Spekulatius

Good opener for everybody's next letter to their partners That was compounder 3 weeks ago, wasn’t it? And Airlines are “credit Card with wings” which now makes them toxic twice over. Amazing how narratives can change in such a short time. I have never seen anything like it, even the financial crisis in 2008 was moving much slower than that. Well the 1987 was quicker so there is that.

That’s a solution. The problem with so many opportunities is decision paralysis.

Shutting down the US for 30 days - I guess he also means the stock market? Did he get a margin call?

Trading like a devil on steroids is the only thing that works now. BJ is up like almost 50% and their financials don’t even look that great. However, I don’t think they have to worry about renewals of their store leases all that much.

A bit more than 35% roughly. Hard to tell, because the equity part goes down so fast.

WMB is mostly demand driven as far as Transco and Northwest pipes are concerned . I think that’s about 55% of their operating earnings. The iffy part is the G&P in the Marcellus and Wyoming that are feeding in Transco and Northwest respectively. A lot of NG producers there are close to bankruptcy, but shutting of NG that is produced as byproduct of crude production might actually help them. In any case, even if producers go down, the demand for NG is still there, minus some from LNG facilities and such perhaps.

This crash is certainly faster. As far as worse, I guess we will see.

Added a bit of RHM.DE. I liked it at ~70€, so it ought to be a good buy at 43€ and change.

Great idea. I would love for Trump to be “sheltered in place”. The sooner the better :-) Yes, with an orange suit to match his skin color.

Yes, I started to look at it. it looks pretty cheap, I looked back at how their business performed in 2008/09 and it wasn’t too bad. Their balance sheet looked better than it is now and they bought back a lot of stock in 2009. They did delever a lot since the Biometric acquisition, so I think they should be OK. Their numbers this years won’t look pretty, but I can see this business bouncing back very quickly.

Anyone heard the “BAM” sound? This could well be a zero. BPY would go first.

Perhaps you are correct. Hard to tell. BA is a wounded whale and would be a perfect shot for Warren’s harpoon.

It’s not a bad idea because to the best of my limited knowledge, the companies LT prospect won’t be impaired by the Covid-19 although short term earnings may suffer. I just don’t think the price is all that attractive. this thing hasn’t even seen its late 2018 lows yet and thr prospect are way worse than they were back then. Still being reasonably sure of no lasting impairment is worth something. We will see a lot of stocks going to zero in the next 12 month.

Sold my TRV into the late surge yesterday - trade was flat. Sold WAB at smallish loss.

Which bonds are you guys looking at. I checke some on IB, like a 2.2% one maturing in May 2022, it it seems to trade in the mid nineties with a enormous bid/ask spread. I really like bonds that trade at less than 70cents on the $ and we are not even close. Anyways, I think BA is too big to fail and will get bailed out.Bonds should be fine, but hopefully equity gets zero’d. last time I checked they were running the company with -$8B in equity due to buyback bonanza. They use their suppliers as working capital donors so a BA default would lead to a chain reaction and I don’t think that’s going to happen.

Not a 100 bagger, but I like PINS. Next revenue numbers may be bad, but I think user engagement will increase. They have plenty cash and I like management.

Been following this company after a fellow from smart Twitter 3:10 Value posted about it. https://twitter.com/310value/status/1224734872947843073?s=21 Got some issue with debt, pensions and the core business not growing and perhaps shrinking. COVID-19 will affect quick lube business because people are driving less and probably defer going to an oil change place even if the car is due.

When does Buffett bail these guys out or buys them in their entirety is a better question. Should know a lot about them given Precision Castparts ownership. Airbus is also available for 1/2 off and in a better shape. I think they might be a better deal. I can see BA restructuring. I don’t think that’s a risk with Airbus. https://finance.yahoo.com/video/boeing-talks-trump-administration-possible-215932595.html This didn’t take long. I agree the US should bail it out, call the stock a zero and rename it US Aerospace.

Germany has been late to the game , partly because health decisions are made by states, but the Hammer came down this weekend. Based on what I am hearing (partly from my parents) compliance is pretty good also there is a lot of bitching by some. So far e have been ~7k cases, but the hospital system is holding up and there are few death so so. I think Italy hit the skids once they were at 10k cases, but I think Germany has more capacity (larger Population size too), so with a little luck it can avert disaster. It’s about 1 week behind Italy in terms of time scale. * Edit - 8K cases.

Why do you think that? What would be your estimate for loan losses? Edit: Looking at this, it was not bad in 2008-2009: https://www.sec.gov/Archives/edgar/data/1393612/000119312511014919/d10k.htm Do you expect it to be (much) worse this year? If so, why? And how much worse? The general argument is they've been reaching for yield with riskier borrowers. At least to a greater extent than they were in 08. What screwed DFS up in 2008 wasn’t the loan losses, but the fact that their off balance sheet vehicles (securitization) needed to come back on the balance sheet, making the healthy equity cushion appear much weaker. They had to raise equity as I recall. Roughly looking at the numbers, Their loan loss provision would need to more than double to eat up their profit, a scenario which I think is possible. With a ~10% NIM, they do have a lot of earnings power to compensate for loan losses. No position currently, but this is one I am interested owning. Owning this at book value is more interfering than owning a bank at book value, imo.

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.

ZIRP is very sticky and will not be over in 6 or 12 month. I think it’s more like a one way road.

I hear bats make good eating. Taste like chicken. I’d probably go for squirrels first. I do have a lot of bats flying around my house in warm summer evenings, but I think hunting them would require a shotgun with a night scope. One acquaintance from our town told me that gun and ammo are sold out. I guess Dick’s sporting is missing out on some revenues.

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. I agree. There is definitely a chance that we are overreacting , but in the absence of good information, what is the alternative? Personally, I think we are probably under reacting to the changes as a whole. There are large parts of the population that act as if nothing has happened. I have in my personal circle (work colleagues, neighbors) a lot of folks who are totally misinformed and totally underestimate the severity of the situation, both in terms of the epidemics as well as the economic consequences. I actually think that the latter one is what is going to take much more time. I live and work in a pretty rural area, so that perhaps why. Other than supermarket shelves being empty, people here have not seen much change yet. Even my wife working at hospitals noticed so far that it is quite (quieter than usual, because they moved many patient out to make space). I am sure this will change quickly. If you like anecdotes, We have acquaintances who went shopping for a truck this weekend in Boston. I also had a colleague coming in this AM he believed there are only 400 infections in the US. he was surprised when I told him that this is probably the official number for MA alone today. I think the collective group here is aware that the Titanic hit an iceberg, but a lot of people believe this is actually all but media hysteria, or just don’t care about the news.

Yeah, trades close to book value now. I think it is more attractive than bank stocks, as low interest rates don’t hurt it’s business model too much. The loan losses could be staggering in the short term though.