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Friday Failure – 33 States (out of 50) Are Spiking With Infections

Holy cow!  

As you can see from the chart, over 20% of the people who are tested in Arizona do, in fact, have the Covid Virus.  Not much better in Florida and anywhere were 1 out of 10 people have the virus it's pretty much game over for containing it.  We did have it contained – but Trump was so eager to call that a victory that he opend up the cages and now we are all Christians that have been thrown to the viral lions by our modern-day Commodus.  Maybe in the future, we'll call the toilet a Trump, instead of a commode in his "honor"… 

That's right, Commodus was the son of the popular Marcus Aurelius but, as Gladiator fans surely know, his reign was one of rot and corruption as he surrounded himself with incompetent toadies and managed to intiate the complete anhilation of the Roman Empire after 12 years of incompetent rule (he was assassinated):

During his solo reign, intrigues and conspiracies abounded, leading Commodus to an increasingly dictatorial style of leadership that culminated in a god-like personality cult. His assassination in 192 marked the end of the Nerva–Antonine dynasty.

Commodus had upset the peaceful balance that Rome had enjoyed for almost eighty years. Currency was devalued and the economy collapsed, leading the country into a civil war that lasted four years. His rule was the beginning of the end for that most famous empire..

Yikes, sounds a lot like the movie we are all currently starring in, doesn't it?  I think we're just about in the middle of act two:

 In context, the Latin panem et circenses (bread and circuses) identifies the only remaining interest of a Roman populace which no longer cares for its historical birthright of political involvement. Here Juvenal displays his contempt for the declining heroism of contemporary Romans, using a range of different themes including lust for power and desire for old age to illustrate his argument.[6] Roman politicians passed laws in 140 BC to keep the votes of poorer citizens, by introducing a grain dole: giving out cheap food and entertainment, "bread and circuses", became the most effective way to rise to power.

[...] iam pridem, ex quo suffragia nulli / uendimus, effudit curas; nam qui dabat olim / imperium, fasces, legiones, omnia, nunc se / continet atque duas tantum res anxius optat, / panem et circenses. [...]

… Already long ago, from when we sold our vote to no man, the People have abdicated our duties; for the People who once upon a time handed out military command, high civil office, legions — everything, now restrains itself and anxiously hopes for just two things: bread and circuses.[7]

—Juvenal, Satire 10.77–81

Sadly, the decline of the Roman Empire was a 5 act play and it was all downhill from there for the next 200 years.

So how about those markets!  Wheeee – Nasdaq back over 10,000, mostly because AAPL has blasted up to $365 a share – up $25 (7.5%) since last week.  Apple makes up 12% of the Nasdaq and 12% of 7.5% is about 1% (too early for math) and the Nasdaq is pretty much flat since last week and, as our Members well know, Apple is often propped up to mask the selling going on in the broader market as $25 also equals over 200 Dow points and AAPL is 3.5% of the S&P 500 as well.

AAPL is up 14% in June and the Nasdaq has gained 600 points or 6.3% so, essentially all of June's gains so far have come from Apple's $45 run and, in the Dow, each component $1 is worth about 8.5 Dow points (yes, it's an idiotic index) so AAPL contributed 382 points to the Dow's 400-point gain for the month.  That would be 95.5% of the gains…

You know how someone is driving and you are sitting next to them and they are talking to you as if you are home on the couch and you see a car too close ahead and you don't want to say anything because you don't want to insult their driving skills but then you get even closer and there's that moment you finally decide you have to yell "CAR!!!" or something because you think the margin of safety is passing?  

CAR!!!

Have a great weekend – I have to take a Trump, 

- Phil

 


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  1. Rise in online gambling during lockdown boosts 888





  2. Good Morning!



  3. Wow! the anti mask crowd in a Florida are an interesting bunch. So weird to watch. Last night our mate came round (she is more skilled than the rest of us) and we made a load of face masks out of spare fabric and old jeans. We thought we could see them at the station to commuters who had forgotten. 

    we also got a leaflet through the door yesterday for home made face masks. All very chilled and no one seems to mind wearing them on public transport. 


  4. Trump dump….dump Trump.  CAR!  ROTFLMAO Phil.  Have a splendid weekend. Outta here!


  5. CAR! … one of your top 5 PHil. 


  6. Pharm…any thoughts on CYDY  They have doubled in the last week.


  7. Good morning!

    News feed working fine now.  Really good articles on quantum physics that haven't shown up yet.  You can always check out our Flipboard magazine too.

    Woops, indexes slipping again.  

    Masks/Malsg – Sadly getting used to it.  

    Thanks but sad, Malsg.

    CAR!

    Just to be SUPER clear – if it were not Friday I think I'd be going for a cash out as this situation is just not realistic.  Masks are now required (in Florida) to just walk down the hall in a public building but there aren't enough masks (hence we are in the mask business!) so we are stuck in a loop.  Every day I go out (every other day at best) there are more and more restaurants that are gone – this 50% thing doesn't work for them and retailers are starting to pull the plug too.

    I simply can't see the investing premise in this other than a Government that is running the printing presses 24/7 so yes, we should have some stocks that are deflationary defensive but, since MOST of that printed money is going to buy Government Debt, we have an extremely false view of inflation.

    Government borrows to print more money, gives 20% to the Fed, Fed leverages money 10x, Fed lends money to the Government to cover all their printing and still has 10% left to hand out to Trump's friends as a thank you present.  When the Fed runs low, Government borrows to print more money and the cycle continues.

    Oh look, we just put up that image on Tuesday.

    Only $12Bn in 3 days – Trump must be on a diet….


  8. CYDY/willsons – appear to be a COVID play, like so many others.  They have a monoclonal antibody to CCL5, which is a chemokine (small secreted protein that activates immune cells)  involved in inflammation. It is a chemo-attractant to move the inflammation to the area.  Very interesting……hold it…wait for it….. as MRK and PFE had oral small molecules back in the late '90s to the CCR5 receptor (of which CCL5 binds to).  Now, CCR5 was one of the receptors involved in allowing AIDs virus to enter the cell and continue its replication.  

    So, my take is…if you have a cell that is making this like crazy, and unlimited 'bankrolling' of the dollars coming out (ie, cytokine CCL5), but only a limited amount of antibody in the system after administration….who wins? Now, I might be completely wrong on this….but to me, as a COVID play, not worth the risk.  I think it is RobinHood Traders driving many of these COVID stocks.  


  9. Looks like data are due out next week as well for CYDY….so another reason to avoid for now.


  10. Notice the spending increase isn't that dramatic – it's the falling tax revenues we talked about that are killing us.  That's why they'd rather see a few million people die than shut down the economy.  All wars are economic wars so buckle up soldier and go out there and shop until you drop!


  11. Phil. CV19 -0 I was looking at the hart from yesterdays news post 

    June 25th, 2020 at 10:19 pm | Permalink | Tweet thisIgnore this user

    Internal documents show Trump is at odds with his own experts as virus surges

    By: Jonathan Allen

     

     

     

    The chart shows that we are peaking again this week ( 6/26 and going above the max we had during first spike) the spike in cases was about 2 to 3 weeks above the spike for deaths.  This indicates we can expect deaths to rise above 2500 / day about  wk 2 or wk 3 os July (based on the very slow reporting of deaths and it may be off another week or 2).   I think at that point, cases may be over 65K cases per day.  Cities in Texas, AZ, NC  and FLA ( and maybe LA) will have hospitals ICU beds above capacity. ( Houston and Phoenix will be way past this).  Based on this, mayors in cities will have to start locking down individual counties ( since Governors probably won't in 'Red States').  Do you think this will have a significant impact on the market?  And if so should we hedge more for this?


  12. Phil – Follow up to previous post – one last point –   Should we just be taking profits off the table and waiting on the sidelines…..   This could get messy.


  13. Ok, so as I read about CYDY, there is conflicting information out there and it appears that, in fact, the CYDY mAb is a CCR5 inhibitor, not to the small protein CCL5 (pays to go to the scientific literature and not the other junk out there on the web that I put my first pass through to understand).  If you want to go in small, then it is worth the risk.  Be prepared to lose 1/2.  I still stand by the MRK and PFE drugs, as they could be resurrected. PFE has one on the market - Maraviroc.  I am still trying to find if it is in clinical trials for COVID.


  14. Thanks for the info Pharm! 


  15. Pharm

     

    What about LIFE  ?

     

    Thanks


  16. Impact/Batman – YES!!!  Look at it now.  As I said above, if this were not Friday I would be calling for a complete cash out of the portfolios.  The risk is far too high to risk possibly inadequate protection.  

    Whether I change my mind over the weekend remains to be seen but I see a disaster and I don't see how the market can keep ignoring it.  As I said the other day, the need for stimulus will grow out of control as we're not fighting a Recession, this is going to be a Depression.

    Sidelines/Batman – YES!  I did some reduction in the last review and will review again this weekend.

    2.5% drop today, if we don't bounce more than 0.5% (of the drop) from here (3,000 to 3,015) then that's a weak bounce and indicates it's more likley we're consolidating for a biger move down next week.


  17. Florida and Texas closing bars now! Governors there took an early victory lap! The Texas healthcare system is getting overwhelmed in some places. 

    I remember when the GOP complained about the blue state bailout! 

    And of course, it's the day that Trump chooses to ask the SCOTUS to strike down Obamacare. Nice timing!


  18. And if I were FB, I would start to worry a bit. Advertisers are starting to bail out. And not small ones – Unilever is leaving. Won't be long until car companies, insurance companies and other will decide that getting associated with white supremacy messages is not a good look. Could not happen to a nice company.


  19. LIFE/qc – different mechanism – NRP2 that is also involved in the cytokine storms that they are seeing in COVID patients. Little more complicated than CYDY's MOA, so I am going to need to look into the MOA a bit more.


  20. Pharm

    LIFE

    Thank you


  21. GLD – I am loading up on the Sept 170 calls. (not investing advice)…..


  22. cash-out/Phil – what do you think the weekend might bring that you're not cashing out today? Covid numbers are typically lower over the weekend and into Monday, but that's just reporting artifacts.


  23. Pharm / GLD

    I have never done GLD.

    Is there a way to reduce the premium by selling calls or puts?

    BCS GLD 170/180 Sep Calls – Net $2.4 for $10 spread.

    What do you think of this?


  24. GLD/SK – sure, I do this on the long calls all the time, but use weeklies and sell 1/2 lots so I can roll IF they jack it up.  So, if you do the Sept 170 Cs (10 contracts), then sell 5 July 6 170 C for ~ 34c. The chart on GLD right now is moving up…and it will move fast.  There is an island gap there, as the trend has recovered and thus more upside is coming.


  25. GLD/Sk – the MACD is moving up, the RSI is pointing down, so there may be a little more play up down with them…..but 1800 spot price is coming.  The CBs are racing to the printing press….


  26. IMAX / I'm still staring at this one —- They have 6 per SH of Cash ….. And no debt to speak of….. I don't think they will go broke.


  27. IMAX/Batman – me too, mate, I've IMAX before & done well. I suspect timing will be key here, as usual.


  28. IMAX / Snow – I've watched them for a bit and made good money on  therm……. they have a seasonality to them and I usually go into them in the around the first quarter and look to exit in the sep to nov timeframe.   However on this one I've been looking at them more as a buy ( maybe at 9 to 10 ) and then sell calls around them….  The key is they must survive.  The Dec 11 $11 callers are at 1.8 so that is not a terrible return ( for 1/2 cover)… most likely the stock may be lower…. This is a stock that will have. a very fast pop if there is any hint of a vaccine, which I am pretty sure we will have one ( wether it's ready or not or effective ) before the election ….  


  29. WKHS – bought 50 JAN 2021 2.5/7.5 spreads this morning and the position is already up almost 25%. Paid $3.05 so max upside is 39%. I think it might be time to let it go. 


  30. Pihl / Vaccine - I posted an article last week regarding the thinking of some investment houses that they believe we will have a vaccine before the election…   They surmised that Trump would force the FDA to approve something whether it's effective or not just to claim victory.  As long as people aren't falling over dying this is going to goose the market and sentiment.  They may even release it as something for at risk people ( healthcare workers, key service workers etc).  I think it makes sense to develop a list of those companies that will benefit and be ready to pull the trigger on some when / if they drop in the next few weeks?   Maybe look at some best of breed cos within certain industries…  Thoughts?


  31. Not getting prettier – bad sign.

    9,000 cases in Florida today – previous high was 4,000.  We have just got to stop testing people!  

    FB/StJ – Kind of an interesting short up here.  Would have been better yesterday.

    Zukerberg is such an ass – PR nightmare.  Also, the rates are very high now and not as effective as GOOGL so partly I think it's an excuse for a lot of advertisers to move away.  Could be good for TWTR.

    Weekend/Snow – Nothing, I just didn't want to cause a panic cash-out right ahead of more stimulus, which I do expect shortly.  As I said, if today were Thursday, I would have said we should unwind over 2 days but, for now, we hope the hedges will mitigate the damage.  

    STP $574,249, LTP $802,594 so still just under $1.4M and it was $1.405,302 last week so nothing to panic about…  yet…  

    And I HATE to be in the Chicken Little Chair, I really do but THE SKY IS FALLING!

    chicken-little Archives - University of Cambridge

    IMAX/Batman – Seasonality is out the window at the moment.  If you are not in them for 2 years at least, pull the plug but the intention on holding them is rolling lower and lower for more and more money until they turn around.  

    WKHS/Dawg – Nice run.  I would certainly scale out a bit.

    Cowen said $11.50 so jumping today but that could fade.

    Vaccine/Batman – Having a vaccine and deploying a vaccine are two different things entirely.  

    The GOAL is 12-18 months.  That is March-Sept next year.  November is not even in the realm of possibility and there have been no breakthroughs indicating any leap forward – just wishful GOP thinkers grasping at very unscientific straws.

    As I said from our first trade of this Pandemic, GILD has been working on SARS vaccine (still not there) for 10 years so OBVIOUSLY there were the best horse to bet on in this race.  Well-funded and experienced team in place with a 10-year lead.  There has been lots of smoke and mirrors from other companies but no substance at all.  GILD doesn't pretend to have magic so they've sold off a bit (we cashed out because $85 was overpriced to reality) and not down enough for me to play again.

    You have to lose this sense of urgency to "get ahead" of perceived trends – that's the most dangerous way to invest.


  32. Phil/PFE

    a few days ago we talked about selling the $28 puts for 2022. That was with stock at major support around $33.

    clearly, that is support and thesis is broken. I did not make a trade

    Do you think it's a broken stock with further downside or a bargain here?


  33. Here you go Batman, all you need to speculate:

    UPDATED: Friday, June 26 at 9:15 a.m. ET

    Japan is the latest country to go after doses of AstraZeneca and the University of Oxford's COVID-19 vaccine, AZD1222. On Friday, Japanese drugmaker Daiichi Sankyo said it's in talks to carry out formulation, packaging and storage of AZ's shot in Japan. Daiichi said it's also in talks with the Japanese government to ensure the country has the AZD1222 doses it needs. 

    Plus, the call for more dexamethasone studies rolled on as U.S. doctors noted that the well-known steroid actually increased the odds of death in mildly ill COVID patients, according to early data from the recently unveiled Recovery Trial. The steroid dampens the body's immune system–good for late-stage patients fighting cytokine storm, but potentially lethal for those in the early throes of the disease. Those patients rely on their immune systems to thwart the infection, doctors say. 

    Meanwhile, as competition between remdesivir and dexamethasone promises to heat up, an infectious disease analyst at GlobalData thinks the drugs might serve patients better as a teamGilead Sciences' antiviral targets coronavirus symptoms directly, while the well-known steroid dexamethasone slows hyper-inflammatory damage. Remdesivir is already in combo testing with another anti-inflammatory, tociluzimab. 

    The FDA has fast tracked NeuroRX and Relief Therapeutics' synthetic peptide Aviptadil to treat COVID-19 patients with severe respiratory symptoms. The drug reduces lung inflammation and protects cells in organs thought to be an entry point for the virus. Aviptadil is currently in phase 2/3  U.S. trials to lower death rates and boost blood oxygen levels in COVID patients. 

    And German drugmaker Merck KGaA said it scored FDA clearance to launch phase 2 studies on its investigational drug, M5049, to treat cytokine storm in COVID-19 patients who develop pneumonia. Results are expected around the end of this year, Merck said. 

    On Thursday, the U.S. broke its record total of new coronavirus infections for the second day in a row, with many states spared early on in the pandemic now facing major outbreaks. In a sign of apparent urgency, the White House will hold a coronavirus task force briefing on Friday afternoon—the first one in nearly two months.

    Can't wait for that conference today!


  34. If I don't get tested for cancer, I don't get cancer, right?


  35. IMAX / Phil – thanks,  I'm not in them at all right now….. got out a while back…. Agree with you that the seasonality is out the window…. 


  36. GILD/Phil – You said, "GILD doesn't pretend to have magic so they've sold off a bit (we cashed out because $85 was overpriced to reality) and not down enough for me to play again."

    1. What do you think is a good price for GILD?

    2. How do you arrive at that number?

    - Thanks.


  37. FAANG really diving into close 


  38. GILD/Saguro – I believe we jumped in around $65 in Feb on our play and I thought that was very fair because they were a good bargain regardless with $5Bn in earnings and an $80Bn market cap.  Now it's $100Bn and still not terrible and their earnings will expand but I'm really just watching and hoping for $65 again.  A covid-vaccine or treatment (which they do have) is just a bonus but it's generally a great company with a foundation for solid growth that has no reason to be interrupted by the virus (people still get the other diseases too).  

    Hey, that's a good research idea.  Let's think about what kind of patients, like COPD will be dying off in large numbers from Covid and short those stocks – we'll make a killing!!! 

    Oxfam India on Twitter: "This cartoon explains #inequality ...

    Down pretty much 2.5% on the button at the close is NOT GOOD!  

    Have a wonderful weekend folks, 

    - Phil


  39. GILD/Phil – Thanks. Stockopedia projects GILD's 2020 earnings to be $8Bn.

    1. Do you believe that?

    2. If that number is roughly right, doesn't that make GILD a better buy now?


  40. Yes, I do but I don't think they will be immune from a pullback, so I wait PATIENTLY!!!


  41. /PFE this is one of Trefis' most undervalued stocks, if that means anything. I kinda think it does. I've gotten some decently performing trade ideas off their list, like Kroger for example, and have been looking at PFE also. Right now they're saying PFE is worth $47.02 vs $32.04 market price. Others on the list that I think might be interesting are CVS and Merck. They also have a lot of energy, travel and hospitality names, but with CV cases headed to the moon, I'm not convinced about those industries., and I already have a fair amount of energy exposure from the bottom feeding I did back in March.


  42. GILD/Phil – Thanks.  Are we there yet? :-)


  43. PFE is a great one.  I guess we can have some stocks in our portfolio to take us through this mess.  Those valuation studies do not take into account the changing conditions.  




  44. Why Amazon Should Buy Macy’s



  45. My Grandpa Max and Grandma Lucy (brother Andy too):

    Image may contain: 5 people, people standing


  46. Mom with our dogs…

    Image may contain: one or more people and outdoor