Spekulatius

Interesting interview in Barron’s: https://www.barrons.com/articles/how-to-value-stocks-according-to-nyu-professor-aswath-damodaran-51593082800?siteid=yhoof2&yptr=yahoo

Probably true this year:

I did not search further what exactly "naval deployments" mean. https://en.m.wikipedia.org/wiki/Chinese_People's_Liberation_Army_Support_Base_in_Djibouti Yes, but this port in question is a dedicated chinese naval base and it is next to an US naval base. it is not a port with unauthorized second use as naval base. But I agree that thing could be quite muddy in some neighborhoods around the globe.

I wonder how this squares with the low number of death observed so far in FLA - just 37 today. Even though I understand that death are a lagging indicator (by 2-3 weeks), they should be higher than 37. It will be interesting how this developed. If those almost 9k cases are mostly young, it sort of explains it, but with this circulation rate, it will be impossible to contain this to only young people.

SCHW, LEVI, PDLI and a few adds to existing positions.

I agree. This decade, the focus will be to counter the Russians and most importantly the Chinese. Just to name one example, the Chinese got their own GPS satellite network up and running. This is of strategic importance to become independent from the US for both commercial as well as for military uses for the Chinese.

How did they end up owning 9% of this POS (Cattolica, Italian insurer)? https://www.insurancejournal.com/news/international/2020/06/26/573658.htm

Seems to work fine on my end. It could be a temporary problem with your internet provider. I have had similar things happen to me every once a while with certain websites.

Isn’t the fact that the chinese keep this under wraps consistent with trying to prevent escalation. If they wanted to escalate,the first hing to do is getting your population screaming for revenge by parading the dead soldiers as hero’s. Also owning a harbor is akin to owning a commercial license to operate a harbor. It does not mean they can use them as a staging ground for the military, which als most certainly would get them into trouble with the host country. Now the Chinese build these infrastructure projects not just as an investment, and a way to recycle their trading surplus, but also to buy influence, but I doubt it buys enough to allow them to use those countries as a staging ground for their military.

Hasn't something similar been said near the end of every quarter since IPO? I have no idea, it could all crash down soon, but these questions are not new. That doesn’t mean much. Some frauds go on forever. Wirecard took 12 years and Bernie Madoff even longer. If Tesla indeed is an accounting fraud, it will still be worth billions of $ and perhaps even ten’s billions of $ after the fraud is discovered. That is the time to short, if one feels like it.

At least the Virus has a V-shaped recovery in the US. It sounds like in Houston, hospital are essentially full, which means that another shutdown is very likely. Hospital utilization will drive shutdowns. I am surprised they let it rise to 97%, but maybe they are not counting overflow capacity. https://www.khou.com/article/news/health/coronavirus/gov-abbott-texas-facing-massive-outbreak-as-coronavirus-cases-continue-to-soar/285-8671a837-d723-4e06-a438-8bbc19e1c86b

The risk seems to be non-linear with age, so the absence of <20 year olds would cause less skew than the absence of >60 year olds. But the health comment is a fair point. Also, 3 deaths is not enough to draw meaningful conclusions. When you look at updates from the Ohio prison outbreak from late May, you will find that more prisoners and even 2 wards have died from COVID-19. They also didn’t didn’t everyone despite stating so earlier.

Spekulatius, Great pick ! Northrop is the best of the bunch, however beware that for GBDS there is reason why Boeing dropped out and the reason was not it being preoccupied with the MAX' woes. I believe the model that Pentagon is going with for GBDS is one that it will own the underlying technical baseline of the GBDS program as oppose to the contractor owning it. Meaning that the best part of the contract which is the 50+ year aftermarket can be re-distributed by the Pentagon to other parties (which may or may not include Northrop). On the other hand, Boeing went hard for the TX fighter trainer, (and got it) because it knew that it could sell what is develops through taxpayer money through international markets. i.e. (the F-16 model with Lockheed). For GBDS, Northrop has no international market for these Doomsday weapons and if it cannot own the technical baseline (thus not owning the Aftermarket), it remains to be seen how profitable that "captive" program will be even if it is the sole bidder. The +$50 billion value for GBDS its huge, but most of it is not front-loaded. But i very much like Northrop, anyways. I think a combination of Northrop, Lockheed, General Dynamics and Raytheon Technologies gets one covered on the nuclear triad and then some. The last two are perhaps cheaper due to their exposure to business and commercial aviations. Xerxes, thanks for the commentary on the GBDS program, I wasn’t aware of this. Nevertheless, I think NOC is doing a good move here, as they stated in a CC that they want to get into the missile business and don’t mind spending Capex to do so. That makes sense to me. I remember when Grumman and Northrop merged and both were considered dogs then, but they have done quite well. Generally, I found that mergers in defense often work out well, which also leads me to LHX (merger product of Harris and L3). I kind of know them in Lynch sort of way since during my carrier , I often work to supply defense companies and those are well known to me. L3 itself was a rollup, but they did quite well concentrating on sensors and electronics and I think the merger with Harris is a winner too. So I bought some shares in today’s weak price action. LHX is not a prime contractor, but they supply critical components and subsystems and do so with great margins. I know that Mr Market is concerned about a democratic victory here but quite frankly, I think the outlook for US defense contractor is quite OK here. Both Russia and China are reducing manpower of their marked forces, but vastly increase their offensive capabilities and I expect the US will have to counter this, no matter who is in charge. i expect the military of the future to be vastly smaller (at least in terms of boots on the ground), but getting increasingly more technical and sophisticated and I think it will shift the defense budget from salaries to R$D and Capex, which is good for defense contractors. About the worst thing they can happen for defense contractors is a low tech war against terrorist like we had from 2001 to 2014 that sucks up the budget from salaries , contractor work and bribes in hostile countries and negate the wear and tear in existing equipment (which is low margin work), instead of working on new toys.

Various Defense stocks : Adds: BAESY, NOC New: LHX Also GMED add to MSGS and a few shares of PKE.

I think HXL should be the comp, not Heico. Both produce composite parts for aerospace from what I can gather. I like the odds here. Put in a limit order, for some shares, but only got a fill in one account.

I'd be surprised if Liberty has it just because it's a chart from a third-party. That said, it's pretty easy to visualize because the EU has about the population of the USA, plus a third. So, keep the same line from the EU, and move the USA line up a third. That said, I agree with your underlying point--the chart is a bit deceptive because, compared to the EU, USA has actually done even worse than you'd think just by looking at the chart. https://ourworldindata.org/grapher/daily-deaths-covid-19?time=2020-03-02..&country=USA~European%20Union You can edit the chart to select the start-end dates, etc. It's not a seven day rolling average though AFAIK. The rising positive test % rate is puzzling and unusual. It raises the possibility that some areas are behind the ball. It may represent delayed community spread, higher testing capacity, higher testing in the younger population as well as targeted contact tracing. In many states, this appears to be mostly noise but, in some states, there is signal in the data suggesting that the uncoordinated response will "succeed" in preventing the slope of deaths from going down. After a deeper look, it seems that Texas, for example, may be one of the worst examples of this. The State is showing higher positive tests, higher positive rate %, higher hospitalizations and ICU occupation, younger age profile in the hospitalized group and Texas is scored low in its capacity to test and trace. In this case, rising positive test % shows an inability to contain the virus. It's also interesting to note that hospitals in general have "reopened" for elective cases which means that "excess" capacity is now much lower than it was a few weeks ago. In Texas, i hear that a pediatric hospital is making modifications to now accept young CV+ adults.. It is ironic that some may eventually express the "no-brainer" opinion that the eventual rise in poor outcomes will have been caused by the senseless (relative) re-lockdowns to be announced which, in fact, will have resulted from the lack of respect for the margin of safety concept. The increasing number of % positive tests while the rate of testing is increasing and the increasing number of hospitalizations is a sure indication of the virus circulating more in the population. We see this unholy trinity of data Trends in TX, AR, NC, FL and worst of all AZ: https://public.tableau.com/profile/peter.james.walker#!/vizhome/COVID-19SeeYourState/YourStateKeys In AZ for example,, the percentage of positive texted has increased from ~6.5- to ~24% while the test rate has increased. The only this can happen, if there are a whole lot more infected around. it should be noted that all the states with issues above were states that did didn’t really get hit early on in March and April. Some red states that did get hit early on like Georgia and Colorado don’t really show the same issue right now, Despite opening up too, likely because people are more careful there. What we haven’t seen a rapid increase in the number of death. This is probably because the newly infected seem to skew young (as some Gouverneurs have stated) , death are a lagging indicator and treatment has improved since March. I do think that with so much VIRUS circulating , we soon see more infection of older people as well. People >64 year old are ~13% of the population, that’s a lot to protect. And that doesn’t even include the younger folks with one or several or existing conditions that may be vulnerable as well.

I never heard about this company before. Nice products, but I think the margin expectation of 15-20% seems high. The history of These rocket stocks in Germany (and probably elsewhere) isn’t exactly great. I see lots of bubble stocks I small cap German stocks with low liquidity.

I recently (and today) added to NOC. They are sort of the sole bidder on two huge contracts coming up - the B-21 stealth bomber and the GBDS (intercontinental nuclear missiles). The US ground based nuclear missiles are dated and probably need to be replaced (unless the US is shelving this which is unlikely) since it pre Cold War and was out in place in the 1970’s. Twos programs are $60-70B in Size which is substantial for ~$36B company like NOC. Other stocks in my watchlist are $LHX (strong in sensors and electronics ), Shipbuilder HII (cheap, but somewhat of a low tech metal fabricator ) and $LMT.

Navarro - China deal was off and then on again 10 minutes later. Great insider trading opportunity?

Those that buy garbage, don’t read SEC documents. A lot of “garbage“ is IPO’d nowadays. In a way, the HTZ offering is a logical extension of this behavior. In a way, given access to enough capital, you can turn garbage into something that has worth. Just like turning lead into gold, it isn’t a very efficient process, but it can be done.

The sports teams are the best part of the former MSGS. Short term issues, but no long term impairment (I hope). I don’t care about MSGE, especially the LV Sphere.

Given our existing dataset, we should know within a week or so if deaths inflect upwards if we expect the same lag time as in late March to hold. Nationally, cases really started inflecting up about 1 week ago, so it may be too soon to celebrate falling mortality numbers....Precautionary principle tells me better to worry than to blow it off and start celebrating, but that’s just me. Additionally, anyone looking at the daily data should see an obvious 7 day periodicity to the bars—rising during weekdays and falling on weekends with lowest counts on Sundays. This probably relates to testing/labs/reporting/etc falling during weekend as the virus doesn’t take weekends off, but some staff do. I would not celebrate too soon by looking at Sunday’s numbers of mortality (which is a lagging indicator itself). Saturday/Sunday’s case number continues to rise despite the weekend effect though which suggests even further rise in cases this week... Death have gone from ~1000/day a few weeks ago to ~300 day, despite a larger number of positive testS and in many states even a larger percentage of positive tests, indicating more Virus circulating around. As mentioned in some news outlets, the likely cause is that one the infected skew you get, which has a large impact on IFR rates. It is also likely that better medical treatment had contributed some to the decline, but I think the biggest issue is age distribution of the infected.

Starter in MSGS.

Yeah, it doesn’t pass the smell test to begin with. This is also very embarrassing: https://www.marketwatch.com/story/german-finance-minister-on-wirecard-oversight-the-supervisory-institutions-did-their-job-2020-06-22?siteid=yhoof2&yptr=yahoo BaFin has a history of going after short sellers harder than going after fraudsters.

I find that surprising since the CDC recommends getting the flu vaccine by the end of October each year. Then the number of flu cases rise afterwards. Outdoors temperatures also tend to go up after people turn on their air conditioning. Anybody noticed this? It happens every year like clockwork.