Spekulatius

IMO - Not a valid comparison with a live and connected device with huge community aspects. I went long earlier this year and the only regret I have is that I did not back the truck on this one. The, the community/ social aspect makes this a bit of a different proposition. I found the following excerpt from the last CC very impressive. What’s the average monthly attendance for a gym membership , even a family membership? I guess it’s a whole lot less than 25. So either one person per household is cycling basically every day per month, or maybe 2 people are cycling every other day? Does that seem sustainable in a world where people aren’t locked inside their homes? Even 12 times per month pre-COVID is 3-4 exercises per week, not your average American. Also, does anyone have views on if churn will go up or down by reducing bike prices? I’ll vote up. Where are people “locked in their homes “. Is everyone living in a 30 story tower in Manhattan here? Where I live, gyms have been open since June (NH) and July (MA). Lots of people have taken on jogging and other outdoors activities. now, I personally wouldn’t go into gym because of safety concerns, but that’s another story. I am sure COVID-19 is a factor for Pelotons success, but I don’t think it is the only reason. More like a catalyst. They will probably have a great winter season because outdoors here won’t be much fun. 25 uses a month is certainly for an entire family, but then gain for a family paying 2k for a bike and $59/ month May actually be a good deal, if you really use it 25x a month. Lots of people pay $50/ month for a gym membership and barely show up.

I see the value of integrated myself, but I am not sure if all customers will value integrated experience over autonomy. My company offers choice between (1) Kaiser's fully integrated plan for free and (2) autonomy plans where employees have to pay a co-pay and deductible but have lot more choice over providers. To my surprise, almost all employees pick #2 because they like to be able to go to the best providers and not be locked inside the Kaiser network. Also, Canada has a single payer healthcare, but patients can pick any doctor and any pharmacy they like. So, I think we can't say with a reasonable probability that integrated system will work over customer autonomy. NPS scores can be a leading indicator of market share as they tell you how much actual customers who have used the product/service are recommending the product/service to their friends and family. Here are the current NPS scores to consider that I was able to find: Aetna: 16 CVS: -5 Amazon Pillpack: 80 Alto: 80+ NowRx: 59 Walgreens: 25 Village Medical at Walgreens: 90 Seeing NPS of Amazon Pillpack and Alto compared to Walgreens and CVS reminds me of how Netflix and Redbox killed Blockbuster. What do folks think is the probability that Walgreens will end up being like Blockbuster vs. Walmart given Amazon Pillpack, Alto, NowRx and other online providers have higher NPS and growing exponentially, starting to steal market share? That said, regarding Village MD, what do folks think about NPS of 90 and market share of 50% for Walgreens after everything is settled that was claimed in the latest quarterly call (excerpt below)l? Do you think Alex meant 50% market share among patients who go to VillageMedical or do you think he really meant that they expect Walgreens market share will go from 20% to 50% when VillageMedical is all rolled out? --------------------------------------------------------------------------------------------------------------------------- Alex Gourlay -- Co-Chief Operating Officer for Walgreens Boots Alliance, Inc., and President, Walgreens ... The other thing that's important to understand in the short term has been the NPS score. The NPS scores are over 90%. So this is a really fantastic feedback, and the way that these particular VillageMDs[VillageMedicals] are designed is really strong from the point of view of your local surgery, quite different, and I hope you've seen the pictures to what many local surgeries look like today. And last, but not least, of course they are very good as a practice, and as a Company with the software they have. ... Well, what I can describe is that, you know Walgreens gets 20% of an average market share, you can expect us to be well above 50% when these with -- of market share when these settle down. Interesting info on NPS, we should probably look at those soft numbers more as investors. value investors tend to overlook those soft stats, but they are important imo. CVS looks bad on they end, but I also found through googling, they the NPS for Minute clinics actually was high. 80+, so maybe that’s a relevant number for CVS’s integerster strategy. As I mentioned before, I believe that the old idea to run a pharmacy with a front store front end (in the case of WBA, it’s more a personal care front end) is dated and probably dead. CVS want to replace this with service offering (Minute clinics) and I see green shoots they this is working in my area. Anecdotally, I just went to get my annual flu shot today at Minute clinic today. I usually get these at work , but due to COVID-19, my employer has cancelled them and now recommend to get them at the doctors office or CVS. The CVS experience could have been better (not very streamlined workflow), but the store was busy with people using Minute clinic services (mostly vaccinations ), so maybe that part is working. As for Kaiser, I have used them a few years back. I used to be with PPO/HMO (Aetna, Blur Cross, United - I had them all) and then decided to give it a try and me and myself absolutely loved it, as everything become much more simple and transparent. The problem is that you have to change your doctors and most people like their doctors (since they chose them), but hate their insurers , so inertia to do so is high. Unfortunately, since I moved to the East coast, Kaiser isn’t an option any more. Of course CVS isn’t Kaiser by a long shot, but it is the direction things are moving, imo. United in a way is an integrated player too, but they started on the insurance side. They have their own PBM and run Market places and health care providers which synergistically Feed into each other. That’s what CVS is trying to do combing from the drug store side.

This is a recent IPO and an interesting business. I didn’t know that they have grown into the largest mortgage originator. They make their money on gains on mortgage sales , so earnings are going to be volatile. The last few quarters were fantastic, because refinance volume was high (Due to lower interest rates) but more important, margins were great too. I don’t own it, but I am tempted to buy some shares should it fall back around the IPO price ($18). They have been increasing their market share significantly (almost 10x to ~9% Market share for mortgages heir the last decade) and I see a chance that they expand into adjacent business lines. https://www.sec.gov/Archives/edgar/data/1805284/000104746920004448/a2242208z424b4.htm

I decided to sell most of my position. I still have Fairfax India and willing to give that more time. Seems like they have a little more preference for quality assets in that portfolio, and I like India's 5-15 year growth potential. The irony is that Fairfax owns a good chunk of Fairfax India, and more importantly, generates really nice management fees and performance bonuses from Fairfax India. If Fairfax India does exceedingly well, Fairfax will benefit handsomely. If Fairfax India does average, Fairfax will still benefit from the fees. I would rather own the asset manager! Cheers! https://tv.getyarn.io/yarn-clip/71cf3f54-184e-4143-b723-0bdce2921b4c/gif#LfJMAgFkOU.copy

Small add to CVS and a starter in ANTM.

IMO - Not a valid comparison with a live and connected device with huge community aspects. I went long earlier this year and the only regret I have is that I did not back the truck on this one. The, the community/ social aspect makes this a bit of a different proposition. I found the following excerpt from the last CC very impressive. What’s the average monthly attendance for a gym membership , even a family membership? I guess it’s a whole lot less than 25.

Learningmachine- thanks for bringing up the dilution, as it was it mentioned here before. A 1% management take on top of the regular cost of running the business is significant and needs to be taken into account when looking at the whole picture.

Yes, I think getting tainted with being part of the energy sector and ESG trends have hurt the pipeline and refinery stocks, I am conflicted on the refineries and my pick would be PSX over MPC because they have better assets, imo. The knock on refineries is that EV may cause less demand. One doesn’t need the entire demand to collapse, if the demand shrinks faster than supply the margin/ spread pressure may make refining a really bad business long before the business goes entirely away. Just recall, there was a dark age for refineries when overcapacity and lack of supply from cost advantaged crude was causing low profits for refineries for a long time. It was abundant shale oil that was one of the main reasons the refineries started to do better. So in an indirect way, the fortunes of the refining sector are tied to the shale, Imo.

It is highly debatable , if you can truly segregate MPLX out from MPC. MPLX crude pipes cannot be reused for NG generally, they are not in the right locations or don’t have the right end points. In some cases it is theoretically possible, but generally speaking , a competing NG pipe already exists in most cases.

I read his letter and think it’s odd that he doesn’t think banks have been impaired. That doesn’t make any sense to me. Sure, we can debate If bank stocks have been overly punished, but there is little debate that they have been seriously impaired by higher loan losses and lower interest rates. This alone would question me a money manager’s judgment.

re appraisal - I refinance with the same lender (no cash out ) and he is still relying on the initial appraisal from when I bought the house in 2018. There was no reappraisal needed for my last refinance, nor for my current one. FWIW, my LTV is ~50%.

Yeah, some people are focussed on politics. Strangely, nobody on this forum is talking about France. Yesterday, France had 6,500 new cases for a country of ~65 million people. Yesterday the United States had 29k new cases for a population of ~325m people. Over the past week, looks like France took over the lead for the most significant covid outbreak amongst developed countries, relative to its population? Things seem pretty manageable in Sweden these days... So, shall we engage in a series of venomous statements about President Macron, now that France is "winning?" Is this MFGA? SJ Oh man. Prepare to be viciously attacked like the dozens of others who came before you; that dared present anything contrary to the narrative of the guy who got snubbed for debate team captain in high skool. Now back to crying about Trump. I heard yet another person who dislikes him is writing a book or prepared to make a statement about how much he sucks! Libtards....go crazy! What is happening in Europe is interesting. Again multiple factors involved but yes politics plays a role. There is significant resurgence in the aggregate in the European Union but the average hides wide disparities. There appears to be some inverse correlation between the extent of the initial wave (eg Sweden and some others) and what is happening now but 'performance' with the first wave is also correlated. There is more testing now but the positivity rate is also going up. An argument could be made that it's better to spread the spread over time but there may be a fatigue component. Time will also reveal more about the seasonal impact. Based on what I am hearing from Europe, fatigue definitely plays a role, same as it does here. The second wave in Europe has been caused to a significant part by summer travel (Spain and other countries depending on tourism opened up) and it has not gone that well.

As predicted, we have finally caught up on Italy in terms of COVID-19 death normalized over population. I am comparing country to country here: I guess Italy’s government isn’t quite as incompetent as thought. They got hit very hard early on, but then managed to contain it. We didn’t.

More like rubbing their nipples and moaning "Oui, Oui, fees, fees" Is this now value investor or merger arbitrage porn? The price of TIF seems to indicate that this is all foreplay.

Of course they are suing. This deal is done for, but TIF probably will get a little bit of cash out of it to settle. The undisturbed, pre COVID price of TIF is ~$85/ share if I see this correctly.

CVS getting some love here. I also added a tiny bit.

I know what I was thinking. I felt there was risk that MA and V could be disrupted. That was clearly not the case, but I think many fellow investors made the same mistake. Again, if you were correct about the duration of the moat, being off a bit on valuation didn’t really matter. At current multiples ( roughly 3x what they were back then) I don’t think that’s the case any more though. With current valuation multiples, I would argue that investing in MA or V is just a bet on low interest rates.

Interesting clinical candidate with an unmet need. It looks to me like they will need to raise cash with a secondary very soon though. Word of advice...this is a highly promoted stock at tier 4 brokerage houses and to date, the company has been very eager to use any sort of share price bump to raise capital. Note, that's what they all do, some just more regularly than others. Thanks for the color. I have no idea what a Tier 4 brokerage is, but I suspect that these are the dinky outfits that recommend and pump microcaps? Anyways, the way I see it CR P has maybe 2-3 quarter of cash left, which means that they probably raise in the next 3 month or 6 month at the very latest. Typically buying ahead of a secondary is not a winning proposition. Tier 4 example http://www.teribuhl.com/2019/03/19/honigs-broker-dealer-laidlaw-target-of-fbi-investigation/ Good warning on CRBP https://seekingalpha.com/article/4245168-corbus-ties-suspect-investors-history-failed-clinical-trials-lenabasum I have a bunch of accounts at a lot of different places either personally or for those I oversee. So occasionally the dirty wringer produces "sales leads" which I end up on. No joke I had a fellow maybe 4 years ago call me unsolicitedly and hard selling me some options strategy on....Corbus. At like $8. A few days later in went down like 50%. I have nothing to add as to whether what the actual company is doing will bear fruit. But having been almost exclusively involved in seeking out and doing deep dives and short only candidates earlier in my career, I can tell you that many times, just using guilty by association with some of these names, is all you need to do(outside of securing a borrow and timing the short entry :P) CRBP down to $2.1 ( down 76%) premarket on apparent clinical trial failure. Wheeee!

Any specific companies you have in mind that you think are interesting or may become so. May feel is that this segment of the market is generally very overvalued because: 1) recent growth rates boosted by the Virus epidemic are extrapolated In the future 2) transition to profits for a lot of these companies is unclear because marketing and G&A seems to match or even outrun revenue growth. Companies call it investment, but there is also a risk that operating expenses are misclassified as marketing and customer acquisition costs, boosting gross margins etc. Companies may know how to play the game...

I think that’s one of the core things nowadays more so than before. Most of the money is made being correct about duration of the business, not the multiple now. You have to look further out. Being right about tanker spot rates in 3-6 month doesn’t provide much of an edge, but being right about a tech moat ten years out does.

Recently re-watched “Casino Royale” , Daniel Craig’s first Bond movie and it has aged very well. It might be the best Bond from the whole series. Now, I am watching “Chef’s Table - BBQ” in Netflix. That’s a pretty well made series for those of us who like BBQ.

Banks as an investment are way more macro dependent than most other business. It is almost impossible to do well with bank stocks, if the macro environment is unfavorable for banks.

none are saints, but they didn't pretend to be either. But man, Apple's got some nerve spouting they are going to try and champion privacy... I also learned on that trip that Apple Maps really sucks after not being able to use Google Maps to get around. Why the hate against Apple. I don’t see them in the Chinese government pocket more so than many other companies doing business there. The privacy changes are beneficial to the consumer which is good step forward.

There was a large push a few years ago from PPO and PBM (hard to tell who really is in charge here) to push online. most of the “savings” came from going from 30 to 90 day refills. I think this came to a halt somehow. Maybe the saving weren’t really there due to waste? It’s really hard to tell.

Are you not worried about their history of dilutions from 2009 to 2018? Dilution was about ~1% annually since 2012. That hardly breaks an investment thesis considering that they had some decent organic growth. You're right dilutions slowed down in 2012. Maybe I should rethink my mental model, but I find constant dilutions a sign of management willing to steal from shareholders, and that can show up in other ways also in not being shareholder friendly long-term, e.g. when push comes to shove, for management to save their jobs, if they need to dilute like crazy, they will do it. Also, I don't like that they are so highly leveraged with a low CET1 - very close to being taken over by regulators if they get any losses. Well, I don’t like dilution either, but one needs to look in more detail. There are cash proceeds from stock Option excercises for example that reduce the effective dilution. Some mature SAAS companies (WDAY being a prime example) dilute their shareholders by 6-7% annually through stock based comp - that’s really a significant economic impact. As for Schwab though, I think the dilution has destroyed less value than WFC overeager share buybacks for example.