Viking

The successful counties all have a number of things in common: robust, aggressive testing process in place. Information is communicated via their cell phone (personal freedom is secondary). Their populations are also educated and supportive of containment measures. Most everyone wears masks when they are out. Until we are able to do all these things we will need to keep everyone in lock down (very blunt instrument). Much should change in the next 8 weeks. Smart people should be able to figure this out. The sooner the better. I am least optimistic on the timing front; politicians and elected officials are often not the best and the brightest (and i say that will all due respect). FDA has now approved the routine nasal swab for COVID testing. Removes another bottleneck. Expect testing to be widespread and easily available. 45-60 minutes turnaround time for inside the hospital, a day or at the most two for drive through testing. https://www.fda.gov/emergency-preparedness-and-response/mcm-issues/coronavirus-disease-2019-covid-19 CMS did a nationwide conference call with physicians today (Seema Verma and Deborah Birx were on it) - what is notable is how quickly this administration is removing roadblocks to Telehealth, and to COVID testing. FDA has also set up numerous clinical trials for treatment and prophylaxis, so that we find out what works and what doesn't. While the planning phase was an obvious botch up, it's been more than a decade since anyone in administration has been even bothered to talk with or listen to physicians in this country. On the downside, if we open too soon, while the economy may or may not improve quicker (don't know enough to comment), what is certain is COVID clusters will show up in hospitals uninvited and be a healthcare transmitted infection (plenty of precedent with MERS-CoV in Middle East). I shudder to think of the safety of our healthcare workforce in the coming months. What's not clear from the decision makers isn't "what we will do", rather "how we will decide". I'd think the data about daily cases and deaths will drive this decision, as well as lessons learned from European countries a few days ahead of the US. Doc, i do see some green shoots starting to come up. The news on the testing front is very encouraging. So much still to learn. Fortunately, lots of very smart people are highly motivated and working overtime on finding solutions. And yes, “how we will decide” will be very important in the coming weeks.

Back to 100% cash. Sold everything i bought yesterday for a 6.5% average gain in 24 hours. I am lucky as all of my investments are in accounts where gains are tax free (I pay taxes when i withdraw the funds). This greatly simplifies the investment decision (to not have to think about taxes). This volatility is crazy. Soon (next 7-14 days) we will start to see the health and economic damage in North America. Could be ugly. Happy to sit in the weeds and see what Mr Market serves up moving forward...

The successful counties all have a number of things in common: robust, aggressive testing process in place. Information is communicated via their cell phone (personal freedom is secondary). Their populations are also educated and supportive of containment measures. Most everyone wears masks when they are out. Until we are able to do all these things we will need to keep everyone in lock down (very blunt instrument). Much should change in the next 8 weeks. Smart people should be able to figure this out. The sooner the better. I am least optimistic on the timing front; politicians and elected officials are often not the best and the brightest (and i say that will all due respect).

So he's basically aiming for doing worse than Italy... https://www.cnbc.com/2020/03/23/coronavirus-trump-says-businesses-could-reopen-soon-while-fighting-covid.html Let's hope this thing just happens to be highly seasonal and his dumb luck holds one more time. Ok, as has been stated Trump is clearly wanting to get the economy moving in the next week or two. What exactly this means is up in the air. The question of the day was something like “will this message not submarine your social distancing message”. The answer was something like “no, this message will motivate people to do a good job over the next week with social distancing so they can get back to normal shortly thereafter”. I bought a bunch of stock today thinking buy and hold. If Trump ignores the advice of his medical experts and opens up the economy my guess is we may see a relief rally in stocks. And i will likely sell everything again and sit in cash. My guess is the virus will reemerge in clusters in many more parts of the country, we will then go back to lock down, and the stock market will plunge yet again. Trump really is doing the best he can. I believe that. And it scares the hell out of me.

Bought a bunch of stuff this morning. Now 35% invested and 65% cash. - 11% Berkshire (gives exposure to Apple, US financials, insurance, utilities) - 4% google, microsoft, facebook - 2% fortis gas (TSE) - 1% Bell (TSE), Verizon, at&t, nike, disney, starbucks, General dynamics, abbvie, suncor - 0.5% west fraser timber (TSE), rogers sugar (TSE) Will buy more on weakness...

Look at it with a wider perspective maybe you are right. Maybe I just listened too much doomsaying :-) I am in Spain. 13 million people working in the private sector vs 14 million people comprising retirees receiving a rent from the government + unemployed receiving some type of subsidy + public administration employees (data as of december 2018, but its been like that for a few years). For how long can that situation be sustained? https://www.libremercado.com/2018-12-19/insostenible-13-millones-de-trabajadores-del-sector-privado-mantienen-a-otros-14-que-dependen-del-publico-1276630056/ (in spanish) Elliot, what you are describing is a situation for you, not a problem. There is a big difference. You need to reframe and come at the variables you can do something about, of which there are many. Sorry to get teachy preachy. You might find the following useful (a framework to think about the future, which lots of great mental models) Designing Your Life - Bill Burnett - Ted Talk -

Agreed. If you are young you are likely going to get the buying opportunity of a lifetime to buy stocks, just like in 2008. Also, if you live in Canada and you wanted to buy real estate you will likely get your chance in the next 12-18 months, especially if the recession is severe. The key is to reframe the situation amd look at it through a new lense (not the old one).

I think indexing/eTF investing has been pretty popular the last 10 years. The big selling will hit everything. Yes, quality will sell off less but it will still go lower on weakness.

US cases have just ballooned to almost 40,000. An increase if 15,000 in less than 24 hours. Wow! Yes, we are seeing ‘pent up’ cases. This is alsp providing some clarity as to just how large and wide spread the outbreak really is. Containment is clearly no longer a viable strategy. Full lock down coming to the entire US in the next week or two. Exploding case numbers and limited medical supplies is not a good combination. Mnuchin said this morning lockdown will likely last 10-12 weeks. Family of 4 will get a one time payment of $3,000. That should cover it. In terms of how long this is going to least and the economic damage it is going to inflict all estimates so far have proven to have been wildly optimistic. Mnuchin says Trump administration, Congress nearing agreement on financial rescue package - https://www.washingtonpost.com/

Liberty, thanks very much for posting the links to many informative articles. Please keep them coming :-) How will we know when we’re through this? The world is not going to begin to look normal until three things have happened. One, we figure out whether the distribution of this virus looks like an iceberg, which is one-seventh above the water, or a pyramid, where we see everything. If we're only seeing right now one-seventh of the actual disease because we're not testing enough, and we're just blind to it, then we're in a world of hurt. Two, we have a treatment that works, a vaccine or antiviral. And three, maybe most important, we begin to see large numbers of people—in particular nurses, home health care providers, doctors, policemen, firemen, and teachers who have had the disease—are immune, and we have tested them to know that they are not infectious any longer. And we have a system that identifies them, either a concert wristband or a card with their photograph and some kind of a stamp on it. Then we can be comfortable sending our children back to school, because we know the teacher is not infectious. And instead of saying "No, you can't visit anybody in nursing home," we have a group of people who are certified that they work with elderly and vulnerable people, and nurses who can go back into the hospitals and dentists who can open your mouth and look in your mouth and not be giving you the virus. When those three things happen, that's when normalcy will return.

This is a tough call. If they agree to cuts and Russia is on board, I think oil pumps up a bit. But the demand side of the equation. It's anyone's guess at this point. I'm still thinking WTI tanks below $20, and Brent goes to about $20. At that point, I'm starting to buy the majors and some midstreams. 10% of the portfolio goes into this. Is the news article essentially saying the US is going to join OPEC? Wow. Amazing how fast the world can change.

But does anyone on this board seriously think any Western society is able to remain in lockdown for more than a month before the entire support base under such measures will quickly fall away? No sports, no entertainment, no parties, nothing to look forward to... and people growing bored and getting immune to the corona news really fast. I get how in theory it could take many months to kill the virus, and how in theory it's a good exercise to think how disastrous this would be to the economy, but this isn't a theoretical society, but a real one that consists of actual people. With mortality rates that low even before mass testing will take it down much lower, people will revolt. In a month we should have better treatment, much better testing etc, but even if we don't and the virus is even bigger than it is now, I'm 100% convinced life will resume for the young, as you won't be able to hold them down anymore. And we'll just live with the virus until a vaccine pops up. Our response is to 'flatten the curve'. The result of this blunt approach is it takes longer to get through the crisis. How much longer? No one knows :-) People will do what they have to do. People have consistently been grossly underestimating the virus for 8 weeks. My guess is this is still the case on March 20.

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?

I am still cautious. The virus has not hit the US yet. We are likely 7-10 days away from starting to understand the damage the virus will inflict (from a health perspective). What we do not know is if parts of the US experiences a humanitarian disaster like what Italy is currently going through. We also have not seen the reality of unprecedented numbers of people getting laid off and the suffering that is going to cause. We have seen some severe economic damage. But we are in the very early stage and much more carnage is coming. I think there is a good chance the virus is going to be with us longer than people think, the lockdown is going to be longer than people think, the health and economic impact is going to be more severe than people think. There is too much we still do not know. so i am happy to remain defensive until i know more :-) PS: its kind of like we are on the beach, the water went out, we know a tsunami is coming, we run in to our hut on the beach for safety and crawl under the table and wait. The problem: we have no idea how big the wave is that is coming and how far inland it will go. Sometimes the smart thing is to get to high ground and wait for the wave to come in before returning to the beach. Most investors are not running for higher ground (cash) but instead are in their hut huddled under their table hoping the coming tsunami is not ‘the big one’ (holding equities or buying the dip).

Yep. Did anyone ever expect to see FFH with a 4% dividend yield? SJ At $290 USD this is late 2007 prices! Did the last 12-13 years really happen? Honestly, some days it feels like Back to the Future. Professor, fire up the DeLoreon because some bad investments and poor liquidity are coming back to roost... SJ Great analogy.

I'm confused. I don't think risk/reward is that great right now but the market may disagree with me and vote this is the bottom. The market may fall a further 50% and I start buying after 20% of that 50%, thus still taking very large losses and being wrong. I have opinions in life but I also know that my opinions are not facts. That I can't think of a reason for stocks to rally does not mean they are incapable of rallying, it means my imagination is too limited. I agree. To much we do not know. Another factor for me is the President; based on his past actions my guess is he will continue to be toxic to a successful resolution to the situation. This just makes me more cautious.

The problem is there is still much important information we do not know. How bad will it get in the current clusters: NY City and Washington State? How will the medical situation impact investors psychology? Will new clusters form in other urban areas in the US? Will US go to full lockdown? How long will the lock down last? What will the US and global economy look like in 1 month? 3 months? Will the virus come back in the fall? Will a treatment be discovered? Will a vaccine be discovered? Investment = Safety of principal + adequate return Rule #1: don’t lose what you got The hurricane is off the coast. I am getting a better idea of its likely path. We will know much more in 14 days. My strategy right now is to buy a small amount of quality on big down days (10-20% of my portfolio) and sell them on big updays for small gains (2-5%). Rinse an repeat. In another week or two perhaps i will switch to buy and hold and build out my portfolio. It will depend on the answers to the questions above (the facts will inform my investment decisions). I am trying to tell myself to be patient as this could get much worse. Current favourite picks (to trade): GOOG, MSFT, Facebook, telcos

Orthopa, great post (long one up top); it covered the human side of the virus. When i watched the 45 minute Wuhan documentary 3 weeks ago i had my holy shit momemt. It laid out in a very graphic way the human destruction the virus causes. And then Iran and Italy gave us examples 2 and 3. The key, i believe, is leadership. Korea initially blew it (their leader was in denial); he was forced to the background and their experts took over. They recovered. The key for the US moving forward continues to be Trump; i have said this many times but Senate Republicans need to put their big boy pants on and work with the House Democrats and push Trump to the sidelines and get at this thing. Managing this crisis is beyond his skill set. It really is that simple. He needs to be pushed into the shadows and professionals need to be empowered to do what needs to be done (right now his yes people are empowered to do what Trump wants done).

US confirmed cases are exploding. Just passed both South Korea and France Total = 9,371 New cases March 16 =. 983 March 17 = 1,748 March 18 = 2,974 This rate of increase will be something to watch in the coming days...

Why, if my position is strong and I have money, and my stock is cheap why shouldn't I do a buyback? If you were a moron and were doing buybacks when your stock was at 30x earnings, sure sucks to be you. Buy guess what, the smart thing is to do buybacks when your stock is cheap, not when it's expensive. Starbucks has a very strong brand. This move hurts their brand. Look at the negative press from today; it is only the beginning - they are going to continually get skewered. Perception is very important.

Why? What exactly did they do wrong? Let’s jack up the Capex on all of these companies so the already razor thin margins in the airline industry tighten even more and increase prices putting air travel back out of reach for the average American. The issue is 2008-09 is still fresh in many people's minds. Lots of ordinary people lost everything in the housing crash. Lots of big corporations got bailed out. Same thing looks to be happening again. Warren feels the scale is tipped too much one way. Lots of voters agree with her.

I wish people were spending their scarce resources finding solutions to the current issue: the virus. Her time would be better spent understanding Taiwan, Singapore and Hong Kong responses and how to fast adapt to US. Otherwise Ackman's fear will play out. And then she won't have to worry about stock buybacks because the US will be in a depression. Companies would be idiots to do a stock buyback right now... worse than tone-deaf... hello Starbucks? (That CEO just became famous... this will likely go down as one of the great gaffe's of this whole sorry episode.)

It looks to me like airlines, hotels, restaurants, cruise industry, travel industry, Boeing are all essentially bankrupt as of today. Small 3-4% gains but i am ok with hitting singles right now. Most will not survive with no revenue if we do a soft lockdown that next 2-3 months. We know the government is going to try and bail some out. That is a tough thing for an investor to figure out (who the winners and losers are going to be). Didn’t work great for bank investors in 2008 (BAC and C). That's why you have to understand your circle of competence. People get slaughtered because they think they know more than they do. By the way, are you still like 90%+ cash, Viking? 100% cash as of right now. I buy a little on the big down days and have been selling it all the next day (when it pops). Crazy market action. I am going to be very cautious until i get better visibility of what the world looks like after peak virus. US and Canada have completely screwed up testing. What is happening with virus containment is the key to what happens in financial markets... until this is better managed and understood people are investing with uninformed opinions. If we sell off into the close i will likely buy a few things...

It looks to me like airlines, hotels, restaurants, cruise industry, travel industry, Boeing are all essentially bankrupt as of today. Most will not survive with no revenue if we do a soft lockdown that next 2-3 months. We know the government is going to try and bail some out. That is a tough thing for an investor to figure out (who the winners and losers are going to be). Didn’t work great for bank investors in 2008 (BAC and C); the companies survived but shareholders had their head handed to themselves. Shadow banking system might be the next shoe to fall... overleveraged companies. Oil and gas industry... Looks to me like their might be a real bifurcation in the market. A stock pickers market. 30% of companies weather the storm and 70% get shit kicked. Not great for ETF holders.

Youtube video: Understanding where we are today in the crisis is pretty straight forward. Where the economy is going in the next week or two is coming in to focus. What the economy looks like in 3-6 months is very unclear. Ackman sees two paths available: 1.) continue down the current road of soft lock down will put the US in a depression. The reason is pretty simple: current measures will essentially put all hospitality companies in bankruptcy (airlines, hotels, restaurants, cruise etc). As layoffs happen, the next wave will take out another band of companies. This will continue in successive waves until most companies are insolvent (Great Depression). 2.) or the US and the globe does a coordinated 30 day full lock down (Wuhan style). This will give governments time to establish a South Korea type testing system. After 30 days you slowly get back to new normal. New normal will not fully happen until a vaccine is developed in 12-18 months. He is buying stocks today because he thinks Trump will pick 2. The second part of this statement is not being communicated by news organizations who are saying ‘but he is buying stocks’. Holy shit.... PS: CNBC had Bill Miller on directly afterwards and he advised buying US banks... crazy cheap at current prices :-)