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Old 02-23-2020, 10:37 AM   #21
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Yeah, but what is Tesla going to do?!?! That's what is REALLY important!
It does make it rather hard to believe in any long term negative financial effects of this virus when people are willing to pay 260 times earnings for a car company.
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Old 02-23-2020, 10:46 AM   #22
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I'm not looking for a debate. You have your dire view, and you're free to go with it. I have mine and will go with it as well. I doubt I will convince you of my view, and I know that you are not going to convince me of yours. So, no reason to waste our afternoons on it.
You misunderstand me. I am not suggesting that we are headed for a real world version of "The Walking Dead" where the zombies cough a lot. I am suggesting that risk assets are priced for a range of outcomes that seem to range from sunny to surface of the sun. Even if we are sitting around the campfire laughing at the pandemic hysteria a year from now, I think risk assets are likely due for a repricing in the meantime as some less salubrious possible outcomes get added to the range.
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Old 02-23-2020, 10:47 AM   #23
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It does make it rather hard to believe in any long term negative financial effects of this virus when people are willing to pay 260 times earnings for a car company.
But, but, St. Elon is a genius who changes the world! Everything he touches turns to bitcoins! He walks on the water and swims on the land!
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Old 02-23-2020, 10:50 AM   #24
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Good discussion - I try not to be binary in this sort of circumstance.

I am, however, concerned about the percentages and the new hot spots. While released numbers may not be accurate, comparing the released numbers to previous numbers - with basic math - are of interest. Broadly, looks like about a 2-3% death rate - lots of unknown factors built into this.

Italy is reporting a hot spot ...
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Old 02-23-2020, 11:07 AM   #25
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But, but, St. Elon is a genius who changes the world! Everything he touches turns to bitcoins! He walks on the water and swims on the land!
I am a pretty big Elon fan actually but I think people get caught up thinking he is actually the second coming or something.

That being said, when SpaceX goes public I will be first in line with my wallet out. I probably will also invest in Starlink when they spin it off.
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Old 02-23-2020, 11:09 AM   #26
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I am a pretty big Elon fan actually but I think people get caught up thinking he is actually the second coming or something.

That being said, when SpaceX goes public I will be first in line with my wallet out. I probably will also invest in Starlink when they spin it off.
I am waiting for when he starts selling indulgences to pardon my (presumed) environmental sins.
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Old 02-23-2020, 11:14 AM   #27
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I am waiting for when he starts selling indulgences to pardon my (presumed) environmental sins.
I mean he kind of already does. Telsa sells their production of zero emission vehicles to other auto companies who do not yet meet the minimums.
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Old 02-23-2020, 11:34 AM   #28
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I mean he kind of already does. Telsa sells their production of zero emission vehicles to other auto companies who do not yet meet the minimums.
I think you mean to say they just sell the emission credits they bank,not the vehicles.
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COVID-19 -based going to cash jitters?
Old 02-23-2020, 01:39 PM   #29
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COVID-19 -based going to cash jitters?

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I am definitely not an alarmist by nature - I stayed long through every reset in the stock market over the last 45 years ...

BUT, in non taxable accounts - tIRA and rIRA - is this a good time to be thinking about an "all out" move?

My reading from places like CIDRAP (Studies show COVID-19 virus likely has multiple infection routes | CIDRAP and CDC warns community COVID-19 spread could take place in US | CIDRAP) leaves me a bit squeamish - wrt to health and money.
I will be 72 years old in June. I have SS and a mini-pension and TSP G-Fund (long term bond fund offered to both civilian federal employees and military, and guaranteed to never drop in share price). Plus, I have cash.

Between all of these, and the equity funds and other bond funds in my portfolio, I am pretty sure I'll be fine as long as we don't have massive inflation.

Which could happen, of course, and while my equity funds might help with inflation, then again they might not give me as much inflation protection as I might wish.

Despite being somewhat of a "security junkie", honestly I believe that total security is an impossible goal. I just try to do the best that I can. If massive inflation hits, then maybe I'll start scamming people on the internet or barbecuing stray dogs or something. (JUST JOKING!!)
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Old 02-23-2020, 01:53 PM   #30
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You misunderstand me. I am not suggesting that we are headed for a real world version of "The Walking Dead" where the zombies cough a lot. I am suggesting that risk assets are priced for a range of outcomes that seem to range from sunny to surface of the sun. Even if we are sitting around the campfire laughing at the pandemic hysteria a year from now, I think risk assets are likely due for a repricing in the meantime as some less salubrious possible outcomes get added to the range.
Yes. Some people say that this should blow over as past crises did, and all will be forgotten. Buy/hold will triumph. Quite possibly so.

But, but, but I have some of that market timing blood in me, and I say that I already thought the market expected too much sunshine even before this virus thing. And now, it is more than an overcast sky, it is already raining. Drizzle in many places. Buckets in some places. And the raindrops are getting larger.

Market is still shrugging it off. OK with me.

I had a bunch of out-of-the-money covered calls expiring worthless last Friday. Will sell more covered calls for March tomorrow. When the market is willing to pay at the end of March 15% higher for some stocks that I own, I am very happy to oblige to sell the options to them.

If I am proven wrong and the stocks go up even higher, and I only get 15% instead of 30% or something crazy like that, I will make less than buy/hold, but it is not going to bankrupt me.

If the market finally gets scared and liquidates, I will step in to buy when I feel it's the right time.

That's how I live my life.
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Old 02-23-2020, 02:01 PM   #31
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Obviously the cruise lines will get hurt here.
Well, maybe not so obvious. I mentioned in another thread that if governments end-up needing "a lot of beds in separate rooms", and nobody wants to go on a cruise, the cruise industry is in a strong position to rent out entire ships.

For the economy in general, sure, the supply chain will be disrupted, but I think that's just a bump in the road. I'm a little concerned about the idea that you can recover from the disease and then get it again, but I'm discounting that here; I presume (opinion, feel free to disagree) that when more data is in, we will find that those who have had the disease will be generally productive again. And as we know, many who have had it, had mild symptoms.

Not to be too morbid, but if the US quickly lost two or three million of our oldest / sickest people, let's face it...that would save a lot of resources. The healthcare industry and nursing homes will be very busy for a while, then they'll probably have plenty of space. Sorry if this seems insensitive; I'm not trying to downplay the horrific toll and suffering by those affected by the disease or of surviving friends and loved ones. This would be absolutely horrific for everyone involved, but just trying to look at the economics.

The bottom line for me is that I'm not changing my allocation. The above examples might demonstrate that, although a knee-jerk reaction is tempting, the system is usually more complicated and acts in unpredictable ways. My bet is on humanity to be as creative and resourceful as they've always been. I think we will get through this, financially, without too much turmoil. I just hope that most of us get through this breathing.
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Old 02-23-2020, 02:08 PM   #32
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Well, maybe not so obvious. I mentioned in another thread that if governments end-up needing "a lot of beds in separate rooms", and nobody wants to go on a cruise, the cruise industry is in a strong position to rent out entire ships.
Fun with questions: what do you suppose the average rental rate and margin would be on a gubmint contract for an entire ship that will be filled with people contaminating the daylights out of it vs. ferrying a bunch of wealthy tourists around and dinging them for every fee imaginable? If the gubmint is chartering entire ships (not that helpful for Cleveland, Chicago, Des Moines, and a host of other large cities), how much will the rest of the world resemble the zombie apocalypse and therefore providing few or no wealthy would-be cruisers?

Gubmint contracts might keep these guys out of bankruptcy, but that is about it. I think a far more likely outcome is for the industry to find people are very leery of cruising given the possibility of ending up on a plague ship, and further downside potential maybe provided by a recession and/or quarantines/travel restrictions.
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Old 02-23-2020, 02:10 PM   #33
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It's been reported that the Chinese Central Government has already asked banks to accommodate small-to-medium businesses which can't make loan repayments due to quarantines devastating sales. What I'm watching is how this unfolds. There may be a point at which the government can no longer prop up bad debt-ridden banks.
If we are hard hit I wonder if our government will ask banks to accommodate small-medium business with loan payment issues....
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Old 02-23-2020, 02:13 PM   #34
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So the cruise line names their price and the government prints money. I'm not sure why they'd name a price so low to only keep them out of bankruptcy. But that could happen, I suppose. True, the non-seaboard populations would have to find other beds, but lots of people live on the edges of the country.
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Old 02-23-2020, 02:25 PM   #35
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Not to be too morbid, but if the US quickly lost two or three million of our oldest / sickest people, let's face it...that would save a lot of resources. The healthcare industry and nursing homes will be very busy for a while, then they'll probably have plenty of space. Sorry if this seems insensitive; I'm not trying to downplay the horrific toll and suffering by those affected by the disease or of surviving friends and loved ones. This would be absolutely horrific for everyone involved, but just trying to look at the economics.

<snip>

I just hope that most of us get through this breathing.
I understand. The thoughts that have been going through my mind lately are none too pleasant. My son is a dietary aide in a nursing home. If things got really bad, I can envision a scenario where old folks in nursing homes/assisted living centers expire because all the staff get sick and have to be quarantined in hospitals or self-quarantine at home. No one left to feed and care for them.

+1000 to your latter comment.
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Old 02-23-2020, 02:25 PM   #36
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If we are hard hit I wonder if our government will ask banks to accommodate small-medium business with loan payment issues....
Business loans? Not likely.
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Old 02-23-2020, 02:55 PM   #37
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Well, maybe not so obvious. I mentioned in another thread that if governments end-up needing "a lot of beds in separate rooms", and nobody wants to go on a cruise, the cruise industry is in a strong position to rent out entire ships...


The ships mentioned in another thread were not large cruise ships, but boat cruises that normally ply the Yangtze River, which flows through Wuhan. As the normal tours have been canceled, these ships are now repurposed to provide housing for the medical staff, and not for the patients.


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Old 02-23-2020, 03:23 PM   #38
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China nationalizes US factory that makes face masks


"Trump Trade Adviser Navarro: China Put Export Restrictions on N95 Face Masks"

February 23, 2020

" Trump Trade Adviser Navarro: China Put Export Restrictions on N95 Face Masks Then Nationalized a United States Factory that Produces Them There (VIDEO CLIP)

White House Trade Adviser Peter Navarro signed up with Maria Bartiromo on Sunday Morning Futures today.

Peter talked about the clinical supply chain emergency situation dealing with America because of ongoing spread of the coronavirus.... "


.... " On Sunday Peter Navarro dropped this bomb.

Peter Navarro: Maria my work at the White House throughout this situation is to examine the supply chains we require to deal with corona. There's over 30 various aspects simply for that alone. And what I have actually found out thus far and also not remarkably is that we have actually offshored much way too much of our supply chain not simply for corona however additionally for the vital medications we require In regards to the instant problem face masks, the N95 face masks. China put export restrictions on those masks and after that nationalized an American manufacturing facility that creates them there. So were handling that in Trump time.

more at link

https://theunionjournal.com/trump-tr...95-face-masks/

.
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Old 02-23-2020, 03:36 PM   #39
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My IPS allows from 50-60% Equities with the goal at 55%.
I was at 56.5% and moved 5.5% to Treasuries last week which has gone up.
Yeah in the end not a whole lot of difference, but makes me feel good.
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Old 02-23-2020, 05:04 PM   #40
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You misunderstand me. I am not suggesting that we are headed for a real world version of "The Walking Dead" where the zombies cough a lot. I am suggesting that risk assets are priced for a range of outcomes that seem to range from sunny to surface of the sun. Even if we are sitting around the campfire laughing at the pandemic hysteria a year from now, I think risk assets are likely due for a repricing in the meantime as some less salubrious possible outcomes get added to the range.
Like many here, I've been scratching my head at Mr. Market's reaction (so far) to COVID-19.

First, a couple disclosures:
I have now sold over 100K in equities as the market continued to climb (including a bit Friday when the market definitely wasn't climbing).

I also am a Marriott stockholder, with over $57K in Marriott stock (as of Friday close). While the stock is down, I'm amazed at how well it has held up...especially since the comps in China will have to be absolutely terrible.

So I keep asking myself what am I missing? Is it just "ignorance is bliss" as I see busy roads here and apparently no change to domestic life? Or is this a see through event, i.e. everyone KNOWS that places like Marriott will have a very very crappy first quarter (at least in certain regions) but expectations are that things will return to normal in a reasonable time frame?

Or is it that we don't see it but the markets are being "helped" though liquidity injections - and all that new buying power has to go SOMEWHERE. Maybe mostly in "safe" government bonds (thus 10 year at 1.47%) but the waves of liquidity also have made their way into just about all asset classes - bonds up, gold up, bitcoin up, real estate up...and stocks up.

I don't know. I had been running under the assumption that that market wasn't done with the bull, that late 2019 was just the beginning of the wild end of bull market phase....but I've been wondering if COVID-19 is the external shock that ends the run. Maybe we would be a lot higher already w/o the COVID-19 situation.

Sorry for the rambling thoughts as I, like many of you, try to work our way through this.
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