Categories
Valuation

Bitcoin Pricing – Upside with Increased Adoption

Summary:

  • We dive into different methods of valuating the “intrinsic” value of Bitcoin and get a range of results
  • We focus on 3 main valuation methods and outline them: TAM valuation, Metcalfe Valuation, and the Monetary Equation. We also talk about the “cost of production” method and the stock-to-flow model, but their assumptions both fall short in our view.
  • Each has its own built in assumptions and philosophy in its approach to valuing Bitcoin. Each also implies different levels and ranges of extreme upside given more widespread adoption and acceptance.

There has been much debate on the intrinsic value of Bitcoin. Bulls insist that Bitcoin and cryptocurrencies at large are in their nascency and the future holds a world where crypto is commonly used as a medium of exchange and we use a cryptoasset-powered blockchain to conduct business and activities such as international payments, healthcare, information settlement, and much more. Bitcoin bears insist there is a lack of historical evidence of real use cases, Bitcoin is too volatile to be a real store of value or medium of exchange, scarcity is irrelevant and not an indication of value, and that the future bulls paint is merely a pipe dream.

We concede each side has some correct points, but this write-up isn’t to debate the merits of Bitcoin, but rather to attempt to price it. NYU Professor Aswath Damodaran said back in 2017 on Bitcoin, “Not everything can be valued, but almost everything can be priced.” We agree professor! He further points out, “cash generating assets can be both valued and priced, commodities can be priced much more easily than valued, and currencies and collectibles can only be priced.” We believe Bitcoin is somewhere between commodities and currencies/collectibles. We take a look at future return drivers by asset classes including cryptoassets in the table below. With all that said, let’s dive in!

Approach 1: Total Addressable Market

The most popular and commonly used approach to pricing cryptocurrencies is to estimate their total addressable markets ((TAM)) and compare that estimate with crypto’s current market capitalization. For example, most finance media and commentators believe that gold is the most obvious comparison as a non-sovereign store of value. Taking the gold price of around $1860 as of writing and the USGS website’s estimate of 244,000 metric tons of gold being discovered to date (187,000 metric tons historically produced plus current underground reserves of 57,000 metric tons), we get a Gold TAM of approximately $16 trn. For analysis purposes, we use the 21 million controlled supply of Bitcoin for a full dilutive number to use to estimate value per Bitcoin.

Sources: goldprice.com, USGS.gov, our estimates,

Bitcoin has achieved slightly less than 5% of the total value of gold according to current Bitcoin prices as of writing. We take this exercise further and include other store of value assets such as negative yielding debt, art, and offshore assets. There is approximately $18 trn of negative yielding sovereign debt currently, over $64 bn worth of art, and an estimated $32trn in offshore assets back in 2012 according to Reuters.

Source: Bloomberg estimates, Statista.com, Reuters, Tax Justice Network, our estimates

If we add up all these store of value assets with gold’s TAM, Bitcoin’s market cap has achieved only 1.2% of their total value. Finally, there is one more store of value asset that dwarfs all the others – real estate. The value of all the real estate in the world is estimated to be $280 trn according to Savill’s. Adding up all these store of value estimates, we get close to $350 trn in total value. Meaning Bitcoin has a current total market cap only 0.2% of all store of value assets’ total value.

Based on the total addressable market pricing method, Bitcoin clearly has multiples of room to run.

The Equation of Exchange Method

An alternative pricing model was proposed by Chris Burniske, a crypto researcher, and Jack Tatar, managing partner of Doyle Capital, in a book called Cryptoassets: The Innovative Investor’s Guide to Bitcoin and Beyond.

In it, the authors introduce a framework widely referred to by the monetary equation of exchange MV = PQ. This model is used traditionally for valuing currencies and is based on the assumption that a currency’s value is related to the size of the market it supports and the rate at which the currency is exchanged in an economy. The definitions of each input are in the table below.

Source: CFA Institute

We get the velocity, number of transactions, and average price of transaction per year of Bitcoin from charts.bitcoin.com. We take the final day velocity, number of transactions annualized, and average price of transaction as of writing.

An example of a transaction value chart courtesy of charts.bitcoin.com

As Bitcoin becomes more widely adopted, all of these metrics should continue to increase, thus leading to an increase in value of Bitcoin according to the model. Using all of our most recent data on Bitcoin, we get a value of around $45k per Bitcoin.

Source: our estimates

We take a look at a range of scenarios with these variables and examine their effects. The first table is the QP side of the equation and the second below table is a range of Bitcoin values based on those above quantities and average price of bitcoin transaction, then divided by the Velocity to isolate the M variable of the equation.

As you can see there is a wide range of price estimates using this approach in our different scenarios ranging from $6.5k to over $160k. What is also interesting is that the value of Bitcoin according to this method and using the most recent data for inputs gets pretty close to the current price of Bitcoin before the recent crash.

Cryptoassets as a Network

Another approach to pricing crypto is borrowed from Metcalfe’s law, a popular theory in technology that states “a network’s value is proportional to the square of the number of nodes in the network”. It is used to explain how the value of networks such as Apple, Facebook, Uber, Instagram, Twitter, and others have grown in value exponentially. When a network has a single user, it’s value is 0, however once you add a second, a third, a fourth user, the network’s value grows rapidly. The key part of Metcalfe’s law is that the value of the network is not linear, but rather a square function of the userbase. For example, a network of two users has a value of “4”, while a network of four users has a value of “16”.

Ken Alabi first proposed applying Metcalfe’s law to the valuation of cryptoassets in 2017 in his paper, “Digital Blockchain Networks Appear to be Following Metcalfe’s Law”. In the paper, Alibi showed that the valuation differences between certain cryptoassets (he uses Bitcoin, Ethereum, and Dash) can be explained with a high degree of accuracy.

We revisit Metcalfe’s Law in early 2021 and attempt to value Bitcoin by the same set of principles. We get the number of active Bitcoin addresses from glassnode studio and use the latest number as of writing of just over 1 million active addresses. Just for sanity, we use a second source bitinfocharts and get a similar number of active addresses. Through this method, we get a value of just over $50k for Bitcoin.

We take a look at a different range of number of active addresses to get a range of values of Bitcoin using this method. As you can see, each increase in the number of addresses increases the value of Bitcoin exponentially.

Source: Our estimates

Other Pricing Methods

There are additional pricing methods with less widespread acceptance, one of which is the “cost of production” valuation thesis. First proposed by Adam Hayes in 2015, the “cost of production” method holds that crypto, like any other commodity, is subject to traditional pricing challenges on the supply side. Hayes suggests that, with the view of Bitcoin as a commodity, each marginal Bitcoin’s cost of production should align with the price of the Bitcoin. For example, if Bitcoins had no real fiat monetary value, would crypto miners be incentivized to continue to spend real fiat money on the electricity costs as a part of mining new Bitcoin? It’s likely they would move to other, more rewarding ventures.

Ratio of bitcoin price observed in the market to the expected price produced by the model using historical data (source: http://www.blockchain.info). 1.00 would indicate that the two prices are identical, anything over 1.00 indicates a premium in the market and below a discount. The average for the study period is 1.05, σ = 0.33, indicating that over the long-term, the market price seems to fluctuate around the modeled price with striking consistency. Source: https://arxiv.org/ftp/arxiv/papers/1805/1805.07610.pdf

However, there are a few issues that come with this method. Its circular reasoning is a significant challenge as it uses two co-integrated variables to value one another. This logically has little explanatory power. Another issue is that the model fails to take into account the massive short-term volatility of Bitcoin or that Bitcoin’s mining difficulty is programmatically adjusted. The “cost of production” valuation method fails to clarify these cause-and-effect relationships and its predictive value is questionable.

Another final approach we want to touch upon is the stock-to-flow model. The model was first published in 2019 by a pseudonymous crypto quant researcher named PlanB. The stock-to-flow model states that Bitcoin’s price is indicative of its scarcity and that this scarcity can be measured by the stock-to-flow ratio – the relationship between the value of a Bitcoin and the new amount of Bitcoin being produced each year.

Source: https://www.lookintobitcoin.com/charts/stock-to-flow-model/

This approach is appealing because of its focus on scarcity as value. This approach also falls short because it conflates correlation with causation. Assuming that scarcity is the single factor driving Bitcoin’s price is a logical leap. In addition, the model ‘predicts’ a perpetually rising price for Bitcoin. For these reasons, the stock-to-flow falls short.

Conclusion

We believe each of these pricing methods have their own logical value as well as short comings and none are as sound or defensible as a traditional discounted cash flow analysis if for equities or credit models are for debt. Cryptoassets hold more similarities to commodities and currencies than to equity or debt, and the challenges to pricing commodities and currencies are well-known.

We would hesitate to use a single model with a few inputs to definitely price a cryptoasset. However, what is clear is that given increased adoption, usage, and acceptance, Bitcoin’s value should and will increase under any pricing model. Precision in pricing Bitcoin at this stage is impossible, but we are optimistic that more refined methods will come to exist in the future.

Our view is more aligned to that of the Bitcoin bulls. With crypto in a still early-stage of development and minimal professional investor allocation, we believe it has significant room to run. If small percentages of the trillions of dollars invested in adjacent store of value asset classes were allocated to Bitcoin, the impact and upside would be significant. As with anything there are risks, but with a long enough view, we believe the reward potential is enormous.

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Daily Update

Daily Brief 12/31 – UK Strain in the US and Amazon Wondery

California reports UK strain: California has reported the first case of the more contagious Covid-19 strain first found in the UK and a day following Colorado’s discovery. During a virtual conference, Dr. Anthony Fauci told California Governor Newsom, “I’m not surprised that you have a case .. We likely will be seeing reports from other states too.”

Luckily it will have no effect on the vaccine according to the WHO. Maria Van Kerkhove, WHO technical lead on COVID-19, said that U.K. officials have informed the group that they don’t believe the new variant will have an impact on vaccines. “That’s good news,” Van Kerkhove said. “But again, there is a lot of information coming out and there’s a lot of studies that are ongoing.”

Amazon acquires Wondery: According to Variety, “Terms of the deal, under which the Wondery team will join the Amazon Music group, were not disclosed. Earlier this month, the Wall Street Journal reported that Amazon was in talks to buy Wondery in a deal worth over $300 million.”

“This is a pivotal moment to expand the Amazon Music offering beyond music as listener habits evolve,” the Seattle- based retail and media giant said in a statement Wednesday. Amazon already has a dominant position in audiobooks through its Audible arm, so its interesting that they are offering Wondery through Amazon music. Perhaps they are aiming squarely at a Spotify-type experience.

Amazon has also commissioned programs from best-selling authors and celebrities, emerging as one of the biggest backers of original audio shows. We look forward to how Amazon continues to try to carve out its own niche in entertainment and experiences.

What we’re reading:

https://www.fastcompany.com/90590042/turing-test-obsolete-ai-benchmark-amazon-alexa

Tweets and Charts we like:

Interesting from Interactive Brokers, we assume he means selling calls

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Daily Update

Daily Brief 12/30 – Vaccine Bottleneck and Intel

Vaccine Distribution Woes: In October Health Secretary Azar said that by year end 100 million vaccine doses would be distributed and every American would have access to doses by March 2021. In November Health Secretary Azar said 40 million doses would be distributed by the end of year. Now we won’t even hit 20 million by the end of the year.

According to CNN, “One count, from the US Centers for Disease Control and Prevention, shows about 11.4 million doses have been distributed as of Monday morning and about 2.1 million have been administered — not even close to the goal Warp Speed originally set.” The Bloomberg source below shows 2.32 million, still well short.

Source: Bloomberg

We certainly hope these hitches are worked out or 2021 will be another long year. In terms of markets (what this newsletter is all about), keep a close eye on distribution progress here.

Intel Stock Rises: But not why you think, rather it’s because of shareholder activism! Per CNBC, “Third Point, the hedge fund led by Dan Loeb, is urging Intel’s board of directors to hire an investment adviser to explore “strategic alternatives” after the chipmaker lost market share to TSMC, Samsung and AMD.”

Dan Loeb is an investing legend and we have immense respect for him and his team. But it’s just so funny that the only way Intel stock goes up is if an activist hedge fund investor tells company management why they’re terrible.

Source: Koyfin – Semiconductor index compared to Intel stock

In his letter, Loeb says, “The loss of manufacturing leadership and other missteps have allowed several semiconductor competitors to leverage TSMC’s and Samsung’s process technology prowess and gain significant market share at Intel’s expense,” Meanwhile, AMD has eaten away at Intel’s share of its “core PC and data center CPU markets,” he continued.

We are skeptical of anything Intel can do to stem this secular tide, but if anyone can do it it’s Dan Loeb.

Tweets and Charts we like:

For any Boomers reading this, here’s your Nifty Fifty

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Daily Update

Daily Brief 12/29 – Herd Immunity and Scarcity

Herd Immunity: Goldman Sachs estimates US herd immunity to be at 26% when combining antibody surveys and subsequent infections estimated from fatalities. A July Seroprevelance study found 9.3% of randomly sampled people in the US had antibodies.

With an estimated quarter of the population already immune from the coronavirus, will we focus on vaccinating the remaining three-fourths? It’s unlikely the US is able to be that efficient, forward thinking, and capable of doing such a thing so many people will most likely unknowingly have antibodies and still receive a vaccine. Still, with a 26% of the population already being immune, the threshold to herd immunity is that much lower and will be achieved perhaps that much faster.

Goldman also estimates population immunity in many other countries with varying degrees with Emerging countries like Peru and Mexico at 39% and 34% respectively, and Germany and France at 5% and 11% immunity respectively

Scarcity and value: Real estate, they aren’t making more of it (unless you’re Dutch). Bitcoin, same thing, with supply constrained at a maximum of 21 million Bitcoins. So their value should always go up right? We argue it isn’t that simple. Yes supply is constrained, but there is another factor that isn’t considered in this argument – demand.

What spurred this thought exercise was the tweet below:

Just because something is scarce does not mean it has value, it also has to be in demand. If I signed a piece of paper and promised to never sign anything else ever again, it would be the only paper on the market that is signed by yours truly. Therefore, it is extremely scarce, there is a supply of one and my cursive signature is quite pleasing to the eye. The value should be astronomical according to the simplified scarcity theory right? Wrong. (unless you’d like to bid on the notecard I just signed – bidding starts at 1 Bitcoin) There is no demand, so the scarcity of my signature is hardly relevant.

Now if for some odd reason there was demand, then sure it would be bid up to levels that wouldn’t make sense since my signature is intrinsically worth nothing. Merely scarcity isn’t enough to drive bids up, there must be underlying demand in the first place then perhaps scarcity can encourage more bidding. The scarcity argument is oversimplified, generic, unoriginal, and frankly wrong.

Tweets and Charts we like:

GDP collapse with disposable personal income rising

Google trends via Cliffwater

Some interesting old school trading commentary

Lessons from great growth investor, Aziz Hamzaogullari

Simply explained why most fail

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Daily Update

Daily Brief 12/28 – Don’t Mess with the CCP

Ant Financial IPO latest: The Chinese central bank summoned Ant executives over the weekend and told them to “rectify” the company’s lending, insurance, and wealth management businesses according to a statement by the People’s Bank of China. While stopping short of any type of breakup of the company, the central bank stressed the need to “understand the necessity of overhauling its business”. Ant was launched in 2004 and is 33% owned by Alibaba.

Jack Ma, and by extension Alibaba, is under immense pressure and scrutiny and was advised by the government to stay in the country, according to Bloomberg News. We talked about Alibaba when this situation first began a month ago.

Last month, China issued draft rules aimed at preventing monopolistic behavior by internet firms, and the Politburo this month vowed to strengthen anti-monopoly efforts in 2021 and rein in “disorderly capital expansion.”

In other news, Alibaba raised its proposed stock repurchase plan from $6bn to now $10bn. Still, we aren’t bullish on Chinese internet giants at this stage with a government telling business leaders, “you are nothing but a cloud.”

Wonder Woman: “Wonder Woman 1984” took in an estimated $36.1mm globally from 42 markets in its weekend release, and $16.7mm domestically in the US. That is compared to the $412.8mm in domestic ticket revenue the first installment of the Wonder Woman series made three years ago.

The movie also debuted on HBO Max on Christmas Day and according to the studio, nearly half of its HBO max retail subscribers viewed the movie on Christmas day. As of October, HBO Max had around 3.6 million direct retail customers.

Running to save the theater industry

“Wonder Woman 1984 broke records and exceeded our expectations across all of our key viewing and subscriber metrics in its first 24 hours on the service, and the interest and momentum we’re seeing indicates this will likely continue well beyond the weekend,” said Andy Forssell, executive vice president and general manager, of WarnerMedia’s direct-to-consumer division.

Our take: movie was apparently not great, for AT&T this is an early sign of success with their strategy we talked about (we aren’t convinced it will save the company), for movie theaters it’s too little.

What we’re listening to:

Tweets and Charts we like:

Investing is easy:

Don’t invest in these ‘EV’ companies. If you trade, sure go ahead.

Actually accurate

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Daily Update

Daily Brief 12/18 – Star Wars antitrust and Robinhood

Star Wars antitrust: According to Bloomberg, “At the center of the latest antitrust lawsuit against Google is a bold claim: The company colluded with arch rival Facebook Inc. in an illegal deal to manipulate auctions for online advertising, an industry the two dominate. Google named the secret pact after a Star Wars character.”

The suit revolved around Facebook’s decision to introduce header
bidding for its own ad-selling tools in 2017 and to mobile apps a year later. This tool allowed Facebook to take small cuts of ads sold across the web and on mobile phones, not just on its own pages.

Source: https://adtelligent.com/header-bidding-trends-2020-publishers-should-be-sticking-to/

This header bidding directly competed with Google and Facebook soon pulled back from the practice. It did so, the Texas suit said, because Google cut a deal, signed at the “highest-level,” that let Facebook sell ads on mobile apps more quickly and gave it other advantages in ad auctions. This deal, too, was given a coden ame related to Star Wars. The suit redacted the name, but the Wall Street Journal reported it was “Jedi Blue.”

If true this is a pretty spicy case indeed. We don’t hold a view that Google and Facebook will be proven guilty, but we are skeptical of any tangible penalties beyond a fine. Time will tell.

Robinhood: Robinhood Markets, the popular stock trading app among millennials, has agreed to pay $65 million to settle the SEC allegations that the broker failed to properly inform clients that it sold order flows to high-frequency traders.

Here you can see who they are trading order flow to:

Source: https://cdn.robinhood.com/assets/robinhood/legal/RHS%20SEC%20Rule%20606a%20and%20607%20Disclosure%20Report%20Q3%202020.pdf

Robinhood has also been accused of ‘Gamification’ by the state of Massachusetts. The filing singled out one customer that the regulator said had no investment experience who made 12,700 trades within a six-month period. Please, if you value the money you’re trading and investing with, don’t make 12,700 trades over a six-month period. If you are an investor, the less trading the better. If you are a trader, I hope you know what you’re doing.

Charts and Tweets we like:

Not much to say

Initial jobless claims hit highest levels in more than 3 months

Fun chart on silver courtesy of @RenMacLLC

Ain’t this the truth

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Daily Update

Daily Brief 12/17 – ESG ETFs, vaccine distribution issues, and crowdsourced Quant trading

ESG ETFs: According to the WSJ, “This year investors have put a record $27.4 billion into ETFs traded in U.S. markets that say they focus on environmental, social and corporate governance, or ESG, practices, according to data from FactSet, doubling the size of the sector.”

According to Elisabeth Kashner, director of ETF research at FactSet, asset managers have launched 31 ESG-related ETFs so far this year, nearly double last year’s sum and bringing the total number of products in the U.S. to more than 100.

Part of the inflows to these funds is driven by fund performance from stay-at-home stocks and shares of other companies that have climbed during the coronavirus pandemic, said Todd Rosenbluth, head of ETF and mutual-fund research at CFRA.

Vaccine too cold: According to Gustave Perna, the army general who serves as Operation Warp Speed’s COO, two trays of vials at two California locations reached 92 degree below zero, colder than the vaccines should be stored.

Pfizer has said its formula needs to be stored at 70 degrees below zero Celsius, the equivalent of negative 94 degrees below zero Fahrenheit. About 2.9 million doses are being distributed across the U.S. this week.

We hope this is a one-off situation, but we continue to monitor any logistical and distributionissues.

Crowdsourced Quant Fund: Quantopian, a Boston-based startup backed by billionaire Steve Cohen and venture capital firm Andreessen Horowitz with a free online platform for developing and testing algorithmic strategies, has shut down. The idea was that by offering everyone on the internet free access to data, tutorials, and tools, it could beat the market by picking the best quant strategies from the world’s untapped geniuses.

A Quantopian trading screen

Becoming a profitable investor is more than just amassing trading ideas, you need to then put them together in a profitable way and scale it if you want to do it in a fund structure with millions or billions of dollars. These are the main problems Quantopian faced – scale and structure.

What we’re watching:

Good interview with legendary investor Charlie Munger: https://www.youtube.com/watch?v=btdqC1V8cgg

Tweets and Charts we like:

Why grifters grift

Image

The interesting thing is that we don’t see the same phenomenon in Europe and Japan, however they have demographic and in the case of the EU, competitiveness issues. Point is, P/Es don’t necessarily have to be high because of low Treasury yields, there are certainly other effects

Fact check: True

Money managers overseeing $534bn are underweight cash for the 1st time since May 2013

Image

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Daily Update

Daily Brief 12/16 – European tech regulation and first trillion dollar ETF

Tech giants face new rules in Europe: According to the WSJ, “The European Union’s executive arm proposed two bills Tuesday—one focused on illegal content, the other on anticompetitive behavior—that would empower regulators in some cases to levy fines of up to 6% or 10% of annual world-wide revenue, or break up big tech companies to stop certain competitive abuses.”

The UK is also looking at pursuing new competition rules for online platforms. These bills don’t mention a specific company, but we all know who the Europeans are interest in regulating. These two strands of legislation would amount to the largest potential expansion of global tech regulations in years.

One the the proposed bills, the Digital Services Act, would compel large tech platforms that reach more than 10% of the EU’s population each month to agree to external audits and impose transparency requirements. Transparency is a vague word. The other EU bill, the Digital Markets Act, would ban certain behavior by what it may deem to be “gatekeepers”, companies with European revenue of at least 6.5 bn Euros ~$7.9bn or a market cap of at least 65 bn Euros and which service more than 10,000 active business customers and 45 million active end users in the EU. Again, such arbitrary terms and figures.

Europeans can’t create globally competitive tech (minus maybe Spotify can you think of a competitive European tech company?) but they sure can draft anti competitive legislation.

Another Decembers IPO: Online retailer, Wish has priced its initial IPO at the top end of a marketing range, raising $1.1bn. Wish is valued at $17bn on a fully diluted basis and the offering is the 31st on a US exchange to exceed $1bn this year.

According to Bloomberg, “With Wish, more than $20 billion has now been raised in IPOs on U.S. exchanges in December — a record for the month. The 2020 total is now more than $174 billion, also an all-time high, the data show.”

First Trillion Dollar ETF: According to Bloomberg, “A Vanguard Group equity fund has become the first of its kind to eclipse $1 trillion of assets, a testament to the rise of index-based investing over the past three decades. Vanguard Total Stock Market Index Fund, which includes both a mutual fund and an exchange-traded fund, had $1.04 trillion of assets as of Nov. 30, company data show.”

Flows will continue to ETFs from lower-fee providers like Vanguard and we expect to hear about a $2 trn ETF within 2-3 years, barring a significant market correction.

Tweets and Charts we like:

A lot of truth to this one courtesy of @alexbhturnbull

Image

Incredible number of dollar value in outstanding Tesla calls courtesy of @Teutoburg1

Image

Another Tesla chart! courtesy of @jsblokland

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In response to European regulator pressure on American tech companies

You decide which phase we’re in now.

Apple call activity has collapsed to the lowest since August 2019 – down 80% from this year’s peak. Courtesy of @MacroCharts

Image

Don’t have much to say here other than the millennial classic, lol.

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Daily Update

Daily Brief 12/15 – Chinese Growth and New York Shutdown

Chines Recovery: China’s recovery from Covid-19 continues and fathered pace in November, with exports surging at the fastest pace since February 2018.

“Exports surged by 21.1 percent year on year to $268 billion, beating forecasts. A Reuters poll earlier predicted a 12-percent growth in exports in November, while China International Capital Corp. Ltd. forecast a 10.8-percent increase. 

Imports rose by 4.5 percent to $192.6 billion, slower than October’s 4.7-percent growth, leading to a trade surplus of $75.4 billion.”

What’s most interesting is that Chinese growth is being buttressed by global demand, not domestic consumption. This signifies that 1. The world is more dependent on China for goods than ever and 2. That consumer incomes in the developed world are supported and being spent during the pandemic. We do, however, suspect that a good portion of these exports is PPE. Your mask was likely made in China.

New York Shutdown: Governor Andrew Cuomo said that New York is headed toward a second full shut-down if Covid-19 cases and hospitalizations continue at their current trajectory. “If we do not change the trajectory, we could very well be headed to shut down” all non-essential businesses, Cuomo said Monday at a virus briefing.

Source: https://covidtracking.com/data/state/new-york

He did say a potential shutdown would be shorter than the one New York experienced in the spring. “Hopefully we’re talking about restrictions only for a matter of weeks, but wehave to be preparing ourselves mentally and practically for that possibility.”

Charlie Munger says Virus will be insignificant in a year: Munger, Warren Buffet’s long-time partner business said, “It’s amazing, I watched the polio get totally killed by the vaccinations .. They’ll spread these vaccines over the world so fast, it’ll make your head spin.” We agree Charlie.

He went on about future equity-market returns and said he expects them to be lower the next 10 years when compared to the previous 10. We agree again.

Tweets and charts we like:

This is true.

#value

Positive news on the stimulus front

IPO fever

$100 trillion is just a number anyway

This is a great thread and a great quote

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Daily Brief 12/14 – Vaccine Shipments Begin and Stimulus

Hospitals Ready for Pfizer shipments: With the FDA approving the Pfizer vaccine for Emergency Use, hospitals are preparing to receive the vaccine today. General Gus Perna, the CEO of Operation Warp Speed announced on Saturday that, “We expect 145 sites across all the states to receive vaccine on Monday, another 425 sites on Tuesday, and the final 66 sites on Wednesday, which will complete the initial delivery of the Pfizer orders.”

These 2.9 million shots are expected to end up being distributed to health-care workers and nursing home residents. Jesse Breidenbach, senior executive director of Sanford Health said that Pfizer is sending its vaccine in specially made containers packed with dry ice to keep it at 94 degrees below zero Fahrenheit.

Stimulus bill unveil: Senator Joe Manchin said Sunday Congress would produce a relief package “for the American people tomorrow, $908 billion .. The plan is alive and well and there’s no way, no way that we are going to leave Washington without taking care of the emergency needs of our people,” the West Virginia Democrat said on “Fox News Sunday.”

The lawmakers will present the language in two separate bills in an attempt to break the gridlock. According to Bloomberg, “One proposal for $748 billion in spending will include all provisions other than state and local aid and liability protections for employers. The second bill will have two provisions that have deeply divided leaders on both parties — $160 billion in state and local aid allocated through a needs- based system, and liability provisions.”

Here’s to hoping they get something, anything passed.

Charts and Tweets we like:

Likely

Financial media is notorious for making calls at peaks and/or being wrong. Have to agree with Will here.

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