Spekulatius

So Trump Tweets to open the schools ASAP, but how are the schools going to open in states that have high infection rates? Unless those rates go down, AZ, AR, FLA, GA, TX and many others won’t be open the schools at all, imo. In any case, the decision to open is made at a district level, not by the governor, much less federal level. The governor/ states gives general guidelines but that’s pretty much it. Having lived through the online schooling since March with my teenager I pretty much think it’s a disaster. If these states can’t open schools in many areas, many parents are forced to stay at home which pretty much guarantees that the local economy there is going to be crappy. I located in MA and our schools district has to create 3 plans ( online only, hybrid online/regular and regular schools with some precautions). I am hoping for the latter and I would be seriously pissed if my local government messed this up and gets hospitals and schools shut down in exchange for keeping bars, gyms and nightclubs open.

I don’t think what he is talking about (totalitarian kind of subversion) Does not apply to our current situation all that well. We now have an abundance of Information sources with rapid feedback mechanisms which gives you exactly the kind of information that you want or should I say deserve. Those things didn’t exist in the Soviet Union or other totalitarian stated in the 1980’s and before and they lead to somewhat different issues.

One thing that we have going for it is that there are a lot of test subjects to run the clinical trials in large numbers. That was one of the issues with SARS - we run out of test subjects due the SARS being ringfenced if I recall correctly. We don’t have the same issue here. :o

Resurrecting this, since I found this interesting interview with the inventor of the VIX. I didn’t know for example that index puts tend to be overvalued systematically since institutions buying them, but individual stock options are not: https://www.bloomberg.com/news/articles/2020-05-15/the-father-of-the-fear-gauge-says-he-feels-reassured-by-the-vix

Amazon music does offer music for “free” if you have Prime anyways. I use it and the catalogue isn’t too bad. I don’t think Spotify will get to 40% market share, but could be wrong. I think there will be a lot of niche and local competitors propping up.

I have found a IBKR simulation account useful to learn about the platform and do some trades that seems a bit more complex (foreign exchange, for sign stock). I also found a useful side benefit - you can use it to get real time quotes for foreign Exchanges For free so to speak. You just buy one share or lot of a stock in the foreign exchange and IBKR while not showing you real time quote, will show you the real time value, which is basically the same thing. Not a huge benefit, but I found it useful in some cases.

I thought about shorting it but in this market I am afraid to short even when, like on this case, on the face of it is overwhelmingly rational thing to do. The Price paid by Buffet for sure isn’t bullish for midstream companies ( OKE, WMB, EPD, ET, ENB etc). I think he paid less than any of the above is valued by the market with the possible exception of ET.

It wouldn't surprise me if D trades down a bit more. Looks like they sold decent assets cheap and they are cutting the dividend but this is for the D board. I think BRK got them this cheap because they were willing to buy the entire portfolio. There are more natural buyers for the pipelines (e.g., EPD for Questar and TC for Iroquois) but that would require a lot more work/time/regulatory hurdles. I think Dominion was will to trade this asset cheaply in return for a better ESG rating. I think BRK got these assets for a really good price (11-12x post tax earnings unlevered).

Boyar thinks that Dolan would rather sell the sports teams than MSGE. He doesn’t really actively manage the teams much, but is an aspiring artists, so it seems to be that the LV sphere Is his project (and it’s a terrible idea, imo). I own some MSGS and upon thinking about this from various angles , the thesis hinges upon Sports team becoming more expensive and I am not sure how strong of a thesis this is. I think the economic value of sports may be maxed out and we are seeing the problem with the cable bundle which looks like it is pricing itself out of the Market. As far as the Braves are concerned, I think baseball is in a secular decline (horrible aging demographics, no international viewership), so I think it is a way less interesting asset than the Knicks or the Rangers. I do acknowledge the discount to fair value, but I think the key isn’t buy the assets rather than the cheapest ones.

Based on Dominions roughly ~900M negative earnings revision due to the deal, Berkshire got the assets fairly cheap.

Pretty good presentation from Boyar value on MSGE and MSGS. They also touch upon AMCX and MSGN. I do agree they MSGN as a stand-alone makes no sense and that it might be recombined with MSGS. One concern I have with MSGS is they sport team appreciation might hit a valuation limit, due to the cable suffering which in the end pays the bills. I looked at MSGS pro forma revenues and they haven’t really grown at all for the last few years. This is also apparently just looking at MSGN performance where the cable fee economics reside.

Time for SD to reactivate some friends in low places to help out breaking some kneecaps if he still want to get his cabin in St. John.

Here is some paper on the D614G mutation of the Virus, which seems to be more transmissible but not necessarily more severe in terms of how it plays out. This mutation seems to be 3-6x more transmissible (Due to higher prevalence of spike proteins on its surface) in lab experiments which should lead to a higher Ro. I think this was the mutation that Fauci was talking about recently. From an evolutionary POV, a variant of the Virus that is more transmissible will probably become dominant over time. This also may help explaining the ferocity of recent outbreaks in the US, besides the other factors that were mentioned before (holiday gatherings, opening high risk establishments like gyms, bars, lack of precautions). https://www.cell.com/cell/pdf/S0092-8674(20)30817-5.pdf

I agree. Valuation is irrelevant, if an asset is controlled by a crook and there is no way to wrestle control away. It’s as simple as that.

I agree with many of these above things pointed out. 1) One thing we did is have our son eat the same food we eat from a very your age (~1 year old). First mixed in and starting from year 2, he pretty much ate what we ate. Even in restaurants, we rarely ordered kids means, but rather have him eat some of thrthe adult food, sometimes diluted down if it was spicy. 2) While we aren’t health nuts, certain things like coke/soda or other sugary drinks were never in our house. He could try to when he was at a birthday sorry with other kids but ended up not really being thet fond about it. Same with sugary stuff. 3) we always had precut apple slices, strawberries , raspberries around as snack. When our son wanted something. In between meals, that’s what he got. 4) My wife involved my son in cooking activities early on, starting with age 2. He learned how to prep food, salads and add the condiments he liked (feta cheese, olives , sautéed onions or whatever the preferred flavor at thet time as) and could to some extend create his own means, like when we amd homemade pizza, he could put the stuff he liked on it (sometime weird combinations but so be it). I think eating your one cooking really helps. 5) replace salty snacks with nuts, trail mix etc. Very easy. Again, my sample size is small (n=1) and what works for one kid, may not work for another, but the above (or some variation of it) might work in your case too. The earlier you start, the easier it is from our experience.

Greg, As you perhaps already know, I'm pretty observant to facts posted here on CoBF, and by all means much-much more observant how those so-called facts are processed and handled. So, to me, you are here just such a low-life cheat fiddling with your numbers that you post here on CoBF, dividing by four, instead of dividing by four-and-something! [ : - D] I hope everything is evolving well over time for your part, and yours! Take care [ : - ) ] [The rest that we're talking about here on CoBF is "just money" [and all that].] In short - now that I actually think about it - there is no capital gain comparable to become a parent again! [ : - ) ] Haha thanks John. Yes, things are well. Just another "period of adjustment" as seems to currently be the norm in the world. I'll do one more day, and then stop posting my daily meals. Just trying to emphasize how it is possible to eat well and cheap. One thing I have found very helpful is that going to the store daily and buying only really what I need for the days meals, greatly cuts back on waste/saves money. Previously, or when I go to Costco, its very easy to fall into a "I'll have some of this, and a bit of that, and oh, throw this in the cart too" mindset. Much of that stuff either goes bad or sits in the pantry collecting dust. Breakfast Eggs Benedict: Eggs 2.49 carton Hollandaise sauce 1.29 packet English muffins 1.50 a sleeve for store brand French toast for kids 2.79 for a box that lasts a week 6 coffees(I drink too much) K cup style 80 ct is $20 Apple juice 2.99 a jug, lasts 2 weeks Lunch Pierogi 3.79 a tray Sautéed Onion 1.99 lb Fish sticks for the kids 2.99 a box (although typically I catch the walleye and wife breads them, so free, unless you want to incorporate all the boating/fishing expenses, which will be an obnoxious add on) Dinner Skate Wings 7.99 lb Asparagus 1.99 a bundle capers 1.79 a jar couscous 1.99 a box pizza bites for the kids 1.99 a bag which lasts 2 meals I wouldn’t exactly rate fish sticks, French toast, pizza bites and apple juice as healthy for kids. We try to limit our grocery shopping to 1x a week, mostly trips to Costco. Sometimes we do a second trip to the Market basket to pick up some veggies etc. We used to go to a local farm and a local higher end butcher, but not that much this year because we now limit trips. I might check out the local farm again this year.

The more BAM owns of BPY, the larger the discount to NAV is going to get, which makes a buyout a necessity. Then they are paying the management fees from their left pocket into their right. This thing is so highly levered with underwater assets that are impaired to a significant extend (Retail, Office) that really wonder what the end game is going to look like.

Except the government has shut down bars, restaurants and a few other things in several states. When you look at LA the Vast number of cases have been amongst Latino’s. Also note that directly adjacent wealthy neighborhoods like Pasadena are doing much better. http://publichealth.lacounty.gov/media/Coronavirus/locations.htm This epidemic hasn’t a strong socioeconomic tilt, it prospers when it gets into the weaker parts of the underbelly in the society. That’s one reason why the US has been doing relatively poorly, besides the leadership issues. The US has a whole lot more soft underbelly than most states in Europe.

US at 33k with TX, CA and a few others still unreported for many counties. Good chance at 50k+ today. Perhaps 100k+ days coming soon given what you know will be rowdiness for 4th of July as well. Oh yea, and OK still hasn't reported the 6000 Trump attendees who undoubtedly have it. Should make for some trading opportunities. I added big time to my general market short into the close. There is almost no way the market opens green Monday, if past patterns are any indication and news flow is as expected. The guess on COVID-19 trends was correct, but the market nevertheless went up about 4% since you posted. It’s simple - if the COVID-19 numbers are bad the stay at home stocks are doing well and the market goes up. If the COVID-19 numbers are good, the economically sensitive and the “Davey Daytrader” airlines/ cruise ship stocks are up and the market is up as well.

Been following this for a while, the cheapskate I am. Some not so original thoughts: Biotoscana seems like a dog - low gross margins, SA exposure, mostly licensed drugs What are these little deals where they spent a few thousand $ on deals? Is any of this likely to move the needle? why even bother ? My guess sooner or later this company will create some value with an interesting deal but right now it looks like a value trap. Again, I also want to thank snowball82 to keep this on our radar screen.

It sounds like Gileadhas granted a royalty free license to some generic manufacturers so I don’t think it will be that big of a problem: https://www.pharmaceutical-technology.com/news/gilead-remdesivir-licensing-deals/

Speaking of interest earning assets - they are exploding. 2019 YE balance was $274B; and it was growing by about 25B a year. At the end of May it's $361B! In May alone, they added 1.25MM new brokerage accounts - that's 10X normal. So business is booming. Much of that cash surge, I'm assuming, is from customers raising cash in the downturn ( March saw a $40B increase from February). Looking backwards, NIM scraped along at ~1.6% from 2012-2015. That's probably where it's headed again. Of course, back then they only had $100-130B in interest-earning assets. Making 1.6% on 370B is almost $6B right there, and that doesn't count AMTD. Schwab really is a beast. It's kind of mind blowing, this operation. They have 19,500 employees, custody for 7,000 RIA's (including mine), and process a mind-boggling number of transactions. And where do they make most of their money? Scraping a couple of basis points on the cash their customers are too lazy to put in a money market. They have 14MM brokerage accounts, which by my math has an average of $26,500 cash each. This thread has re-awakened my interest. Thx for the thread. Edit: It's probably unwise to take that 370B as gospel. It may not last, if customers put it to work; and I'm not sure they can make margin on all of it (last Q it was noted they parked something like $58B of the cash at the Fed). Thanks for thr number, they are helpful. The headwinds from lower NIM for the next years is something one needs to content with. SCHW is similar to banks in this respect, however compared to banks, they don’t have to content with the potential ugly loan losses. I am pretty sure that 10 years from now, they will be in as strong and perhaps stronger position relative to competition as they are today.

Most of the cases occurred in a few counties in LA and Orange County. The outbreak occurred after the lockdown was eased and bars were allowed to open. From a few anecdotal reports that I have seen causes are: 1) family festivities (Father’s Day, Memorial Day), Those May explain the timing of the delayed wave. 2) bars Due to socioeconomic reasons, emigrants are more susceptible apparently and that is what we have seen in the LA area as well. LA always had more virus circulating than other areas but it seems like above factors caused the runway train wreck. Again, the virus isn’t political, it doesn’t care about red or blue. If it starts to circulate freely and you don’t hammer it early and hard, the exponential growth will have its way and the results are what we are seeing.

All bank stocks have been weak. BAC is no exception. Their tangible book ( the more relevant number to compare different banks imo) is $19.79/ share , so it trades at a small premium to tangible assets still.