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Ten Million Infections Tuesday – Just in Case You Forgot About the Pandemic…


244,470 people dead, 6,554,460 people recovered, like our President, leaving 3,623,096 actively infected people among us – 1 out of 100 citizens who, at this very moment, could be transmitting the virus to someone else.  HOPEFULLY most of them are following protocols and wearing masks and maintining social distancing

Housing Secretary Ben Carson and White House Chief of Staff Mark Meadows were not following protocols at last week's election night party, attended by 100 people at the White House, and they have both come down with the virus and, keep in mind, all 100 people were tested before entering the White House – so it could have been a lot worse.  Literally the only person wearing a mask is Health and Human Services Secretary Alex Azar.

A person with the virus can be infections 48 hours before they test positive and the the CDC defines "close contact" as spending at least 15 minutes within 6 feet of an infected person beginning two days before they test positive or exhibit symptoms.  CDC's Popescu called the party, in particular, "a ripe environment for transmission to occur," and said anyone in attendance should have been informed and asked to take precautions.

As with Trump's last party, which infected dozens – it will take a week for us to see who catches the virus from this completely irresponsible event.  Of course, that's not the only irresponsible event going on, of course.  127,151 Americans were infected yesterday, 1/4 of the World's 504,752 new cases, despite having just 4% of the World's population.  We are, indeed a nation of over-achievers.  Even our 10M total is 20% of the World's 50,459,886 infections, we are getting infected at 5x the rate of the rest of the planet.

I know it seems very ordinary that 244,470 (the chart is from yesterday and today isn't over) people have died from the virus.  "Only" about 1,000 people a day are dying at the moment and 3,000 people died on 9/11 so what's 1,000 people per day dying of a virus, right?

Try to keep in mind, however, that "only" 116,516 Americans died in two years of World War I and "only" 405,399 Americans died in WWII – and that took 6 years – this has been 8 months!  

And it's getting worse.

President Biden wants us to wear masks but Trump was making fun of Biden for often wearing a mask in the first Presidential Debate and Trump supporters intend to "resist" President Biden by no following his rules on the subject and possible not getting vaccinated – even when the vaccine becomes available.   This kind of idiocy is dangerous for the whole country – you can't eradiate a disease if only half the population takes precautions but what are we going to do?  Force them?

While I understand why the markets are thrilled to be rid of Trump and even more thrilled that there's a vaccine in site, there's still a very long, hard road ahead between where we are now and normalcy.  

The coronavirus pandemic remains a top risk to the U.S. financial system, the Federal Reserve said in a report released Monday, warning that uncertainty over the course of the virus and its economic and financial consequences remains unusually high.  “Investor risk appetite and asset prices have increased in recent months but could suffer significant declines should the pandemic take an unexpected course or the economic recovery prove less sustainable,” the report said.

The Fed also warned historically high levels of business debt and weakening household finances could pose a significant vulnerability in the medium term. So far, strains in those sectors have been eased by significant government lending and relief programs, as well as low interest rates.  “That said, some households and businesses have been substantially more affected to date than others, suggesting that the sources of vulnerability in these sectors are unevenly distributed,” the report said.

Here's Powell's speech from last week:

So let's not get too ahead of ourselves with the bullishness.


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  1. Good Morning.

  2. Ulta to open beauty shops inside 100 Target stores in 2021

  3. GOP Tries Again to Get Supreme Court to Ax Health Care Law

  4. Thai PM Urges Calm ‘From All Sides’ In Protests

  5. Phil BABA today down again 22$ possible time to sell some puts?

  6. Economy / Phil – The greatest danger at this time is words coming from McConnell and his merry band. They are already talking about deficits and austerity as was predicted by many of us here. They are already in their opposition mode where wrecking the economy is the price to pay for regaining power! I guess Pelosi could have simply told Trump to go jump in a lake when he asked for a Covid stimulus and watch 50M unemployed people go vote in November! The same thing happened in 2008 when Bush has to beg the Dems to help save the economy!

  7. Phil / WBA simply wanted to say thanks!  I never would have pursued it but you banged the table. 

  8. Seconded on WBA – up just shy of 10%, finally above the 200dma

  9. WBA I don't know about the Banging still 37K down on that sucker.

  10. Phil / WBA –  I don't see Any news on WBA. do you…  I'm still naked on the '22 $35 callers.

  11. The next portfolio should be called the "Fundamentals Value Portfolio", aka The Table Bangers!

  12. Good morning!

    Big Chart – Those "M" turned into "W"s so happy days are here again – I guess.

    BABA/Yodi – Under monopoly threat in China – that's not good.  They aren't cheap enough for me to call a bottom – still 30x earnings after the sell-off.  EBAY is a way better deal – people forget about them. 

    Year End 31st Dec 2014 2015 2016 2017 2018 2019 TTM 2020E 2021E CAGR / Avg
    Total Revenue

    8,790 8,592 9,298 9,927 10,746 10,800 9,777 10,107 10,885 4.20%
    Operating Profit

    2,476 2,197 2,325 2,431 2,222 2,269 2,663     -1.73%
    Net Profit

    46.0 1,725 7,266 -1,017 2,530 1,786 8,234 2,442 2,595 108%
    EPS Reported

    -0.691 1.60 6.37 1.96 2.08 2.09 3.11      
    EPS Normalised

    -0.691 1.64 6.37 1.82 2.08 2.30 3.49 3.40 3.69  
    EPS Growth

        +289 -71.5 +14.7 +10.6 +78.6 +47.4 +8.71  
    PE Ratio

              21.0 13.9 14.2 13.1  

              0.442 0.292 1.63 0.990  

    Economy/StJ – I think they are overplaying their hand because they could still piss off Georgia and lose the Senate.  I'm sure McConnell thinks he's playing to his base there to win Georgia but real people are hurting and Senate races aren't won by county – they go by popular vote so driving the Dem base to the polls and taking money out of the hands of the GOP base may not be a winning strategy for Jan 5th.

    You are very welcome, Jeddah.  

    We were nicely aggressive in the LTP too:

    WBA Short Put 2022 21-JAN 45.00 PUT [WBA @ $43.11 $3.33] -20 3/2/2020 (437) $-22,000 $11.00 $-3.15 $-10.28     $7.85 $-1.85 $6,300 28.6% $-15,700
    WBA Long Call 2022 21-JAN 30.00 CALL [WBA @ $43.11 $3.33] 50 5/18/2020 (437) $59,550 $11.91 $1.94     $13.85 $3.05 $9,700 16.3% $69,250

    • WBA – Earnings were good!  If we get back to $45, the calls will be $75,000 and the short puts worthless and currently it's net $23,600 so good for a triple from here.

    So now we are at target and we sell 25 (1/2) WBA 2022 $45 calls for $4.80 in the LTP as that's $12,000 in our pockets and we can always roll them up to 50 2022 $52.50s (now $2.40) or we can always sell some short-term calls if WBA goes lower to cover so it makes no sense NOT to take $12,000 off the table after a nice pop like that, does it?  

    If WBA does fantastically well, we can always add a 2023 spread but, for now, we're happy to get back towards the black (as Yodi notes).

    It's a shame, really, I was going to make WBA my 2021 Stock of the Year if it didn't jump back over $40 before Thanksgiving…

    Table Bangers/EMike – As I pointed out with yesterday's list – it's called the LTP!

  13. News/Batman – It's not news to us, there's a vaccine, it will be distributed at WBA and CVS – how else are you going to vaccinate 300M people?  Doctors don't have the storage equipment, it's impractical to do it that way, hospitals would crowd up but we can subsidize drug stores who are already logistically deployed to service pretty much every community in America and WBA and CVS already have strong vaccination programs in place (not to mention robust databases) so they have everything they need to implement a mass vaccination. 

    And, while people are there – they may buy a candy bar too!  

  14. Phil/IBM – Missed the LTP trade entry, would you recommend a different spread or is it still good?

  15. Vaccination – It looks like Costco is the lowest cost among big retailers for flu shots. Excellent place to get one!

  16. Just to confirm Stg of yesterday, confirmed as well at news channels in Europe, this vaccine has to be stored at -80C. Not sure if pharmacies have these freezers?

  17. Phil/storage – having worked at such places, academic medical centers have plenty of -80 freezers – although those tend to get a lot of use already, so whether they can make room for vaccine…..

  18. IBM/Ravi – From scratch I would go with:

    • Sell 5 IBM 2023 $100 puts for $20 ($10,000)
    • Buy 15 IBM 2023 $110 calls for $20 ($30,000)
    • Sell 15 IBM 2023 $135 calls for $10 ($15,000) 
    • Sell 5 IBM Jan $120 calls for $4 ($2,000) 

    That's net $3,000 on the $37,500 spread so that's $34,500 (1,150%) upside potential at $135, which is not very far away.  The short calls can be rolled and I don't think IBM will explode and, of course, any time IBM doesn't gain a few % in a quarter, you lower your basis. 

    Also nice that we're starting out $10,500 in the money so it's another Trade of the Year contender with that kind of leverage!

    COST/1020 – True, they will have them as well, as will some supermarkets, I imagine.  With Biden in office, there will be a huge campaign to get everyone vaccinated.  The anti-vaxxers are going to hate it…

    Freezers/Yodi – They don't but neither do doctors so, as I mentioned above, you have to pick the logistically smart choice.   WBA and CVS have 10,000 US locations each (generally across the street from each other) vs about 1M doctors in probably 200,000 offices so much more efficient to use WBA and CVS for distribution.  

    Freezers/Snow – It's not like we can't make them and ship them but can we make 20,000 or 200,000 realistically?   We made, apparently, 100,000 ventilators in 100 days (May-July) earlier this year so I imagine we can knock out some freezers too.  

  19. Phil/IBM- Thank you!

  20. I've heard JNJ has a version will not require refrigeration…

  21. 'that' will not… :)

  22. Phil / WBA – thanks I started to partial cover my 80X WBA '22 35 Calls ( 8) at 4.65 will cover 1/2  - I do believe 44 or 45 is doable so scaling this in….  but will cover today if possible…  have some 25x $40 short puts as well ( 8.2) may partially cover these if it gets to 45…..   I'd like to pull the Jan calls for 45 put I think people are rotating moving into unloved stocks T by the way is having a nice pop in the last 3 days as well….  Looking to Cover with some Jan 30 Callers. if I can get 1 ish for them.

  23. And lets not forget it takes two shots exactly two weeks apart, or 2 months apart? That is one load of vaccines. I presume they would get the front line people first, Drs, hospital personnel EMT and teachers since schools are closing again all over the country. Anyways I think it seems too good to be true, but I'm a skeptic on all vaccines anyway or anyone saying 90% efficacy. My Doc talked me into the pneumonia shot which takes two also but I got so deathly ill from the first one there was no way I would go back for a second. And it doesn't even prevent pneumonia. Just lets the body know "there is a problem" DR. Spock! After that the Doc said no to shingles vaccine for me. So far so good.

  24. WBA/Batman – We don't look gift horses in the mouth.  This is a move we would have waited a quarter or more for so you have to lock some of it in.    

    Shots/Pirate – Much as I hate shots, I'm very glad not to have polio, small pox, tetanus etc….  In fact, I was super-happy I had a tetanus shot the time I jumped off something and landed on a board and the nail went right through my foot!  There's a certain common good to vaccinating members of our society so that dangerous diseases don't run rampant.  Yes, there are certain adverse effects but nothing compared to the diseases we are keeping at bay by vaccinating the vast majority of the population.

    Jason Crawford on Twitter: "Myth: polio was already declining before the  introduction of the polio vaccine in 1955 Fact: the epidemics were actually  getting worse…"

    Vaccination History

    • Blackstone Group (BX +1.6%) President and Chief Operating Officer Jonathan Gray sees continuing a lot of the same themes that the firm has been pursuing before the pandemic, with the potential for some particularly hard-hit sectors to revive, he said during the BofA Securities Future of Financials virtual conference.
    • In real estate, for example, he still sees growth opportunities in housing, infrastructure, life sciences, data centers, and renewable energy plays.
    • Themes he likes are garden apartments in the U.S. and logistics, especially last-mile assets, around the world.
    • 2021 will continue to be "challenging for the physical world" businesses, such as hotels, travel and entertainment.  Leisure travel is coming back, he notes, but group business travel "will take awhile."
    • Blackstone will be "investing in some of the more dislocated areas," he adds.
    • Blackstone's broad range of businesses and investment strategies give it expertise that can be applied across platforms. In its credit platform, the company's capabilities in real estate, infrastructure, and such "will create more and more opportunity for us," Gray said.
    • Its ability to invest for the long-term also helps, he added, allowing it to ride out storms.
    • Not all of its businesses have been thriving. "The hedge fund space has had some serious headwinds," he said. But BX's hedge fund business has been making progress. The company's hedge fund team have "done a great job of protecting capital" and have brought the unit back to break even.
    • While boosting returns has been challenging, the hedge fund unit has been able to grow revenue as it moves into new areas. "We hope to find ways to get it growing" like other areas of the company, he said.
    • Blackstone's position as a private equity giant doesn't mean there's not room for growth. The private equity market is still small ($4.5T at the end of last year) when compared with the public equities market of over $100T, he said.
    • Given recent regulatory changes that will make it easier for 401(k)s to invest in private equity, Gray sees serving retail investors as a long-term strategic opportunity, "where (we) build up relationships with the advisors and serve them as we would our institutional clients," he said.
    • As for acquisitions, buying another company isn't high on the firm's list. "The bar is very high for us to do a big acquisition," Gray said, noting that it would have to be in a business that Blackstone isn't already in.
    • U.S. aviation authorities are considering new safety-related penalties or other enforcement action against Boeing (BA +5.1%), WSJ reports.
    • The Federal Aviation Administration has alerted the company that alleged quality-control lapses on assembly lines and undue management pressure on engineers certifying safety systems could amount to violations of a 2015 settlement of systemic safety oversight problems, according to the report.
    • The FAA is said to be examining issues affecting several aircraft models, including production of the 787 Dreamliner.
    • The report comes as FAA's leadership is preparing to allow Boeing's 737 MAX fleet back in the air as soon as Nov. 18, which is helping to lift Boeing shares today.
    • Boeing (BA +6.7%) lost another 12 orders for its grounded 737 MAX jetliner and recorded no orders while delivering just 13 aircraft to customers in October, as the company lagged further behind rival Airbus (OTCPK:EADSY), which recently reported its best monthly performance of the year.
    • For YTD 2020, the number of MAX orders canceled, or removed from Boeing's official backlog when it applies stricter accounting standards, totaled 1,043 aircraft.
    • Deliveries for the 10 months through October total 111 aircraft, down from 321 for the same period a year ago.
    • But Boeing is one of today's top-five gainers on the S&P 500 following reports that the Federal Aviation Administration could reinstate the 737 MAX by Nov. 18.

    • Preorders for the new Macs start today and shipping starts next week.
    • Update 3: The new M1 MacBook Pro offers 8x the performance and 5x faster graphics compared to the prior model.
    • Apple says the new MacBook Pro is 3x faster than the best-selling Windows (MSFT -3.3%) laptop in its class.
    • The Pro offers 17 hours of web battery life and 20 hours of video playback, the longest ever for a MacBook Pro.
    • The Pro also still includes the active cooling system that was removed from the new Air.
    • MacBook Pro still starts at $1,299 and $1,199 for Education.
    • Update 2: Apple announces the Mac Mini with 3x faster performance, 6x the graphics performance, 15x faster machine learning, and up to 60% better energy efficiency than the prior quad-core Mini model.
    • Mac Mini now starts at $699, $100 lower than the previous generation.
    • Update: The first Mac model with M1 is a new MacBook Air. Apple says the M1 version is up to 3x faster than the prior model with 5x faster integrated graphics and a 3.5x faster CPU.
    • Battery life offers up to 18 hours, the longest ever in a MacBook Air.
    • Pricing still starts at $999 or $899 for education.
    • Original post: Apple (AAPL +0.1%) kicks off its One More Thing hardware event with the first Macs containing the new family of in-house silicon, beginning the two-year breakup process with Intel (INTC +0.1%) chips.
    • The chips are based on Arm architecture (Nvidia (NVDA -5.8%) is purchasing Arm for $40B) and will likely be manufactured by Apple foundry partner TSM (TSM -1.3%).
    • The M1 chip will power the new Mac models built on Arm architecture. The 5nm processor prioritizes power efficiency and includes an eight-core CPU that the company says offers the best performance per watt of any CPU. There's also an eight-core GPU (billed with the world's fastest integrated graphics) and a 16-core Neural Engine.
    • Here's a graphical look at more M1 features:
    • Apple says every app made by the company will be optimized for M1. A number of companies will launch Universal apps that will work on either processor. Adobe (ADBE -4.0%) will be out with Universal Lightroom next month and Universal Photoshop in 2021.
    • Related: In the recent fiscal Q4 report, Apple reported all-time high Mac revenue of $9.03B, which was pushed well over the $7.93B consensus by the pandemic's work and learn from home tailwinds.
    • Beer sales accelerated over the last four weeks, according to the latest Nielsen data on retail store sales.
    • Total beer sales rose 13.7% for the four-week period that ended on October 31.
    • "The hard seltzer category grew 101% YoY in the last 4 weeks (vs 12-week growth of 107%), achieving 8.1% share of the combined beer category (up ~350 bps YoY). Second to hard seltzer growth was hard tea, up 36.1% in the last 4-week period (flat with 12-week growth), followed by 4-week growth in imported beer of 14.1% (an acceleration from the 12.4% 12-week trend)," reports Cowen analyst Vivien Azer.
    • Sales growth by company (Y/Y over four weeks): Anheuser-Busch InBev (NYSE:BUD) +9.4%, Molson Coors (NYSE:TAP) +4.5%, Constellation Brands (NYSE:STZ) +17.1%, Heineken (OTCQX:HEINY) +10.2% and Boston Beer (NYSE:SAM) +45.6%.
    • Notable brand winners: Michelob Ultra Lager +25.7%, Blue Moon +20.6%, Pacific +32.5%, Truly +115%.
    • Earlier: Investors warm up to beverage stocks on vaccine hopes for 2021
    • Alibaba (NYSE:BABA) shares are currently down 7% after earlier news that China's State Administration for Market Regulation will seek feedback on draft anti-monopoly rules that target online platforms like BABA and Tencent (OTCPK:TCEHY,OTCPK:TCTZF).
    • The rules include a variety of anti-monopoly actions like offering different prices for the same product to different groups of consumers.
    • Last week, Chinese regulators halted the blockbuster $34B IPO of fintech Ant Group, which is controlled by retired Alibaba chairman Jack Ma and counts Alibaba as a stakeholder. The halt happened two days before the record-setting dual market debut.
    • In better news for Alibaba, the first official day of its annual Singles' Day sales event hit 372.3B yuan in the first 30 minutes, according to Bloomberg.
    • Previously: Ant Group's $40B IPO fully suspended after Hong Kong decision (Nov. 03 2020)
    • Walmart (WMT +1.5%) and General Motors' (GM +4.7%) Cruise plan to test using self-driving cars to deliver customer orders. 
    • The test will take place in the early part of next year in Scottsdale, Arizona, where Cruise's driverless cars will deliver orders to customers' homes from a Walmart store.
    • Walmart execs say if the program works well, the two companies could expand it to other stores.
    • "You've seen us test drive with self-driving cars in the past, and we’re continuing to learn a lot about how they can shape the future of retail. We're excited to add Cruise to our lineup of autonomous vehicle pilots as we continue to chart a whole new roadmap for retail," says Tom Ward, SVP of Customer Product, Walmart U.S.
    • Earlier: General Motors could be priced as an EV story next year 
    • The Federal Reserve's shift to letting inflation run over its target of 2%, to make up for slower-than-aimed-for inflation, is driving Goldman Sachs's view that the steepening yield curve will be a key global investment theme in 2021.
    • That view is already playing out as the curve got close to its steepest level since 2016 after encouraging coronavirus vaccine news brightened the growth outlook for the next year.
    • "As the economic recovery consolidates next year, we expect to see more differentiation across the curve, with policymakers committing to keeping front-end rates low, but higher expectations for real growth and inflation driving long-end rates higher," write Goldman strategists including Zach Pandl.
    • That should be especially true in the U.S. as the Fed adopts its new average inflation targeting framework, they said.
    • Goldman sees 10-year Treasury yields reaching 1.3% by the end of next year vs. ~0.96% recently, and they sees 2-year yields creeping up to 0.25% from 0.18%; that equates to a roughly 30 basis point steepening for the 2/10 spread, recently at 78 bps.
    • Factoring out the expected effects of inflation, real yield spreads are expected to expand, too, they said.
    • 10-year real yields have stayed below zero since late March.
    • The strategists expect the 5-year real rates to fall further from recent -1.2%, while they expect long-term real rates to become less negative over the course of 2021.
    • "We expect a steeper real yield curve, especially if our bullish oil price forecasts prove correct," the Goldman strategists wrote.
    • In another 2021 theme, Goldman predicts that Brent crude oil prices end 2021 at $65 per barrel, up roughly 50% Y/Y.
    • UBS thinks General Motors (GM +6.0%) is fully back on track and is likely to have strong momentum well into 2021. Analyst Patrick Hummel also thinks that a re-rating by investors on GM as an EV story is possible.
    • "Shares are trading <6x PE 2021E, offering exposure to an aggressive EV transition story that will likely drive a re-rating of shares over the next 1-2 years. With a focus on crystallizing value of its EV strategy (more details might be announced on 19 November in a EV deep-dive), GM will likely get more credit for being a relative winner in the transition. Even though the flipside of the aggressive EV push is higher capex (guided well above $7bn p.a. at least through 2023) at the expense of cash returns to shareholders, we think it is the strategy that ultimately creates the most value."
    • What would a re-rating look like if GM starts to be viewed in part as an EV story in 2021? Here is a little snapshot below of just one metric that shows how investors view EV potential.
    • UBS has a Buy rating on GM and price target of $50.
    • "We believe GM offers the best near-term earnings momentum story amongst western-world OEMs, combined with an aggressive EV strategy and optionality to crystallize EV/AV value," sums up UBS in its bullish note.
    • OPES Acquisition (OPES -0.2%) business combination target, BurgerFi International expects Q3 total revenue in the range of $9M-$9.2M vs. $8.2M year ago.
    • BurgerFi had opened seven new restaurant YTD and plans to open an additional six new restaurants in Q4.
    • YTD delivery sales:
    • “BurgerFi is a remarkable partner for OPES and we believe it will prove to be an attractive public company given its unique positioning within the rapidly expanding ‘better burger’ space,” said Ophir Sternberg, Chairman & CEO of OPES Acquisition. “We look forward to consummating the business combination and expect BurgerFi to continue to show tremendous shareholder value."

    Burger Fi is great!  

  25. Burger Fi does look good.  If only one was a little less than 976 miles away.

  26. bitcoin only spent about 4 weeks above 15k back in Dec 2017 to Jan 2018. 

    If it hangs out here for a while it's a base for push higher.