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Monday Morning Math Notes – Looking Ahead in a Viral Market

Should we stay or should we go?  

THAT is the question I've been pondering this weekend as we've had an excellent run in the markets off the bottom and all of our Member Portfolios, except the Dividend Portfolio, are back in the black and we should be THRILLED, in this kind of market – just to get our money back.  Still, the thing is – if we go back to cash – then what?  This is where the Fear of Missing Out (FOMO) comes in because, while we are comfortable that we can take our cash and make money in any kind of market – we still don't want to miss out on deals of the century, do we?

So I have been reading and thinking all weekend and watching the virus counts and looking at what's happening around the World and considering the data and here's what I think:

21% of 1,300 people tested randomly in New York City and 14% of the people in New York State had antibodies for the Coronavirus.  That means 1 out of 6 people have been exposed enough to have had a reaction – it doesn't mean they are definitely immune but we're talking about 15%(ish) of 20M people (that's 3M for Fox viewers) and "only" 300,000 (so far) had symptoms that were noticable enough to get counted while the rest developed anti-bodies after apparently mild exposures.

In New York City, about 21 percent tested positive for coronavirus antibodies during the state survey. The rate was about 17 percent on Long Island, nearly 12 percent in Westchester and Rockland Counties and less than 4 percent in the rest of the state.  State researchers sampled blood from the approximately 3,000 people they had tested over two days, including about 1,300 in New York City, at grocery and big-box stores. The results were sent to the state’s Wadsworth facility in Albany, a respected public health lab.

In California, antibody testing in two studies found rates of exposure as hign as 4% in Santa Clara County and 5% in Los Angeles County.  Keep in mnd the sampling, at stores, may disproportionately include those who have either already had the illness, or those who naturally tend to go out more and so are more likely to be exposed to the virus but still, the numbers are encouraging.  

Just How Badly Can the Coronavirus Mess Up the Stock Market ...While none of this changes the fact that we're dealing with a horrible, deadly disease and should use extreme cautioun before we risk exposing 300M Americans to a virus that, even with these optimistic infection rates (that's a strange phrase!), is still 0.05% deadly vs. 0.01% deadly for the common cold (that's 5x more deadly for the Fox viewers) - ECONOMICALLY it means we're dealing with a managable situation where 1.5M people will die over time vs. 2.8M US Citizens who die in an average year. 

This is in-line with the Spanish Flu, which killed close to 100M people worldwide and about 1M in the US, when our poulation was only 100M people AND only 25% of the population got the flu, since we were still mostly farmers back then and practiced social distancing by nature at the time.  

So a fairly unchecked spread that infects all 330M Americans could kill 1.5M people but identifying sick peolple quickly through stepped up testing and "flattening the curve" could keep us under 500,000 deaths and will spread those deaths out over at least a couple of years – even if there is no vaccine and no cure.  Horrible as that is, ECONOMICALLY, we can live with that.  

Given that data and given the Government's reaction so far and looking at the reactions around the World, here's what I think is likely to happen and the big assumption I'm making here is that people with coronavirus anti-bodies are not likely to be infected.  If that's NOT case, then Coronavirus will be like the flu and we'll get it every couple of years and the life expectancy of human beings will drop significantly.

How to Flatten the Curve on Coronavirus - The New York TimesSo how are people likely to react to potential herd immunity?  Well, the 20% of the people who have antibodies are certainly going to leave their homes, eventually they will demand (economically) places to go like restaurants and bars that cater to the "immune".  That will reduce the effectiveness of our lockdown but it won't mean the curve isn't flattening as each of those people may or may not infect one other person.

One thing they don't mention about "flattening the curve" is that the aim is not to prevent you from getting the virus – you WILL get the virus – it's just a matter of WHEN.  Given that everyone will be exposed to the virus eventually (unless we go to a permanent lock-down until the virus is completely dead in the wild), policy makers don't want the curve TOO flat – as that just drags things out longer than they have to.  What they want is to keep people exposed at a level our Health Care system can handle and let's hit that line and get it over with.  They don't tell you that but it's true and it drives the policy in the background.  

That's why they are encouraging states to open up.  There are plenty of states have low infection rates and people won't build up antibodies (herd immunity) if we keep them all locked up so, if their health-care systems can handle it – let their people go!  

New York won't ease restrictions because their medical system is at capacity and if you want the Death Rate to go from 0.5% to 5% – just overburden the Health Care System and you'll be there in no time…  On the other hand, South Dakota is right, they are sitting at home for no reason as hardly anyone has been infected yet and their hospitals are ready to handle some sick people, so bring them on.  

Phuket viewpointThat leads us to what we will call the "Phuket System" for ending social distancing and here's how I think it will play out.  Phuket is a lovely region of Thailand where, although there are many miles of beautiful land wherever you go – everyone lives on top of each other in small villages.

IF this antibody testing holds up, then what we'll start seeing in major cities, where the infection rates are hitting 20%, is likely to be as follows:

  1. The people who have tested positive for anti-bodies will begin going out more.
  2. This will put pressure on other people (their friends) to say "Phuket" and go out as well. 
  3. Certain bars, restaurants, movies and clubs will brand themselves "Antibody Friendly" or "Phuket", if it catches on (#Phuket) and things there will be pretty normal – other than the selectivity of their clients.  
  4. Young people are extremely likely to go out since they have very low rates of noticable infections so let's say people under 20 pretty much all say "Phuket" and are out within a month (think how long the last month has seemed and imagine another month if you were a teenager).  
  5. If this doesn't have horrible consequences, that behavior will begin to be mimicked by the under 40 crowd and almost all of them will say "Phuket" and be back to work and, in short order, back to bars and restaurants.  

Now we have a bifurcated society where 25% of the people over 40 (who have antibodies) and almost all the people under 45 (200M) will be back to "normal" and, since they have the money, you can be damned sure those busineses will be caterting to their needs.  Of the 85M citizens between 45-65, I'd say 75% of them (64M) will say "Phuket" and go back to work for economic reasons.  That will leave 25% of that group (21M) and 75% of the seniors (50M) who haven't been exposed and are considered high risk (35M) still shut in in the fall.

Coronavirus: World in 'uncharted territory' - BBC News

That's 56M high-risk Americans this Fall and, like any good Zombie Apocalypse, it will get worse every day as the low-risk or risk-taking people in the Phuket Group number 274M (83%) of your fellow citizens and that means that you will now have to act very carefully to avoid the infected hoards and all the stores, bars and restaurants will be open – but not for you.  YOU will have to go out of YOUR way to find places that cater to your special needs and there will be plenty – as you'd still be 17% of the population, but the cost of catering to you will increase substantially.

It's enough to make you want to say "Phuket" and take your chances, right?

Effect of Herd Immunity on Spread of diseases in a population ...So that is our most likely future.  If easing the lockdowns isn't a disaster in the early cities, then more and more people will say "Phuket" every day and yes, more and more people will be infected but if the ratio remains 10 unnoticeable cases to every 1 serious case (still MUCH worse than the flu, no matter what Fox says), then herd immunity, here we come!  

Economically, even given the drastic lockdowns, we're still at about 70% of our normal economy and that's because people are still eating and shopping (albeit on-line) and paying their rents and auto loans (for cars we don't drive) and utilities, etc. 

The Government has provided plenty of money to get us through June and it's only the end of April so, timing-wise, if the early States that go back aren't much worse by mid-May – Phuket begins around the 15th (still 3 weeks away) and you'll see young people looking for hotels on Memorial Day weekend (25th) along with restaurants and the pressure will ratchet up from there, into July 4th where – if we don't collapse our medical system, the under 45 crowd will decide it's time to get back to normal.

So, if we assume Q2 is shot (ends May 30th) and we're down 30% but then only down 15% in Q3 and down less than 10% in Q4, I don't see the overall economy being down much more than 10% overall and that's $2Tn and the Government has put more than $2Tn into the market and is certainly willing to put in more so I don't think we should sell our long positions UNLESS we start seeing re-spreads of the virus in places where restrictions are easing.  

Otherwise, PHUKET!  

(with sensible hedges, of course)


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  1. Interesting numbers Phil and in fact, we will soon find out that more people were infected than previously shown. However, without social distancing, that number even in NY would 5 times higher (100%) and the question would then be – how many more people would die because the health system is overwhelmed. Mortality rates could increase dramatically as a result. We are still talking about the possibility of an additional 1.5M deaths (on top of the average number of deaths). IMO, there are too many unknowns to leave my shelter now.


  2. That's my worry here:

    What is going to be the impact of all these small business going BK?


  3. Good Morning


  4. The end of a friendship
    Hi Guys sorry to bother you with this one but I consider you as friends and I would like you to give me your opinion, as it still bothers me what is presently going on in the mind of a leader lunatic, as well as in the mind of many Americans and  my now ex friend Albert, who so stern support the man. Please let me know if I was to hart on him. If you pro Trump and not wish to mention your opinion on PSW send me an email but with reference “Albert” so you will not lend in scam. My question “did I go too far?
    I have known Albert (Swiss and US citizen) for over 28 years we met in Mexico, his first wife (very nice lady) died and he remarried a US nurse ca 20 years younger than him, Albert must be some 77 years old did have a managerial position in a leading US supermarket, from where he, I expect as well receives a good pension. That he and his new wife turned in to a stern Trump supporter puzzled me. Here the correspondence started.

    ________________________________________

    On Apr 26, 2020, at 09:15, Dieter Kolberg <yodiet@live.com> wrote:
     Hello Albert,
     
    Hope you two are doing well. Many times I remember still our last discussions about your support of the disarranged clown.
    I sincerely hope by now you have come to you senses.
    I trust Judith did not give him the idea of injecting Lysol to kill the Corona Virus! What an idiot. He surely hit the new with that idea in Europa.
    By now he has become the laughing stock of the world.
    Surely my trading club in the US cannot find any more degrading words for him.
    We are still in Spain, living under strict restrictions, but these are absolute necessary to avoid the spread of the virus. I trust it will only end, once they have found the right injection (not Lysol) to combat the virus.
    Let me know what is going on with you, trust your diving trips are very much restricted as well.
     
    To both of you stay healthy,
    best wishes from Yolanda and Dieter

     

    ________________________________________

    Gesendet: Albert Sonntag, 26. April 2020 08:40
    An: Dieter Kolberg <yodiet@live.com>
    Betreff: Re: Greating from Spain
     
    Dieter,
    Why in gods name are you so taken it by our president.

    Just let me clear up one thing. I do not like what Trump says but I love what he does. You can well imagine how well I profited from the three years with him in office. You said in one of your previous e mails that my portfolio was to risky
    I have AMZN,NFLX,BLK,JPM,AAPL,BX and MSFT these are some of the companies in my portfolio. Now you are bright man (dispite your opinion of Trump) check out where my holding where three yeas ago in comparison to now. Have I made my point??.
    I am selling our property in Spanish Springs and we are moving to San Diego. I found a home on one and half acre of land.
    <genMid.200011056_1_0.jpg>
    Now you can do me a big favor and stop sharing your trading group’s opinion in the US of our president. If they have any brains they made a lot of money during Trump’s time in office.
    You might want to share that old European saying with them “
    Do  not bite the hand that feeds you“

    Judith and I are doing well I hope you and Yolanda are going to be able to leave Spain soon.
    So stay safe and wear you mask.

    Take care
    Best wishes from both of us
    Judith and Albert

    On Apr 26, 2020, at 09:15, Dieter Kolberg <yodiet@live.com> wrote:
    Albert,
     
    Well I am still amazed. Even that I share some of the stocks you listed I hold as well. They have not grown on the clown's Mist, but grown on the skin of their employees. The man is a pathetic liar. He produces lies on a daily bases. Sadly to say he has become the joke of the world.
    You did not comment on injecting Lysol in to people?????? Serious Albert is this what you expect from a leader of a country?
    Moving house. Is the picture you show the house you bought? Well I hope Trump will not raze the wall any higher on the Mexican border, as you need abought 5 slaves to clean the place. What about forest fires?
    We still have the home in Mexico on 7 Hectares. I learned and know what work it is to keep it up.
    Remember we do not live forever. I have purchased an apartment near a lake in my old home town. 100 square meters and I get lost in it. I prefer my RV 15 minutes to vac and it is clean. If I do not like the place I park, I move to a better one. There are so many lovely sides in Europe. God only knows how long one still can enjoy this privilege.
    This spring we did have the French Alps in mind, but all shut down.
    We are not a prisoner in Spain, can leave here any time I wish. Only there are no other camp places open in Europa. So we enjoy where we are.
    Relaxing the restrictions in Germany will only bring up a second wave of infections. Even that your leader thinks he is a miracle man, obviously changing his view every day, you also will still see the results.
    Only the proper vaccine will stop all pain, not even Lycol will do it.
    So thank God there are some better brains behind the companies you purchased shares off, than the brain of your smart leader.
     
    In that spirit Albert step out of the box and see the real America.
     
    Still like to remember you as the smart man when I met you.
     
    Sincerely your friend
     
    Dieter
    Von:
    Gesendet: Albert Sonntag, 26. April 2020 11:54
    An: Dieter Kolberg <yodiet@live.com>
    Betreff: Re: Greating from Spain
     
    Dieter ,the smart man you are I would have thought that You would have gotten the message: I don’t like your opinions on our president.
    As you know I hold duel citizenship and there are reasons I live in the US. So stop it please.

    The visits to CH cause always pain. There is no hope that pain will diminish with the one and half Muslims your leader let in to the EU.
    No intention for me to live among sheep.
    So hopefully me next from you will be a little more uplifting for me.
    Sent from my iPad

    On Apr 26, 2020, at 09:32, Albert wrote:
    Dieter, do me a giant favor and stop this fatuation with Trump. I don’t like it. You guys will have enough to deal with all the muslins from Africa

    Sent from my iPhone
    Dieter Kolberg
    So, 26.04.2020 11:58
    Albert if you do not even can answer some down to earth questions I feel sorry for you. You even will find Muslims in the US. Sorry to tell you. You will not get any further comments.


  5. Just in case you all missed it…new post on Arena is up here.

    I am playing the December $60/70 BCS, selling a few puts OTM short dated to help pay down the spread. You can drive a truck through the spread, but if you can pick it up for < $2.75, that works.


  6. You fell into the trap of resorting to ad hominem attacks instead of using facts, and then you resorted to attacking your friends in addition to Trump, instead of respectfully disagreeing with them. So now you lost your friends and have failed completely to convince them that their support of Trump is misguided. It would have been better to ask them some intelligent questions about the situation that forced them to consider your ideas, or more importantly reconsider their own. 
    I disagree with the politics of Democrats and Republicans both and if I did what you did, none of my friends would be speaking to me right now. 


  7. Good Morning.


  8. 5 largest Stock in the S&P 500 report earnings this week,(MSFT,AAPL,AMZN,GOOGL & FB) .

    This is the 2nd time that this has happened.  The others- in weeks- 1/26/15 & 1/29/18, S&P went down 3.7% & 3.9% 

    past performance does not guarantee future results..


  9. GM Phil, give me a call about the masks when you have a minute 917 836 6789


  10. dawgydaddy Thanks I can take the punches and down to earth reply.


  11. yodi

    I don't understand why you are so hell bent on making everyone agree with you.  I thought he was your friend?  Is that a requirement of your friendship?  I am not of the same beliefs of many of my friends.  They are entitled to their opinion.  So are you; and so is Phil.  But the insults are needless and don't do anything to change minds.  In fact they are no better than Trump--when you think about it.  


  12. YOGI- Your friend is like many here who live in complete denial of dtumpy and his actions. With your friend everything is about money and denial is well instituted in his life. Also remember many men and women "admire him" as he is so successful! What is harder to understand is I know many who don't have a dime and still are his devotees. Misogyny is alive and well and women are fine as long as they as they are around to service men's needs,  presently or in the future. Therefore I never invest in a battle with anyone and if they choose not to act on their own self interests, that's their choice. Debating with people who refuse to weigh the facts is futile. Always hard to lose a friend but with blinders on they will never accept facts.


  13. Has anyone seen the Bakersfield, CA urgent care owners who said:

    "Do we need to still shelter in place? Our answer is no. Do we need businesses to be shut down? No. Do we need to test them and get them back to work? Yes we do," says Dr. Dan Erickson.

    The two say they have their own statistics that show COVID-19 is similar to the flu.

    Seems like faulty math trying to extrapolate those they tested to the whole country, or multiple countries.


  14. Well said, pirate.


  15. Yodi- here is a suggestion for your future RV travel plans. Come to the US and spend a year in flyover country campgrounds. You may learn something plus your friend, I suspect will come and visit despite your harsh commentary. Sounds as if he is quite resilient. 


  16. pstas Thanks for the suggestion BUT first as a foreigner you only allowed to stay for 3 month in the US. Presently and who knows for how long they do not even allow people from Europe in to the US as far as I know!!!!


  17. /USO/Phil- USO moved out of June contracts to late 2020 and 2021 contracts today per BB news. Is it worth holding our bcs after this move or you still thinking of exiting? Tx


  18. Bakersfield/rperi – yes, that video is getting an astonishing amount of traction. I haven't sat through it; it's over an hour, but friends inform me that there's really nothing new and exciting about it. They would like to open their business and make money again, but who wouldn't. And they don't have any more expertise in epidemiology than you (I assume you're not an epidemiologist), have, rperi.

     


  19. Good morning!

    See, Cramers on TV screaming "America needs to be OPEN!"  

    Does it?  As I have noted, Europe take a month off every August and it doesn't kill their economy.  Of course we can't do it all the time (that's Communism) but a little Socialism won't kill us, right Kelly?  

    THAT is the big fear of the Conservatives – God forbid people realize that their companies can survive not working for a month and people realize they can take a month off and the World won't end – that's a real disaster for Capitalism! 

    Of course the World will end if we stretch this out past June but that's why I'm worried about getting back out too quickly – if the infections spike above our ability to deal with them in the Health Care system and the death toll jumps higher – people will freak out and we will have a high chance of heading into a Depression as businesses and workers simply won't be able to pay their bills and then the landlords and the lenders, etc. etc. 

    The king and i etc GIF on GIFER - by Sinskin

    Deaths/StJ – That's what I'm saying though, 1.5M people will die – it's just a question of when.   1.7M people a year get cancer and 650,000 people die of it every year.  We COULD do mass screening and early detection and lower the death rate to maybe 300,000 but that would cost, let's say $1,000 per citizen so $330Bn a year in preventive screenings and 300,000 mostly old people's lives simply aren't worth $1.1M each – sorry…

    These decisions are made every day for diseases and airbags and seat belts and airplanes and food safety, etc. etc. – cost-benefit analysis is a real thing – even in Communist countries.  

    And keep in mind that cancer is not a virus but it "infects" 3% of the people, mostly over 65, EVERY YEAR.  There's 50M of them and they are over 65 for 10 years so they have a 30% chance of getting cancer with a 35% chance of fatality – much worse than coronavirus (if it does not re-infect).  

    All social distancing does is spread the fatalities out over time and yes, less infections mean less stress on the health care system and hopefully less fatalities that way too but at what societal cost?  There is a certain point at which it becomes unrealistic to prevent more deaths. 

    Of course these are awful decisions no one should have to make but someone has to make them and, eventually, if you refuse to make a choice – Adam Smith's cold, dead hand will make it for you!  

    "You can choose from phantom fears

    And kindness that can kill

    I will choose a path that's clear

    I will choose free will

    Each of us

    A cell of awareness

    Imperfect and incomplete

    Genetic blends

    With uncertain ends

    On a fortune hunt

    That's far too fleet" – Rush 

    As you say, what's the impact of all these small businesses going bankrupt.  What about the food that's rotting in the fields while a plague of locust are destroying 1/3 of Africa's crops?  6 months of this and we'll be in a Depression for sure and a lot more people will die of hunger and disease under those conditions than even the unchecked coronavirus can hope to eliminate.  

    Albert/Yodi – As he says "do not bite the hand that feeds you" – some people value security over freedom, this is something you are very unlikely to argue them out of – Ben Franklin already tried:

    Quotes about Security and liberty (83 quotes)

    In this case, your friend is saying he values his financial security and is willing to forgive Trump everything else as long as he makes him money.  You then go to hold him personally accountable for Trump's actions and you call him stupid – that's not nice and you know that.  I'm certainly guilty of the same behavior sometimes – it's easy to get caught up in the moment – especially when you are frustrated by the situation or Trump's latest escapade.  

    And yes, it's short-term thinking.  As we can see, it's all fun and games with Trump until there's an actual crisis and then it's mishandled and the economy is in shambles – except the market isn't in shambles because "Trump" saved it by placing the US $6.5Tn (30% of our GDP) further in debt (so far) – on top of the $4Tn in debt he's already piling on to give your friend his prosperity.   

    Do I consider it "winning" when I'm robbing my children in order to pad my accounts?  Well, I'll leave my accounts TO my children (tax-free, thanks to Trump) so it's really their friends I'm robbing (though what I do spend on myself is robbing them anyway) and everyone else in the bottom 99% and some people can do that with a very clear conscience and some can't.

    The US does not teach Philosophy in schools for good reason – we don't want people thinking about the consequences of their actions.

    5 Stocks/Randers – FB should do well, GOOGL, AMZN too.  MSFT not much issues and AAPL some business interruption on hardware and now we'll see how services hold up but, if anything, this week might prove why they are the big 5.  

    Sorry Kustomz – I will call you around noon.

    Testing/Rperi – That's the key though, we need testing and the Government is still failing. 

    USO/Ravi – Well that's interesting but that means the 2021 contracts have to go from $30 to $60 for USO to go from $2.18 to $4.36 so no, time to get out.  


  20. Please thanks


  21. Agree with most of your thoughts on the shutdown but not so much the Europe month off.  Yes they do that but airlines, hotels, restaurants, theaters etc all still open (the entire tourism industry). I have been there in August and it is more like the economy shifts locations than shuts down. And even though they are used to that, Europe is being just as economically hammered and everyone else currently.


  22. No I am certainly not an epidemiologist, and yes they are business owners so biased in opinion, just trying to figure out why it gained so much traction that my Pastor is telling me we need to open the church.  There are probably many like them but there are proportionately many more that disagree, like Public Health agencies and experts.    


  23. Take a look at FCEL options. Something going on there. Earnings 6/15


  24. Opening up/rperi – hmm, well my Quaker Meeting is certainly not considering opening yet. We were slow to reopen in 1918, too – our archivist just found this after I got curious: "10th to 12th month – “Due to the great 1918 influenza pandemic, no meetings are held for three months by order of the health authorities”

    This was (and is) Orange Grove Friends' Meeting in Pasadena, California (founded 1907).


  25. Europs/Tangled – I know it's different, of course, but businesses shut down – you can't get anything done, yet the World keeps spinning.  That's the point.  

    The economy CAN'T be stopped.  8Bn people waking up in the morning, eating something and going to the bathroom is already an $8Tn economy – there is no STOP and they didn't even get dressed, take a shower, brush their teeth (not in that order) or turn the lights on or go from one place to another without walking and certainly they didn't make any phone calls or buy gas or build a home or wash their clothes… We're already up around $40Tn….  

    So the Global Economy is the real irresistible force of physics and you have to accept that so you can realize there is no object you can place in it's path that will stop it.  It's like a ball rolling down hill that hit's a rock.  It may bounce up or down or sideways or even back a bit – but then it keeps rolling down hill.  

    Of course, as I've always said (and said in 2008) UNLESS you actually kill the people, you can't permanently kill the economy and finally we're putting that somewhat to the test and I've been considering all the variables this weekend and I decided the most likely outcome (66%) is Phuket – people aren't going to stay in a cage over a 1% chance of dying – we've had enough revolutions and wars in this world to know that is true.  

    Pastor/Rperi – No church, no collections.  That's pretty easy to figure out.  

    FCEL/Pirate – That was supposed to be a Stock of the Future trade but we missed it.

    3 months/Snow – Well they were a lot wiser back then than we're being now.


  26. TSLA back to winning!

    LTP is up 14.7%, gained 10% since Friday for some reason.  Well, not some reason, this reason:

    That's $573,475 and the STP dropped to $508,782 but that's acceptable – it was about $543K on Friday so kind of neutral is where we wanted to be while we wait for this week's earnings.  


  27. SBA website is down within 2 hours of re-opening loans to small businesses.  


  28. Church – strangely enough, with the advent of online giving we have averaged 85% of our normal collections since March 1.  Still, there is the pressure to provide services that people normally receive as part of this giving.


  29. Yodi - you should rekindle with your friend. netiher of you no more or less responsible for trump. 

    My wife is japanese. She is no more responsible for Pearl Harbor than I am for nuking Hiroshima and Nagasaki.

    What you're running into is identity and anxiety. Oh posted about it Friday evening if you want to read it.


  30. GBTC at 6 was good!


  31. I think BCH and BSV could go 10X. I can see these two coins at 2k each:

    https://coinmarketcap.com

    (#5 and 6 on the list)


  32. Nice write up Phil, I agree that people are going to say "Phuket" and start going out. I think that's the only way it can roll out as we can't stay on lock down for another 12-18 months. It has been all about flattening the curve and giving the medical profession (and manufacturing) more time to prepare. Young people will go out but there is a large number of young people that are in contact with older people, like your kids with your mom, like the majority of people working in retirement homes.,kids that live with older parents, people with family members that have underlying issues, are those people going to go out? How will that affect the economy? I think it will take longer than people think to get back to something we would consider normal. There are of course a million other things to consider, share buybacks, global trade, tariffs, :) Who are the winners and losers,…..we will leave it to you to figure out for us Phil …..haha :)


  33. Punching In: NY, Trump Head to Court Over Covid-19 Paid Leave


  34. Hi Phil, Can you pls go over the major support & 5% lines for /GC. With $ strength and gov spending over covid, this would continue to be in play over the next couple of years. 

    Also, what site do you generally use for historical earnings and financial statement analysis. 

    Thx


  35. SKT 6.66 and sells off,  somebody has a sense of humor


  36. Concentration of the S&P 500 in the top 5 stocks is around 20% of the total market cap. now.

    This market is kind of like the world's income inequality too. 


  37. Gold/RS – Gold doesn't have "support" the way stocks do because it doesn't have any intrinsic value other than as an electrical conductor.  Silver is more of an industrial metal than gold is and gold doesn't get interesting as a conductor until it's down around $250 – so you'd better hope you find support before there.

    From a purely technical standpoint (yuch!) Gold had a hard time breaking over $1,700 so if that is support that will be a good sign but the longer-term support for gold is $1,600, which held up well once we got over it in the last crisis for a couple of years but then all the way back to $1,200.  

    Gold is constantly being re-priced by the Dollar and is not likely to go much higher unless the Dollar breaks down – which is unlikely. 

    SKT/Kustomz – I'll take it.

    Top 5/Randers – It makes the S&P so easy to manipulate. 


  38. Oil:

    The Dec 2022 0.50/4.50 spread on USO is $1.30 which means it's ITM enough that if it stayed at $2 from now until then, you still wouldn't lose money on it, and if it got back to $5 which corresponds to an oil price in the mid-$20's, it'd be 200% profit. Is this as big of a no-brainer as it appears or am I missing something? I guess if they did a reverse split, but seems like in the long run that would wash out. I know USO has high rollover costs. Maybe there is a better way to play this for a long-term eventual recovery? Thoughts anyone?


  39. Friends/Yodi

    One thing you may not be aware of is Fox News. I know Phil makes fun of it from time to time, but if you don't watch it, it is hard to imagine how skewed it is. People in the U.S. who watch Fox News have a *very* different idea about what is going on in the world, and how capable Trump is, and even what Trump has or has not done or said. Fox News viewers are likely to think that Trump is doing a good job, and that everything that is going wrong in the U.S. now is China's fault. Fox viewers with those opinions are not being stupid, they are making inferences based on information that you and I have reason to believe is incorrect.

    I once commented to a friend of mine, a Fox News viewer, that I thought George W. Bush was the worst president I knew of in American history. (This was before Trump.)  My friend was shocked that I could think that, and vehemently disagreed.  We let it drop, and we're still friends, but we don't talk politics anymore.

    One last thing. There's an old saying, "To make a friend, you have to close one eye; to keep him, two.   :-)


  40. Hi Guys To all who have added your comment to my request a hearty thank you. Very  good advice to consider. Thank you.
     


  41. Saguaro- I thought the same thing and mentioned it to someone. They were affronted, but I made the comment that when we went to Canada it was tough to talk to the Canadians as they thought we were really stupid for electing him TWICE. I laughed but they didn't. At the time I thought he was the worse, but obviously now I have to eat my words. As it is I only quote statistics, or facts. My personal opinion except on FB or here is my own!


  42. Lost my Internet for a bit…

    Oil/Dawg – You can see why I warned people off them – so crazy!   I just don't trust USO anymore, they are reverse-splitting it and another sell-off from there could take it way lower again.  You won't have an 0.50/4.50 spread but a $4/36 bull call spread on 1/8th as many contracts.  

    Trump/Sag – Good article on who's the worst:

    So I have written, as I did on March 12, that Trump is the worst president in modern times — not of all time. That left open the possibility that James Buchanan, Andrew Johnson, Franklin Pierce, Warren Harding or some other nonentity would be judged more harshly. But in the past month, we have seen enough to take away the qualifier “in modern times.” With his catastrophic mishandling of the coronavirus, Trump has established himself as the worst president in U.S. history.

    His one major competitor for that dubious distinction remains Buchanan, whose dithering helped lead us into the Civil War — the deadliest conflict in U.S. history. Buchanan may still be the biggest loser. But there is good reason to think that the Civil War would have broken out no matter what. By contrast, there is nothing inevitable about the scale of the disaster we now confront.

    The situation is so dire, it is hard to wrap your mind around it. The Atlantic notes: “During the Great Recession of 2007–2009, the economy suffered a net loss of approximately 9 million jobs. The pandemic recession has seen nearly 10 million unemployment claims in just two weeks.” The New York Times estimates that the unemployment rate is now about 13 percent, the highest since the Great Depression ended 80 years ago.

    Far worse is the human carnage. We already have more confirmed coronavirus cases than any other country. Trump claimed on Feb. 26 that the outbreak would soon be “down to close to zero.” Now he argues that if the death toll is 100,000 to 200,000 — higher than the U.S. fatalities in all of our wars combined since 1945 — it will be proof that he’s done “a very good job.”

    But that's the point with Trump, he is the master of propaganda.  He's able to take horrible numbers like that and spin it into how great of a job he's doing and he has a whole network backing him up.  They not only prop up their own BS but they tear down the credibility of competing networks – WITH THE PRESIDENT'S HELP!  It's insane – if they made a movie with this plot you would think it was completely unrealistic.  


  43. Pirate, Phil -

    Sometimes I hope people will simply stop watching Fox News, and gravitate to a source which strives for accuracy.  Other times I hope the FCC could do something, possibly just make it so they can't call themselves "news". Other times I just give up and appreciate that today, still, I'm healthy and have enough food.


  44. Yodi / Albert:

    Well Yodi,  knowing you personally and sharing the same RV hobbies Iá agree with you…and agree with Albert, as an engineer a dot explanation is easier to write.

    1. You still have a friend, you just avoid talking with him about the sensitive issue, I believe you can share a lot of different themes.

    2. He is right!  is talking from a financial point of view, we have been losing a lot of opportunities here because we were base in daily action, he bought in cruise missile style and he could not be happier, but THAT is the most important asset of Trump with the people, we in comparison have a daily "what the f.. is this B.. dong", 

    3. If you see it in a cool way, most Americans will hear something about Trump 10 min. in a day, perhaps in the channel that reinforces his opinion (good or bad)….and period, 10% of the population will read a newspàper, 5% will view a political discussion as in PBS NewsHour, for me the best news program in the U.S., but they will see his financial statement very often an that is moving up, he /she has a job, had a salary increase, so life goes on.

    4. The stock prices are out of any analysis and Tesla is having an over $750 price against logic or GOOGL but the prices are there!, what will happen….the prices now and in November will be there.

    5. Where in the world your friend with 77 can have a good job ?, only in the U.S:! and he, as many have a good situation during the Trump era…period.

    Tell Yola to talk with Judith…just in case.


  45. Fox/Sag – In Canada they aren't allowed to call themselves news.  

    Life goes on/Advill – Not the first time that argument has been used:

    Newsweek: Is Asking Inane Questions the Future of Journalism ...

    Mussolini made the trains run on time" and other things you don't ...

    Jim Rose on Twitter: "USSR also invented the Concorde. And ...

    He killed six million people. - ppt download

    As long as the bad stuff doesn't affect you – why should you care?  

    Crusades and shit. - #71772911 added by sasyboncho at Hitler did good


  46. People looking for justification for their behavior or support of someone/something will always find excuses or create an ideology to support it. Here is an article about the latest book from Thomas Picketty regarding income inequality:

    https://www.wired.co.uk/article/thomas-piketty-capital-ideology

    Every unequal society, he says, creates an ideology to justify inequality – that allows the rich to fall asleep in their townhouses while the homeless freeze outside. He recounts the justifications that recur throughout history: “The wealth will trickle down”. “The rich will give it back through philanthropy”. “Property is liberty”. “The poor are undeserving”. “Once you start redistributing wealth, you won’t know where to stop”. “Communism failed”. “The money will go to black people” – an argument that explains, Piketty says, why inequality is extreme in countries with historic racial divides such as Brazil, South Africa and the US.


  47. KOF – Coca Cola Febsa S.A.B… largest franchisee coke bottling company… pays out $1.25 or so semi-annual dividend (ex-date later this week). Trading close to 10 year lows ($39.xx). Anyone know if the fall is Covid-19 related or something else completely. 

    Pretty illiquid options though…


  48. C´mon, Phil

    Trump is a brilliant stupid !  his mafia-style plus military punch has torn a lot of things in the U.S, he is not alone, Italy, U.K, Belgium or Holland have it in different flavors of the same dish, is a planetary thing.

    I think that U.S democracy will handle it but I don´t perceive a particular danger for  the U.S System, 


  49. FEMSA, As far as I know, they sold a control part to KO so we are talking of a Mexican KO company.

    Mexico is the highest soda per capita consumption in the world, now being affected by a sugar content tax (Mexican children are of the most obese in the world)  and a COVID and Mexican peso devaluation thing.

    They have the OXXO franchise which is no the around the corner mini-market for 80% of Mexicans.


  50. FANG not taking part in todays rally

    interesting — maybe some are actually worried about earnings?


  51. Justifications/StJ – To some extent "life is unfair".  You win the sperm lottery out of 1Bn and then you randomly are born rich or poor, first or third World and then a series of random events shapes your life but to what extent should the winners not win is the question?  Communism seems a bit harsh one way and Capitalism the other but I think that, as long as the basic needs of all are met:  Food, shelter, clothing, medicine and some reasonable entertainments – then it can be capitalism for all above the line.  

    I think it's funny that we have laws regarding the care and treatment of animals that guarantees them minimal rights that we don't grant to human beings.  

    Anticruelty laws require that animals be provided with basic necessities and be treated humanely, unless it is “necessary” or “justifiable” to deny them food, water or shelter

    If only we treated humans "humanely"….

    KOF/RN – Hard to tell if the dividends will continue but seems like a good one to ride out but that sugar tax is probably going to sting.  I'd go conservative with a small entry and/or wait for earnings (5/1).

    RUT had a really big day, up 4.27%.


  52. Of the many simpleton phrases Trump maniacally over-uses, the most enigmatic is being the "best." He's always saying "the best this," "some people say it's the best [or biggest or most tremendous] whatever they've ever seen." For example, Trump said I have the "best words."

    If one were to take this word "best," and related words, it would mean "better than anything that has come before." For example, an increasingly fast world record time for a bicycle course. The "best" being the fastest time.

    With trump it's this concept becomes one of being 100% subjective. I've alway been trying to square this concept with what actually exists. My sense is certainly it speaks to the opposite affect: trump has never been the "best" at anything actually, in any sense. Anywhere really. For example, take his "best brain" comments and compare that to the reality of a guy who will sue anyone back to the stone age that exposes his college transcripts. "Healthiest president ever" from a doctor letter the he wrote himself. I mean, it's just weird.

    To be sure, and I would suspect everyone kind of knows this by now, trump creates an alternate world where he's at the center. He's simply the "best" _________ (insert whatever) because he says so. But why that is so important to him is, well, just a weird weird concept to me.

    It also speaks to a larger enlightenment that trump has actually never, and will never, experience: If you've ever actually been the best at something, you realize it's one of the least important aspects of the pursuit, and has no meaning whatsoever to the larger enlightenment that life can offer.

    He's just a sad little man, most certainly lost forever. Maybe that reflection is what so many others see and relate to on such a deep and personal level.


  53. This market looks interesting. I might throw $850 (this is the max for the site) at the one I like the best for November.

    Taking stock of that, looking at 270towin, I'm currently thinking the following Dem pickups:

    WI, MI and PA of course. And then, OH, FL, NC, AZ and the singletons of NE-1 and ME-2. That gets to 362-176 = 186, or the Dem 150-209 category.

    I'm covered 36 EV's to the downside (which means 18 because it'll be x2 for the subtracted result). I can can get one of OH, NC and AZ (but no more than 1) and I have to be right about FL. On the positive side, Dems also have a shot at MT and IA but they don't change the betting tier outcome, and also to a lesser extent GA as well. TX might be in play, maybe 10% chance, and I would have to be right that TX stays red.

    The biggest problem is Sleepy Joe. Worst candidate ever. I'm so sick geriatrics (sorry older guys but it's not you, it's me). Trump, Bernie, Biden, Hillary, UGGGGG! NO!

    How about Biden steps aside and an Cuomo/Cuomo ticket? Hahaha! Cuomo/Newsome? 

    Best one ever: Abrahms/Obama ticket. (meaning Michelle Obama of course).


  54. BDC 

    Interesting take on the use of Best. That may fit into Melania's odd " Be Best" initiative too!


  55. "Best" – google "best" followed by any noun and see what pops up. That's Trump's sense of the word. Apparently anything can be "best" as long as someone is shameless enough to claim it is so.


  56. I believe that is called Delusions of Grandeur.  A common symptom of schizophrenia and bi-polar disorder.


  57. Cadaveric Blood transfusion: 1929, Russia, then made obsolete by the use of capitalist refrigeration and the ability to harvest and store blood from living people by Dr Fantus in Chicago in 1937. Socialism 1 – Capitalism 0 (I think we're being generous here, but what the hell?)

    Kidney transplant – Performed in Russia in 1933 but they didn't think to check if the blood type was a match, so the transplanted kidney never actually functioned. First successful transplant Dr Peter Murray of Boston. Socialism 1 – Capitalism 1

    Artificial heart – Canine version invented by a Russian and implanted in a dog that lived 2.5 hours, using an external electric motor. First successful human artificial heart was invented by Jarvik, but was actually a rip-off of a design by American Paul Winchell – a professional ventriloquist. Socialism 1 – Capitalism 2

    Heart-lung transplant – Soviets did early lung transplants in 1947 by Russian named Demikhov. The first semi-successful Heart-lung transplant was performed by Dr D.A. Cooley of Houston in 1968. The first successful procedure is attributed to Dr. Reitz of Stanford University, 1981. Socialism 1 – Capitalism 3

    AK-47 – design was ripped off from captured German MP-44 assault rifles. It could also be argued that the FN FAL/FNC and AR-10/AR-15 are both superior to the AK-47 anyway. Regardless, no score to Mikhail Kalashnikov for successfully ripping off a Nazi design, but since the Nazis were socialists too, Socialism WINS! Socialism 2 – Capitalism 3

    First mobile phone – Motorola DynaTac 1947. Socialism 2 – Capitalism 4

    First satellite – Sputnik 1957. First satellite that actually had any purpose other than propaganda value: USA 1958 Explorer satellite measured earth's magnetic fields. Still, it's a technical win. Socialism 3 – Capitalism 4

    Radial keratotomy – Russia 1974, however keratotomy in general the first was Tsutomu Sato of Japan 1936. Next progress in the field made by Jose Barraquer of Bogota Colombia. Then Russia. Then Lasik was invented in the USA in 1980. No more freebies for socialism. Socialism 3 – Capitalism 5

    Now there are millions of things that capitalism produced first so we can't start a list of that, but just on the Big List of Socialist Firsts, socialism actually did score 3 out of 8 so yay for socialism!


  58. Just watched the 60 Minutes episode with the Blue Dot epidemic tracking/predicting company.  I think any major investment house or company not signing with them is a fool.