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alwaysdrawing's Achievements


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  1. This is very important stuff, and very helpful. Another interview with Mike Green here on the same topic is helpful too: https://investresolve.com/podcasts/investing-in-the-upside-down-logicas-michael-green-describes-why-passive-flows-corrupt-market-structure-and-how-to-profit/ The potential for dislocations on the downside is a big deal, and if the Fed fails to convince investors that they can save the day we may see unprecedented market drops. The role of passive in indiscriminate buying creates higher price levels today, and is an updated view of Klarman's view of index funds 30+ years ago. In the meantime, passive has become a huge market, and the volume of indiscriminate buying is astronomical compared to anything Klarman imagined when he wrote Margin of Safety.
  2. Well, it's far from a cure, but the numbers I've been seeing say a 35% reduction in deaths in patients who require a breathing machine, and 20% in patients who require supplemental oxygen. So, if you assume that almost everyone who dies from COVID-19 is in one of these two categories, and that, say, 100K people were "slated" to die from the latest explosion in cases in the USA, that might mean 25K lives saved. I agree it's not a breakthrough. It's an incremental improvement, learning which existing drugs help. But I still think it's noteworthy as a significant improvement, even if it isn't a breakthrough. (Like, if we had 4 more incremental improvements of comparable levels--and they didn't overlap on the patients they helped--COVID-19 wouldn't be a life-threatening disease in western countries.) I'm delighted to have incremental improvements because I think it's very unrealistic to hope for a breakthrough "cure-like" treatment from a novel drug in a few months. When I was thinking about flattening the curve to give time for treatment options to improve, I wasn't thinking that based on the hope for a vaccine or a breakthrough drug, but rather for incremental improvements in treatments that lead to large increases in survival rates. That type of reduction in mortality is up there with the best things in medicine. Imagine saving tens of thousands of lives, of people who can return to a mostly normal life. That’s incredible!! The fact that it’s a $1 pill is even more amazing. Nonetheless, we could still be looking at a lot of pain ahead. Lockdowns did buy some time, and if Dex helps reduce mortality by those large numbers, then that alone is a good reason to have locked down. I wish those here would take a step back from the political discussion. I am critical of Trump especially, but plenty to criticize Cuomo and the governors for as well. I doubt we will be convincing the most partisan among us, and I suggest we try to discuss the policies more than the specific blame assignment.
  3. Many seroprevalence studies have the same faults as the Santa Clara study. I've read a number of the studies he's included, and the bottom line is, seroprevalence studies are just not a great way of estimating IFR when the false positive rate of the serology tests is so high. NY just has some of the better statistics I've seen available--I just included as a proxy for general IFR estimating. I wouldn't hang my hat on those estimates, but even the population level death statistics show that it's higher than he's estimating.
  4. Caution: Preprints are preliminary reports of work that have not been certified by peer review. They should not be relied on to guide clinical practice or health-related behavior and should not be reported in news media as established information. https://www.medrxiv.org/ John Ioannidis is the author of the discredited Santa Clara serology study. There were multiple issues with the study, including sampling bias, not adjusting for the sensitivity and specificity of the serology test, poststratification, and others. This new study aggregates his original study with a bunch of other seroprevalence studies with similar flaws, and gets the same as his original results....but with the same limitations. Perhaps the bottom line is best summed up by Nate Silver: When you look at locations with larger outbreaks, you see worse mortality rates. Why? Because if the false positive rate is 2%, then if the base rate of the population is 20% who have COVID, the error is only 10%, while if the base rate is 1%, it could be 200%. Serology surveys are used to tell us approximately what proportion of the population has had a disease, not typically to estimate the Infection Fatality Rate (IFR). There are numerous threads by good sources on Twitter from back in April on this by Trevor Bedford, Natalie Dean, PhD, and many others. One such thread here walks through a number of the limitations: A Columbia statistician named Andrew Gelman discusses the problems here: https://statmodeling.stat.columbia.edu/2020/04/19/fatal-flaws-in-stanford-study-of-coronavirus-prevalence/ Natalie Dean thread here: If you want an estimate based on less noisy data, you can look at the NYC population level deaths and you can calculate some back of the envelope estimates. Pretty clearly COVID hits older folks much harder, but I think the rates are higher than Ioannidis claims based on serology studies. https://www1.nyc.gov/site/doh/covid/covid-19-data.page Citywide, the death rate is .21% (that's of all people in NY, not just cases), with 75+ having a death rate of 1.57%, 65-74 0.63%, 45-64 0.19%, and 18-44 0.02%. That's on a population level, in a city with an estimated 25% prevalence, these numbers would have to be multiplied by 4 if you want to estimate the IFR, giving you approx 0.84% overall IFR, with subgroups 75+ 6.28%, 65-74 2.52%, 45-64 0.76%, 18-44 0.08%. Based on the data I've seen, those numbers look more realistic than Ioannidis.
  5. I agree totally. The US has done terribly, and the politicization of NPIs like masks is the height of stupidity. We are going to face the worst of it, public health wise and economically, until we start acting like a mature, responsible country. That means, continued mask wearing, increased testing, increased manufacturing capacity for PPE, and eventually, when we are able to obtain a result like Italy or other European and Asian countries with better results, to introduce contact tracing. I do not have confidence we are moving in that direction. I actually think states/American people may refuse any second shutdowns, and the situation could quickly spin out of control with (relatively) unmitigated spread.
  6. Given the lag time, we should know within a week or so if deaths inflect upwards if we expect the same lag time as in late March to hold as nationally, cases really started inflecting up about 1 week ago...Precautionary principle tells me better to worry than to blow it off, but that’s me. Anyone looking at the daily data should see an obvious 7 day periodicity to the bars—rising during weekdays and falling on weekends with lowest counts on Sundays. This probably relates to testing/labs/reporting/etc falling during weekend as the virus doesn’t take weekends off, but some staff do. I would not celebrate too soon by looking at Sunday’s numbers of mortality (which is a lagging indicator itself). Saturday/Sunday’s case number continues to rise despite the weekend effect though which suggests even further rise in cases this week... I don't generally read this thread much anymore, but I agree this looks like an inflection point in the US states that are newly spiking. Texas, Florida, Arizona, and potentially California may all be looking at another lockdown within a couple weeks. California at least has increased mandatory NPIs like mask wearing, however the others do not seem to be changing their NPI guidelines (yet). Maryland notably has been a more proactive state regarding NPIs--I wouldn't be surprised if GOP Governor Hogan becomes a new star after this, as he has drawn a clear contrast with other GOP governors. Overall, the falling death rate seems likely due to increased testing, and to some extent better treatment protocols. There is probably also a better mix of ages for lower mortality, as high risk groups have taken increasing precautions. The increase in positivity rates as well as positive tests in the recently spiking states is worrying--especially with reduced NPIs and "return to normalcy", I worry we will be looking at a second large outbreak or several clusters. The bigger these outbreaks get, the more painful reacting is, as it means either shutdowns or increased spread beyond the borders of the outbreak. Globally things do not seem to be slowing either. India, particularly New Delhi, is in a very bad and dangerous situation. I am very concerned things spiral out of control in India. Brazil is obviously another hugely problematic area. Mexico's positivity rate over 50% is incredibly worrying to me. Overall, global cases hit an all time high yesterday....a Sunday. That likely means things are even somewhat worse than reported due to weekend reporting effects. This coming week will be telling--Tuesday's statistics may be a wake up call, once the weekend effect has worn off. I have added small positions in 1 month VIX $60 calls and 2 month 30% OOTM market puts as a hedge for what I think would be the likely market reaction if events unfold how I see the statistics trending (i.e. hospitalizations/deaths increasing as a mirror on a two week lag to infections, and infections continuing to increase as the incubation period matures).
  7. I have no opinion on how demographic changes would affect bank shares, but both my anecdotal experience, and figures from the BLS seem to show that spending is pretty correlated by age. https://www.bls.gov/opub/btn/volume-4/consumer-expenditures-vary-by-age.htm
  8. You don't understand. The fact that revenues are down 20% means that the stock should be flat or up. Since the revenue growth will be 25%+ just to get back to the old revenues! Market is forward looking, duh! Not happy to admit it, but I very clearly do not understand!
  9. This is an interesting problem for clothing retailers, or anyone else that sells seasonal goods. How far in advance does the typical clothing retailer acquire inventory, e.g., by mid-march I assume most winter clothing is already gone. Is the mid-march inventory primarily spring or summer clothes? Either way, it seems like there is going to be alot of out-of-season clothing around. Would off-price discounters benefit from that? Also, someone's going to have to eat most of that. Will brands take some of it back? Maybe off-price can buy tons of stuff cheap, but who wants Easter stuff after the holiday? How many people just don't need new swimsuits at any price if they are cancelling their trip to Hawaii? Plus, we were at all time high consumer sentiment in February....how's consumer sentiment now? All of my friends are delaying or cancelling vehicle/house purchases, and sticking to the necessities, even if they have money. Who is going "shopping" even if stores re-open? And to what extent was BURL's target market (women with incomes $25k-100k) affected financially? Well, they showed a huge loss as predicted, but BURL stock is up ~20% since this post. It’s strange, the balance sheet is in much worse shape, but yet the stock and in particular the EV is higher now than pre-COVID, despite far worse fundamentals. I know they mentioned higher sales in the stores they are open, but still, that’s a lot to pay for some green shoots in a scorched yard, imo. I'm clearly missing something. Mr. Market willing to pay more for lots of companies these days. I'm honestly hard pressed to understand some of the valuations in the marketplace right now. I still have my BURL puts, and a fair few other puts, and I certainly have had my face ripped off by the recent rally. My best explanation is that this is an optimism fueled rally, bolstered by liquidity from the Fed and the CARES act. Regular people are spending substantially less than usual, and they are putting their extra funds towards financial assets, which has a significant effect on the margin. You can see definite signs of excess--HTZ stock is up a lot every day despite literally being bankrupt, with shares almost surely worth $0. AAL has even higher enterprise value than pre-COVID. ZM trades at 100x revenues. How do investors expect to have cash returned by companies like ZM? One thing I've been reading a lot of is people suggesting that revenues are down 20%, so it makes sense the stock is down that % too. It's not clear to me that as many investors understand how -20% often means earnings are -50%, -100% or worse. It's possible we are in a new era. If so, I'll likely be mostly on the sidelines until I can understand what's happening. I am mostly in cash right now, although I also have put position for Jan 2021 on what I think are bubble names (CVNA, BURL, TSLA, ETSY, GE, SHOP, ZM, SMAR, SPLK, OZK, FXI, HSBC, etc) as well as put hedges on SPY and QQQ. I have been buying some FXI puts recently, as I think US/China tensions are significantly on the rise, and the situation in Hong Kong and Taiwan could mean a rapid breakdown of relations.
  10. It makes me happy to know that my taking time away from this forum in no way diminishes the quantity or quality of shitposting.
  11. I have no idea if Uncle Warren is selling, however WFC seems likely to lose a lot of money in the short term, and the actual business seems impaired in at least the medium term. It wouldn't surprise me if WFC lost 75%+ of its value over the next 5 years. They have too many branches, cannot grow, and their business model (taking in 0 cost checking deposits and making safe loans) seems impaired by the current marketplace for loans over the short term, and the Fed crushing their profitability with 0 or negative rates. The fact is, with persistently high unemployment, the market for safe loans might be significantly smaller for years....that's not good for WFC. Note: I have no position in WFC long/short and no position via options. I have a small position in puts on other banks. I am not long any banks.
  12. Just FYI, USO filed an 8-k, changing their holdings from 80% front month, 20% next to 40% front, 55% next, 5% two from now (eg, 40% June, 55% July, 5% August) EDIT: This makes the near term default risk minimal, as the longer dated futures contracts will not lose value so fast. Short term puts will likely expire worthless, longer term will devalue as long as contango persists. Difficult to calculate NAV right now, because USO was trading outside their prospectus and it's impossible to know the prices they paid. Crazy situation all around.
  13. I'll just sign off...sorry for spamming
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