Cigarbutt

Yes, there's the financial repression risk linked to YCC, especially given the USD exposure for a stranger, so gold may make sense in that scenario. After WW2, when there was yield curve control, financial repression and when Treasury/Fed was one, real rates were negative. However real rates were falsely negative then as the seeds of real progress on productivity, real growth and fiscal discipline had been planted. Now negative real rates are for real. There was confusion above about the goal of a long position in long term US risk-free bonds (TLT). Duration exposure is not the whole story. In summary, gold looks great if the Hulk Hogan picture applies (photo taken after a period of quarantine). Long exposure to TLT may end up a better option if the recovery takes longer. (disclosure: i think the second picture will revert back to the first one, eventually) Pictures taken from a dated academic macroeconomics textbook. Of course, i may be wrong and we may just muddle through, somehow.

Recent preliminary but significant developments about vaccines. -Astra Zeneca releases data that supports the hypothesis for significant reduction in transmission and indicates that a delay between the two doses may be beneficial, on a net basis (stronger immune response with second dose). https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3777268 -More data from Israel supporting the notion that the vaccine is having a significant and independent effect on the disease (and its complications) trajectory. https://github.com/hrossman/Patterns-of-covid-19-pandemic-dynamics-following-deployment-of-a-broad-national-immunization-program/blob/main/2021-02-03%20%20-%20Patterns%20of%20covid-19%20pandemic%20dynamics%20following%20deployment%20of%20a%20broad%20national%20immunization%20program.pdf Do your own diligence but this looks like a favorable asymmetric bet. If you're rational, do it; if not, Just Do It.

Do you mind explaining... I'm more of a macrotourist than anything else. I’m curious as well. I took the other side of this and bought very far out of the money puts. When starting to internally manage excess savings 20 years ago, in order to assess publicly traded options, the goal was to assemble a portfolio of about 10 holdings (with most funds in the top three). That’s still the ultimate goal. Apologies for this macro part that contaminates and perhaps corrupts this board but will try to answer the question. 20 years ago, if somebody would have mentioned the possibility to go long on the 30-yr Treasuries with yields at 1.90-1.95%, i would have ignored immediately, something that the reader may do as well now, as the long term fundamental reasoning is irrational and the position is based on how surreal the situation can go. Since the GFC, this has been a recurrent and profitable opportunistic venture (on margin for the first few years) and, during the last phase (2019 to end of February 2020) which i thought was the last puff, i mentioned here: “i hope to never meet again circumstances indicating that investing in long term risk-free bonds would make sense.” There you go. The consensus view now is that the economic recovery is underway with 'reflation' helping. It seems though that there is wide underappreciation (opinion) about how VERY unusual the present monetary and fiscal pictures are (example: the deficit THIS year in the US will be (what is expected now) at least 20 to 25% of GDP). We are going through (at least from a certain perspective) one of the greatest centrally-planned experiments. To make a long story short, think of MV=PY. It appears that the massive debt overhang (absent MMT) will cause interest rates to fall (contrary to popular wisdom), no matter how high M is propped up. During the last profit puff, muscleman asked a similar question and i used a rocket science analogy and he likely thought i was stupid and irrelevant (he was probably right) but now the rocket trademark belongs to a different crowd (see above) who are the embodiment of primitive animal spirits and who have figured out what really counts. So now, I need to use something else. What comes to mind is the Frank-Starling law. It’s well explained by Wikipedia but don’t waste time on this. It’s a theoretical concept that, somehow, can be useful when split-second decisions are necessary to keep someone alive. The idea is that, to increase cardiac (economic) output, one can increase the amount of fluid (money) in the circulation and/or can increase the amount of fluid pumped by the heart per beat (it’s called inotropy and is equivalent to lower interest rates for the economy). However, the law implicitly implies that the longer-term underlying outcome is strongly correlated to the fundamentals. Increasing liquidity and contractions, at some point and non-linearly, results in acute failure. Flat lines don’t point to inflation. The basic question: Is the greatest bull market in ‘risk-free’ bonds over? i bet not quite, especially in this non-linear territory. Today, I’m spending some time, for fun, on an idea recently mentioned on this board; it’s basically a company involved in shredding documents and it’s so much more interesting than the macro stuff.. https://www.macrotrends.net/2521/30-year-treasury-bond-rate-yield-chart i became aware of the potential opportunity in long term US government bonds when i indirectly benefited with Fairfax who, during the GFC, sold their long term Treasury bonds at a time when credit spreads exploded in other fixed income areas and the evolution of long term risk-free yields has been fascinating since then. BTW spartansaver (in the unlikely event that you made it this far in this post), i strongly disagree that we’re on the opposite side of the ‘trade’. So, we’ll have to disagree to agree and all roads (may) lead to Rome. Warning: this thesis is extremely contrarian. Moody’s released yesterday: “Prices Rise Here, There and Everywhere”. These guys are extremely bright although they were somewhat behind the ball before the housing b****e.

TLT, ETF long term Treasury Bond Seems like an asymmetric situation at this point; with a mental stop-loss if..

@Investor20 A ‘short’ report could be well done (peer reviewed by team producing report) and could be ‘worth’ disseminating to the investment ‘community’. Still, that report is only one input and even if it may contain determinant content, it is still one input. The years of life lost study you refer to was IMO worth publication. Now, how will it survive ‘community’ review? There are clear limitations (which are described in the report and others) and an easy argument could be built that the confidence interval for the reported result could be as large as the number itself. Please note that i agree with the direction of the submitted conclusion. FWIW, i’m familiar with the main author and have benefitted from some of his previous publications. One of his fundamental interests is the importance of community bonding.. (as well as end-of-life care and free speech). There may be a difference between ideal and reasonable. For the ivermectin part, this is still work in progress. This specific process, unfortunately, is tainted by the same potential deep flaws that affect the Covid-and-various-supplements narratives, with ideas starting from hunches and jumping to conclusions, with the potential for huge (and costly) mistakes. If (fundamentally) interested: The evidence is indeed low grade and the strategy deployed by proponents is deeply questionable. Recently, reference was made to a potentially useful drug: colchicine. Without going into data that is still not widely available, the ‘headline’ numbers reported are not surviving too well deeper analysis and peer review. The path between an idea and its application is often a very long and difficult one. When one feels like losing a game, a potential outcome is to complain about (or question) the rules of the game. That’s fine. You can also try to up your game. Good luck. Spartansaver is right though. There must be something better to do.

Hi Investor20, Here's finally a topic we may agree on (partially at least). :) Opinion: the price of 'closing' schools is high and has been likely underappreciated, especially for the younger cohorts. Over time, this conclusion has grown stronger (with more evidence). Having said that, the study you mention has VERY serious methodological limitations. ----- When you spot a serious investment opportunity (i've almost forgotten how this feels like), isn't it useful (and fundamental) to viciously try to kill the thesis from all angles before embracing the occasion with a significant commitment (mental and financial)? i'm asking because, for the main author of the study, it must have been very difficult to adopt this disconfirming attitude when he initiated and performed the study.. There's hope however. On his Twitter thread, one of the authors of the study had this video: ----- It feels like i've done my share of tilting at windmills lately and i wonder if the overall investment climate has anything to do with it?

To be clear: as individuals, we have to each come up with some kind of odds (based on incomplete info and uncertainty, for various life decisions) and bet on those odds and i totally respect that others reach different conclusions, for themselves. i assume personal disclosure of age, health etc is not necessary or relevant here but i did not take supplementary vitamin D before Covid and have not, so far, changed this conclusion with Covid but remain open to be convinced (change my assessment of odds), seasonally or otherwise. You may think that this posture is a result of unnecessary obstinacy and you may be right but there's this (likely true) anecdote about Mr. Buffett who was offered to make an asymmetric bet for a specific shot while golfing. https://www.investment-in-stocks.com/stupid-in-small/ Please don't take the 'stupid' qualifier personally or in direct relation to this question. :) BTW, when one of my daughters reached 18, she asked the following question: when you vote (oups forbidden word now), do you vote for yourself or for the greater good? and i was not able to give her a satisfactory answer (although i tried to give her tools to reach her own answer). What i mean by that is that the answer given to such a question (vitamin D supplementation) may require a different threshold if you decide as an individual (should i take it myself?) versus if (let's say) you've been given responsibility to (let's say) allocate scarce funds for studies or distribution at the population level (we have delegated many collective decisions to others in democracies). i've always tried to align these non-binary questions. It's not always easy. CF

This was interesting and IMO fairly balanced. Respectfully submitted (i get it that it’s a sensitive issue for some). Disclosure: This is an interesting (and potentially promising) area which i’ve actively followed for a long time. Also, i sometimes recommend (and prescribe) vitamin D (and related). The underlying goal of this post is to underline the (very obvious) potential flaws in the process. Personal decisions are left to individual’s discretion. And, given the article below discussing the difficulty in allocating insufficient resources to outsized needs and because of aspects of the process that played out during Covid where the allocation process proved to be flawed, how can the process be improved and what’s the best way to attract human and physical scarce capital to promising but uncertain ideas? https://www.msn.com/en-ca/health/medical/how-the-search-for-covid-19-treatments-faltered-while-vaccines-sped-ahead/ar-BB1denyb?ocid=msedgntp In the last year, I’ve had many interactions with various people in the medical (and alternative) field and, strangely, whenever I spoke to people who had some kind of intimate interest in a specific area (both practical care and research), they typically spontaneously believed that their respective areas of interest had some kind of importance for Covid (belief unrelated to the scientific plausibility). Kind of strange. Still, an open mind is necessary. There’s this guy who (contrary to consensus expectations) ‘believed’ in colchicine and 14M and a few months of hard work later, he may be on his way to something material. When looking at almost the entire spectrum of vitamins, nutrients and various other compounds, there are various levels of individual schools of thought with basic science explanations, scores of correlation studies and associated recommendation intent to correct specific ‘deficiencies’ Doesn’t that point to the real possibility that these deficiencies are simply markers of something else? Sir William Osler’s legacy had a huge impact on my learning and he described this ‘rule’, the Osler’s rule (not only for neurology) that, in the large majority of cases, it’s better to have one explanation for a phenomenon (clinical manifestation etc) than to have a multitude of explanations for multiple sub-segments of that phenomenon. https://en.wikipedia.org/wiki/William_Osler In the last few years, there has been literally an explosion (not helped by the Covid episode) of studies improperly using statistical techniques and underestimating the huge difficulty in bridging the statistical to clinical significance. Going from correlation to causation is a very painful (and lengthy) exercise. Another area that is being stretched is the issue of cross-overs. Very rarely, a pill or a product found to be helpful for a specific problem is found to be useful for another problem but that’s quite rare, especially if the problems have no coherent or rational link. It is strange that adherents to a specific pill or product will tend to come to a similar conclusion whatever the underlying problem including life extension. The latest thing i’ve come across is the significance of the gut microbial flora on Covid. Again, there are various scientific reports about how the gut flora can be linked to ‘immunity’ and various studies showing correlations between specific types of gut flora and Covid risk (including severity) and the recommendation automatically becomes to ‘treat’ the ‘deficiency’ by altering the gut flora, without underlining the real conceptual challenge with Covid, a virus gaining access to the body through the respiratory tracts and without taking into account that the gut flora may simply be a marker of something else. You are what you eat and i would say that the strength of conclusions should be based on the quality of the inputs and analysis. I get the relative attractiveness of relatively ‘cheap’ and ‘safe’ options but a remarkable aspect related to decreasing hospital mortality early on during the Covid episode was not mainly in relation to the introduction of helpful remedies (although there was some of that) but more in relation to the abandonment of safe and cheap options that did not work and that took precious resources away from what did, once controlling for another major factor, the level of community spread around hospitals, with higher levels of spread inversely correlated to Covid inpatient outcomes. Yes, just correlation with a range of potential explanations, most of them disappointing. https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2774572 Resource (capital) allocation can be a pain to discuss but it’s such a fundamental issue.

It seems this topic interests practically nobody which means the topic is either irrelevant or supremely interesting. The point of this post is that you can make ANYTHING rational. In a way, that’s what Mr. Shiller is suggesting. It all depends on the underlying assumptions. The extent to which ultra-low interest rates have become justification for higher asset prices is puzzling, to say the least. Of course, interest rates act like gravity but this needs to be questioned IMHO, both for specific investment targets and for many markets indices. In the last year, I’ve been involved in two private joint-venture transactions; asset-light and value based on return on capital, where the level of interest rates essentially played no role. Investment is kind of cool when it is most business-like. There is also one private investment i’ve been contemplating (commercial real estate) and i thought there was an opportunity recently (operational) but the price asked remains way too high because of the ultra-low interest rate environment. For the investment to be RATIONAL, the required assumptions include to have interest rates to stay very low for many reasons: to keep the interest burden on the leveraged transaction low, to have an unusually high amount of funding based on debt, to help justify a lower expected return on the total investment and to maintain a low cap-rate for the terminal value. And no consideration for the potential negative impact that ultra-low interest rates may have on the operational foundations (lease revenue) of the business. In the last few years, Mr. Buffett has expressed that he has had unusual competition for acquisitions in relation to this low-rate phenomenon even if “stocks are cheap because interest rates are low”. Unlike other acquirers who base their cost of capital on a high relative level of cheap debt, Mr. Buffett has mentioned that he always values deals as if funded entirely with equity. He has also said that, to discount future cash flows somehow, one has to use the prevailing long rates as a general guide but it seems he has always used a risk-adjusted margin depending on the transaction (this was discussed on the Altius thread at some point). Even if the return on equity required may have gone down because of the enduring low rate environment (this has been recently described by petec in the MKL thread), i would bet the relation between ROE decline and rates to be non-linear and perhaps detrimental, once certain levels are breached. Anyways, this new-era-of-low-rates-justify-high-valuations for individual transactions often remains a puzzle and when used as a justification for high valuations for entire indices, then very unusual assumptions need to accompany the reasoning process in order to meet the ‘rational’ qualifier. Disclosure: I’ve been morbidly fascinated by the Japan bubble, its outcome and the way a new-normal-era has been defined. In relation to this thread, the following is a piece of work ironically released at the height of the Japan bubble (Feb 1990). https://dspace.mit.edu/bitstream/handle/1721.1/63287/arejapanesestock00fren.pdf%3Bjsessionid%3DF033E76A57BECD8D0068600D18A21E3A?sequence%3D1 TL;DR version. The authors sort of say that the rise in the Nikkei index in the late 80s (valuation wise, with reported PEs in the 50-60 area) was an unsolved puzzle to some degree but that it may have been entirely ‘rational’ with the following assumptions. Mr. Buffett wrote something similar in 1999 (market return expectations vs necessary assumptions). 1-Need to adjust down reported Nikkei PE ratios (by about 40%) because of accounting and tax rules differences 2-Need to integrate higher (and more optimistic) growth expectations (despite not being apparent or justified at the time), especially longer term 3-Need to integrate lower expected returns Of course (we later realized), Japan markets in the late 80s were not rational and, perhaps, return to the mean overshot to some degree, but the reason markets went so high was because a material amount of investors, during the period, considered levels rational, given very specific and unusual assumptions. And the Cassandras of the time looked very stupid for a while as the levels of assumptions required grew substantially more extreme with market levels. Looking at the math behind PEs, the authors did a good job at showing that simply making very small changes in long term assumptions for r and g, one could get into non-linear assumptions. Of course, non-linear assumptions are also potentially subject to return to the mean, and more. They also showed that assumptions 2 and 3 are not directly observable and cannot be really determined ex ante. I think that’s what Mr. Buffett means when he uses the rear-view mirror analogy. So, what’s in store for Japan? I have no clue and specific investments may work out although unhedged transactions IMO remain potentially problematic over a reasonable investment horizon. The Nikkei index has been trading at PEs of 20 to 30 (unadjusted) for the last few years. The assumptions for the market as a whole now need to take into consideration the following: the economy at large is facing unprecedented headwinds (getting older demography, gradually less productive, about to enter a dissaving phase, a growing gross net debt to GDP at about 270%, a growing net debt to GDP at about 180% (this was at 19% in 1990) and a progressively more hyperactive central bank (who holds about 45 to 50% of all JGBs, and about 6 to 8% of their entire stock market)). However, the required central underlying assumption is that ultra-low interest rates will continue forever and more. In fact, if one believes in the Nikkei and one is unfazed by the headwinds, it’s interesting to note that the 10-yr rate is now at 0.04% (versus 5% in 1989) so that if the gravity linear rule applies to interest rate to valuation (the reasoning room that Mr. Shiller opens), one could expect PEs to ‘rationally’ and potentially rise to 2500-3750. In the 1990 annual report, Mr. Watsa, when referring to the Japanese market, wrote: “No trees grow to the sky”. All that is required now is for the animal spirits to be released (at least that’s the message that been relayed for the last 30 years in Japan). Opinion: PEs of 20 to 30 in Japan now for the Nikkei may represent very significant overvaluation if one uses very reasonable assumptions. Of course, we will find out over time and this may help to clarify the ultra-low rate conundrum that has been in existence for some time now in various places. i politely submit that we (in the global sense of the term) have become prisoners of our own design but this posture has recently looked progressively more stupid so who i am to say?

Ha Ha! Your idea is a good one and you are commended to have posted the idea when you did. i've been doing this for 20 years now and i'm still trying (for sub-indices and specific targets) to define what a 'bottom' is and the ideal timing indicator for a change of fate has remained elusive. A nice thing about this thread is that it can be re-visited in the future. :)

i agree with the concept of investing at the bottom (and, at some point then, the worst and mostly injured as a basket, the better) but i wonder if a solid framework has been provided to define what is a bottom and not much has been said about the very strong and adverse correlation to smaller and trashier stocks when general market directions are down (falling knife type of thing). The significant differential performance has occurred since around October and i'm not sure there are fundamental reasons to explain that (although there are plenty of 'technical' possibilities..) Also, if market timing is the thing, it seems like waiting for an average human gestation period and then to plow back everything in the most shorted stocks seems to do the trick. On a more fundamental level, i wonder if future investors looking back to 2020 may not remember this episode like 1987: a truly memorable period but one which, with perspective, looked more and more like a blip in the chart and which did not really influence where things were heading, eventually.

Vaccines are not perfect and it can argued that deployment could have been faster. The following is helpful food for thought if interested in retrospective analysis, although the tone is self-congratulatory, to some extent. Looking back, one has to consider also how survivorship bias can cloud the analysis. What's shaping up to be very powerful tools was not that clear, earlier on. Also, it's interesting to note that the first human participants were paid 1100 USD on the way to the promised land. When in skool, there were a few acquaintances who made a surprisingly fair amount of money for participation in trials but i never came close to consider the adventure worthwhile, given the potential downside risks (maybe related to excessive risk aversion or lack of courage?). https://www.usatoday.com/in-depth/news/investigations/2021/01/26/moderna-covid-vaccine-science-fast/6555783002/ As username mentions at the bottom of his window: There's no limit to what a man can do or where he can go if he doesn't mind who gets the credit (or as long as somebody else does it). Comparing my area to California, i would say this is a relatively good problem (how to distribute 'excess' vaccines) to have, if you can manage it. In California (% of population): -number of doses per population: 7.8% -'direct' contact healthcare workers and nursing facility residents: 5.5% -aged 65+ (expected to be covered around June according to priority rules at this point): 14.9% At this point, the demand will work around the definitions of 'direct', indirect and 'essential' and will have to navigate between rules and practicality. How does one self-assess one's essentialness?

Irrelevant, since fareastwarriors Mom doesn’t have a penis. You’re definitely on track to fulfill my prediction. i really hesitated before commenting here (questionable relevance etc) but you just initiated a book thread about extraordinary popular delusions and there is an intersection between the mass movements in stocks that we experience now and the vaccine rollout. Periodically and in different areas of the world, there are serious reports related to disappearing penis collective panics (i promise it's for real {the panic episodes i mean}; just look google it). The explanation(s) behind the crowd momentum is (are) somewhat controversial. Just like a virus spread, there is a beginning, a peak and an end, more or less. There are many variants of this phenomenon which are often grouped under the label of mass psychogenic illness. In Australia, there was (likely) such a related (and fascinating) phenomenon which manifested in an airport: https://www.mja.com.au/journal/2005/183/11/mystery-illness-melbourne-airport-toxic-poisoning-or-mass-hysteria More recently, there has been (possibly) a similar scenario in the Canadian Embassy in Cuba (still way too early to tell however and still a very touchy subject). Anyways, speaking of Australia, this very issue is being addressed: https://www.auckland.ac.nz/en/news/2020/12/10/dont-let-psychogenic-illness-undermine-the-covid-vaccine.html "If men define situations as real, they are real in their consequences." William I. Thomas So, how to deal with this? To confront? To ignore? Fortunately, like all mass movements, it eventually comes to pass. God Bless Phallic Preservation. ----- Going back to fundamentals, Israel is showing that if there is something that is shrinking with the vaccines, it's likely the poor outcomes.

This post takes the perspective to answer the following question: Is some kind of portfolio insurance required here? My humble answer is no or only some kind of cheap insurance, if you can find it. Destroy the following at your convenience. Virus mutations happen and 'we' still don't get the significance (in terms of models etc). You can start with a simple Galton-type model which would give some kind of normal distribution and then the odds would be relatively easy to figure out but 'life' is not so simple. For viral mutations, you need some kind of adapted model that looks like this (simplified): So, if you're into how insurance reserves are estimated, you need some kind of standard model with stochastic adjustments. In short, to deal with this, maybe an excess of loss coverage could be considered. Because of what i include below (the situation is dynamic and needs to be followed), at this point, based in part of what follows, i would say portfolio insurance is not necessary (for this specific aspect) or one could look for cheap excess of loss possibilities with high attachment points. There are many 'studies' out there and they are not all saying the same thing. The mutations on the surface spike proteins are key. Opinion: this virus (genetics aspect and mutation potential) is likely running behind compared to the invested human capital to fight it (and its evolving variants). Also, if ever the virus tries to reach escape immunity, there is a large herd of nerds looking for a fight. The following is one of the best (and recent) outputs on the topic. It's small and early but it basically shows that the variants have the potential to make present vaccines less effective but, for two of the three variants, the antibody levels were reduced by a factor of 1.42 to 1.46 (simplified). Look at page 13, suppl. figure 4 if interested. https://www.biorxiv.org/content/10.1101/2021.01.27.427998v1.full.pdf There appears to remain some margin of safety. This is a fascinating topic which is quite unrelated to investments but has relevance for the functioning of a discussion board. My hunch (supported by work done by others) is that: -online discussion boards tend to attract people with high degrees of self-esteem (that could be warranted (or not)), even bordering of the Narcissistic side... -anonymity provided by the platforms favors a drift in the level of agreeableness... -this board likely attracts people with an unusual level of attachment to money, with the potential to leave less space for other good things in life... i have to go; my wife tells me to detach from the screen and invites me for a cross-country ski ride.

There is a lot to learn from WRB. https://s22.q4cdn.com/912518152/files/doc_presentations/2020/Investor-primer1-YE2019.pdf Page 18 is an interesting look at the longer cycle (reserves) up to 2019. i'll wait for the 10-Q but it looks like 2020 will have an about 0.2% positive redundancy (for the year). Page 11 helps to see the underwriting price cycle with the lag that you mention sometimes alluding to the lag between price increases and actual earned premiums reaching the bottom line. WRBerkley is almost predictable in a way (as much as insurance can be..). And MKL does have a significantly higher equity exposure in its investment portfolio (vs the typical (re)insurer out there). ---) Back to FFH 2021

Unfortunately the transmission hypothesis can only be clarified after the fact. i'm looking for data now about how vaccines are working (will work) in the real world compared to reported results from before and to confirm (or infirm) what i anecdotally see around me. Israel is at the leading edge of this specific natural experiment. Numbers are relatively small and trends are only forming (also there are many factors including a recent 'lockdown 3.0' (if you believe in those)) but the trend in severe cases vs new cases at large seems to agree with logical conclusions that could be inferred from accumulated knowledge. The trend down in severe cases appears significant and seems to be happening before the trend down in new cases which would also go along the age distribution of the vaccines and the greater effectiveness of vaccines for host disease suppression vs transmission. If interested, see the following, especially figure 4 with associated text: https://resources.oxfordeconomics.com/hubfs/OE-Downloads/00000105.pdf If the above suspicion is correct, Israel (and the lagging countries in vaccine rollouts) will report results falling off a cliff, variants notwithstanding.

^My opinion has little or no value and can be safely ignored. ----- Here's an interesting and reasonably critical piece on Dr. Fauci: https://www.thedriftmag.com/the-case-against-fauci/ Some of the points are valid but benefit from hindsight. The public health medical leader in my province has also made mistakes and has appeared intermittently inconsistent. He also has been heavily criticized. What i understand is that he would often get up at night (insomnia) and looked awfully tired at times. The weight of the mission has been heavy and it gets lonely at the top. How do you account for the fact also that some important players have inconsistent strengths (and weaknesses). Dr. Scott Atlas became a leading adviser, for a time, during this crisis. The MD has produced several editions of very helpful spine imaging books (very good quality on many levels). Still, when leading the public health question, he did not really rely on science and used mostly emotions and contaminated thinking to bring out worst among many. ----- FWIW, i think consideration should be given to reinstate Gregmal as a contributor.

i assume this is about Mr. Buffett's comments related to the typical reverse contrarian position of pension funds. i'm not sure this means that pension funds are wrong, it may just mean that they may be (depending on your independent thought process). BTW, if i were managing a typical pension portfolio now, i'd probably quit and go to med school or something. Why? -Expected returns may not have adjusted to to-be-realized returns (asset side) -Discount rates may not have adjusted to the massive disinflationary secular decline of the 10-yr yield (liability side) -Despite very favorable returns along most or all asset classes in the last 10 years, funding ratios remain well below 100% i guess it's OK if one is OK to depend on the kindness of strangers, federal or not. There are many ways to look at this data. One is to use the Fed Financial Accounts Z.1 (this is almost as captivating as reading CBO documents). Private and public pensions have shown similar patterns over the last decades. Here's a short review (1952-2012), see page 2, figure 1. The figure shows the incremental dollar pattern that Mr. Buffett describes in the 1970s and early 80s. https://www.pewtrusts.org/~/media/assets/2014/06/state_public_pension_investments_shift_over_past_30_years.pdf Since 2012, both private and public pensions have shown similar trends with risk assets (public equity, private equity and other alternative investments) going to about 80%. Within alternative investments, there is a rising share for real estate and infrastructure, as typically shown by Calpers: https://www.preqin.com/insights/research/blogs/calpers-alternatives-portfolio-shows-growing-real-estate-and-infrastructure-investments

i think it's not the 'political' part which is the problem per se, it's the correlated tribal thinking which may contaminate underlying thought processes and ruin the quality of exchanges. Will you take the vaccine? Based on data and logical conclusions from data, vaccines have been, overall, a significant benefit. i think it's quite sad that polio has not been eradicated in many countries because of false beliefs and unsubstantiated pre-conceived ideas. FWIW, in my province, there is almost a natural experiment going on. An absolute sequential priority rule has been used to inoculate vaccines in older people's homes. The most at-risk homes are essentially 100% covered. This is relatively anecdotal but outcomes appear incredibly strong. The vaccines are well tolerated (did you notice that investigations about the Norway worry that you posted has been mostly put to rest) and the new cases are going towards zero very rapidly. To compare, the next 'intermediate' homes which are next in line for vaccines, still report truly awful numbers. Also, have you noticed that the Chicago vaccination numbers are showing a gradually shifting age composition now skewing to the older cohorts? This is developing (like in many places) and there is some delay with reporting (like the CDC discussion we had before) which means that the true picture (older age profile showing later) shows with some delay.

I don't think Berkshire wants optics that comes along with bailing out HFs that were pummeled in this even. Even if it was a decent return. IMO LTCM was a different era and arguably a less controversial strategy (except for the level of leverage). And he ultimately passed didn't he? Not quite, at least the way i understand it. A short and relevant summary: https://www.richmondfed.org/-/media/richmondfedorg/publications/research/econ_focus/2009/summer/pdf/economic_history.pdf This was the era when it's nobody's and everybody's fault started to apply with inspiration to come for more and more moral hazard collective rescues.

There's been an unusual amount of noise lately. So, more perspective. Follow the money, they say. The following confirms (contrary to what some suggest using exactly the same data) that fund flows, per se, have little value for what's coming in terms of overall market prices. To add value to the noise, even if not enough to produce market timing signal, the household equity allocation has been reaching 1999 levels again, and more. Mr. Benjamin Graham, who is not relevant now in this kind of market, used to suggest a 25-75% for exposure to riskier assets vs safer bonds although he had suggested the potential difficulty in reliably adjusting along the way. Anyways, these days, all asset classes go up (stocks, bonds (risk-free or not), pensions, home values etc) and even massive recessions barely cause a dent in net worth: And, these days, the more leveraged, the most shorted, the better. Of course, everything may be justified. Perhaps not. And yes this too shall pass. A way to reconnect to fundamentals:

This is on the edge of my limited knowledge and i guess you wonder if railways obtain good margins on those contracts. Because of commercial 'sensitivity', contract clauses are not widely reported. It seems that railways need to invest (buying and leasing) significant funds to meet this specific demand and ask, in return, for a multi-year commitment and a baseline daily (bpd equivalent) take-or-pay scenario. i think the Alberta government was recently on the hook for such contracts negotiated at at time when prices (and demand) were higher. So, BNSF could be eager to contract for such crude-by-rail agreements and the deals would likely be quite profitable short term but this does not appear to be a long term advantage. There was an article about CN some time ago dealing with this topic, sort of: https://www.nationalobserver.com/2019/05/01/news/crude-rail-temporary-solution-pipeline-shortage-cn-rail-ceo

Interesting question. Keeping everything else equal and on a first-level basis, Keystone XL not coming through would increase demand for railway carload petroleum products transport for BNSF. But: -Coal transport is much more significant in volume (18% of freight revenues year 2019) and the policy 'intent' behind the Keystone decision would likely spill over into a more rapid decline in coal transport over time. Eventually, the intent would also involve moving away from natural gas, another accentuation of previous trends for the mid to long term. -Unlike coal, railway petroleum volumes are highly dependent on shale oil price dynamics. Fluctuating and hard-to-forecast demand is not ideal for the railway operator (logistics, equipment, etc). -Keystone not occurring is more likely to be marginally (and temporarily) beneficial for CDN railway operators like CN as the output related to tar sands will tend to go elsewhere than in the US and railways may play a role to reach export terminals. At any rate, the long term moat of BNSF relies on the fact that it will retain its comparative advantage to carry any of many potential products, from point A to point B.

Yes time is of the essence but this is an unusual challenge (size, relative novelty, bureaucratic inertia and resistance. others...). Most people have forgotten now (let's call this the extreme brevity of vaccine memory) but, during (and after the peak of...) SARS, from October 2009 through May 2010, 27 percent of the U.S. population over the age of 6 months (about 81 million people) was vaccinated against H1N1 influenza, including about 34 percent of individuals in the initial target groups. Interestingly, during that process, there was significant questioning (supply-demand mismatch) during the initial phase and reverse supply-demand mismatch issues when maximum vaccine availability was reached and vaccine candidates started to show growing lack of interest. So yes, whatever works and let's get moving even if not ideal. An interesting aspect is that vaccination rates in general (like the flu) vary widely among states with Rhode Island being first and Florida last both for the total population and at-risk subgroups. You can't win them all. Hi Investor20, You may want to take a look at the CDC hospitalization statistics again at this point. They are lagging the real world by a few weeks but are now correctly showing that trends are down. I'd appreciate if you could supply data on K2 (the vitamin not the mountain): https://www.msn.com/en-ca/health/nutrition/this-underrated-vitamin-may-help-weaken-covid-symptoms-says-expert/ar-BB1cYnm5?ocid=msedgntp#image=1 An expert source, who declined to supply a disclosure of potential and real conflicts of interest, mentioned that "vitamin K2 intake might be the most important thing you can do to extend your life."

For vaccines, the (from warehouse to arm) ramp-up is proving to be somewhat challenging and there are global dips in inoculation rates during holidays and weekends but the mid-term trajectory appears to be quite bullish (for disease eradication). Here's a country to country comparison but you can pair others if you like. The oversubscription ratio (OR,% procured through contracts to popn) works a bit like IPO pro-rata distribution but, with these vaccines, there are factors that influence who gets what and when and some countries have 'bet' on failures, on some still unknown outcomes and on proven-to-be effective vaccines that will be available only later. Some numbers here may not exactly match official numbers because of slight methodology differences. All numbers in millions except percentages. popn doses 'delivered' % per popn doses 'given' % per popn % 'given' to 'delivered' OR USA 328.2 41.4 12.6 21.1 6.4 51.0 169.0 Canada 37.6 1.12 3.0 0.80 2.1 71.4 330.1 The US is doing relatively better along most parameters. There is some difficulty for the conversion from 'delivered' to 'given'. This is related to many variables and is still a puzzle to some degree. Some respected and relevant players suspect fragmentation within the supply line may play a significant role: https://www.bloomberg.com/news/articles/2021-01-23/slow-vaccine-campaign-remains-a-puzzle-to-ex-warp-speed-chief?srnd=markets-vp All in all, i understand the (relative) frustration but this feels like the period immediately after Pearl Harbor where many felt uneasy during the phase where there was a huge space between real production and potential production. ----- Having said that, i've participated in a huge survey (healthcare related) about various expectations and results came out yesterday. For two questions, my answers are completely anomalous. About two thirds of participants think that there is an imminent threat from a completely new virus which i think is tainted by recency bias but what do i know? My main concern is about the status of the underlying host (a bit like Mr. Grantham) and this seems to concern less than 1% of respondents. :-\