Wednesday, February 19, 2020

More on Uber

I've gone through UBER's financials, and I think this is a stock play, not a bond play. Unlike Tesla, Uber seems to want to borrow on a regular basis. So If I'm wrong about the outlook for Uber, I can see a scenario where they issue more senior and secured debt. That would hit the existing bonds.
Nonetheless, I really like Uber's fundamentals and management.
I noticed on today's tape that Blue Apron is looking for a buyer or some other type of financing. They don't directly compete with Uber Eats, but there is an overlap. The fact that Softbank style investors are not willing to pour money into them is a good sign for those left standing.

Tuesday, February 18, 2020

Uber

I'm thinking of buying UBER stock or bonds. The thesis is the same as it was for TSLA; the company has off-balance-sheet assets that would be valuable even in a bankruptcy. I haven't gone through the numbers, but here is the thesis.

For TSLA the assets were intellectual property and a number one market position. For UBER it's not as clear cut. They clearly do have a number one position. This makes a difference because of network effects. So they have more customers -> drivers get more fares -> more drivers -> customers have shorter wait times -> more customers.
I'm not really sure about the intellectual property...If it's only an app with central scheduling, well that would be easy for an Amazon to replicate. I know they spent big bucks on self-driving technology, but they are probably in last place here.
According to the new CEO, Uber Rides is currently profitable and will get more so. Uber Eats is still a loser, and faces substantial competition from low cost local companies. These local firms can employ cheap illegal immigrant deliverers which a public company cannot. Uber Freight is just getting going, but I think the network effects will be strong. A business will want to use an established corporation, with deep pockets, for its freight. So the locals are not a threat.
Uber also owns minority stakes in Didi (DIDI) in China, Yandex taxi (YNDX) in Russia and GrabTaxi (GRAB) in Southeast Asia. According to Uber, these are worth 11.8B. That's a good cushion for the bonds.

I'll go through the numbers in a later post. Right now, the bonds seem a great buy, and the stock maybe as well.

Monday, February 17, 2020

Main Page for Coronavirus Statistics

Using mathematical modeling from data of both coronavirus and previous epidemics, the WHO estimates that the fatality rate is 0.3% to 1.0%. The reason this is lower than reported is that the model attempts to take into account mild cases that have not been reported.

The World Health Organization is no longer reporting laboratory diagnosed cases separately. It now only reports total cases. So I am starting a new spreadsheet with this data. Unfortunately it only goes back a few days. The good news is that cases in China outside Hubei are dropping swiftly.

For those who have just come: The Chinese policy appears to be: let the epidemic in Hubei burn itself out, but protect the rest of the country. This may be starting to work. Here's data from the WHO on new Chinese cases...


Hubeitotalex-Hubei
New Cases ex-Hubei
Feb 14519866393211946
Feb 15544066657612170224
Feb 16562496858412335165
Feb 17581827063512453118
Feb 18               59989               72528               12539                     86
Feb 19               61683               74280               12597                     58
Feb 20
Feb 21
Feb 22
Feb 23
Feb 24
Feb 25
Feb 26
Feb 27

Friday, February 14, 2020

Update on Tesla Bonds

Back in April 2019 I published a post on Tesla bonds. The thesis was that Tesla had large amounts of off-balance-sheet assets, mostly intellectual property. Although the financial situation of the company at the time was questionable, I felt that the bonds would be money good even in a potential bankruptcy. I bought the bonds for my personal account at about 87.
They are now trading for about 103. Not quite the run the stock has had LOL. Nonetheless, I am still holding on. The recent decision of Tesla to raise capital by issuing stock rather than debt makes them even more valuable. Nonetheless, I'm not adding since the upside is obviously not as great.
The basic thesis is still intact. Tesla makes the best electric cars in the world. The recent crop of German competitors falls short. What is Porsche thinking with a 250 mile range. Don't Porsche owners have weekend homes?
The technology of electric cars will continue to advance over the next five years or so. Eventually they will become a stable technology, and costs and marketing will take over. By then Tesla will be hard to unseat.

Thursday, February 13, 2020

Coronavirus Data

On Feb13 the Chinese authorities changed the way they report Coronavirus cases. Previously they had reported only laboratory-confirmed cases. They have now switched to including clinically-diagnosed cases as well. This increased the number of cases by about 15K. This new increased number was reported in most of the mainstream media, with or without the explanation. For the sake of consistency, I am continuing to report and analyze the laboratory-confirmed cases at:
https://thecommoditystrategist.blogspot.com/2020/02/is-coronavirus-burning-itself-out.html

Monday, February 10, 2020

More on Coronavirus

I plan on updating the table from the previous post daily. So check back at https://thecommoditystrategist.blogspot.com/2020/02/is-coronavirus-burning-itself-out.html to see the new data.
This is usually updated late afternoon New York time.

Is the Coronavirus Burning Itself Out?


This data is now being updated in the post "New Coronavirus Statistics."

This data is no longer updated...

The Chinese policy appears to be: let the epidemic in Hubei burn itself out, but protect the rest of the country. This may be starting to work. Here's data from the WHO on new Chinese cases...

The Chinese government is now reporting clinically diagnosed as well as laboratory diagnosed cases. However, it appears that all the cases ex-Hubei are laboratory diagnosed. Therefore this table, which is laboratory only, probably gives an OK estimate of the trend.


Hubeitotalex-Hubei
New Cases ex-Hubei
Feb 17153118214668
Feb 29074144115337669
Feb 311177172386061724
Feb 413522204716949888
Feb 516678243637685736
Feb 619665280608395710
Feb 722112312119099704
Feb 824953345989645546
Feb 9271003725110151506
Feb 10296314023510604453
Feb 11               31728               42708               10980                   296
Feb 12               33366               44730               11364                   384
Feb 13               34874               46550               11675                   311
Feb 14               36602               48548               11946                   275
Feb 15               37884               50054               12170                   224
Feb 16               38839               51174               12335                   165
If the trend ex-Hubei can continue, we may be coming to the end. Of course, if the epidemic spreads to other countries, all bets are off.