LC

Thanks for posting. Funny how bottom-up legislative approaches are never passed by politicians who represent top-down interests. :-\

The funny thing for me with Taleb is that I like his advice for everything other than financial systems. Take his barbell method and in general his writings on anti-fragility and adaptability. I do not use this for an investment portfolio. But think about applying them to a healthcare system (topical, I know). It's actually pretty good advice: you want 90% of your activity to be maximized at dealing with the average caseload. But you also want adaptive systems at either end of the curve to deal with unexpected events (in either direction).

I have problems with that study and its conclusion. Data sources for interest rates in the 1300s aside, they have 12 data points for a pandemic over a 700 year history. We have difficulty modelling losses with 20+ data points over a 100 year period. Additionally, coronavirus deaths are at 25,000 - it wouldn't even classify as a pandemic per this author's threshold. Finally, they claim that real interest rates are artificially depressed for 35-40 years post-pandemic? Well, take the HK or Asian flu, occuring in the late 50s/60s. Were rates artificially depressed in the 1980s as a result? I would argue no they were not. Perhaps there is some effect of pandemics on short term rates; but to make claims about 30+ years in the future is pretty outlandish to me.

Donating money here in Denver to help the low income/homeless get meals, particularly now that we are in lockdown and work is pretty scarce. Also trying not to cook at home, rather ordering from local restaurants that have a skeleton crew - all the proceeds are going to pay for employee healthcare & meals for current staff and everyone furloughed.

I don't think Buffett is buying back shares when there are reasonably priced targets out there. Repurchases have always been his last resort and he never does it in any real size. So if the market tanks 30-40%, now we are expecting him to suddenly change his tune? I don't think so. If I had to guess, I'd guess there have been minimal repurchases over this time period.

I am holding my breath as well. Doctor/nurse friends here in Denver are gearing up for an expected influx of patients, and believe they are unprepared. Specialists are worried about COVID cases taking resources from other areas.

Leases are broken all the time. Property owners rarely expect to extract full payment from a bankrupt tenant who broke their lease. Let's say CAKE refuses to pay. The property owners have two options: -Let CAKE stick around, maybe make some deal where the property owner gets paid some % in the future. -Or, the owner kicks out CAKE, finds a new tenant, and sues CAKE to eventually collect their capped payout in BK courts. Now, cheesecake factory is not your neighborhood bakery and the property owners are not a little old couple who own a duplex. So you're looking at large CRE owners negotiating with a large tenant. So the game gets a little more involved. Can SPG for example, shut the doors on 30 CAKE restaurants, find new tenants, and launch a lawsuit against CAKE (all during a viral crisis) for a lower price than letting CAKE bail on rent for a month or three? And, how will that affect SPG's reputation among future tenants, investors, etc.? I don't know, but that's a big chunk of what this boils down to.

I agree with this, and then of course the inevitable political bickering that will result from it.

With the C-word dominating the news, just some other things going on in the world which may be relevant: The EARN IT act may potentially ban end-to-end encryption: https://nakedsecurity.sophos.com/2020/03/13/earn-it-act-threatens-end-to-end-encryption/ A massive locust swarm is tearing through part of the world: https://www.npr.org/2020/02/21/807483297/why-are-swarms-of-locusts-wreaking-havoc-in-east-africa Spain is in the midst of a corruption scandal: https://english.elpais.com/spanish_news/2020-03-16/spains-king-felipe-vi-renounces-fathers-inheritance-over-foundation-link.html Putin going full dicktator, changes Russian constitution to remove presidential term limits: https://www.nytimes.com/2020/03/16/world/europe/russia-putin-president-for-life.html

Given the lack of reliable data, we really have just guesses as to when the virus first entered the US, how many were (and are) infected, how many died from the virus and were not tested, etc. etc. etc. The point is, the only real way to determine (generally) the severity will be this year's morality and hospital utilization compared to the prior few years.

LOL, it's kind of ridiculous, but also kind of true. Do you remember in late 2007/early 2008, when a bunch of people on this board were saying "all this crap is happening, and the market is barely reacting negatively. Are we insane, or do we just not get it?" Then in summer 2008, everything collapsed. This felt the same way in February--all this bizarre stuff was happening in the world, but the market remained high for no apparent reason. I could've put 5% percentage of my portfolio in VIX calls and doubled my portfolio. I wouldn't do more than 5%, because you don't need to, timing is hard, and I could be wrong. But it was really obvious from around mid-February that we were in trouble (basically, once containment failed and the virus started popping up all over outside China.) I think it's also a case of nobody wanting it to be true. "Oh, maybe it just stays in China and never even reaches Europe". "Oh maybe it's just a flu that will blow over" "Oh we can't trust China's numbers anyways" "Oh once the warm weather hits this will all be forgotten" "Oh we have a much better healthcare system". Etc. etc etc. New rule: When some weird shit is going down on the other side of the world, actually try to quantify the probability of it occurring globally and take an appropriate hedge, even if it seems minuscule.

The guy probably bought CDS on airlines hotels travelcos cruiselines etc.

I agree with your second post regarding forced selling. It can be a great opportunity to buy shares in companies you know; and have a long-time horizon for expected holding. It can be difficult to identify forced sellers in most cases (COVID being an exception I suppose) On your former post I too am still thinking through. For example Visa is up the last day or two and so are my ITM calls. Would I have been better off with OTM calls? I don't know for sure. I raised some cash but have not put all of it to use, so raising even more cash using OTM calls may not have been useful (at least as of today). On the other hand there's more leverage with the OTM calls. Also I am trying to think through the various scenarios: down/flat/upwards market in two years. The second and third order effects (i.e. what you do with the $$ raised via this strategy) are difficult to imagine.

https://www.cnbc.com/2020/03/20/private-jet-industry-asks-for-bailout-funding.html The private-jet industry is asking Congress for bailout money, even as many private jet companies say sales are strong as wealthy flyers avoid commercial flights. The National Business Aviation Association, or NBAA, which represents private-jet companies and corporate jets, sent a joint letter with other industry groups to congressional leaders saying the industry is facing “increasing financial uncertainty” and that private-jet companies should be included in any airline or aviation bailout.

Please do not self medicate with aquarium cleaner: https://www.businessinsider.com/coronavirus-woman-husband-died-chloroquine-warns-not-to-trust-trump-2020-3 The president has repeatedly touted chloroquine as a "very powerful" treatment against the coronavirus and falsely claimed it was approved by the Food and Drug Administration. NBC News reported that the man, 68, and his wife, 61, took chloroquine to guard against the novel coronavirus, which causes a potentially fatal disease known as COVID-19. It's not clear how much chloroquine the man consumed, and Banner Health said he and his wife ingested a version of the chemical that's used to clean aquariums. Both of them needed to seek medical care within half an hour; the woman is in critical condition, and the man died.

Don't sweat it, I sold around 23? And thinking of buying back in. At least you got dividends. ;D Here's another one: In a crowded city at a busy bus stop, a woman who was waiting for a bus was wearing a tight leather skirt. As the bus stopped and it was her turn to get on, she became aware that her skirt was too tight to allow her leg to come up to the height of the first step of the bus. Slightly embarrassed and with a quick smile to the bus driver, she reached behind her to unzip her skirt a little, thinking that this would give her enough slack to raise her leg. Again, she tried to make the step only to discover she still couldn't. So, a little more embarrassed, she once again reached behind her to unzip her skirt a little more. For the second time she attempted the step, and once again, much to her chagrin, she could not raise her leg. With a little smile to the driver, she again reached behind to unzip a little more and again was unable to make the step. About this time, a large Texan who was standing behind her picked her up easily by the waist and placed her gently on the step of the bus. She went ballistic and turned to the would-be Samaritan and screeched, "How dare you touch my body! I don't even know who you are!' The Texan smiled and drawled, "Well, ma'am, normally I would agree with you, but after you unzipped my fly three times, I kinda figured we are friends."

So I am no scientist but from the armchair perspective, I think a realistic possibility is by May June July (call it late spring/summer), COVID is on the retreat and life is returning to "normal". I put that in quotes because I don't really know what normal will look like, but for lack of a better term let's call it post-quarantine. Then the flip side is that come November/December, what if we see the emergence of another related, highly infectious and deadly respiratory virus? To me this is a higher-than-zero probability sequence of events. So IF we do see a waning over the summer, it may be prudent to hold off from taking full risk until we see what the winter brings.

You know I'm trying to extend the olive branch and concede Democrats are playing shitty politics as well. If you want to point fingers as people are dying, you can stand there by your lonesome and point away to your heart's content.

Trying my best. Sold some short-dated PM calls. Bought a slug at $69/sh a week back; sold 70-strike Apr 3 calls for $1.20; Will look to close out the calls later this week/early next week for 0.20 or less.

Some double IPA at lunch that was hiding in the back of the fridge. Ribeye and woodford reserve tonight.

Fair enough. What's your take on the Democrat's reluctance to support the stimulus bill? What do you expect of them? Just the Democrats? Both sides are at fault: Now is not the time to try to establish a slush fund for your donors, as I believe Mitch McConnell has done or attempted to do. Now is also not the time to put in your own legislative pet projects, tenants of the Green New Deal, that you know will only likely stifle this,” Rep. Max Rose, a moderate New York Democrat, said of the House bill Playas are gonna play, and shitty politicians are gonna be shitty politicians.

I hear what you're saying with (1). Perhaps I should rethink my options. I figure, I'd rather have that intrinsic value stored up. If I buy OOM options it frees up a bit more cash; but my exposure is very conditional. I'm always a bit nervous with OOM options because in the case of (2), it seems like they are only useful if prices run up enough. And you have to sell at the right point i.e. maximum upwards movement and volatility - do you find these OOM calls have a limited lifespan where you can make decent money? Or do you plan to hold until expiration and count on being right on both direction & timing? You're right on volatility - LEAPs past 2021 were very expensive today.

Thanks for sharing (and good luck with the little ones/your sanity ;D)

Yes! Moved a few positions from stock to LEAPS, to free up cash to play the volatility, protect downside in case I am underestimating the severity while also locking in attractive prices if there is a sudden positive catalyst. This strategy has been very profitable in 2008-2009 but then the volatility is so much more at that time. From purely financial perspective, let us hope the volatility lasts for some time. Vinod Hi vinod, Are you buying LEAPS ATM? I am doing a similar strategy buying deep ITM.

https://www.ny1.com/nyc/all-boroughs/news/2020/03/24/cuomo--rate-of-coronavirus-infection-in-new-york-is-spiking UPDATED 1:50 PM ET MAR. 24, 2020 There are now 25,665 positive cases confirmed in New York State, with 14,904 cases located in the city. As of Tuesday, at least 210 deaths in the state have been linked to the coronavirus, 131 in the city alone. Cuomo says 3,324 patients are currently hospitalized, 756 of those are in intensive care units. The rate of hospitalization in the state is now 23 percent. Speaking from the Javits Center in Manhattan, Cuomo says the focus remains on ramping up hospital capacity and equipment, especially ventilators. The governor says it's expected the apex of the outbreak in New York is likely 14 to 21 days away. So far, Cuomo says New York State has procured 7,000 ventilators, but anticipates needing 30,000. The governor says the state will need upwards of 140,000 hospital beds to treat coronavirus patients, up from a previous estimate of 110,000.