Mephistopheles

What a dumbass. Doesn't make me feel good that a leader during a pandemic can be so dumb.

I dunno - I think everyone is saying that rates will go lower because they've been tired of being wrong for the last 12-years. It was just as recently as 2018 when no one wanted to own bonds and were sure that rates were headed higher. Basically, since 2008 people have been saying rates can't get any lower. And despite certain bounces off local-lows like the taper tantrum and post-Brexit moves, the general trend for the last 10-years has been lower with new lows in rates set every few years...because the economic environment demands lower rates. I don't see that changing just because people are finally throwing in the towel after 12-years of being underweight duration and wrong. They're only beginning to see the light and that may change 6-months from now when people may, once again, be clamoring for higher rates saying the bottoms are in and there is no way rates can go lower. Rates will fluctuate in the short-term, but my guess is the 10-year doesn't go anywhere near 2% for the next few years. As a point of reference, the recent high was ~3.25% in 2018 at the middle of the rate hiking cycle. Will we have zero interest rates in 10 years? Maybe. But what does that mean for income for banks and their valuation? NIM will suffer of course, but I suspect non-interest income will play more of a role in banking profits. Secondly even if interest income and net income suffers, valuations should hold up or expand right? At zero interest rates, normalized valuations could be 20+. Willing to bet on WFC is at like 10x 2010 earnings.

Buffett is known to undersell and this may be another such instance. He also stated that given the range of outcomes, brk isn't necessarily cheap. If it turns out the virus behaves like the Spanish flu (second wave deadlier) or worse, or if it starts mutating more aggressively, or if we remain status quo and no vaccine for 18 months and not administered to everyone for another year after - you can assume the travel, entertainment, dining, and related industries will for sure be in a Great Depression, and most likely a recession in broad economy. Because as Bill Gates said, you can't force people to go out and ignore a pile of dead bodies. What if government free money dries up? Then it's time for the old man to bring out his elephant gun. If any of the above happens than Buffett will look like a hero and probably outperform s&p500. Lots of paths for this to happen.

Are these Jan 21, 2022 expiry? Yes, I'll edit Mephistopheles - Do you mind sharing your thoughts on the size of this position and how you allocate? Sure. I have a mix of common and options. Bulk of it is common with some options at strikes 25, 27.5, 30. Options like <1% of portfolio. I bought today because WFC is near the lows from March, and cost of leverage was only about 10% + dividends. Meanwhile the stock is at like 75% of TBV. Depends on how this crisis plays out, I thing the banks are very well capitalized. Govt will never let them fail. Zero or negative rates for long would hurt. Everyone says we will have same rates or lower for long. People act like we will never see high rates again but I don't think we can ever be so sure.

Are these Jan 21, 2022 expiry? Yes, I'll edit

WFC $25 strike leaps Jan 2022 at $5.15

Let's move the thread back to coronavirus. There is no convincing people in politics of your opinion. Everyone sticks to their beliefs. Use the politics forum to rant and fight.

Good catch - I see that now. Sold $6.1 Billion net of purchases for the month of April. Probably the airlines

I don't get why they can't each video in from different locations

I thought it's almost all in excess of required? Buffett's personal requirement is $20 billion minimum, so maybe $105 b to deploy. From my understanding, the insurance companies have massive statutory surplus given a lot of what BRK owns (such as the railroad) is held within the insurance companies. I could be wrong. Buffett probably regrets the OXY deal. They received shares in lieu of cash dividend yesterday and immediately filed a prospectus to sell all 17+ million shares received: https://www.sec.gov/Archives/edgar/data/797468/000114036120008880/nt10010921x1_424b7.htm#sSS If he was such a big believer why would he sell at 1/4 the price of where it was when the deal was made?

Not sure about this. They always say they have no idea where interest rates will be in 10 years. Also in this interview Munger suggests that all this money printing may lead us to inflation. My take on this interview is that this is just Munger, he tends to be the pessimistic one of the two. After the financial crisis he said he wouldn't be surprised if he had a prolonged Japan style environment. I'd love to hear Buffett's take in a couple weeks.

In this trial, Remdesevir was started a median # of 12 days after symptom onset. I think like 53% were already on a ventilator when the medication was started. Not sure what # of days of symptoms the patients in the U Chicago Gilead had, but one of the inclusion criteria for the study was a positive viral PCR within <4 days (going on memory). Usually symptom onset is when people get tested. So in other words, for the NEJM trial the median patient went almost a full two weeks of symptoms without starting the medication and I think that's a key difference. By that point if you're really sick, the virus has likely taken over lungs, you develop ARDS and the drug won't touch you. U Chicago data implies if you start patients early enough then it can make a big difference. Still need controlled data but it's a good start.

Looking at this from 10,000 feet, I see three things 1. Supply shock: Now there is an output cut from OPEC+. This indicates to me that higher prices are in the long run interest for these countries. 2. U.S. Interests: It's also clear that a thriving domestic oil industry is in the long run national security interest of the U.S, and this also requires higher prices 3. COVID Demand shock: This is what is keeping prices low for the time being #1 and #2 will ensure to keep a floor on prices, so once #3 resolves isn't Crude likely to shoot back up? We will see many bankruptcies among the U.S. producers. Those assets though will likely end up with the majors, who should be able to survive. So then is a good investment idea to buy a basket of the majors at historic low equity values (XOM, CVX, RDS, BP)?

Some conflicting data - France and Spain are not doing well. Spain is actually worse than Italy right now. Spain and France both habe BCG vaccination.Also, Portugal, which has no BCG vaccination and is poorer does much better than Spain, it’s direct and richer neighbor which does have BCG vaccination. So quite a few countries run counter this trend eventhough they are otherwise comparable. You've got it backwards. Portugal has mandatory BCG vaccine and Spain does not. France had BCG vaccine only for school children up until 2007 and for healthcare workers until 2010.

Remember in the financial crisis he put $5 billion in Goldman, and the very next day Goldman was able to get another $5 billion at better prices from the market? Occam'z Razor - he wants all the good deals for himself, doesn't want to give a boost to the markets by going on TV. He went on TV after 9/11 and during financial crisis, wrote that op-ed. Yea, but times are different. BRK is so large. He might get a chance to deploy like $100 billion in this crisis at killer prices. He doesn't want market to bounce based on him showing his confidence.

Interesting idea. I just pulled up the long term stock chart on Tenneco and over the decades it probably traded at an average of $30 per share, give or take. However in 2001 it dropped to $1, and then rose back up to $30, then in 2009 it fell to $1 again, before rising to $60 at points, then over the last two or three years it has fallen to around $2 again. Have you looked at the valuation or fundamentals yet? I haven't had time to dig into it. Are the reasons that it's cheap this time different from the past couple of drops? The big difference is a massive increase in debt load due to the Federal Mogul acquisition in Oct 2018. $1.1 billion of obligations expected this year. They have $700 million of cash on hand and another $800 million remaining on the revolver. This should help weather the storm for the next year. But the stock is trading like an option. The unsecured debt is trading for 50% of par. May be a good bet and buy some of the equity on top , that's what Munger did.

FYI. This is silly. Both the chloroquine and the placebo showed that almost everyone was cured in both cases. It's a useless study since everyone was cured. Do people recover WITHOUT chloroquine? YES obviously since there have been like half a mllion infections and vast majority cured WITHOUT chloroquine. So it's useless to have these stats. In other words, in order to show (or not show) a statistically significant difference between placebo and chloroquine, you need a good amount of people who did NOT recover.

You realize Malaria is also an infection right? Obviously a clinical trial would take a long time. But time is not what we have on our side in a pandemic, and we have to rely on the best data we have. Take a look at this report by French providers: https://www.sciencedirect.com/science/article/pii/S0924857920300996 Lol at "Azithromycin is an antibiotic". So dismissive. I highly suggest you read the evidence on synergistic effects of Azithromycin+Plaquanil in malaria: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3170143/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4944689/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC127390/ I'm not relying on Trump or Twitter either The mechanism of action of Chloroquine and related compound on heme in RBCs and therefore malaria is known. COVID has nothing to do with RBCs. Azithromycin is a very commonly used antibiotic. Coronaviruses are not new. There is very little real evidence out there that these drugs would work against COVID. Obviously if there is a patient who is very ill and nothing else is working, it may be worth a shot, but the French study showing a combination of Azithro + Hydroxychloro is very very flawed and you can read what's out there from physicians & scientists on how poorly constructed that study was. I am not here to discuss pharmacology anyway. I think probabilistically and I my estimates for Azithro working is not zero, but close. Hydroxychloro is higher, but it's not significant and nowhere close to 50%. Remdesivir sounds more promising, but we'll have to wait. This thread has taken up much of my time the past month or so I've been sounding the alarms on this. Glad to see some people out in the real world finally taking this seriously. Hope many patients can be spared from the worst of this, and glad to have a real leader in Gov Cuomo. Again not the point. But your whole argument that you cannot use immunosuppressants in infections is totally flawed. Malaria is an infection and immunocompromised people are at a higher risk YET it is still recommended to treat with hydroxychloroquine. Also saying "azithromycin for this is plain stupid (because it's an antibiotic)" is just dismissive and again a flawed point which contradicts the real medical evidence that is established. Perhaps the antiinflammatory affects of the drug reduce odds of ARDS. We'll find out eventually. And nobody is saying that there is substantial evidence to treat COVID. University of Minnesota started a double blind study recently, we'll see what comes about. I'm just trying to correct misinformation.

You realize Malaria is also an infection right? Obviously a clinical trial would take a long time. But time is not what we have on our side in a pandemic, and we have to rely on the best data we have. Take a look at this report by French providers: https://www.sciencedirect.com/science/article/pii/S0924857920300996 Lol at "Azithromycin is an antibiotic". So dismissive. I highly suggest you read the evidence on synergistic effects of Azithromycin+Plaquanil in malaria: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3170143/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4944689/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC127390/ I'm not relying on Trump or Twitter either

Hydroxychloroquine also fights lupus and rheumatoid arthritis. Are you saying lupus and rheumatoid arthritis are caused by viruses? Because if you're not, than the comment you made is stupid. actually there is a theory that RA is "triggered" by an infection in people who are susceptible genetically. so yes. and of course lyme's is caused by a bacteria, with attendant inflammation results. while most of research money goes to cancer research, given that so many important diseases are inflammation based (arteriosclerosis, arthritis etc), one might hope that covid19 (causing pneumonia, inflammation of lungs) might have a salutary effect to focus more attention on inflammation I meant to say "are you suggesting lupus/RA are caused by parasites"? Regardless, the point I was making is that the drug has other benefits unrelated to parasitic infections, thus it being a malaria drug is not a reason to ignore it.

Do you even need primers? Just study the income and foremost the cash flow statements and everything else flows from that. Primers tend to get you into rabbit holes that make you blind for collective shortcomings of an industry. Well how else to learn about competitive dynamics for instance? Not only between horizontal competitors but between upstream, mid, and downstream players. I'm sure I can buy a basket of shale producers and if oil shoots back up I can make a killing but I'd rather be able to understand nuances between different companies.

some random dude on twitter wrote some interesting (and very bullish) comments on the French study I linked here yesterday: https://twitter.com/boriquagato/status/1240630279301033986 and posts below that. It's just one person's thoughts so who cares, but I found them interesting, and I'd like to be an optimist these days and tweets like these help. what I and others had missed yesterday in this study was that it might have been remarkably succesful because of the combo of two seperate drugs working together, not just the hydroxychlorquine. SMH at people who think azithromycin, an antibiotic that works against bacteria and hydroxychlorquine, an agent that works against a parasite, is likely to fight a virus. Same as anti-HIV drugs for this which are anti-retrovirals (hint: COVID-19 is not a retrovirus). Hydroxychloroquine also fights lupus and rheumatoid arthritis. Are you saying lupus and rheumatoid arthritis are caused by viruses? Because if you're not, than the comment you made is stupid.

What's the best way to learn about oil and gas for a beginner? I'm trying to read through this massive 400 page primer but it's old from like 2007, I'd like to find something more up to date.

I don't get it, how many hours a year did Gates have to spend at Berkshire or MSFT? Doesn't seem like much. It seems like he had most of the rest of his time for his foundation. So sad to see him leave.

Yes he gave an example of problems with the amex card and buying delta but I think southwest is different. He also said he'd never invest in airline (stocks) again. Never say never.