Friday, October 31, 2014

10/31/14 Ebola in the Shadows

I posted the following on another blog.  Since it's Halloween, why not here as well:

Following the well-publicized story of Nina Pham, I'm not so easily reassured about the difficulty of contracting Ebola: 

(a) Pham was fully aware that she was treating an infected patient and took precautions, yet still became ill. Have they identified her 'break in protocol?' 

(b) An infected passenger disembarks from a plane and is noted to be symptomatic. This person is detained. The plane she was on has already departed after only a cursory cleaning by the flight attendant, who is unaware that the passenger had discreetly thrown up several times during the flight, leaving traces on the seat handles and cushion. An infant now occupies her seat, and her parents have no reason to think it's unsafe for her to play with her toys, which she habitually chews on b/c she's teething. 

(c) A dog or cat comes into contact with infected bodily fluids, which are then tracked into the owner's home. 

(d) An asymptomatic Ebola victim flies into Mexico. During the 48 hours it takes to cross the border illegally and arrive in NYC, he becomes symptomatic and unwittingly infects forty others who travel with him in a truck equipped only with buckets for waste. None are willing to report their symptoms to authorities or present to a health care facility. 

(e) A mentally unbalanced Ebola victim knowingly attempts to infect others. 

All of the above are unlikely scenarios. However, I would have ranked (a) as being the most unlikely.

28 comments:

  1. (a) RYMBX (Rydex Commodities) closed down -0.08%. Position size 12% of the port.
    (b) RYGBX (Rydex 1.2x Government Long Bond) closed down -0.36%. Position size 25%.
    (c) RYEIX (Rydex Energy) closed up +2.06%. Position size 25%.

    After netting against my losses in miners, I came out ahead.

    Effective risk management is the single best predictor for long-term success. I'll try to organize my thoughts this weekend.

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    1. I'll admit this morning's harrowing plunge in the mining sector was unnerving. But then I'd just finished discussing with tof earlier this week the importance of composure while maneuvering out of a nosedive.

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  2. TOF,

    Re FCAU, I'm thinking about selling my GM and moving it all into FCAU. I also own auto parts company MRE.TO.

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    1. What you said makes sense and the upside is definitely much higher if we get a move.

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    2. Institutions own between 57% and 70% of GM & F. If they want to retain say a 40% ownership of FCAU then that means they need to purchase a total of about 500 Million shares. Exor Spa owns about 30% of the stock but the remaining institutions own about 100 million shares. That means there's a gap of 400 million shares that would need to be purchased. That's about $5 Billion worth of purchasing power based on today's prices. I would have to imagine some of that will be new money...maybe 25% of it (actually it could be a lot more if the thinking goes that its going to get a premium valuation for Ferrari like Tesla which would attract lots of non auto institutional investors / hedge funds) but a large chunk should come out of F/GM and into FCAU.

      It could be the type of thing where we see a really good run heading into the IPO, then a selloff after the IPO. I believe I would keep shares of Ferrari in the spinoff and sell shares of FCAU. And assuming GM/F are held in check I think it would be a good opportunity to then switch back into GM/F.

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  3. NWLI - Today volume was pretty high.

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    1. Stock within a few points of alltime highs, but still only 63% of book, less than 10 p/e and safe and conservatively managed company.

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  4. Re Nina Pham, I think the government was not fully prepared for handling this Ebola case and has since put proper procedures and better equipment in place. I don't think it should be a concern going forward.

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    1. Understood. We need to ask the hard questions, though. Viruses thrive on lapses in human behavior/attention (including those based on 'political correctness'), and generally evolve in perfect tandem to the rhythm of human life. There is much to be learned from each epidemic. Hand-washing, water purification, touch free restrooms, and universal precautions all evolved themselves from epidemiology.

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    2. I don't think anyone's panicked yet. Both legislators and epidemiologists are working hard to contain the outbreak, which includes exploring every possibility, however remote.

      Most hospitals have now added an important element to their Ebola protocol: an observer to guard against breaches in protocol. A highly significant addition.

      Truth is paramount. I'm a guy who likes to think ahead, and the full truth will always include matters we don't (necessarily) want to think about.

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  5. This is really cool.

    https://www.motifinvesting.com/?utm_expid=46965885-20._kxKuwnjQ9CyqmiKZeMSXA.0&utm_referrer=https%3A%2F%2Fwww.motifinvesting.com%2Fmotifs%2Ffighting-ebola

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    1. In a nut shell you can basically create/customize an ETF type fund for 10 bucks.

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    2. Or, you could go all in/out on say 25 stocks.

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    3. http://www.frugalrules.com/motif-investing-review-investing/

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    4. So the advantage is you can buy 10 stocks for $10 each rather than buying each one individually? Same with selling? Are there limits on # of shares? What's the catch? Can you only buy equal amounts of each or only up to a certain amount?

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    5. Sorry mean to say 10 stock for $10 total

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    6. Not sure there would be any advantage for you, dude. You're an all-in one stock kind of guy. It might make sense for me. For instance, I tend to buy in baskets: [SLW/GG/GDX], [EWZ/PBR/BSBR/VALE]. [DBC/USO/WEAT].

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    7. I don't go all in as much as I used to unless it's a unique circumstance. Typically it's 3-5 stocks. But I need to plan for changing it up so this could be interesting. Only concern I would have is what if you want out of one of the stocks do you have to sell all of them? And limitations like amt you can purchase...

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    8. Hard enuff to track that many let alone nearly impossible to exit 25 stocks at a moments notice, in case of a "brown event".

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  6. Mark- You enjoyed 'The Assets,' and might enjoy 'The Debt.' http://www.imdb.com/title/tt1226753/

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    1. The somewhat similar film titles are entirely coincidental, and unrelated in any way to my recommendation.

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  7. Any of you guys have any experience investing in rental properties outside of your local area?

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    1. Does attempting to retain ownership after having relocated to outside area (state) count?

      You can get screwed on capital gains taxes if the state of ownership has no state income tax but compensates that with higher property taxes b/c you most likely will have to pay capital gains taxes in your state of residence.

      What I'm saying is, carefully consider the tax consequences, if any.

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  8. DC Police Commissioner - "We've tested about 15 different police video cameras and all of them have produced crystal-clear video records. We've got our choice narrowed down to a few."

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  9. UNG - No big volume spike yet, like happened at the Feb top.....???
    $WTIC - Could go to $10, per Gartman.

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  10. INTC - Going to $70? I'd be surprised if that happened in the next couple years but I think it's possible in 10 years. I'd also be shocked if SPX doubled from here in the next couple years.

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  11. NFLX now offers six seasons of 'George Gently' for download. For some reason, I've bypassed the series until now. Lead role played by Martin Shaw (who also played an exorcist in 'Apparitions,' another well-written British series).

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