Spekulatius

Did ticket prices in China go up after reopening? that might be a clue. If they significantly raise ticket prices, I think there is going to be a lot of backlash and brand damage.

What would the numbers be for taking zinc by itself, or for the cocktail without adding the hydroxychloroquine? The study says patients treated with hydrochloroquine benefit from zinc, but perhaps a more important question is whether patients treated with zinc benefit from the potentially deadly hydrochloroquine? Eric, the study is between Zinc, HCQ +Azithromycin vs HCQ+Azithromycin. The authors believe that HCQ helps zinc absorb and Zinc has antiviral properties. https://www.sciencetimes.com/articles/25658/20200512/hydroxychloroquine-azithromycin-zinc-triple-combo-proved-effective-coronavirus-patients-study.htm In the study, half of 900 COVID-19 patients were given the triple-drug combo of hydroxychloroquine, zinc, and azithromycin. The other half were given only hydroxychloroquine and the antibiotic, azithromycin. I just take zinc and save myself the rest. Great benefit cost ratio. The rest I am not sure about.

Maybe time to visit this thread about Pharma in the middle of the epidemic? I am looking specifically at MRK right now. It’s a pretty understated drug company and what caught my eye is that they are very strong in vaccines. MRNA with their fancy tech and a couple of Phase 1 drugs is worth ~$28B and MRK with a bunch of vaccine (including one for Ebola) is worth $220B EV. Doesn’t seem right. Plus you get the whole drug company and pipeline with a monster like Keytruda with it. MRK also has a COVID-19 vaccine in the pipeline, but they don’t talk much about it. MRK generally only issues news about Phase 2 or higher drugs/vaccines. Trades at 15x reset Y2020 earnings which seems about fair. Bought a few for my wife’s coffee can portfolio today and thinking about going more in. So far I like what I see, it wouldn’t call myself an expert in drug pipeline matters.

I have got one share left. Hanging on with my fingernails.

Bycles is most likely a one off boom. It’s probably over by June/July. Walmart stated that they saw people buying bikes when the stimulus checks came in mid April. That tell us something already.

Here is the most impotent question - when do we know when the gradual shifts to the suddenly? or in other words, when do we know when the gig is up? Back then in 2008 folks were suggesting a failed treasury auction, but I don’t think that would be it. Besides they I think I have seen it happening with Bunds and it actually wasn’t a big deal. I do think one of those things could happen: 1) short term interest rates shoot up 2) USD devalues suddenly against other currencies , most likely Euro or Chinese yuan There are probably other unpleasant things but I am not sure which one that might be. I also wonder if in the future the status of the USD as a reserve currency could be diminished , most likely due to the Chinese yuan picking up some market share. For that to happen, the Yuan would need to be freely convertible and also float against the USD (it is now pegged). That would also mean that the Chinese would mean to run their economy differently and give up their mercantilistic ways. At some point,the trade warnt why is going to fan up might force this issue anyways. In any case, the Chinese economy is op going to be the largest economy I the world and with 1.4B people, their current is destined to be a reserve currency. I don’t think they have a choice, the only way this is not going to happen is if the Chinese economy blows up.

You have to do something for your target customer really well or you are dead. The department stores are victims of their own mediocracy since they don’t do anything particularly well. I would even say most mall retailers fall into the same bucket. The Competition of most segmented retailers in a mall are not influencers with a website on the internet or online only retailers.

Brand power is not what it used to be. ::) Right when COVID-19 went live in America in March, the crappiest brands and items were sold out. The high end stuff generally was still available.

How did you go bankrupt? Two ways. Gradually, then suddenly. ( Ernest Hemingway)

Thanks for all the input. I agree that PGR looks impressive. They may be over-earning a bit, but they are also growing and the multiple isn't really rich either. It’s one I should buy and possibly add more at a opportunistic times as one is unlikely wrong about the business quality here. One thing ai noticed is that PGR has become a little bit of a “stay at home stock” lately and tend to be strong on weak days and weak on days the market is bullish. So there is probably a chance to get in at an opportunistic price just based on the markets short term volatility.

Her is another study from Accenture. Seems bearish for fashion, alcohol (!) and eve; electronics. https://www.accenture.com/_acnmedia/PDF-123/Accenture-COVID19-Pulse-Survey-Research-PoV.pdf#zoom=40 Somewhat surprising, people intend to shop more locally.

McKinsey consumer survey in Europe. It seems a lot of people especially in harder hit countries (Italy, Spain) are gloomy and intend to spent less going forward: https://www.mckinsey.de/~/media/McKinsey/Locations/Europe%20and%20Middle%20East/Deutschland/News/Presse/2020/2020-04-08%20Consumer%20Sentiment%20Survey/200408_Consumer_Sentiment_Survey.ashx Interesting is the much lower spending intend on discretionary items (jewelers, furniture, Alcohol (!) etc).

These mortgage Reits are basically like tripple leveraged mortgage agency bond ETF‘s. Because if the leverage, volatility in the underlying paper just kills them. This happens every couple of years. They are papers for yield suckers.

Throwing that one in again to get you guys' input. Could Fairfax insurance businesses face similar losses? As large as Lloyd's? I think you need to think about covid on a sub-by-sub basis. Prem assures us that the US subs (C&F) used the industry standard virus exclusions in their commercial contracts, which should protect them from business interruption claims. It seems like about half of the US states have enacted legislation to provide immunity to nursing homes for covid claims ( https://time.com/5835228/nursing-homes-legal-immunity-coronavirus/ ) so that too should help limit litigation. So far, I have not read about any litigation involving C&F, but there are definitely many cases already launched against other US primary insurers (KJP posted this in the P&C thread: https://www.law360.com/pennsylvania/articles/1273308 ). Given that Northbridge didn't take a covid provision, one presumes that they used some sort of exclusionary language for business interruption. What is more, nursing home litigation risk in Canada is less pronounced because getting a class certified is a bit more difficult, and you can usually only sue for actual economic damages in Canada -- punitive damages are very, very rare in Canada, and that would be the expensive part of the claim because the economic damage from the premature death of an 88 year-old is pretty minimal because most of them don't have a job or run a business (ie, when an senior citizen dies a year or two sooner than he should have, virtually no income is lost). Zenith is one of the subs that causes me consternation. Zenith has stated on its website that a covid related workers comp claim needs to demonstrate that the virus was caught in the workplace rather than in the community ( https://www.thezenith.com/wp-content/uploads/Zenith-Coronavirus-Update.pdf ). In most cases, that's a pretty hard thing to prove, but I do wonder whether there won't be some employers/employees who argue that the existence of a covid cluster in a workplace is adequate proof of virus provenance. In particular, nursing homes, public transit agencies and slaughter houses have all had a heavy incidence of covid, resulting in time off and sometimes death of employees. I question whether some of that might ultimately come back to Zenith if groups of employees convince a judge or jury that the existence of an employment related cluster is adequate proof that covid was actually a workplace injury. But, I don't recall seeing any covid provision for Zenith. Like every other reinsurer in the world, Odyssey is a bit of a concern because it's impossible for a shareholder to have any idea of what exactly is being reinsured. Odyssey took a $50m covid provision, so obviously there are at least a few policies that are a problem. But, is Odyssey reinsuring a primary company that was sloppy in the wording of its business interruption insurance? Hard to know, but it's a point of concern. The other sub that might be a problem is Brit. Brit does business in the UK and apparently some of the commercial policies written by UK insurers did not have a virus exclusion, so that might be the driver behind Lloyds' large estimate of indemnities. Brit did take a covid provision in Q1, but who knows the extent of their problem? Did they write many commercial policies with business interruption? What reinsurance have they taken out on their commercial book? At this point, we don't have many options other than to take Prem at his word and assume that the covid claims will not be very large. We don't have many options other than to accept that the $84m provision in Q1 is a fair estimate of the ultimate covid liability. But, I certainly don't blame you for being concerned about how this might evolve. SJ It is important to note that any provision taken for Q1 represents the status as determined on 3/31 , but most likely earlier than that to determine losses. I think we will see much larger losses in Q2 and Q3, but they doesn’t just apply to FFH subs, it applies to all Insurers. On 3/31, the epidemic was just ~4 weeks old and insurance losses will take time to play it.

This Vaccine / Moderna seems like a Hail Mary approach or sorts. I kind of think we get a vaccine that may not work. The incentives are strong to get out something... anything.

I think this (Capital and ability to spent) is pretty important and Masa was probably the main proponent of this. It’s a brain dead strategy similar to scorched earth in away and unlikely leads to great returns. I think it is important to recognize the startups that are using this and basically just avoid them.

It is pretty clear that the WHO made serious mistakes in this epidemic. It’s doesn’t seem the right solution for the US to leave the WHO alone as it doesn’t solve any problems. if the WHO is too beholden to China and it t well be, then the solution is to Reduce China’s influence on this very important organization. Why is this organization impotent? An epidemic is a world wide issue as we have seen and it doesn’t care about border, race, politics and skin color. Once it gets started, it’s going to go everywhere. The WHO did blinder, but also keep in mind That when you read what they’re wrote - “No evidence of human to human transmission” - it means exactly nothing! no evidence (yet) doesn’t mean that there is no human to human transmission, it just means that they hunt seen evidence that proof yet. The US he their own boots on the ground and regardless of what the WHO said, we had information already, the intelligence briefing mid January was proof of this. Keep in mind that this thread was started in late January l all based on public domain info. So the failure of the WHO is no excuse for the failure of the US to deal with this internally, especially since many countries have done this so much better l even though they had no better intel than the US. The failure of the WHO need to be investigated and will, other countries have asked for it, but killing the WHO and having no equivalent can’t be the solution. The WHO has helped to prevent Ebola and SARS from becoming an epidemic in the past and maybe others as well. It’s a pretty small insurance policy (~$560M is really a drop on the bucket compared to what we spent to fix this problem).

Wasn’t the fact that the crude tankers all need scrubbers to clean the bunker fuel the original thesis for the tanker trade in late 2019? It seems like ages ago.

I had put it in the too hard pile too first. But the situation is different, the pandemic is widespread. There are seeds of infection in so many countries, it's not going away by itself IMHO. Phase 1 results have given proof of concept, so I think it's worth taking a look. Key issues from risk side are: Will the vaccine be effective? Or better asked, what are the ballpark % chances of it being effective - I'd say 50-50 for starters. Will the FDA approve it, and for what all age groups: 18-55, older, children? What is the total addressable market? Who all will compete - the greatest question in biotech after derisking. More vaccine doses to more people mean more TAM. Best to think of the North American market as reliable for valuation purposes, all the rest is likely gravy. How many other competitors will compete once a leader is ahead of the pack? It's not easy to conduct trials once cases decline. Is there a flywheel that the company has beyond SARS CoV-2? I think there will be a couple of vaccines on the market , it the first ones has a substantial market potential and it seems like their technology is able to produce a vaccine quicker. Even if it is an imperfect vaccine, in terms of efficacy and side effect provide, it’s going to find a use case. I first thought that a study for 18-55 year old misses the mark because the main risk groups is >70 years old, but there is a huge market of those who deal with said risk group and also anyone who is immune helps reduce the spread. Think health care workers, first responders, assisted / nursing home living workers, teachers etc. Even a “dirty” vaccine would be better than nothing. In any case, I think vaccines don’t tend to work as well for older folks because it is harder to create the immune response (immune system is weaker) and higher dosing may cause problems for other folks. The doctors here may correct me on that, I don’t claim to be an expert.

Central banking always has been a confidence game. That’s all there really is to it. once confidence is lost, the currency is worth ?. Germany has a bit experience on that matter. The older generation at least would take a recession over debasement any time, because it is quite possible the get both.

jschembs, alwaysdrawing & meiroy, If you read some of the latest pages in this topic with focus on "How did USA end up in this actual situation?" - [related to the situation about the Corona virus in the USA] - based on different political orientations, it will actually provide value to you. -There is actually a common denominator & agreement, which is an underlying shared general & deep frustration in the various posts about the situation [, which to me is somehow comforting]. Let’s say it that way. My friends and relatives in Germany are a whole lot more worried about our family than they are about their situation. The stats in my state (MA) are 20x worse than they are over there.

Exactly. It's also a matter of size. For a company as large as Amazon, with their revenue and access to capital, it's not that big of a deal to buy some bankrupt retail assets when the opportunity presents itself. I bet they buy JCP just for the properties. They probably redo them into last mile warehouses.

Yes, PGR is a LT winner. They have increased their revenue growth going into property insurance (they used to do only car) and it’s not clear if they have the same advantage there. It’s trading a bit above its LT valuation baseline. I would buy it if I can get it below 1x EV/ sales. PGR doesn't write its own property. They offload it to the likes of Homesite and First American. This is the reason for their wildly inconsistent policies and pricing across the markets, interesting complaint rates patterns, and varying agent experiences. They are very strong when it comes to auto/motorcycles though I'm not a buyer at these valuations. On a personal note, we switched from Progressive to Erie (home/auto/umbrella) because the quote was about the same but Erie's coverage was substantially better. I wasn’t aware of PGR not writing it’s own property insurance - then it sounds like the deal Geico had with Traveller where they resold Traveller homeowners as a bundle. I found that I can beat Geico’s standalone and bundle price every time with a bundle from an other insurer. In CA, that was Mercury and now on the East coast, with mutual insurers.

re MRNA - they release results of a phase 1 trial. Got a sweet hard deal from the government for vaccine development. Technology sort of unproven and now do a stock offering for $1.25B. How many ethics violations all done at once does this represent? If this doesn’t represent the current state of regulatory capture and pump and dump scheme of the capital markets, I don’t know what will. https://investors.modernatx.com/news-releases/news-release-details/moderna-announces-proposed-public-offering-shares-common-stock-0

Added to HDG.AS (Hunter Douglas ) recently. World leader in window coverings. Cheap and low leverage (debt ~1x EBITDA) . Family run (83%+ owned) and quite illiquid. Bought some before COVID-19 and averaged down after surprisingly good Q1 results. They sure will take a hit from COVID-19 downturn, but it just seems to cheap. http://investor.hunterdouglasgroup.com/news-releases/news-release-details/hunter-douglas-results-q1-2020