Spekulatius

I am kind of wondering if the 2 decade old mega trend of younger and to some extend older people moving into urban centers has come to an end. Some folks clearly think so. Again I follow some real estate podcasts and MF had a pretty interesting guest they was building on the idea of 18 hour suburbs. Also, the millennials are getting older and might think about having kids. When you get to they point, having a backyard is typically of more value than having a Starbucks in the same city block. Then this COVID-19 thing might have been the final straw. Here are some anecdotes: https://www.cnbc.com/2020/05/15/gov-ned-lamont-people-could-move-from-new-york-city-to-connecticut.html I am skeptical of NYC real estate and I think even those residential apartment REITs that concentrated on this millennial big city trend might be challenged.

That’s pretty heretical talking here. It might get you confined to the “praising the virtues and glory of FFH” or the politics section.

And everyone would lose. No, Liberty (the concept) would win. ;) How naive you are. You think China would come out of a world war more democratic? You think liberty in the US would increase in the face of nuclear war? You think Taiwan wouldn't be potentially destroyed? You think dead people are free? Didn't Germany and Japan come out of a world war more democratic? Yes, but it took two trials though. The first one made it worse. I don’t think we want to go there.

It was 2 years ago. Haven’t been back since. Bg2008 would know better. I do think it’s a great location and the redevelopment from VNO would change that. My concern with VNO is you are paying for the last 2 decades mega trend, but what is the mega trend for the next two decades? Overall though I would rate PGRE higher than VNO and VNO higher than ESRT. I don’t think the thread of having a competing observation platform can be easily discounted for ESRT. Most people just want a selfie with their stupid face and the NYC skyline behind it and it might even cooler if the Empire State Building is on the pic rather than you being on the Empire State Building. Then there is the whole issue with crowding and tourism coming back, which will happen, but who knows how long it takes. Just for the real estate junkies that can’t pay for the real proprietary research. I signed up for Realtymogul free webinars and they have been pretty good in their selection of high caliber guests. It’s free and I got my money worth and then some.

Litigation lawyers and lobbyist are leeches, at least on the society as a whole. however depending on how you look at it, they do provide a lot of value for their “customers”, ar least in some cases. Controversial take: All religious organizations can be regarded as leeches. I would rate the Catholic Church as the biggest and certainly one of the most durable ones ( full disclosure: I was raised catholic)

Some how, buying VNO feels like going into Ross store and buying a shirt that I don’t need, in an outdated style that I don’t like, just because the discount noted on the sticker is so great. If I am lucky, I can sell it at a yard sale for a lesser discount (and a profit for me), but likely it will end up in a closet forgotten.

Beware the narrative. Just because you see a picture of a full bar doesn’t meant that it’s a typical situation or they all bars are full. I suspect some people just go out and others don’t yet. Any pickup in case numbers from lack of social distancing will take about 4-8 weeks to really show. At least in some regions (Georgia) they have reduce the occupancy to a level that will reduce the risk of spread hopefully. We will see how it goes. I don’t think anyone can predict the result exactly.

I think you need to look into more detail. I know for fact that Texas didn’t have a statewide shelter in place , but it did have shelter in place in the larger cities like Austin, DFW and is think Houston (not entirely sure on they latter), so essentially they had the same thing where it counts (cities). Being spread out with relatively low population density and without public transport also helped. I think this is at least a large part of the explanation , but there could be other factors (weather etc) as well.

Arn’t most GP/ LP relationships like leech/ host. For a leech/ host relationship the following would need to be true. 1) it’s hard to impossible to get rid of the leech 2) the leech can suck on the host, but it can’t suck it dry without imperiling itself 3) The leech benefits much more with less effort So a hedge fund GP isn’t really a leech because typically the LP can Get rid of him. A closed end fund manager may be a leech, or private equity or the beloved BAM. With MLP, the GP in most cases acts as leech. I mean the GP/LP relationship is basically a codified leeching relationship.

No recession in the liquor ? business apparently: https://corby.ca/en/news/article/?id=137338 Cheers!

BJ’s contribution to herd immunity wasn’t particular impressing, emergency room visit and all. I also don’t know what came into his mind we he told his nation on Sunday that’s whoever can should go back to work on Monday basically. That’s kind of a short notice. What is sort of ironic is that the UK had tougher restrictions for citizens during the shutdown than most of the rest or Europe (Germany, France, Scandinavia, France) and yet their results are on par with Italy and Spain’s despite having more time to prepare. Germany and Denmark have already eased their restrictions before the UK could.

Every commercial property lessee is going to ask for rent reduction /participation in cost due to COVID-@9 impairments. Have some office space where you can’t fit all the people in the elevator at the same time, or can’t occupy your office space with the same density - well you are going to ask for a rent reduction. Same for pretty much any B&M store which are getting whacked by online retailing anyways. That’s going to have quite a bit of impact for the real estate asset and CMBS loan valuations. Ouch!

I got an PM and email. You may get it by sending an email to them: Support@tikr.com Her is a link to sign up: https://app.tikr.com/register?ref=o94y6y No Affiliation with these guys, but I use and like the site. It’s has fundamentals and news for international stocks and is still free (beta).

I doubled my ABEV today. ;) The thesis for ABEV is as follows: 1) The stock is down more than 50%. 2) The stock has never been they cheap in terms of P/S (as far as I can see) 3) The balance sheet is very strong (net cash) 4) Most importantly: Brazilians like beer (courtesy Of DooDiligence)

I added to CMCSA, TRV, ORI, VIVHY. Started new positions in HDS and ABEV after some DooDiligence.

I haven't been able to envisage the end state here. So imagine you are super-successful like Oz, NZ, Singapore and your cases go to zero. The rest of the world (ROW) screws up and muddles its way to group immunity, perhaps at horrific cost. So ROW have 70-80% people with immunity, and the virus is still circulating. Now you have three ways out. 1. Vaccine is developed and you get immunity without the horrific costs. 2. The virus is totally eradicated. 3. You live in your bubble, separate from the rest of the world until either 1 or 2 happen. This doesn't seem like a viable option if its a long time. So whats the end state these guys are thinking of or hoping for? I wouldn’t necessarily discount the possibility that bilateral travel bubbles form between countries with a low enough prevalence of COVID-19. In fact both New Zealand and Australia are thinking about this and this would help out the New Zealand tours industry as most tourist come from Australia. I can see other bubbles forming in other regions like Northern Europe and later southern there Europe if the number go down far enough. You only need to do this for 18 month hopefully until a vaccine is there and / or you can reduce the risk of adverse outcomes with better medication. So they would be the end state since you ask for it. Since I am basically located in a COVID-19 leper colony here in MA, I am not counting of going anywhere far this year, certainly not Europe as I planned. It’s probably going to be a camping trip north, if those folks from VT, NH or ME will have us. https://www.theguardian.com/world/2020/may/05/trans-tasman-travel-bubble-to-allow-flights-as-soon-as-lockdowns-ease-morrison-and-ardern-agree

That's an important "but" that can't be hand-waved away. A lot of antibody tests had false positives in the 50% range, depending the population being sampled (it'll be higher outside of the major outbreak zones). That's way too high to be very useful. Stanford Dr. Bhattacharya says he had 0.5% false positive in his test. The 0.5% may be important for Santa Carla study that found 3% infection rate. But still you can take 2.5% and calculate IFR. 0.5% false positive is not important for NYC with 20% infection rate. Or Boston Chelsea with 30% infection rate. The different studies gave infection fatality rate between 0.1% to 0.5%. NY had higher rate at 0.5%. For example Miami Dade study gave 6% and 0.5% is not very important. https://www.miamiherald.com/news/coronavirus/article242260406.html They say 165000 infected. Presently about 500 dead (I dont know numbers as of mid April). So a conservative number of using todays 500 deaths/165000 gives 0.3% IFR. Below is a study by Denmark: Using available data on fatalities and population numbers a combined IFR in patients younger than 70 is estimated at 82 per 100,000 (CI: 59-154) infections. Thats 0.082% for patients younger than 70. The seroprevalence was adjusted for assay sensitivity and specificity taking the uncertainties of the test validation into account when reporting the 95% confidence intervals (CI). New tests are even better. See below: Researchers at the University of Washington School of Medicine found Abbott’s test had a specificity rate of 99.9% and a sensitivity rate of 100%, suggesting very few chances of incorrectly diagnosing a healthy person with the infection and no false negatives. https://www.cnbc.com/2020/05/08/study-suggests-abbott-covid-19-antibody-test-highly-likely-to-give-correct-results.html Some people dont like the result of 0.1% to 0.5% IFR but it is now done by Denmark, Germany, Santa Carla, LA, Miami Dade, NYC, Boston by different well known professors and hospitals. The IFR is much lower if you take less than 70 population. At one point people need to agree with the data. I agree that some areas (NYC, Chelsea MA) are reaching numbers that imply that we are well on way of herd immunity. It that a true only in those heavily hit areas, not true in the rest of NY or MA and much less the rest of the country. It not true in Sweden either, Stockholm, Sweden represents only 10% of the Swedish population and that’s where the majority of the infection are for now. I am routing for the Swedes, they have a clear plan and are following it, so far within a fairly acceptable cost. Germany and other Skandinavien countries have pushed the curve far far down, so they have a chance squash the second waves ( the extend of which is a function of how far down the first wave have been pushed ) with aggressive test and track. What is our strategy? It depends on the state you are in and we just have to wing it. Sad.

I don’t work with enterprise finance stuff, but I can’t imagine it being so difficult that it takes more than a year to roll out a fluid efficient tech stack. I mean what exactly are JPM and others doing that WFC can’t? It’s banking....not VR, AI. I’ve been apart of enough enterprise projects dealing with top secret security standards, HIPAA, and finance data to know it can’t be that difficult. Anyone with experience in this sector? I think what your wrote is correct if you start from scratch, but most likely not correct if you need to seamlessly replace legacy systems that are working together and need to work very reliably without errors for hundred thousands of employees and millions of customers. Imagine if an IT transition blows up and thousand of customer see error sin their statements etc. The CEO will be in front of Congress with a subpoena and defends his “cost cutting”. I think Viking is correct to see the banks partly as tech companies too and I don’t think that Wells Fargo scores that well right now.

This COVID-19 pandemic is just like an accelerant for digital transformation. It givr I don’t work with enterprise finance stuff, but I can’t imagine it being so difficult that it takes more than a year to roll out a fluid efficient tech stack. I mean what exactly are JPM and others doing that WFC can’t? It’s banking....not VR, AI. I’ve been apart of enough enterprise projects dealing with top secret security standards, HIPAA, and finance data to know it can’t be that difficult. Anyone with experience in this sector? It is definitely true that WFC is behind VAC and JPM. I used to be customer with BAC years back and their online banking was the best. WFC really hasn’t upgraded their experience for years, at least not the front end. It was really stale when ai left them last year (I was customer since 2005). WFC biggest advantage was their branches, they were well run, at least in CA. But people go less and less to branches now and with COVID-19, the branches are almost useless, except the ATM in front of them. I think BAC and JPM are ahead with digital transformation and WFC is behind and in times of crisis, it’s very hard to catch up. As an investment I think JPM and BAC are better bets in my opinion. I bought a little JPM today. I sold my WFC last year for pretty much twice the price it is going today.

Honestly I think this is prudent. I get why shareholders and free-market proponents would be frustrated here, but I'm in the camp that this will be MUCH worse than the market is currently anticipating and the last thing we need is to bail the banks out again in addition to the rest of the corporate sector. Cutting dividends for 6-12 months until we have more clarity on a path forward and what ultimate defaults will be seems reasonable even if we anticipate the capital levels at banks are sufficient. This goes further to ensure that banks will be part of the solution/recovery instead of contributing to the problem. If after 6-12 months, dividend cuts are deemed unnecessary they can pay out the missed amount as a special div and repurchase a block of shares or something. Either take direction from the gov't in exchange for leniency and assistance or do your own thing and be allowed to fail if that ends up biting you in the ass. I'm ok with either approach, but not this middle ground where we have leniency and bailouts for companies that did stupid shit and didn't leave themselves with enough financial flexibility to weather a bad environment. I actually agree that it is prudent to preserve capital. JPM actually did allude to this in their last CC, if one cared to listen and they are best capitalized or the three major banks. FWIW, I bought a small starter in JPM at the close.

^ If you like CNA, then just buy CNA. With a bit luck, L will buy you out at a decent premium. I actually think it is bound to happen some day. I do agree they CNA as made progress, but they also still have some iffy long tail exposure. Again, with insurance, there are plenty of cheap other options about there.

How do we know where it "matters most"? Masks. Nursing homes where more effort is put in separating infected from not infected. Better ventilation and training at Nursing homes. We are fighting the Virus on twitter and with the Fed. So far, the Virus doesn’t seem to care.

Yeah a day after the St Louis Fed came out stating that they don’t want low interest rates. You can’t make it up. He may need the negative interest rates to keep his cardboard box empire from collapsing.

Yeah, my excitement didn’t last long.

A big hacker attack would most likely hit conventional and less IT savvy business more than the GOOG , FB‘s , or cloud service or SAAS providers. If anything it would speed up the move to the cloud and would benefit larger companies relative to smaller ones.