Spekulatius

Agreed. Continuing the old thread rather than starting a new one is interesting for perspective.

Excellent article in the Atlantic about COVID-19 R0 dispersion, superspreaders and infection clusters. For one thing, it looks like Sweden actually had a strategy to target clusters much more effectively than others. Same with Japan: https://www.theatlantic.com/health/archive/2020/09/k-overlooked-variable-driving-pandemic/616548/

If you look countries who have had best in class responses to handling the virus (with the best health outcomes and least economic damage) testing was the backbone of their effort. And mask wearing and social distancing. Strong communication with consistent, unified message (lead by science / health professionals). Not rocket science. But still very difficult to execute. Gee, remember when the Surgeon General said masks weren't effective, and that Dr. Fauci guy said the same thing? This is correct and the same mistake was made elsewhere (in Germany for example). If you realize you made a mistake, you should correct it, not double down on false beliefs. It’s no different than investing. I think I posted this in this thread, but the Moment Fauci started to talk about the benefits of mask in those Coronavirus meetings, I saw people at work wearing masks the next day. Nobody ask them to do so, it just happened because at least some people were listening. Then my company started to distribute surgical masks to everyone (they were hard to get initially) and then wearing them became mandatory. No community spread at work so far , unlike what we have seen in the White House. It‘s not bulletproof protection, but together with social distancing rules, this works and stops the spread.

I expect a third wave. Current trends in hospitalization are already trending up and we know that in an epidemic, trends have momentum. Even the Northeast is seeing already and increase in hospitalization. https://covidtracking.com/data/charts/us-currently-hospitalized These cyclicality / waves we are seeing are not really separate waves, more or less the same wave hitting different states at different times. We are seeing a second wave in Europa however, in particular Spain and Britain are noteworthy, because they were hit hard by the first wave. So second waves are definitely in the cards in the US. I think thanksgiving will be a major driver from increased travel and family gatherings and together with a seasonal trend will cause another spike. How pronounced it’s going to be will be mainly be driven by people behavior.

Perhaps, the Tencent equivalent today is still Tencent. They have their Fingers in many trends highlighted above. The other prediction is that we should expect to see a few megacaps from Africa. Right now, it seems like it is a wasteland for investing But there an evolving Startup and I would expect a few companies to crack the code within thr next 10 years there. Africa Is pretty diverse, so it hard to expand from one country another even. Perhaps, the Chinese manage to colonize , womit could be chinese companies dominating this market 10 years out possibly.

Quick take on the situation in Spain, one of the worst Wortformen in this pandemic: https://www.bloomberg.com/news/articles/2020-10-04/spain-s-toxic-politics-and-health-crisis-have-got-merkel-worried

similar line of story THE PLASTIC PANDEMIC COVID-19 trashed the recycling dream https://www.reuters.com/investigates/special-report/health-coronavirus-plastic-recycling/ Yeah, plastic bags were supposedly dead, but did they stage a comeback!

Bumping this one for relevance. I highly recommend these meetings - I have been to two of them so far and they have been high quality. Value investors will be hard pressed to find a better value for your $5 and time spent.

The spike in used car values is caused by shortage - a combination of lower production for a few month and higher demand caused by stimulus most likely. It will be revert in time unless you believe we are going to have a vehicle shortage in the US. I consider this unlikely.

I would not consider myself a liberal (or a die hard conservative) A secured non-recourse financing is an agreement between the lender and the borrower where the lender/borrower have agreed upfront what the security for that loan is and the simplicity and transparency of that arrangement underlies much of the financial innovation of the past few decades (securitization). I see nothing wrong with handing back keys / strategic default. the lender took that risk and charged you for it. My understanding is that the typical car loan is secured and recourse. So, if there is nothing wrong in handing back the keys, there is nothing wrong for the holder of the newly declared delinquent loan to go after (to obtain (through a legally-supervised process) reparation) the individual's assets or earning power for the excess value not covered by the collateral. There are personal responsibility issues that are being dealt with by the present rules of the game. However, one has to wonder about the rules of the collective game when such a high and rising percentage of trade-ins carry negative equity. Where are we failing on top of poor individual choices? It's not an easy question. Easy credit conditions are a sign of development, innovation and sophistication but easy credit conditions are also punctuation marks in the credit cycle. At this point, who's bearing the actual risk? i would venture to say that we all are and that's not necessarily comforting? Securitizations are great but they increase the distance (and put a number of intermediates) between the person who needs the funds and the one who provides them. Yes, car loans are generally recourse. So in this case, there is the possibility that the lender might go after the delinquent counter person’s other assets. Usually, they don’t do that, but that possibility should definitely within the expectations for the outcome. Personally, I wouldn’t judge whatever someone is doing. I know some friend of my wife who defaulted on their mortgage post financial crisis. This was in a non recourse state and based on the rough numbers they gave me (deep underwater in equity, teaser loan with balloon payment coming up), I recommended them to default, which they ended up doing (I think they got the same advice from other sources). In the case discussed here with only 9k at stake and a recourse loan, I wouldn’t recommend it just for practical reasons, as a shot credit can create major inconveniences for you that most people don’t take into account etc. But each it’s own.

UK stocks are tax friendly for US investors - there is no withholding of dividends except for UK Reits where 20% is withheld. The Netherlands are also tax friendly in Europe and that is one reason why many Holding companies domicile there.

It's great move, Speculatius, Because HII is not a business, it's a scheme [with a ticker, though] to suck up funds from the US military budget to keep people meaningless employed. Well, I am not sure I fully agree. Should the US just outsource building these ships to Korean shipbuilders for example? it sure would be cheaper, but I don’t think it would ever happen. There is some issue with IP too, but I don’t think there is much IP in the hulls and that is actually my concern with HII in the long run. Longer term, military power is going to be driven by technology much more so than by the number of boots on the ground. that’s why I believe the likes of LMT, NOC and LHX are better bets than HII.

For reference, the largest bank in the UK - Lloyds currently trades around 28 pence.

^ It is also puzzling that there is a group of people even here that believe that herd immunity is inevitable, yet would not take the vaccine. It seems to me they it should be clear, that catching the live virus in the wild in a totally uncontrolled setting as far as dose and delivery is concerned is the worst option of all. Getting a vaccine that is not a live virus (so it can’t replicate) in a controlled setting and with hopefully known safety data should be much better in almost any scenario, even if the vaccine isn’t perfect in terms of efficacy (catching the virus naturally sure isn’t perfect either). Getting a vaccine is surely more cost effective than an ICU stay and getting infusions of MAB and Remdesivir.

Getting her credit shot for just 9k doesn’t seem to be worth it.

LEVI (AH) and HII. HII was a starter position and the defense play I had the least confidence in.

Hey, PLTR is the tobacco stock for software investors. I kind of like the idea.

I don’t think maintenance for EV’s will be lower. What is the difference between EV’s and ICE’s, the drive train (motor and transmission). Sure there are different issues (no oil change, spark plugs, transmission fluid changes), but even electric motors can have issues and there are friction parts in both. Most issues are nowadays with the electric or electronic system as we have more Motors, sensors etc. Soon we are going to have more cameras, IR & LIDAR systems, computers, software etc for thr self driving cars. I think the character of vehicle maintenance will change dramatically, but I am not sure the cost will go down. Accident frequency will probably go down, but the cost to repair those complex systems will be higher, so it may be a wash.

This one is far less favorable. They basically claim PLTR is a government contractor worth 1x revenue. https://nymag.com/intelligencer/2020/09/inside-palantir-technologies-peter-thiel-alex-karp.html

This is a pretty controversial co in the field of big data. They started out with defense work, but now more then 50% of their revenue comes from commercial customers. In a way, it is a bit like the well known defense contractors I own. Their main moat might be they they are willing wo do work, that other’s won’t touch. I am not sure if their government work gives them an edge with commercial work or puts them as a disadvantage. Here is an S1 tear down: https://mattturck.com/palantir/ It’s highly valued at around 15x EV/revenue run rate. Losses have been considerable , but operating results are improving and they actually generated an operating profit (ex stock option expenses) in H1 2020. This will go in my watch list for the time being.

Sounds like some folks like what they see as well. It certainly helps to have more eyes on a stock to make sure nothing substantially is overlooked. I went through the proxy statement a bit and noticed that the BOD is very old and probably would benefit from some fresh perspective. Overall, I didn’t find anything strange there. I like thet they have a stock ownership requirement of 6x base salary for the CEO and 4x for the president. There also seems to be a provision that may allow activism:

I hope you don't mind that I chime in, but could you elaborate on the part in bold? I don't understand what you mean with "they're better and faster than the competition right now". It's also unclear what you mean with "they are much better at software and fast iteration". I think it is a lot of fluff but nothing very tangible. As you could have guessed, I don't think they have a moat at all. imo the brand premium is a result of the fact that they are the first mover in the space combined with the fact that they have built an EV from the ground up in combination with the Musk aura. People that bought a Tesla when there was no major competition have experienced the advantages that an electric car has over an ICE car (like the the instant torque) and attribute those features to the fact that "it is a Tesla" rather than the fact that it is an EV. With the risk of repeating myself: take a look at the best selling EV's in a country like Norway, where EV's have 60% + market share (via https://eu-evs.com/). In 2020, the Model 3 is only the 5th best selling car after the E-Tron, the VW Golf, the Hyundai Kona and the Nissan Leaf. Also this: how many people are actually interested in the software behind a car? I guess it's < 5%. Most people are still just interested in getting from point A to point B. Here also you can find for instance someone who prefers the Polestar 2 over the Model 3: https://www.businessinsider.com/tesla-model-vs-3-polestar-2-ev-electric-vehicle-comparison-2020-9?r=US&IR=T (Yes, I know that others would prefer the Model 3, but it shows that it is really a personal choice) Some other potential explanations for the Tesla moat: - the supercharger network: other OEM's are combining forces to build out charging networks and infrastructure, so I don't really see it's advantage - range: Tesla's in general offer extra range compared to the competition, which is definitely an advantage. Having a 400 mile range versus only a 350 mile range will definitely entice people to buy a Tesla, but I can't imagine that for most people range would be the number 1 priority / reason to buy a car . - Autopilot / FSD: I'm probably biased here, but imo Tesla is the perceived leader because they are willing to cut corners, while other OEMs their nr 1 priority is driver safety. How is it for instance possible that you see Youtube videos of cars on Autopilot with the driver sitting in the passenger seat, while Tesla requires its drivers to be able to take the steering wheel at all time? Other OEMs would add a feature to the car that you can't drive with no one sitting in the driver seat (e.g. via a weight sensor in the driver seat). Tesla doesn't do that. Btw: Tesla's volume growth in Q3 is nice, but it is funny that they don't want to provide a split in sales for their different models. The main reason I see that they don't do that is because it would show the cannibalization of their own models. It is clear that the Model 3 has been cannibalizing Model S sales and I would imagine that Model Y is now cannibalizing Model 3 sales. I've also seen additional price cuts: Model Y has seen a $3k price cut just 4 months after its launch and the China made model 3 also got a price cut. Will be interesting to see how the ASP's have moved this quarter. Luckily, Tesla now has enough cash in the bank to continue losing money on each car they sell, so I guess that volumes will continue to grow over the foreseeable future as long as they can continue lowering prices. Tesla’s Autopilot still seems to be the best in terms of the car driving itself according to several sources I can find, but isn’t necessarily the safest Because it doesn’t check if the driver is paying attention. So that’s why driver in Tesla sometimes yolo around in their cars leading to some of those nasty accidents that are well documented: https://insideevs.com/news/446766/tesla-autopilot-euro-ncap-assisted-driving-tests/ Software is becoming way more Important and certainly with semi autonomous driving slowly becoming mainstream, it will be even more so in the future. People may not care how it works, but they certainly care what it can do.

The stock was flat, the business wasn’t. MSFT’s revenue grew from $25.3B in 2001 to $77.8B in 2013; roughly 10% annually.

^ I have Seen a lot of questionable analysis in their thread, but this is beating almost all of it. Adding up all the percent positives to get the total cumulative positives would only work if everyone in NY would be tested every week and everyone tested positive once eliminated from the pool of subsequent testing. Of course that’s not the case, the number tested each week is only a tiny part of the total population.

10 years ago they sold hundreds of cars a year of one model based on a Lotus, give them a little time to build a line up. Tesla is usually accused of moving too fast, not too slowly.. But all BMWs look like BMWs, all Porsches look like Porsches. If what you have is desirable, it's not too much of a problem. If you have more commodity products, then it helps to try to make a zillion variations and try to see what sticks or what may fills a niche. Same for iPhones vs Android phones. The bigger car companies have a lineup up cars that tend to have a similar style, but yet different. Tesla’s to me look like Hyundai’s to me. They have good tech in them (batteries , motors) and the performance (acceleration) is very good. Quality is abysmal though. I think it is at this point an enthusiasts car for people that are willing to put up with those shortfalls. We will see if that’s the case when competition comes up with more mainstream cars, which should be next year.