Spekulatius

That’s a great site. Bookmarked. Thanks for posting!

AZ not looking good at all. While the higher number of positive cases can be explained by higher testing numbers either, the higher % positive definitely points into the wrong direction, as does in the increasing number of hospitalizations. The number of death is still small. TX and a few other states in that neck of woods show similar trends. That didn’t take long: https://www.reuters.com/article/us-health-coronavirus-usa-arizona/arizona-calls-for-emergency-plan-as-covid-19-spikes-after-reopening-idUSKBN23H03K

FPE.MI - Italian artisan jewelry manufacturer. Got a buyout offer, but then the new majority owner decided not to go all the way due to COVID-19. The business will take a hit this year, but I think Italy will recover faster than thought. Seems very cheap for this great little business.

Of course the bonds are a crap investment too. by the way, if you compare bond yields to stock yields, you should compare investment grade bond yields (let’s say BBB) and not risk free bond yields to stock yields. The analogy to 1999 is not perfect (it never is) but there are a lot of similarities 1) influx of new market participants - back then via discount brokers like E*TRADE, now via free trades Robin Hood 2) highly speculative trades with a disregard of fundamentals (I don’t think I need to elaborate here) 3) Fed overshooting - in 1999 due to the perceived Y2K problem, now due to epidemic, which unlike the Y2K is very real. That’s where the parallels end unfortunately. The Economy was doing very well back in 1999 and is arguably in worse shape. The Federal budget had a surplus vs record deficits and we had a reasonable political setting back then. Interests were higher back then but were easing as well but then the Fed took the lunch bowl away after Y2K came and passed with not even a whimper. It is less likely now that this is going to happen, but who knows? FWIW, if we get 5% earnings growth from 2019 levels for the next 10 years I think we can consider us very lucky.

AZ not looking good at all. While the higher number of positive cases can be explained by higher testing numbers either, the higher % positive definitely points into the wrong direction, as does in the increasing number of hospitalizations. The number of death is still small. TX and a few other states in that neck of woods show similar trends.

I think 2020 is far worse than 1999. Compared to what’s going on right now pets.com looks viable in retrospect. I think it should just IPO again and I bet it would surge because if the nostalgia value. What's making you say that 2020 is worse than 1999? I remember stories on places like 20/20 (or something) about how much money people were making. Well, we have the stock market of 1999 and the economy of 2001 ( after 9/11) at the same time. Add to this a government about as competent as the Weimar Republik’s if you care. For completeness,

I think 2020 is far worse than 1999. Compared to what’s going on right now pets.com looks viable in retrospect. I think it should just IPO again and I bet it would surge because if the nostalgia value.

Trump has a point (imo) pointing out the protests On one hand and the resistance to allowing campaign rallies on the other : https://www.cnbc.com/2020/06/08/trump-to-resume-campaign-rallies-this-month-as-states-loosen-coronavirus-limits.html However, the protesters skewed young and mostly wear masks and the protests were outdoors, while Campaign rallies would be indoors and the audience as well as the headliners (including himself) skew older. Will they wear masks? This will be an interesting experiment.

Another anecdotal observation. They don’t buy Stocks that are about to go bankrupt because they don’t know about the impending bankruptcy, they buy them because they go bankrupt, having observed that bankruptcy often causes stocks to spike up. So now, some traders front run the bankruptcy or the bankruptcy traders.

Did bankrupt companies stocks actually pop in 1999? I don’t think so. 2020 may actually be worse than 1999: If you think about this too much, you go ?

USA! USA! USA! Make Covid Great Again! i was part of an interactive online session today dealing with risk management and COVID-19 (how to establish protocols, guidelines when the sky falls etc) and there was a relevant part. One of the participants showed a risk-consequence matrix: low risk high risk low consequence #1 #2 high consequence #3 #4 For many scenarios, CV exposure often ends up in section #3. This is, in a way, similar to driving above the speed limit or investing in an overvalued market. The #3 area often gives rise to controversies in the application of collective measures imposed on individuals. A disconcerting aspect is that individuals seem to go through a two-step process: a) risk perception and b) risk tolerance. How does that work in Las Vegas? Well, the crowd going to Las Vegas is probably not that strong in risk assessment and statistics to begin with. Same with the protests in a sense, although I think the risking catching the Virus at a protest is lower than at the casino. Are the buffets open? Might as well go all in. A while ago the major of LV gave an interview. It was something to watch.... Edit - I checked for some sort of recent visitor experience and this sounded a whole lot for subdued then the Twitter walkthrough above: I found the lack of staffing quite interesting.

Anyone noticed that trends in a lot of states are ticking up. AL, AR, AZ, CO, CA, TX, FL and others. Some of it can be explained by the number of tests going up, but when number of tests go up and % of positives go up and hospitalization rates, it most likely a real trend. We will see how much of a trend this becomes - I guess it is expected when opening up the economy. The NE states still show downward trends, but of course we haven’t opened much yet.

^ I think the bullish take for suburban houses that their appreciation For 10-15 years has lagged so far below core city areas now that they have become a great value in some areas. It’s highly attractive for some millennials who probably get into the age of having kids where the better suburban schools and more space make this option more attractive. Then we have a trend towards remote working and the pandemic which generally was far worse to experience in cities as additional factors lately.

Yes, and that is why the WHO should Continue to perform a study (or at least finish it) even when the odds are long Remdesevir is not just expensive, but also a drug that needs to be Intravenously in 5 or ten rounds applied, which makes it unlikely a game changer even if it works. HCQ is cheap and even if it is only modestly effective might have a significant value especially for the many poorer countries, which are really the main focus of the WHO anyways. Why not add an arm with Zinc in the Solidarity study. I would prefer exactly same dosage regimen as done by NYU grossman study. Many doctors believe in this Zinc addition. I earlier cited a NY doctor and LA doctor. Here is another article, this from India. ...... Along with HCQ, zinc is also normally administered to Covid patients. Doctors said, “The virus is inside the cell and zinc cannot get inside the cell for biochemical reasons. HCQ opens the door and lets zinc in. That’s all it does in this context,” said Dr Praveen Kumar, a physician at a private hospital. "The antibiotic azithromycin protects the patient from secondary infections.” Meanwhile, another renowned cardiac surgeon said, “In Karnataka, the drug has cured many. Cardiac arrests have happened due to various other comorbidities and can’t be linked with this drug alone.” Doctors and medical researchers suspect that several drug companies in the US want to push new drugs that almost do the same work as HCQ and are lobbying for its ban. “But the central government being very firm on the usage of this drug, it’s highly unlikely that its usage will be stopped to treat Covid patients,” a senior doctor said. https://www.newindianexpress.com/cities/bengaluru/2020/may/27/karnataka-doctors-to-continue-hcq-for-treatment-2148433.html ....... When doctors from NY, LA and India saying Zinc helps with HCQ and HCQ and Zinc are very cheap and can be easily provided to a lot of people and HCQ at these doses is already approved for long term use for Lupus, isnt it proper to test that first? Note: Not a medical advise. These are prescription medicines. Consult your doctor. For discussion only. I take zinc supplements myself. They supposedly help against common cold and may help against COVID-19 as well. There is minimal downside so I don’t see why not. Taking antibiotics as a prophylactic is generally not a good idea, I think. It increases the chance of Having to deal with antibiotic resistant strains later. I would think it is better to take it as needed generally.

If ~10% exposure is enough to cause herd immunity, the how do you explain the extremely high positive test rate (>30%) for antibody in Chelsea (the hardest hit community in MA)? If 10% exposure were enough, the 30% exposure should have never occurred. https://www.bostonglobe.com/2020/04/17/business/nearly-third-200-blood-samples-taken-chelsea-show-exposure-coronavirus/ I haven’t seen much updates lately on antibody test results. Some other communities have been evaluated in our neck of woods, but the Chelsea study was never repeated. This study was from mid April, so the positive test rate should be even higher now and close to the herd immunity threshold. On many other points you made, especially deferring medical care, I very much agree with you. I while ago for example, I went through a CC transcript from TMDX, a company that works in the field, of improving organ transplants. They pretty much stated that all organ transplants came to a screeching halt in March 2020, which means that many organs went to waste (got buried) because there was literally chaos and nobody knew how to deal with hospital capacity (mostly reserved for covid) as well as how to ensure that organs weren’t from infected donors (since there wasn’t sufficient testing ). While this is addressed by now (hopefully) it means that many organ transplants didn’t get done and since there is a shortage of donor organs, some will not get transplants don’t just get deferred, they simply will not get done for people that might have otherwise gotten them.

The market was up when the unemployment numbers were worse than expected and the market was up when the number was much better than expected. I think the market just looks for an excuse to go up!

Yes, and that is why the WHO should Continue to perform a study (or at least finish it) even when the odds are long Remdesevir is not just expensive, but also a drug that needs to be Intravenously in 5 or ten rounds applied, which makes it unlikely a game changer even if it works. HCQ is cheap and even if it is only modestly effective might have a significant value especially for the many poorer countries, which are really the main focus of the WHO anyways.

Everything from Richard Branson Kelcy Warren (Energy Transfer) for MLP’s Bill Ackman (Gotham Partners) Everything Marc Cohodes shorts....

You don't understand. The fact that revenues are down 20% means that the stock should be flat or up. Since the revenue growth will be 25%+ just to get back to the old revenues! Market is forward looking, duh! Not happy to admit it, but I very clearly do not understand! For the company, I work for (manufacturing business) the costs have gone up across the board. Higher salaries (temporarily) additional consumables (PPE) and cleaning and the occasional shutdown when someone tests positive. We also had some supply chain disruptions although those have waned.

We used to have macro trader, but that doesn’t really work better than “value investing”. What works now is “meta trading” and some younger folks are better at it than us old stooges. One just has to make sure you can grab a seat when the music stops.

Honestly, I don't think it's Fed we're fighting. It's the Treasury. I've been thinking through the last couple weeks how this could be possible or make sense. The only thing I've come to is the market hasn't felt the impact yet. Yes we might have 20-25 million sustainably unemployed for the medium term which is ENORMOUS (3x 2008/2009). But, 70% of those people are currently making MORE with the exceptional unemployment benefits. In other words, the economy isn't feeling that 20 million have been laid off - it's feeling that 15 million people have been given raises. I wouldn't expect discretionary spending to be Bonanazas b/c they're still unemployed, but it probably did prevent a huge number of people from cutting back on purchases which is still a net positive...but it's temporary one. In addition to that, the $1,200 checks that went out to a massive portion of the population helps too...but is also temporary. So right now the economy is feeling pretty good and the biggest issues that have actually been felt were the supply chain disruptions which are quickly being rectified. The only other "pain" in the economy at this time is rents that are being deferred. I think this continues on untill the economy is allowed to feel pain - which will be when the exceptional unemployment benefits and that's scheduled to be next month. Yes, I think it is correct that a large part of the Population got essentially a momentary pay raise, especially lower income folks who got laid off. I do think that the latest development reduce the chance if a large follow up stimulus, especially the in employment boost of $600/ week disincentivized many to go back to work. It really needs to go or at least fat drastically cut.

This warrants a further look again imo. The Alzheimer’s drug (Aducanumab) is back on, but the filing is apparently delayed. This is still high risk drug in any case, but I think the rest I’d the franchise cover the current market valuation. Anyone tracking this one closely. I sold the few shares I bought back then but think about buying back in.

I think we are getting to the point in this bull market where pigs fly, quite literally.

There was at one point a belief that the sickest were shedding the most virus, but now there have been study results indicating that viral shedding is highest when pre-symptomatic, if that is true, you may be a little too optimistic Another issue is that shouting has been estimated to shed 1000x as much virus as simply breathing. Think of the indoor choir practice example that is often cited. I saw many examples of a someone without a face covering screaming right in someone else face from less than three feet.. I hope they weren't infected because that's got to be extremely high risk. Yes, the highest Viral shedding is asymptomatic shortly before shortly symptoms. My Thinking based on what I can stitch together though is that people they never show symptoms will never show high viral shedding at any time. Which makes sense if you think about it they people who never show symptoms likely als ways keep the virus in check with their immune system. At least that’s a plausible explanation why the largely asymptomatic kids never seem to create much transmission to more susceptible adults in schools. If transmission from kids to adults in a school setting were common , it would already have shown up as infection clusters in Denmark and Germany, but so far that it not the case. The stuff they doesn’t happen is often as insightful than the stuff they is happening. When we think for example about the much commented upon spring break parties in Florida a while - well we never heard much about infection clusters that could be traced back to these events. It’s also a fact that Florida did much better than many expected in this epidemic. The likely factors that helped were that the spring break parties occurred mostly outdoors and involved mostly younger folks. Invert this and put a bunch of older folks in a badly ventilated (I assume) confined place, which we call assisted living or nursing home and we very much know what happens. All the above is not a sure fact, more of a hypothesis, but it matches the observations so far. If we know about the do’s and the Don’ts we can open up the economy smartly with reasonably low risk.

Have you looked at EMGC? There's a (public) writeup on VIC. EMGC is a fundamentally different business. RGA stock up 12% today. Glad I covered yesterday. they also closed a subordinated bond offering. Looks like they are trying to reinforce their balance sheet, which is a smart move.