Yesterday, Google forwarded me the following unintelligible quote from my visual voicemail.
"This is the New York City Health and Hospitals. I'm calling because New York City recommends a booster vaccine for everyone... Thank you, New York City Hills and close Beatles most particular recommend the boss. Yes, they there is a Quattro."
That bizarre message transcription reminded me that - as the market gyrates on weird, non-news from Ukraine - we are conveniently forgetting the elephant in the room: Covid. I am a worldometers.info nerd, and, by their figures, the U.S. passed 1M Covid fatalities Wednesday.
Just extraordinary. As the world sees the horrifying human toll being inflicted in Ukraine, it is sad that there are really two massacres occurring simultaneously. It makes me want to buy Big Tech stocks. You?
But investing is about looking forward, and figuring out cash flows, not setting public policy. Reacting to public policy is another matter.
I am in the UK now, and the mass propaganda on so-called climate change is, frankly, nutty. It's so bad that London mayor Sadiq Khan took a break from ignoring the recent surge in knife crime in the capital to issue an air quality alert Wednesday. But, according to a release from the UK government, pollution was forecast to be high because of a shift in winds bringing polluted air from Belgium and France. Seriously, I am not making that up. There must be some bloke with a measuring device somewhere that could actually tell if the number of particles of SO2, NOx and others are actually at unsafe levels. But no numbers are mentioned in the release.
Absolute madness. It's just mass hysteria. But you know who doesn't believe it? China. Just as major cities like Beijing and Shanghai are, according to my friends there, making it very difficult to get a license plate for anything but an EV, China is building the hell out of coal generation plants.
Thus, China is winning. They are not fighting wars anywhere, they introduced a virus that no one in the West can defeat, and they clearly don't care about air pollution or climate change mythology. The only real air pollution I have ever experienced was in Beijing in 2011 when I couldn't see the Water Cube from 200 meters away. Wednesday in London was the nicest day I had experienced there since I left 20 years ago. The air was crisp and clean.
I would go long China and short Europe. Elon, puzzlingly, is doing the exact opposite, with his German white elephant plant in Grunheide which has boosted Tesla (TSLA) shares this week. Tesla finally achieved GAAP profitability and cash flow positivity by building a plant in Shanghai and running the hell out of it, with about one-third of its output exported to Europe.
To follow that success, Elon has decided to open a factory that is quite far from European industrial infrastructure in what is, in my experience, the highest labor-cost country in the world. How was that a good idea?
It wasn't. If you want a pairs trade, long China short Europe, short TSLA and go long NIO (NIO) .
No reasonable human argues the Wuhan lab-leak theory anymore and, sadly, it looks like Covid is here to stay. With 1M Americans dead and a total fatality count of 6.1M folks around the world, we still haven't figured out a way to treat this virus. I had it. It sucked, and I Pfizered (PFE) myself as soon as possible after my symptoms cleared so as not to have to repeat the sickness. But, of all the remedies I tried, the only one that was at all effective was Vicks Formula 44, which my Grandma used to give me when I was sick when I was a kid... in the 1970s.
I will once again mention a company with which I have a management relationship, Arcturus Therapeutics (ARCT) . ARCT stock has had a nice bounce back after plummeting into the teens, but it is their IP that is most valuable, not their stock. People are going to need to be vaccinated. Possibly forever. And ARCT's mRNA technology is being exploited in Vietnam, with economic advantages from low labor costs. Moderna (MRNA) uses Catalent to make their formulations, mostly in the high labor cost U.S. So another pairs trade, long ARCT, short MRNA.
And, I have one more pairs trade. Long my HOAX portfolio and short Cathie Wood's (ARKK) . Have I mentioned that trade before? Hahaha. Yes, Jim, you did yesterday. But it's not about taking a victory lap after defeating my opponent by more than 70 percentage points in the first three months of ARKK's existence. It's about taking the other side from people (John Kerry comes to mind) who push an apocalyptic mythology without a shred of statistical evidence.
I am on it. Close Beatles may most recommend the boss... but my clients just like to make money. And, yes, as everyone who lives in NYC knows, they there is a Quattro.