Spekulatius

Sold $EIX and $SRE ( price target reached)

Adding to INTC

Europe got complacent. Cases here are rising too - in all regions. I think we will crack 100k cases/ day very quickly. Hospitalization is the one metric to look at. The last waves topped out at 60k COVID-19 hospitalization. Once we get to this number, the hospitals system becomes strained, we are going to have local restrictions again. Edit: another indicator - my wife went to Costco today and noticed that several items like paper, wipes were sold out, just like during the first wave. Apparently people are getting ready for things to come. Hording confirmed from my wife‘s sources in the Bay Area ( Asian people tend to be early). Long lines in grocery stores & Costco, some paper goods and Ramen noodles sold out etc. We have seen this before.... So, it wasn’t just me. Animal instincts are much earlier on display in a Walmart than in Wegman‘s: https://finance.yahoo.com/news/walmart-ceo-consumers-are-stocking-up-again-as-coronavirus-rages-on-174308762.html

I don’t think customer are double dipping, but they may decide to move some modules from ERP to other cloud vendors when they move. It is hard to rip out the entire ERP system, but it is possible to replace modules like HR or travel (Concur) to Alternative vendors that then integrate their module(s) into the customers SAP system. SAP has seen some slowdown in their cloud offering as well, not just on-premise. This could mean that SAP cloud offerings have trouble competing or that cloud vendors might see lingering effects from COVID-19 as well

Very few people in Wegman's store Saturday morning. No lines to get in, not many people in store, and very short lines at registers. Last time we went to Wegman's (I think in June/July) there were lines to get in, store was crowded, and huge line at registers. Saturday nobody was hoarding at all. Huge selection of toilet paper, paper towels, etc. We bought some since hey Spekulatius told us to hoard 8), but we were the only ones buying. Some guy even made fun of our paper towels pack on the cart. ::) Got to get in before the rush. Wegman‘s is a rich people‘s store and doesn’t have the right vibe for the horders. Try a Costco or even better a Superwalmart next and see how it goes. I bet gun an ammo sales are up too to get ready for the election riots.

Europe got complacent. Cases here are rising too - in all regions. I think we will crack 100k cases/ day very quickly. Hospitalization is the one metric to look at. The last waves topped out at 60k COVID-19 hospitalization. Once we get to this number, the hospitals system becomes strained, we are going to have local restrictions again. Edit: another indicator - my wife went to Costco today and noticed that several items like paper, wipes were sold out, just like during the first wave. Apparently people are getting ready for things to come. Hording confirmed from my wife‘s sources in the Bay Area ( Asian people tend to be early). Long lines in grocery stores & Costco, some paper goods and Ramen noodles sold out etc. We have seen this before....

This second wave comes at a terrible time for retailers and malls - looks like Black Friday is entirely cancelled and will be replaced with online deals. No wonder $AMZN stock is up in a down Market.

The data in this website is not correlating with other websites. https://covidactnow.org/us/south_dakota-sd?s=1200292 is giving south dakota positivity rate with 15.4% Also the website is giving Florida positivity rate 16.3%. But the Florida state website report is giving 4.71% as of Oct 24 and ranged from 3.6 to 6.7 in last two weeks. http://ww11.doh.state.fl.us/comm/_partners/covid19_report_archive/cases-monitoring-and-pui-information/county-report/county_reports_latest.pdf Could well be. Those guys use data feeds from the state websites that can get disrupted when they change something. The SD Gov website also shows 15.4% positivity ( which is still pretty high) and that’s for a 14 day average.

Kelcy Warren is the main issue. He is a terrible operator and also screws his unit holders when he has a chance. Just look at the preferred he served himself in 2009. He stepped down as CEO but still lingers behind the curtain. I have both KMI and ET. KMI found discipline and is slowly and painfully deleveraging. ET should start seeing FCF starting 2021. As Spec said, KW is an empire builder and not a particularly good operator. What ET needs now is good operators. As far as ESG and solar/wind, these are immensely unprofitable for utilities and ratepayers. Lazard's most recent report is a shiny brochure for the stuff they are selling and has inconsistent assumptions that paint solar/wind better than it actually is. Check out Block island where utility had to buy energy at $200 MWh in North East (where electricity could be had for about $30 MWh). Southern chose Nat Gas over solar because their analysis put solar project is at at negative NPV. Crazy headlines (e.g., LA getting solar at 2 cents per KWh is a nice headline but if you dig into the pricing it's not exactly 2 cents). Basically, nat gas is going to stick around for some time and I say that while holding small position in Orstead and in the middle of putting solar panels on the roof of our house. Based on what I am seeing at Berkshire Energy and NÉE, renewables are immensely profitable for utilities. NEE has been a leader with wind and a monster of a stock. I agree on NG as a good and relatively clean source Of energy, but the Obstruction about building a pipeline To Long Island, where there is a shortage of NG and a lot of houses are still heated with dirty oil, is real, and imo here to stay. As an investor one needs to look at what is actually happening vs what should happen.

Yes, all of the above, but there is also real risk if the energy sector volume shrinks (shale, oils sands), so will transportation via pipelines. I think there is significant risk that crude pipelines that connect shale basins will see reduced volumes and hence reduced revenues. Oil sands are better insulated due to their long life nature, but ENB has a real issue with Line 3. Overall, the real economics for pipelines have worked across the board. Even the highest quality and most bond like refined product pipelines habe seen reduced throughout due to COVID-19 and there is real risk further out with the faster than expected adoption of EV’s that the duration of the cash flow for these assets is shorter than presumed a few years ago. I think it is a bit dangerous to assume that Mr Market is totally stupid in reducing the valuation of pipeline assets.

Kelcy Warren is the main issue. He is a terrible operator and also screws his unit holders when he has a chance. Just look at the preferred he served himself in 2009. He stepped down as CEO but still lingers behind the curtain.

What? Here in Texas the property taxes are insane because they are used to fund the school districts. I don't have kids but many of the public schools in local middle class neighborhoods seem very modern and well funded. During the recent pandemic friends with children have mentioned their transition to remote learning was smooth because all of the students already had standard issue: laptops, iPads, and hot spots from their public schools. I'm sure there are areas where they are high and schools are good. I'm speaking as a presumptuous Yankee. There's areas in the NorthEast where property taxes are lowish as well, but generally, if you're a tri-state area/New Englander, lets say you have modest HH income of $250k and a modest house, maybe $500k..you're at like 7% state income tax and 2.5-3.5%ish annual taxes on the value of your home...thats $30-40k in taxes; then you go take a peak at Florida or Texas and the same house carries 1-2.5% property taxes(or lower in some places) and state income is 0 and there's an epiphany of sorts. Now imagine if your income/house are more than "modest"...its a total money grab. I am a European transplant aas most of you know and have lived and my teenage son went to school in CA, NY (Long Island) and now MA. All three areas had actually pretty good schools imo(since I bought my house in good school districts). 1) In CA (North Bay Area) schools were underfunded, but high parent engagement and a strong social fabric made up for it, 2) Long Island school had excellent funding and subjectively it was the best school (teachers)with great activities (sports, music). My son loved this school, but the social fabric was a big issue. It is shocking for me to see a school with a security guard and metal detector. Bullying was an issue, drugs (opiates etc), weapons (knives), cyberbullying. lots of spoiled kids, imo. This was in a good area (Commack, 40% jewish). We learned later that one of our sons playmates down the street committed suicide with his dads gun (broken household, divorced) 3) MA, outer Boston suburb. School is well funded and but extra curricular activities can’t match the school in LI. It’s a smallish school district. Intact social fabric is the biggest plus. There are issues, but not the point that metal detectors are needed. This school has struggled with the transition to remote learning this spring, but the current hybrid schooling works well, imo. Not sure what to take from this, but for me it’s clear that what goes on outside the school walls is just as important than what’s happening inside. I can’t really speak to the private school experience (my son went to a private kindergarten in CA, but all later schools were public) but I think there is value in kids seeing the whole (or at least a larger part of the social spectrum) rather than the gilded part that goes to private schools. There is a fine line between protecting your kid from some very nasty experiences and going too far and protecting the of how real life looks like.

My guess is hospitalizations will be the key statistic. If cases spike and hospitalizations do not then little will change. If hospitalizations increase to uncomfortable levels then politicians will be forced to do more. Just like in March / April. Case count increase to me is a red flag. Hospitalizations, which usually take 2-3 weeks to show up will be the call to action (should they get uncomfortably high). The experience in the coming months will likely be very different than in March / April. We have learned much about the virus that will inform actions. Most importantly, the most vulnerable understand the risks and therefore should be much more prepared. So i do not expect severe outcomes (deaths) to come close to levels seen in March/April. I agree on hospitalization driving the decisions. #of infections is not a good metric since it scales with number of cases and death are a trailing number. Anyways, a positivity rate of 38% is shocking 7 month into this epidemic and indicates that the folks making decisions on health matters are sleeping at the wheel and should be booted, imo. That’s my opinion, but thats for the SD voters to decide.

+1 For those who like Thinkpads, this is a pretty good deal: https://slickdeals.net/f/14460524-lenovo-thinkpad-x13-gen-1-laptop-ryzen-7-pro-13-3-1080p-16gb-ddr4-128gb-ssd-833-50?page=7#comments You can go through Rakuten and get another 10% cash back off. I ordered one today to replace my 2012 Dell XPS13 which is running on Windows 7 and while going strong, some software (TurboTax) is just not going to work any more.

I went through the charts today and SD has a positivity rate of 38.2%? https://public.tableau.com/profile/peter.james.walker#!/vizhome/COVID-19SeeYourState/YourStateKeys Very little testing -2k tests daily. That’s nothing even for a state with low population like SD. I guess they like sticking their head in the sand.

This shouldn’t be a problem. I personally would roll it over into Fidelity and Schwab and maybe from there into IB later, because I don’t trust those guys at IB to get these things right. If there is any issue, you may have a hard to to get them resolved. With Fidelity or Schwab, I don’t think you will have issues. Disclosure : I have IRA’s with both Fidelity and IB.

They are going to get through this, but it is not fun to own a company with almost 4x leverage and shrinking EBITDA. There is a hard way and an easy way to delever - the hard way is via paying back debt, the easy way is keeeping debt the same and growing EBITDA. KMI has to do it the hard way (actually really since crude crashed in 2015) and it hasn’t been a nice ride for shareholders.

There are a lot of options: direct funding for dual use (military and commercial) process development work. Guaranteed contracts for semis used in military applications. Preferred vendor etc. subsidies for corporation with US equipment vendors etc. I am sure they can figure out something. In the end however, it is correct the government can support Intel, but nothing guaranteedPs success, especially if they become complacent, which is a real risk when working with and for Uncle Sam.

I assume a central bank sponsored e-currency would run with a ledger at a de trial bank? that’s the only way this would make sense I assume. Again, if so, why is the point of a bank collecting deposits? There is none, at least not with zero interest rates. The banks then would simply lend from the central bank directly and maybe that simply defines what a bank is going forward. lending still requires expertise in most cases, but such a system also could encourage direct lending from a central bank. The central bank would have much more information than it has now, since it had the ledger of any transaction. This would weaken the status of banks, credit record agencies and all sorts of financial intermediaries, money launderers etc.

In the United States, the first part of that planning process should be a diagnostic blood test in advance to see who is already carrying antibodies. So, create a two-stage vaccination process where people can apply in November to be amongst the earliest vaccinated, but as part of the deal, they go for a blood test in advance to see whether they have antibodies and actually have any imminent need for the vaccine. Then, once the initial surge of demand is satisfied, you have stage 2 where anyone can present themselves at a vaccination station and obtain the vaccine on demand, whether they need it or not. Today, we are at 8.6m officially diagnosed cases in the US. So, how many true cases are there, maybe 85 million? That would suggest that already there is 27 or 28 percent of the population that likely has at least temporary immunity and does not urgently need the jab. If the first jab does not actually occur until January 1, and if there are a modest 50k/day of officially diagnosed new cases in the US, there would be a total of 12 million official cases on January 1, which would likely represent perhaps 120 million people who have already had covid, or about 35 percent of the population. Given the extent of covid spread to date, it is entirely possible that only ~100 million vaccinations would be required to drive the R0 below 1. Other countries, such as Canada, where the spread has been less pronounced will require a much more comprehensive vaccination program. SJ I don’t know if your 10x multiplier (tested positive vs actual infected). I have seen multipliers of 4-5x based on studied in Germany that may not apply here. As testing gets better , this multiplier comes down. As for antibody tests, they are somewhat costly and certainly will cost more than a vaccine. Frontline workers don’t get tested for antibodies either, so who exactly will bear this cost? I don’t think the capacities for widespread antibody testing is there either. I don’t think antibody test results will play a role on how the vaccine is distributed. I think the last large scale study in the US was the dialysis users' study, which showed that 9.3% of dialysis patients had antibodies during July. In mid-July, there was 3.7m, official cases in the US, which was about 1.1% of the population. So, the most recent major study would suggest 8 or 9 to 1 ratio for a sub-population of people who are more vulnerable than average and who should have been well motivated to avoid covid. But, I would agree that presumably the 10-to-1 comes down as testing becomes more prevalent. I suspect that you are correct that diagnostic antibody tests are unlikely to be used in a vaccination programme. The first 20 or 30 million vaccinations in the US will be in hot demand from the most vulnerable populations, healthcare workers and first responders and then demand will slow as less vulnerable people will be less motivated. Unfortunately, it is likely that 30% or 40% of those initial vaccinations that will be in very high demand will be "wasted" on people who are already immune by virtue of having already had covid without even realising it. The cost of the "wasted" vaccinations in dollars will be pretty minimal, but the frustration of those who are anxiously awaiting their turn will be palpable (as it was during the H1N1 vaccination process). SJ I have some doubts about hot demand. The polls seems to indicate a fair amount of skepticism about COVID-19 vaccine. The Moderna vaccine has a new mechanism of action, so for me it is the largest question mark. Perhaps a lot of people go the “you try it first “ route? I would take the vaccine and my wife too, if it become available and assuming it has been properly vetted. I think about the worst thing Trump could do is get an emergency authorization for the vaccine if it’s clear that the FDA has gone though the complete vetting process yet and we don’t have complete confidence in data. I follow Merck closely and while they are behind, they have very good vaccine tech and working on an orally administered vaccine thwt is also supposed to work well for older people. Older people unfortunately have a weaker immune response and that it why vaccine often don’t work as well for them. This is unfortunate, because especially with COVID-19, older people need protection most. So it will be interesting to see a subgroup analysis for the 65 year + age cohort to understand if the vaccine even works for them. Lots of decisions to be made and ai feel the discussion about this should have started already.

I think there is always something to learn, if a stock does something vastly different than expected. I think shorting on valuation alone is a bad idea generally speaking, there has to be something else to make a stock a short. I mentioned this before, but ai gave up on shorting be sure for me, it doesn’t seem to be worth the brain damage and seem to add risk rather than reducing it. The only thing I would short is going short an index, but even in this case, I would rather buy a put, because with put, I make a bet with limited downside. Right now, puts are not really affordable which is why I don’t own any. Sometimes a good process produces a bad outcome, but I felt the VIC writeup to fairly weak. Is it just me, but I feel the quality of VIC write ups has really gone down the tubes the last two years or thereabouts.

In the United States, the first part of that planning process should be a diagnostic blood test in advance to see who is already carrying antibodies. So, create a two-stage vaccination process where people can apply in November to be amongst the earliest vaccinated, but as part of the deal, they go for a blood test in advance to see whether they have antibodies and actually have any imminent need for the vaccine. Then, once the initial surge of demand is satisfied, you have stage 2 where anyone can present themselves at a vaccination station and obtain the vaccine on demand, whether they need it or not. Today, we are at 8.6m officially diagnosed cases in the US. So, how many true cases are there, maybe 85 million? That would suggest that already there is 27 or 28 percent of the population that likely has at least temporary immunity and does not urgently need the jab. If the first jab does not actually occur until January 1, and if there are a modest 50k/day of officially diagnosed new cases in the US, there would be a total of 12 million official cases on January 1, which would likely represent perhaps 120 million people who have already had covid, or about 35 percent of the population. Given the extent of covid spread to date, it is entirely possible that only ~100 million vaccinations would be required to drive the R0 below 1. Other countries, such as Canada, where the spread has been less pronounced will require a much more comprehensive vaccination program. SJ I don’t know if your 10x multiplier (tested positive vs actual infected). I have seen multipliers of 4-5x based on studied in Germany that may not apply here. As testing gets better , this multiplier comes down. As for antibody tests, they are somewhat costly and certainly will cost more than a vaccine. Frontline workers don’t get tested for antibodies either, so who exactly will bear this cost? I don’t think the capacities for widespread antibody testing is there either. I don’t think antibody test results will play a role on how the vaccine is distributed.

Yes....I agree....that is what is meant by "Herd immunity" according to Barrington declaration....not lack of infections but the disease becoming slowly less severe. We are already seeing this. Below is the CDC updated hospitalizations this week. Early introduction of vaccine, especially for vulnerable along with therapeutics would help. 1-On the 3rd wave that the CDC data does not show really well, at least at this point. Just like in early July, when the CDC did not show well for a while the forming 'second' wave because of lag-related issues (lag in reporting updated data and lag inherent to the sequential case-hospit-death that tends to occur over time). It looks like the "third' wave will be smaller. Compare: and https://covidtracking.com/data/charts/us-currently-hospitalized 2-"Early introduction of vaccine, especially for vulnerable along with therapeutics would help." This benign and perhaps obvious on a first level basis statement is, in fact, a fascinating statement and may explain part of the misunderstanding implied by the Barrington Declaration. Even under the most optimistic scenarios, the vaccines are unlikely to be distributed widely for many months. Also, the earlier forms of the vaccines may be the most at risk for temporary immunity. So, vaccines are likely to be insufficient, in terms of demand, for a while and an interesting discussion will occur concerning who will or should get it first. Before Covid, when discussing scarce vaccine availability and herd immunity for a population, a predominant school of thought suggested to distribute the valuable vaccine not to the 'vulnerable' population but to frontline workers and other individuals who could act as super-spreaders and to use other 'social' measures to keep the vulnarables protected. ^ I hope for priority distribution for frontline workers as it would concern my wife. I think distribution of the vaccine (the three W’s - who, when, where) should be an extremely high priority for the government and it should be planned upfront before the vaccine is available. FWIW, there is very little specific testing for front line workers here and I suspect it is for liability reason and because they want to avoid widespread quarantines for frontline workers, in case someone tests positive. The testing for patients appears to be quite comprehensive.

Maybe people expect their sanitizer sales will sky rocket... https://www.cnbc.com/2020/04/24/coronavirus-kegs-are-going-bad-boston-beer-has-a-solution.html I think SAM May benefit from the demise of some craft brewers. As far as I can tell, booze sales have been pretty good so far during the pandemic. I certainly did my share buying beer, wine and cider. The valuation is egregious, but that’s true for a lot of stocks including those with much crappier fundamentals than SAM. I wish I had gone long this one at ~$460. Their sales have been gangbusters. They have category killers in craft beer, ciders and now hard Selters. Aaaand maybe, hoping to hit $12 in EPS for CY20. Jim Koch and insiders continue to dump their shares all over. Cant really think of too many better recession hedge stocks than this. Competition is coming from all over with the new seltzer releases....just like it did with soda and cider. I didn’t even realize the stock is up ~25% today until now , my comment was solely based on business performance. In my opinion, they have done a great job with the Dogfish acquisition and now with Truly Selters, which at least here near their. Home base (MA) seems to be winning over White claw in terms of display. They are also grabbing market share in beers (call it craft beer or not). Anyhow, as a consumer and just an observer how they do on retail or just looking at their financial performance, they do a great job.I can see them using their stock to roll up region craft beer producers (maybe Sierra Nevada to get a west coast stronghold) and growing organically with new products. They are clearly better operators than TAP or BUD. Eventually, they may get into spirits too. The stock is overvalued, but so what. Overvaluation alonein my opinion is almost never a good reason to short something. Yea, I definitely brought it on myself. I dont care to look back on the posts, but this was/is a pure valuation short/hedge. I added a bit more today around $800. I've got a stop at $1050 and will cost myself about 250 bps if hit. I actually did a reasonably amount of work on this some years back when the stock was trading around $175. Figured upside on a sale was $4.5B or so. Was long for a little bit. Hard to imagine Truly is a $6B brand, but who knows in todays market. I dont think this is a "great" company. But its definitely not a bad one. In relation to one of your other posts on shorting, Chanos often mentions the 3 Fs. Frauds, failures, and fads. Ive found the first two are reliable, but fads are highly subjective. One of my best longs in recent years was Sodastream, a 7x trade(left a bunch of upside on the table selling too soon) even though many thought it was an obvious fad. Fads are fads until theyre not. Will probably be the case here. Just another case of "dont short on valuation alone". An acquaintance sent me an email today on this. Made a rather funny remark about how given the market, you'd think the only thing people did during lockdown was eat Wingstop and drink Sam Adams... OK, this is rubbing it a bit in, but SAM popped another cork on Friday +18.85% So how go shorts go about risk management? Disclosure: No position I did buy a caseworker Trulia Lemonade for “research purposes” and because my wife wanted to try it and we both don’t like it and consumption is slow. Taste seem artificial and somewhat metallic (for lack of better terms). I think we will stick with Mike’s hard lemonade despite the calories.

Tech seems to ebb and flow. Intel is out of favor like AMD was out of favor from 2005-2014ish. Sometimes the simplest thesis is the best. I think their fab facilities will become more crucial with time. They do have a culture issue and a leadership issue. But that is always fixable. I also still hold a position and will likely add a bit here and if it continues to down on negative sentiment. I have a small-medium sized position and consider adding after I looked at the release and the CC transcript. There really isn’t much unexpected bad news except shrinking ASP for server chips and it isn’t clear that it is an Intel specific issue. Other than that, Intel has released some 10nm node (equivalent to 7nm TSMC) chips, but yields are still an issue , which isn’t unexpected (it was telegraphed last quarter). Despite the above ,they met earnings and beat slightly on revenues. The deal to sell the loss making (-900M last year) NAND Business is a strong positive. No new issues with 10nm or their 7nm developed seem to have popped up. The Bull thesis is that Intel is still a leader in chip tech and trades cheaper than it did for eons. It is also a strategic assets for the US and the US government will do everything it can to make sure it remains so: https://www.valueinvestorsclub.com/idea/INTEL_CORP/6955176147 It is clear that Intel has issues, and needs some serious adjustments but I actually think that the current CEO does the right things. It’s sure would be better if a tech wizard were still the helm, but for now, I don’t think he is doing a bad job.