPM - over funded by 3.3 Bn BAC - over funded by 4.9 Bn WFC - under funded by 350 Mn I would say that there is a zero chance that big banks have to raise equity due to actuarial changes with the pension plans. Edit: Interesting how her tweets are supposedly about the big banks, but then she doesn't really talk about big banks.