Spekulatius

TOU (Tourmaline was recommended in another source /podcast, but I don’t recall the source any more). Some smaller one look ridiculously valued, but if everything sells of so hard, one might just go with the best of breed. I think NG could come back regardless of crude prices. If weaker competitors get shaken out.

Another weird distortion - wholesale gasoline for 19c /gallon, down from $1.5. Weirder than the GFC. People must be driving way less and someone really needs to sell. https://twitter.com/donutshorts/status/1242173934298112006?s=21

Hotels stocks have gotten hit worse than airlines even. DRH is down from $10 to ~$3. Same with a lot of energy stocks.

It is foolish to believe that the economy can be saved by descending into something worse than a 2nd world country with hundred thousand if not millions dying. It makes no sense and is more than foolish thinking.

https://finance.yahoo.com/m/d771d4d4-47c5-324d-bd86-549347e8acce/invesco-mortgage-capital-reit.html

Lack of buyers , some forced selling. It’s the Wild West out there. Act accordingly and have your revolver loaded and ready to shoot. According to my rough calculation the buyer @1025 bought LAACZ at an unlevered cap rate of ~20%. Of course the earnings may go down somewhat, but it is really really difficult to see a scenario where this isn’t a good deal.

So he's basically aiming for doing worse than Italy... https://www.cnbc.com/2020/03/23/coronavirus-trump-says-businesses-could-reopen-soon-while-fighting-covid.html Let's hope this thing just happens to be highly seasonal and his dumb luck holds one more time. Ok, as has been stated Trump is clearly wanting to get the economy moving in the next week or two. What exactly this means is up in the air. The question of the day was something like “will this message not submarine your social distancing message”. The answer was something like “no, this message will motivate people to do a good job over the next week with social distancing so they can get back to normal shortly thereafter”. I bought a bunch of stock today thinking buy and hold. If Trump ignores the advice of his medical experts and opens up the economy my guess is we may see a relief rally in stocks. And i will likely sell everything again and sit in cash. My guess is the virus will reemerge in clusters in many more parts of the country, we will then go back to lock down, and the stock market will plunge yet again. Trump really is doing the best he can. I believe that. And it scares the hell out of me. He was talking about a big celebration, before in his first meeting. Clearly a big gamble is probably his bets chance to get re-elected, if it doesn’t work..oh well. In this crisis, we will see a huge difference between countries with strong leadership and and poor one sadly also good luck vs bad luck.

Yes, this thread should be about the longer term economic effects of the epidemic. We have already enough discussions about the near term outlook in term of epidemiology in the Coronavirus thread. Cigarbutt coined the term New deal 2.0 and I really like it. First of all it is consistent with the tremendous interventions from the government around the world that we are seeing and second it describes a fundamental paradigm shift that I believe we will have as a consequence of all this. When this epidemic first got started, I regarded it as similar to the 9/11 recession because I thought it will be mostly related to travel and airline. This is clearly not the case any more, the consequences are not confined and most likely will affect every sector. So, the GFC Is a better comparisons at this point. I have no idea how, but I think we will see more government involvement and regulation and less free market. I could be wrong of course, but I see that as the likely course we are taking.

Be careful with first time home buyers. A lot of them get cold feet. In this environment, I couldn’t really blame anyone.

I agree. I think people would have a whole lot more confidence if they let those “can do“ people do the talking rather than the muppets in the Oval Office. I think at least one “hotel hospital“ in my area is being worked on for needed surge capacity right now as I learned though my wife,

Probably not this year since they lack online presence.

988 years in the future and they are still blowing up. Nobody learns from history... /shakes head I have alway been forward looking.The archeologists in the future will realize the wisdom of my ways.

They would get a waiver. The US can’t get the Aerospace supply chain go to hell, this would indeed be a national security issue. Heico would be one of the last one to go, a lot of dominos would fall before Heico. For disclosure, I don’t own it.

I think it’s the other way round and BAM is thrown out with the BPY water.

I think it was a margin call. I picked up some at $1410 (my stinker bid) but wasn’t quick enough to get more. The guy who scoreD some at $1025 got a price that is better than during the GFC, especially if you adjust for the value created since then. Absolutely crazy.

SARS was a warning that Chinese Communist Party never took seriously. I know you mean "we" as a humankind, but that absolves CCP of any responsibility. No one else was in position to shut down these wet markets. Once this ordeal is over, the world should unite and hold CCP accountable. H1N1 originated in Mexico and the Spanish flu most likely in the US. It is true that the Comunist party is at fault her, but let’s face it the condition in many 2nd world countries and perhaps even 1st world countries with industrialized animal breeder make something like this likely to occur. If you watch the series Pandemic in Netflix you get idea that there are several outbreaks in several places in the world at any time. Most of them stay under control , but if not we now know happens.

In Germany the trend is flatting too, as seems to be the case in Italy as the hammer finally came doen. US still had more pain ahead in this department. The reason why everyone looks at headlines is because it is a headline and liquidity (or lack thereof) driven market. I do agree there are some unbelievable bargains out there, short of going into a real depression.

It seems like many states and the federal government are taking a wait and see approach as the number of confirmed cases grows. Based on everything I've read, a national shutdown should have started last week if there was going to be any chance of significantly slowing the spread down. It looks like we're too late. By the time the president announces a national shelter in place, the numbers are going to be off the charts. My personal expectation is the US is a week or two behind Europe. The only upside is it might be over faster. My wife works in healthcare and they are preparing for an onslaught. One large hospital in the Minneapolis area has apparently been working to convert an entire floor to ICU beds. Many countries have effectively shelter in place . Germany has is for a couple days and they have escalated compliance today. It’s too early as there seems to be some weekend reporting effect (with lower numbers on weekends) but the numbers of new infections have begun to show promising trends and so far, the Heath care system is holding up. I think people have come to realize the seriousness last week and compliance has improved, which wasn’t the case in Italy at all. US is still in the exponential growth phase so who knows how it ends.

I think the big difference to 1918 was that A) WW1 was raging which was already an existential threat for combatants in Europe. As Bad as the Spanish flue was, it wasn’t an existential threat. B) Equity Valuations were much lower. The economy in the US was booming at this time due to all the Production needs for war. If we had a PE of let’s say 8x now, I would be a whole less worried about the stock market correction (even if it’s a pre crisis PE).

Do you even need primers? Just study the income and foremost the cash flow statements and everything else flows from that. Primers tend to get you into rabbit holes that make you blind for collective shortcomings of an industry. Well how else to learn about competitive dynamics for instance? Not only between horizontal competitors but between upstream, mid, and downstream players. I'm sure I can buy a basket of shale producers and if oil shoots back up I can make a killing but I'd rather be able to understand nuances between different companies. I would avoid shalers altogether. If you do invest in upstream at all, stick with majors or those with long live resources like the Canadian oils Sand plays CNQ and SU or perhaps CVE if you like an option like play. The reason why long live resources can survive longer is because they don’t have to reinvest as much once the resources is operating, except for maintenance capital. Shale is a short live resource and thy constantly nerf to drill or the resources are going to run dry. But in a way, that is also obvious through the cash flow statement, if you dig enough, hence my remark. Midstream is similar in this way as are refineries. All of them are better than shale E&P‘s imo.

There is a lot of information put out there that masks don't help unless you are infected (which isn't helpful since we also are told that you can spread it and have no symptoms), and people are being asked to save them for the hospitals. So they may be doing as they've been told. I believe that masks do help, as evidence shows from Asia. Even non N95 masks may help. I don’t have the link right now handy, but a scientist from the German Robert Koch Institut hypothised that the severe cases afflicting young people may be explained by the Virus getting directly into the lung rather than getting from the upper respiratory tract and then spreading into the lung. later. The latter case allows for the body to time stage an immune defense, while the former case may not. It’s all hypothesis right now, but makes some sense to me, and if true, even a crude mask should prevent microscopes from getting into the lung. Seems to me that breathing thought the nose and avoid breathing through the mouth as well as wearing a mask is a good idea. it‘s all conjecture, but downside is limited.

Yes, every time I think about the provisions in the Patriot act, it raises my blood pressure. This thing hands the keys to Big Brother.

This is incorrect, and dangerous thinking. It is true: accurate information is a critical factor, but it is not possible for humans to obtain such early in these viral outbreaks. The pandemic response is warranted - the precautionary principle is the only guide that would ensure the survival of the species. In these situations, you don't need accurate knowledge of the probabilities in order to know what to do. Our emotions and stress are wiser guide than our intelligence in deciding how to react. Strongly agree with this. That's how the precautionary principle works. When there is wide uncertainty with a lot at stake, you err on the side of taking things seriously and overreacting. I would have thought more people on this board would be fans of the margin of safety, but ¯\_(ツ)_/¯ By the way, I haven't been paying attention to the US election. Did Andrew Yang win? I hear the US Gov't is handing out cash now. Yes Andrew Young (UBI), Liz Warren (student loan interest rates forgiven) won, Bernie (Medicare for all) is next. It’s free for all, Airlines, Cruise lines are already fed in the soup line. Shale and Energy is begging. I guess the lobbyists for all the industries are working overtime. Clearly, we have an extraordinary economic situation, but it is still surprising to see much more government intervention than in countries that are called socialist here. I’d be more in favor of something that helps individuals, if we have learned anything from the GFC it should have been that. You stole my follow on jokes that I had planned. Pretty amazing isn't it. Quite a shift Trump has always been populist and a bit socialist. It's just a right wing and flyover state version of socialism. The real outrage here is simply that better leadership and earlier action would likely have resulted in lower overall costs, less disruption, and less panic. Consistent governance might be better leadership than slashing, then growing in a panic. I think we forgot to credit AOC, because MMT is coming as well.

You believe the market has priced in the chance coronavirus has hastened the end of these companies? The possibility of being made illegal? It isn't even illegal to marry a child in this country. This is a country where masses of school children are riddled with bullets at school but freedom to own guns wins the day. Is there a constitutional right to tobacco I'm unaware of? In the US the smoking rate is what 25%? Try to take away the drug of choice for 25% of the population and see how that goes for you electorally? Maybe there is some coocoo kamikaze congressman out there that sees this as his wet dream coming to life. But for the rest of them ain't gonna happen. Maybe the tobacco industry gets on the bailout bill as well? As far as the Argumentation goes - We had a really profitable business to kill our customers slowly to optimize NPV, now Covid-19 reaped our best customers quickly though no fault of our own! Put a picture of a tobacco farmer on a Deere tractor with Maga hat on the paperwork and off it goes.

I like GD, but not for the reason you mentioned. Gulfstream is an important business for GD with many years worth of backlog, but the most important business is its defense business. These are nuclear submarines, combat systems, tanks, cyber defense etc.