Spekulatius

3 trial results came out the same day: NIH ACTT trial - discharge in 11 days vs 15, mortality 8% vs 11.6% in Remdesivir vs control arms ( so reduced morbidity, second order effects on reducing overburdened health care systems) https://www.niaid.nih.gov/news-events/nih-clinical-trial-shows-remdesivir-accelerates-recovery-advanced-covid-19 SIMPLE trial - 5 days and 10 days use showed no significant differences (so can be used in shorter course). IDK why they did not release any data about the control arm in this one, I thought it had it... https://www.gilead.com/news-and-press/press-room/press-releases/2020/4/gilead-announces-results-from-phase-3-trial-of-investigational-antiviral-remdesivir-in-patients-with-severe-covid-19 China Remdesivir trial 237 patients data - no significant mortality benefit https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(20)31022-9/fulltext As far as the twitter poster goes, one point well taken is that the next population to study in trials would be earlier start of treatment (now that we have same day per testing) and high risk non-hospitalized patients (somehow delivering at home maybe). Sarilumab phase 2 data also came out, with phase 2 outcome met and phase 3 trial focusing on critically ill patients only where potential to reduce mortality is being seen. Thirdly a lot of attention is going towards the prothrombotic effects of the virus as well as proning early. Stacking all of them and what we know about the virus after all this time, I think mortality will be lower in the future, although a little bit lower not a lot lower (just my opinion). Thanks for the comments. I agree that treatment is improving (and has already) and mortality will be lower. Even though we go down the path of herd immunity , I think there is a huge benefit of getting the perhaps inevitable infection later rather than sooner.

Here is another controversial take. Remdesivir May be worthless. Don‘t have an opinion either way, but it looks the poster may have some valid points. For various reasons (intravenous applications in 10? Doses ) it is unlikely a game changer anyways. https://twitter.com/markhoofnagle/status/1256242036015063042?s=21

A bit more GD and restarting TRV.

If this talk becomes more prevalent and Trump picks it up we are going to see a couple of limit down days in a row. Treasuries will get absolutely destroyed with obvious consequences for the financial system.

Yes, I think that’s essentially correct. Due to different starting points and vulnerability, the same thing did not work in Italy , Spain so more stringent measures had to be taken to get the situation under control. I would call Sweden a success in a sense that their citizens support their strategy and the cost has been in their opinion ( which is really all that matters ) acceptable.

The day after tomorrow may take a while : https://www.cidrap.umn.edu/sites/default/files/public/downloads/cidrap-covid19-viewpoint-part1.pdf

Looks like some contingency are put in place after all by our supreme leader: https://apple.news/AYVZcXZ0WSNCZ9DfJmFf3LA

Haha,self interest? He owns business as well that are closed right now.

Generally tech has really shown a superior operating model during this pandemic. For example virtually no tech company is shut down, even companies that produce stuff like semiconductor or even semi equipment companies keep operating t while for example automobile is shut down. Of course all the FANG companies are operating and basically trouncing their competition. Tech companies typically flex better and can adjust costs and keep profitable even when volumes are down. This is different than with many industrials , B&M retails stocks etc. The tech companies typically have great balance sheets with little or no debt and plenty of cash. Combine all the above and you just get better performance in any environment. Through my own circle of friends from my town , I know some folks who work for semi equipment/ automation companies and all of them kept operating. Some of them were starting to prepare their company for the pandemic in late February as they heard from their colleagues in China what was going on and how to deal with this in case it would reach the US. Quite some foresight and I know they were in daily contact exchanging information and had rearranged their workspace to reduce people density in their US facility by 80% with staggered shifts and everyone who could working from home etc. Compare this to General Motors (which also has a chinese sub) and see the difference. This whole pandemic lets me rethink how I think about “ business quality” a bit and it’s a bit humbling as a value investor quite frankly.

It’s not a matter of mental capacity, it is the issue that they have no idea what’s ahead of them. I also don’t think MKL is egregiously cheap right now. Insurers are in the “ trust me” business so a strong balance sheet beyond doubt is paramount. Berkshire very likely has the same issue and while I bet they will be buying back share, the same basic thinking applies and constraints them more than people think.

One of the very few companies buying back shares at the moment.

Bought a bit of GD. I felt the guidance was Ok and the valuation is pretty good at ~ 11x current (post COVID earnings)- Also added a bit more Vivendi.

The market has provided ample opportunity for those who missed this in March to cash out with the S&P now where it was in October 2019. There should be no valid excuse for these people if they lose their shirts. https://www.wsj.com/articles/coronavirus-turmoil-free-trades-draw-newbies-into-stock-market-11588158001 “I feel like everything that I buy, I watch pretty closely and if it’s something that’s not doing well, I’ll generally try to put [that money] into something that is doing well instead,” https://www.bloomberg.com/news/articles/2020-04-29/firemen-and-romance-writers-faces-of-a-fierce-rebound-in-stocks “I’m a complete noob when it comes to stocks,” the mother of high school senior twin boys said while sheltering at home. “It’s not thousands and thousands of dollars that I invested, but it’s a start. We’ll see what happens. I hate to say it, but it’s like gambling, isn’t it?” More accounts were opened and dollars invested at E*Trade in the first quarter than in any prior full-year period, according to a company statement. The brokerage added 329,000 retail accounts and over $18 billion in net retail assets. Haha who would have thought that having everyone stay at home and enjoying free trades supports the stock market. Seems to me that we need everyone to stop working via a forced lockdown to get the SP500 to new heights. Apparently, the economy isn’t needed any more.

The China study did not show statistical significance and it was in patients with severe disease. The NIAD ACTT study (Not necessarily in as "severe" patients, but hospitalized ones who have imaging findings or need supplemental O2 or a few other criteria) did not show statistical significance in mortality, but did show reduction in time to recovery that was statistically significant. Unfortunately does not seem to be a game changer based on the NIAD press release (study hasn't been published yet), but so far Remdesivir is the only drug that has been shown to do something in a RCT in Covid (unlike Hydroxychloroquine/Azithro), so it's something I guess. So the ACTT shows that it works in patients, but not necessarily severe ones (per inclusion criteria at https://clinicaltrials.gov/ct2/show/NCT04280705). This may indicate that Remdesivir works if administered earlier, before the disease becomes severe. The problem with this is that Gilead has indicated that it takes a lot of resources and time to manufacture doses of this medication (I believe their estimates are to have enough for hundreds of thousands of rounds of treatment this year) and if we are not restricting Remdesivir to only severe patients but giving it to everyone hospitalized, we may not have enough of the drug because that is a fairly large number of patients... The problem that I see with Remdesivir application early on is that it is administered intravenously in 10 dosages. So it is only something that can be done in a hospital setting (or equivalent ) and not very conducive to early intervention.

Another way to look at this is that interest rate for MXN is currently 6.5% vs nearly zip for USD or Euro. This means that forward looking Mr Market expects the Peso to lose ~6% annually relative to the USD or Euro.

It seems a bit harsh to constantly review Sweden on the number of deaths compared to their neighbours as their policy was never aimed at less corona death in the first place and they were upfront about this. If someone wants to compare, you have to look at the broader picture (economic growth, quality of life), which you cannot do until much later. Despite what many predicted, their IC capacity seems to be holding. I think it's useful to look at what this approach does vs different approach. I don't see anything harsh or unfair here. I also saw some numbers somewhere that it's not because things arent officially closed that they aren't basically closed.. saw numbers on Swedish restaurants and theaters being basically zero, but don't remember where. Probably same for any big events, travel, etc. I think the main argument from the Swedes is that they can keep doing what they have been doing for long time, unlike those nations that are doing a lockdown. The opening of the US in some states where they still don’t really have falling infection rates strikes me as risky, but I guess we will have to see. I think the interesting part will be how we manage to open the schools for the next school year (I assume the current school years is going to be all remote, at least where I live) The state I live in (MA) still has persistently high infection and death rates (in fact. today may have been a record for latter ) which means that our very leaky shutdown probably persists for a while. https://www.mass.gov/doc/covid-19-dashboard-april-29-2020/download

FICO scored can be repaired in a couple of years. It’s not the end of the world to have shot credit. Pay your CC a couple of years and you are good.

^ Yes, COVID-19 will be big Catastrophe even for medical institutions and some companies. Think inadequate PPE, inadequate safety protocols for medical workers, cross infection of patients, problems with patient care due Overload etc. It will take a while to figure out, but I am sure lawyers are already looking for angles. It’s not just medical either - when you look at the news from meat fabrication plants from Tyson with clear evidence of work related outbreak clusters, you know there are going to be lawsuits.

Maybe people expect their sanitizer sales will sky rocket... https://www.cnbc.com/2020/04/24/coronavirus-kegs-are-going-bad-boston-beer-has-a-solution.html I think SAM May benefit from the demise of some craft brewers. As far as I can tell, booze sales have been pretty good so far during the pandemic. I certainly did my share buying beer, wine and cider. The valuation is egregious, but that’s true for a lot of stocks including those with much crappier fundamentals than SAM.

To add to what Petec mentions, look at pretty much all the Indian companies held the past 3-5 years. There was what looks to be a bubble in Indian stocks a couple pf years ago. The ride that Fairfax has been on with these holding has been absolutely amazing. Moving forward Fairfax had better hope that Hoisington’s macro call is wrong (that we are moving towards mild deflation). Emerging markets (India) could be challenged moving forward. Some of the individual holding like Recipe (Canadian restaurant stocks - many full serve) will also struggle mightily in the near term. Is is staggering how the outlook for Fairfax has changed in 12 weeks. 12 weeks ago my view was Fairfax was ideally positioned to benefit from hardening insurance market and risk on in stocks (including emerging markets). They had made a number of moves to lock in some investment gains and get other investments positioned to succeed. The virus has completely submarined them. Completely unexpected. Resulting in more pot holes that will now need to be filled in (testing shareholders patience). My focus right now is quality. Recently bought CB and WRB. Cheap; well managed; easy to understand; well positioned. I feel good when i listen to their conference calls (although i much prefer listening to the old Berkely to the son :-). I agree with you. FFH looks like trash. It had a stub left that I should have sold at $450 when I sold the bulk of my position and ended up selling into the decline at $315 and I am not looking back. Drawing down the revolver should raise some eyebrows as it clearly shows that they walk on thin ice. Cigarbutt also made the same point basically looking at how heavily their are into equities relative to their equity base.

It's a bit early right now but with higher unemployment, it will be a great time to upgrade the talent without breaking the bank. Every team and company has dead weight. I’m pretty sure I’m the dead weight though. How long do you think before they find me? Once they find out, escape via a promotion and you are good for a couple more years.

Thanks for posting. I am invested in the Bollore orbit in other ways (ODET.PA) did some partial tax losses sales and decided to get back into this via Vivendi (the crown jewel) directly. The Universal music business alone covers the Vivendi so all the other business are for free so to speak. Universal music is a fantastic and growing cash cow and especially in the current environment worth a very high multiple. VIV has increased their dividend and seems to be buying back shares. I very much like what I see.

So here we go: Belgians urged to eat fries twice a week during lockdown. https://www.cnbc.com/2020/04/28/coronavirus-belgians-urged-to-eat-fries-twice-a-week-during-lockdown.html

I have a feeling that this vaccine will be a lot more tricky than people think, because of how this affects different groups of people. For people under 20, it basically doesn't affect them. It affects very few people from ages 20-30. Then starts ramping up as people get older. So if we do come up with a vaccine, are we really going to inject it into all the kids and risk the unknown long term side effects? Most kids would probably prefer getting the actual virus than rolling the dice on an unknown drug. Would you inject it into your toddler? If COVID-19 is as deadly as Ebola, people would be lining up to take an experimental vaccine because that gives better odds for survival. But since it affects certain groups more than others, people in the safer groups are not going to want to take the mystery vaccine or it simply won't be approved for that reason. There are something like 100 vaccines in trials already. One or more of them will likely be the vaccine that we will use in 2 years. But we are not going to accelerate the studies because this virus isn't deadly enough to risk potential unknown side effects. The more realistic black swan on the positive side is a treatment that decreases death rate and speeds up recovery time. I agree - the immunity via vaccine eventually or one has been infected already and shows antibody isn’t really binary , it is more a probability question. I am sure they having been infected already provides some infection , as will a vaccine. The probability of a reinfection in both cases is unknown. Some vaccines work very well, in terms of preventing reinfection, other are imperfect, like the flu vaccine. The flu vaccine for example works best in you get people who least need it and not so well in older people unfortunately. It is possible that we run into the same problem with COVID-19 too, but it is not knowable yet.

Pretty interesting simulator. If this is correct and we lift restriction too early, than we have to pay the piper roughly 2 month later. Personally, I see ourself going down the path of herd immunity and I guess they simulation shows this too. I don’t see a way that we avoid going having the virus go though most of the population, with the current level or testing and tracing in place, with the obvious consequence for IFR rate and duration of the epidemic. I guess we will find out. We know we lifted the shutdowns too were too early, if we get runaway outbreaks in late summer/fall. Perhaps we can manage the outbreaks and keep R0 close to one in which case will still have the virus going though most of the population, but without runaway outbreaks. It will be interesting to see how the different states do in this situation ,as they deploy different strategies with different durations as far as restriction are concerned.