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Author: michael

C-19 death rates change senior housing investing risks

C-19 death rates change senior housing investing risks

Early on the C-19 days, even before US had acted, I predicted that senior housing and the companies that provide those services were going to be challenged in the longer term. The business model future was questioned in my mind. Hence, I sold all my shares in REITs holding those properties, e.g., WELL and LTC. (disclosure, I did NOT sell at the top and ignored my intuition; i sold later at profit, but with less than possible).

Some data on C-19 deaths and ‘where’ they occurred supports the thesis that this business model will be challenged moving forward. Will folks stop using long term senior care facilities … NO! Will people use them less or consider more options (opening up new business models) before signing that lease / agreement, YES!

The business model will be challenged, but the how, when and who remains open. That level of ‘unknown’ is just beyond my portfolio risk tolerance given all else going on … Eventhough, the LTC management is absolutely top-notch, and under most circumstances I would take the risk w/ them … but C-19 is different.

Infographic: High COVID-19 Mortality Rate Linked To U.S. Care Facilities | Statista

Source: https://www.statista.com/chart/21824/covid-19-deaths-in-us-long-term-care-facilities/

Bumblebees ‘farm’ flowers to accelerate pollen production

Bumblebees ‘farm’ flowers to accelerate pollen production

Some days, I read somehting and all i can say is ‘WOW’ – incredibly interesting and something that I did not know – one of those ‘blow me away’ factoids. A recent study of bumblebees and how they can influence flowers to accelerate pollen production was one of them … and scientists have yet to figure out how they do it – only that they can, and do! Source

Quote below is the kernel of their findings, “Based on their lab studies, the researchers were able to show that the bumblebees’ propensity to damage leaves has a strong correlation with the amount of pollen they can obtain: Bees damage leaves much more frequently when there is little or no pollen available to them. They also found that damage inflicted on plant leaves had dramatic effects on flowering time in two different plant species. Tomato plants subjected to bumblebee biting flowered up to 30 days earlier than those that hadn’t been targeted, while mustard plants flowered about 14 days earlier when damaged by the bees.”

A balanced view on C-19 impact to investing – Dale Roberts

A balanced view on C-19 impact to investing – Dale Roberts

One of my always read authors posted a good balanced view on C-19 impact to economy and investing. Dale helped me a couple of years ago in taking solid positions in 10yr bonds that have proven out so far, e.g., MSFT, AAPL, BRK, KR, etc. The majority of voices at the time were calling a bottom on yields and putting fear into bonds … I took the plunge in part based on Dale’s analysis.

My portfolio strategy remains anchored in risk mitigation is foremost; don’t worry about ‘beating the market’ and resist any and all temptation to succumb to FOMO. My capital can remain very conservatively placed until I have confidence in investable value with commensurate risks. – Not much in it today, imho.

His closing is worth the full text, quote:

So yes, there’s hope

That said, even given the best possible miracle outcome and timing, it’s quite likely that economically, the damage will have already been done. And it will be a challenge for a rushed vaccine to change our already ingrained new normal behaviours. It may take a while for most of us to leave the fear at the door.

We have been asked to be too scared for too long, and that was for our own good. And mostly for the good and health of healthcare workers and the at-risk populations.

But I certainly hope that we begin that economic rebuild as quickly and safely as possible. To protect the health of workers, the vulnerable and the healthcare workers we will need to do this economic restart in very slow and measured fashion. If we step on the accelerator too hard the virus will take us into oncoming traffic.

We cannot afford a failed restart. This is the most dangerous economic experiment in human history.

Be safe. Be well. Be generous.

In summary I’d suggest we have a scared consumer, scared business owners, businesses that are going away; businesses that won’t be able to survive the new normal. There is that ceiling on how much we can fight back economically. All while the virus attempts to make things worse and more challenging at every stage.

There are many headwinds that will make a V-shaped recovery more than unlikely.

Grist answers, “What’s the more climate-conscious diet: plant-based or place-based?”

Grist answers, “What’s the more climate-conscious diet: plant-based or place-based?”

It’s a great and often asked question … the full post is here. The answer in a nutshell, quote: “The most effective change you can make to your diet, in terms of greenhouse gas reduction, is to go plant-based and limit meat consumption. That’s it. It’s also certainly lower impact in terms of water usage.”

Working from home (WFH) & education levels

Working from home (WFH) & education levels

Seems like the higher your education level, the more flexibility and options you have for working locations – or WFH basically.

Infographic: Is Working From Home a Privilege? | Statista

Source

This is not surprising, but there is a terrible social construct inference that hurts my soul. The lesser educated are expendable and the right people to put on front lines in a ‘war’ – sound familiar? Knights and foot soldiers (peasants) anyone?

Non urgent $ reads – 5-21-20

Non urgent $ reads – 5-21-20

So much to think about …

So much to think about …

This recent post by Dr H has my head spinning; mostly around topics that have been forefront and already twirling, but this is worth the read.

The structrual changes C-19 may bring are broad and wide – socially, economically, poltitically foremost. But, there seems two questions that I spiral down to: a) what changes in my own personal behavior should I make to help move my community to a more positive space (safe space – health and economic), and b) how do I as an investor make money without exploiting the pain of others?

One of the comments to the post also has an interesting tidbit of thought that can easily be extrapolated to ask, what is the right proportion of the economy that can be focused on non-essential services / goods? That is a great question and the follow on question about how a society would engineer this is almost politically (at least here in US) untouchable.

Comment quote with my bold: “Anyway , what comes to mind is this Pandemic and how it exploits different parts of the World in different ways based on the characteristics of different economies and their relative position as regards development and prosperity..
Here in the US a developed economy relatively prosperous the large portion of the GDP is Consumer Spending (generally quoted at 70% ) This creates a situation where the jobs especially in the lower 50% (earnings wise that is) are in services and thus nonessential to the functioning of a society except as regards people having income and perpetuating the system. When the apple cart is upset (as currently it is) the magnitude of the problem is phenomenal in it’s scale . Elsewhere the dynamics change based on the ratio of services to essential activity.. It as I recall was my initial argument against Globalization which was a trend during the Clinton Years and was a factor in American Prosperity for 4 decades to come… It will be interesting to watch the Recovery Rate of different economies on the Global scale… I sort of see this feature as being a relevant part of future discussions and Political trends…..Actually it already is”

Could US do this? – NO!

Could US do this? – NO!

Infographic: One Infected Clubgoer Triggers Massive Response | Statista

Quote: The Korean Centers for Disease Control and Prevention said that as of Wednesday, 119 new infection have been traced back to the 29-year-old and that 5,517 fellow clubgoers have been contacted in the process. This has led to 7,272 additional tests being administered on Tuesday (on top of the baseline of 4,000 to 5,000 tests carried out daily in the country) to patrons and their families/immediate contacts. Authorities said they had identified a total of more than 11,000 people who had been in the general area on the night in question.”

US seems hardly able to test sick people let alone use testing to quickly find infected people w/out symptoms, or on the positive side, test people and let them know that even though they were probably stupid to go clubbing, they are not infected.

source: https://www.statista.com/chart/21697/contact-tracing-response-seoul-south-korea-covid-19

A big-a^^ moon

A big-a^^ moon

Reminder to click on image to see original – some contrast and saturation were applied to original for better image

Non-urgent $ reads – 5-12-20

Non-urgent $ reads – 5-12-20

Note: There were several days w/out bicycle time (too nice outdoors, so biked in the sunshine); this is a collection that is at least 1 week old.

Not surprising, but stupid and misleading – Ag exports

Not surprising, but stupid and misleading – Ag exports

Dr H put out a great post this morning on the continued exporting of US meat products during a time where companies / officials are claiming broken supply chain and farm goods / animals being destroyed … Something just does not reconcile based on this post.

The original content came from Reuters, and from their piece, quote, “While pork supplies tightened as the number of pigs slaughtered each day plunged by about 40% since mid-March, shipments of American pork to China more than quadrupled over the same period, according to U.S. Department of Agriculture data. tmsnrt.rs/2YLF1XN

Smithfield, which China’s WH Group bought for $4.7 billion in 2013, was the biggest U.S. exporter to China from January to March, according to Panjiva, a division of S&P Global Market Intelligence. Smithfield shipped at least 13,680 tonnes by sea in March, Panjiva said, citing its most recent data.

To quote an old farmer friend of mine, “something sure smells like pig sh^t!”

Mary Meeker’s team on C-19

Mary Meeker’s team on C-19

The ever insightful Mary Meeker and team put together a piece on C-19 following her typical content pattern. https://www.documentcloud.org/documents/6842117-Our-New-World.html

I did not find it as actionable as her regular internet updates, but she and team definitely put down things that a) need to be included in my framing of investment opportunities and risks, and b) are going to require additional research / work and time to provide actionable insights.

The piece is worth the read

I will leave their insights to your harvesting, but the one point she closes on and I totally agree … “We will get thru this, but life will be different”