Kaegi2011

In my mind it has less to do with what the govt will do as what the citizens should do, now and in the future. Imagine, if I saw that new infections and deaths were going down, and testing was going up, I would feel far better about traveling with my family (and we have three trips planned for the next three months, two including my parents, who are in their mid/late 60s). In the absence of information, I'm going to do the safer thing, which is to not travel. Nothing is worth putting my parents at risk, so it's just not worth it. So even if that info isn't immediately useful at this moment, I think it'll be immensely helpful in the not too distant future in terms of helping all of us get on with life.

Um... I for one would like to know how the virus is spreading (or not), for my own and my family's health, if for no other reason. How is this controversial?

Thank you for this. Even if it's anecdotal, it seems like there is a lot of helpful information that's being gathered and shared in your city. I'm beginning to wonder whether it makes sense to play a bit of a barbell options strategy on this. It seems that there are two likely scenarios from here: 1) It'll have a major impact on the global economy. If so, the cascading impact won't be seen/felt for a bit (months?) to come, and downside is potentially quite a bit lower. 2) It's a nothing burger. World mostly goes on with a few stumbles, but nothing really long lasting nor severe. However, the central banks aren't going to pull the support all that quickly given that they want to protect downside risk. So now we have a situation where not much has changed since the beginning of the year, except the 10Y treasuries are like 60bps lower... I'd have to imagine stocks go up a decent amount if for no other reason to close the yield gap... Assuming an approximation of yield drop similar in earnings yield, that's ~3.5-4x PE expansion, so ~20% upside potential. ON the downside, we could have earnings and multiple contraction, which I think will be a lot more than 10%... Looking at SPY Sept 18 options, the 280 puts are ~11.60 mid, and the 340 calls are ~3.50 mid. Since the puts are super expensive, I can also sell the same expiry puts at 250 strike to recoup ~5.75. SO if I go long the 280 puts, long 340 calls, and short the 250 puts, that's ~ $9.35 all in cost for the trade. Breakeven on upside of ~$350 and downside at ~$270, but downside capped at $30 bucks gain. Thoughts? Anyone else think this will be more binary at the tails than in the middle in terms of market outcome?

This forum has degenerated over the past few years but this is a new low. I would say vitriol like this is inexcusable but that’s up to Parsad. At the very least you should delete that post and apologize like a decent human being. +1 I agree. That comment was beyond rude. Deletion and an apology are the right thing to do. +2. Forums like this where people can discuss and debate, but doing so respectively, are far and few in between. Let's try to keep it that way.

Right or wrong, people are panicking. Try to find a face mask anywhere these days. A lot of my friends, who are highly educated, are stockpiling stuff like there's no tomorrow (as if that's going to really save them if shit hits the fan...) ;) That's where the impact and the cascading impacts could be quite severe. People forget that manufacturing was already close to (if not in) a minor recession prior to the virus. A few delays along the chain that takes out the inventory buffer could be quite painful. And if anyone comparing to China and saying that it'll (only) be a 3-4 week disruption is being delusional. No self respecting, gun wielding 'Murican is going to not leave their home for weeks at a time if there's a real outbreak. Let's get real. Regardless if the market was overvalued or why, the market is going to be unpredictable because the outcomes are unpredictable. IMHO anyone who thinks they know how this will play out with any level of certainty is not thinking through all the possibilities. Edit - Also, if you look at govvies yields it's pretty clear that it's not just the equities markets that is concerned. If you haven't refi'ed in a while, time to look it up!!

All great questions that I think nobody can answer. I think the wild card is that there's no way to really narrow down the possibilities of outcomes. We can try, and maybe feel better about it, but inside a company what do you do when you can't travel to meet customers, or meet suppliers, or when consumers are potentially bunkered down? Imagine being an airline, or a hotel, or a chemical manufacturer right now - how do you plan Q2? Do you try to right size the cost structure or not? Better yet, what are the ranges of outcomes that you need to plan for - down 80% to +10%? In some ways the tourism industry has it easy in the sense that their products are temporal. If you're in a manufacturing sector and potentially has to deal with the snap back in demand in Q2 or Q3 or Q4 - how will you do it? Do you build inventory now in anticipation? Do you cut the employees or keep them on despite really low utilization? How do you coordinate along the supply chain? I don't have a clue the cascading impacts. The one hope I think is on the horizon is that warmer weather is coming soon(ish). THat should cut down dramatically on the disease, but even then it's not clear that it holds for Covid19 since it's new and we don't know its seasonal patterns yet.

Do you feel Pence is right person for the job? Isn't that the discussion (rather than a partisan one)? I figure he probably knows as much as just about anyone else does right now. He's also a shrewd politician that knows what to say...which you might not have when a real medical expert is at the helm. So... you want someone to deliberately misinform the public? And do you really think he knows as much as anyone else (e.g., someone who has spent their entire life studying diseases)?

Do you feel Pence is right person for the job? Isn't that the discussion (rather than a partisan one)?

I think you'd be surprised at how little VPs of companies understand even their own incentive compensation structure. Like an option is basically a black box to them in terms of how it works. So you're right logically, but I think the point that there's risk aversion generally within corporate America very much rings true.

This is absolutely true. It's so, so incredibly hard to create a culture where failure does not taint someone's career in a large company. It's also incredibly hard to separate the process from the outcome (e.g., you don't want to create a culture where people are just making stupid bets in hopes of a big payoff). Candidly I'm not sure there's a solve for this for organizations of any scale. In many ways, this is just an extension of the issues that Clay Christensen talks about in Innovator's Dilemma.

They're pretty secretive and they're probably the most under the radar PE firm out there. And the model is fairly unique - they basically source deals from their own network of high net worth individuals who own businesses and promise to hold them for a long time. Not forever, but also not flipping it three years down the road. Very Buffettesque way of doing business (e.g., proprietary sourcing, stable capital, etc.) and it seems to be working. Whether the deals are good or not I have no clue as they don't seem to be targeting institutional money (at least any that I could find), so no disclosure on performance at places like Calpers, etc.