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Looks like BCART may be contemplating being acquired. Guess we'll have to wait for details in the next few days. Unusual for a company so far from being accretive.
FL
https://www.globenewswire.com/news-release/2019/08/27/1906828/0/en/Press-release-Biocartis-NV-Invitation-to-the-Special-Shareholders-Meeting.html
Biocartis no longer tradable for U.S. residents.
Tried to add to my position during the weakness this week and it was thwarted. After first claiming it was a FINRA suspension, the Schwab Global representative indicated it was a "regulation S" suspension. From what I can see this regulation pertains to Safe Harbor to offer US securities abroad or to make Foreign securities available to US residents. Schwab would offer no other details or the name of a SEC person more familiar with suspension.
This type of suspension appears most common with improper advertisement or solicitation of purchase offers. My purchases were totally unsolicited I became aware of the firm after the GHDX partnerships were announced.
The conspiracy theorist in me believes this is in response to an upcoming announcement that BCART and Wonfu are breaking ground on a Chinese cartridge manufacturing facility. Based on the attached press release, I believe that the Chinese have completed their validation program. BCARTs Sept 2018 Wonfu Agreement indicated they would proceed with local manufacturing once the Chinese completed validation.
https://www.scitechnol.com/peer-review/biocartis-idylla-proves-fast-and-accurate-in-detecting-oncogenic-kras-and-egfr-mutations-in-paraffin-embedded-tumor-samples-VT7n.php?article_id=9132
FL
Dew, I was aware of the Sysmex claim of superior sensitivity in the MAF<1% cases. I have not been too concerned since they're Oncobeam test has a 5-7 day TAT and increased costs. Their are NGS players providing similar sensitivity and TAT as sysmex. The recent William Blair Investor event featuring Guardant stresses the importance of them reducing the TAT to be able to access the diagnostic-prescription window. I read this as their CDx partners want 1st crack at the prescription by partnering with a CDx partner that turns results around quicker.
Sysmex does not bother to discuss the concordance in the higher MAF cases. Idylla is very versatile in that it can analyze solid biopsy samples and/or liquid samples with only a few minutes of hands on time. The pathology journals I've reviewed are very specific that no one diagnostic platform performs best in all situations. Idylla has performed well enough that Journal of clinical oncology felt it was appropriate for first line MDx analysis.
FL
The close ties between GHDX and BCART is one of the primary reasons I think next year will be a turning point for BCART. the OncoDx Breast IVD test on Idylla is undergoing validation and should (assuming validation proceeds smoothly) receive EU marking next year. Germany and Gr Britain have been the fist in the EU to provide positive reimbursement decisions. They expect France by early next year. The ability to make a quick decision on whether the patient will benefit from chemo should be a driver for quicker adoption of Idylla.
BCART provides a great way to play the positive TailorX data without having to pay up for GHDX.
https://www.genomeweb.com/business-news/germany-agrees-nationwide-reimbursement-genomic-health-oncotype-dx-breast-cancer-test?utm_source=Sailthru&utm_medium=email&utm_campaign=GWDN%20Fri%20AM%202019-06-21&utm_term=GW%20Daily%20News%20Bulletin#.XQ0w4OtKgb4
Regards FL
I believe that Fisher is a bit conflicted. They develop and market MDx equipment and consumables yet they also run a major online catalog exchange that features the equipment of competitors.
https://www.fishersci.com/us/en/catalog/search/products?sortBy=popularity&keyword=Automated+Molecular+Diagnostics+System+Instruments&searchType=P
I used to use the Fisher relative popularity feature to track Biocartis' sales of Idylla systems. However, BCART launched their own sales force in the US so Fisher is no longer the only sales outlet.
In any event liquid biopsy is becoming more crowded that than many investors in the field realize.
FL
Idylla is appropriate for a variety of first line diagnostic purposes. I was speaking more to the use in a monitoring application where the development of a resistance mutation is suspected. Idylla is configured to identify common gene mutations associated with certain tumors, it is not going to identify subtle resistance mutations that may render a drug ineffective. This will require a more robust NGS analysis.
The following journal article does a better job at discussing where Idylla use is appropriate (Refer to Discussion section and the flow chart). Based on this and similar articles, I believe there is a place for both methods.
https://jcp.bmj.com/content/71/9/757
Have a good weekend.
FL
FAST TAT
The unrelated post just made probably answers the question. I beleive that many of the pharma companies believe that the couple week head start gives them a leg up on competing treatments. The results are available the same day as the biopsy and the molecular pathway is diagnosed so the physician has the ability to prescribe with knowledge. The periodic system updates via the internet enable the placement of targeted ads/educational information. GHDX also claims that there is a tremendous aversion in a lot of countries to shipping tissue samples outside of the country. GHDX claims that Germany, France and others have been clamoring for a point of care system.
Many countries stipulate reimbursement levels based on the test irregardless whether it is analyzed in a certified lab or at the point of biopsy using an IVD test. I believe that due to the present cost differences between IVD and NGS, this provides the opportunity for the physician or clinic to theoretically pocket a lot of the difference in cost between the cartridge cost and the reimbursement price generating nice profits for the clinic, hospital, Dr. office etc. As my previous post indicated, the cost of NGS is coming down rapidly so this price differential wundow may not exist forever. I think BCART recognizes this and that was one of the reason for their convertible offering a couple weeks ago. They want to quicken the pace of moving their tests from research only to complete registration for diagnostic purposes. This opens the system for wider usage.
FL
KITE BCART agreement
https://finance.yahoo.com/news/biocartis-group-nv-biocartis-kite-050201173.html
Dew
This agreement is an example of why I like the fast TAT IVD platform. If BCART successfully develops this assay the results will be available to track the effectiveness of the treatment with results available in a few hours instead of the current average of 17 days. It eliminates the cold chain/shipping and a lot of the potential errors (cross contamination, labeling, etc.) that can occur in a large lab setting. NGS systems follow up will be necessary to test for mutations etc. but I believe that the real time results are invaluable in the first diagnosis/treatment setting but also in assessing the patients response to the CDx pharma treatment.
Now if all the partnership agreements would translate to profitability! As you probably know, I have a tendency to be way too early in many of my investments.
Regards
FL
Grail Liquid Biopsy
The prices in NGS oncology assays including liquid biopsy are falling quicker than TRUMP can impose a new tariff. There are a lot of competitors and payers are pushing price reductions. I think there is a race to the bottom with the winners getting high volume at low reimbursement rates.
Between GRAIL, Foundation, Guardant, Resolution, Invitae Corporation ... I can't keep track of all the players in this field. I like BCART for its ability to reduce labor, reagents, Turnaround time, and the fact that the results are rendered at low cost at the point of biopsy. I think the clinics will figure out that they can bill the assays out and get reimbursed at a significant profit. This can help drive uptake once Idylla goes from Research Only to approved for clinical diagnostic purposes (as it is in the EU). There are few competitors in the Sample to Results Fast TAT oncology IVD product space.
If I have an error in my reasoning I don't mind if someone points it out.
Have a good weekend.
FL
CO2 is much more soluble than methane. Water washing or decomposition of source material in the presence of water can strip the CO2 from a biogenic gas. Isotope plots of C13 v deuterium would help assess the source and the subsequent diagenesis. I agree that the N2 is probably sample contamination.
Good to stumble onto a good geochemical discussion.
FL
I'm not sure what yahoo's figures are based on. Page 18 of the Annual report released a couple weeks ago states 46% increase in product sales revenue 2018 over 2017. That is less than half of the prior year (91%). I know it's pretty lumpy but there are a number of moving parts (primarily revenue recognized from lump sum payments from collaboration partners). I think they need to get to 350,000 - 375,000 annualized cartridge sales to break even.
I think there is pent up demand for the an IVD Breast cancer solution underscored by the TailorX study. Also, the Chinese and Japanese partnerships should start bearing fruit during the 2nd year. I suspect that sales will see a major inflection point in 2020.
What I find somewhat intriguing and maybe a little scary is the ways that the ecosystem might be utilized. Education on partner drugs through cloud connections is probably great and a partial reason CDx partnerships. The mining of physician or clinic diagnostic trends might be illegal. That type of problem is probably a long way off considering the installed base is relatively tiny.
Regards
FL
Liquid Biopsy
You running a test to see if I'm still lurking?
In my opinion Next Generation Sequencing arena is getting pretty crowded. GH, Foundation and Grail have great financial backing and in the case of GH there is considerable euphoria. I still like BCART out of Brussels as a dark horse. Their system (Idylla) is a PCR IVD system that provides fast TAT at a fraction of the cost. The Jour of Clinical Pathology is drawing flowcharts that target Idylla usage in a First line analysis capacity with NGS run to resolve discordances, or to ID less common mutations. I've yet to see significant competitors despite the fact that BCART has partnerships and has launched globally. I think they are situated much the same way the Cepheid was positioned in infectious disease assays.
https://jcp.bmj.com/content/71/9/757
The availability of results within a 2 hours or so for a fraction of the current cost of NGS should mean there will be a place for Idylla. Their cartridge system can be used for solid or liquid. Although only ct KRAS, NRAS and BRAF have received EU marketing authorization for liquid biopsy.
BCART will be presenting at ASCO comparing their MSI cartridge results to the Promega MSI assay. Bristol Myers has partnered to use this cartridge for CDx for the Opdivo + Yervoy combination. BCART has a total of 5 CDx partnerships and I think the platform is ideal for the pharma company to get the jump on competition and introduce educational/marketing information at the time the genomic pathway is first diagnosed.
I'm also looking forward to the roll-out of OncoDx breast test on Idylla next year after the validation studies are completed. I sold all my GHDX to buy BCART since it should benefit extensively from the same news that gave me a 150% gain in GHDX.
Here is a recent BCART slideshow. I like the fact that BCART is currently flying under the radar while they launch globally. They have raised cash and will be pursuing FDA 510K approvals. This will enable the system to be used for clinical rather than research only use.
https://media.biocartis.com/biocartis-investors/documents/190509-BCART-Corporate-Presentation-9-May-2019.pdf
Regards
FL
FDA seeking to revamp the 510 pathway for IVD devices. This looks to be a much needed modernization of this pathway. FDA is planning to remake the program to focus on the devices performance rather than how it compares to a predicate device.
FL
https://www.emergobyul.com/blog/2017/10/us-fda-rolls-out-new-market-pathway-breakthrough-medical-devices
https://www.emergobyul.com/blog/2019/01/us-fda-pushes-510k-performance-criteria-predicate-device-policy-changes
I'm aware of the GHDX move on last night's earnings. I sold out of GHDX on the last big move. I still think Biocartis is the better way to play TailorX uptake. They will sell more cartidges and consoles and other services.
I would not be surprised if Biocartis announces their intent to IPO in the U.S. at next weeks conference call. It's probably a little early since the market cap is only $650M and they are a year or two from profitability but it would be a good move to capitalize on the recent GH and GHDX moves.
FL
Liquid Biopsy
I don't necessarily disagree about the competition in the liquid biopsy arena. I invested in BCART:XBRU (getting shelled today) because I'd rather own a disruptive technology provider in this area. They have rolled out on a worldwide basis an IVD platform that allows the results of liquid or solid biopsies to be available in a couple hours rather than 3 weeks. Validation studies are indicating excellent concordance with the reference methods most commonly utilized. The fact that it reduces costs, space needs, technician time and allows treatment to begin much sooner differentiates Idylla from others offering liquid or solid biopsy test methods.
I exited GHDX after it ran up 120% following the Tailor X ASCO results. Most of that money went into BCART since GHDX is migrating the OncoDx Breast assay to BCART'S Idylla, it makes no sense for one to run up on optimism without their partner running. GHDX recently indicated they are set to roll out OncoDx in Europe on the Idylla platform next year. I suspect now that Idylla has launched in the U.S. that they will follow it up with an IPO, here. The GH ipo shows the extent to which valuations are inflated in the U.S.
Regards FL
Unloaded GHDX today. Amazing how the re-release of a 2 yr old study (Taylor X) at ASCO gets so much media traction. If this is such good news for GHDX my guess is it is even better news for BCART:XBRU.
The interesting thing is that GHDX has said a number of countries have shown resistance to shipping tissue samples out of the country. If this continues I think it is an impediment to the centralized lab facility model.
FL
I'm mostly out of GHDX. They had too many successive quarters of missing their own growth estimates.
They are laying off 10% of staff (mostly lab staff) so I anticipate profitability will ramp somewhat going forward. They indicated that there is significant resistance in many countries to allow tissue samples to be sent to a lab outside of the country of origin. They are rolling out a Biocartis cartridge to allow the OncoDx Breast cancer assay to be conducted at the point of biopsy. NICE has approved this test for reimbursement to assess patients that can benefit from chemotherapy.
Regards
FL
There are not many Ag land REIT options out there. FPI has more row crop exposure than LAND. My bet is that the the lease rates follow the commodity prices. The 2012 drought resulted in a spike in commodity prices that were reflected in stronger land rental rates. The rental rates have been pretty flat since then. I find land more attractive than the commodity itself for a host of reasons (option rollover costs, management costs, past grain price history, etc.).
The graphs you presented do not paint a pretty picture. You are largely betting that this time it is different (i.e., a more sustained move will occur in Ag prices). I'm not sure if technology (or lack of response to AG problems) will be the reason for a commodity price upturn. Dicamba drift is causing soybean wilt problems, but I think farmers will find a response. The biggest problem might not be technical or land but rather the lack of farmers. Jim Rogers points out the average age of a farmer is pushing 60. If we limit immigration and the majority of millennials want to live in urban areas, strong inducement may be necessary to encourage farming careers. We have been getting by with huge efficiency gains, this cannot go on indefinitely.
With regard to the management structure of FPI, the price per acre dropped low enough to overcome my aversion. Pittman's past statements have made me comfortable enough with his decision making. It is apparent that he is using the Cisco model of offering FPI shares in payment for farmers surrendering their farms. Based on last weeks conference call, he took a 30% haircut in his compensation last year rather than lowering the dividend. His attitude that he must respect the agreements he made with the farmers who sold their land is commendable.
My biggest concern with FPI is that they increased their exposure to the California central valley area. When the land subsides as much as it has (visible from satellite imagery & gravitational surveys) in response to irrigation it is a strong sign that the aquifer is being depleted. Almond trees may not be the best use of the water.
What convinced me to invest in Ag land is that it is inversely correlated to bonds (i.e., does better during inflationary periods). Given the long term trend in bond yields, it is apparent that bonds may not provide the ballast they have historically.
Regards
FL
Wow
The article & charts do a great job at proving that technology can be deflationary. Fertilizer improvements, herbicides, pesticides, large combines, irrigation, satellite crop assessments, tillers etc. have immensely improved Ag production in the past 50 years and in the process driven the price of the commodities into the ground.
The interesting thing that might be changing is that world demand is increasing. There is an interesting TED talk from a couple months ago done by an African woman who was a commodity trader. She did a world calorie balance (# of calories needed to maintain life * population * pop. growth rates..etc.) to determine that the world will be at a net deficit in approximately 10 years. To overcome this deficit she concludes that marginally arable lands in Africa and Asia will need to become productive. This is no small task given soil issues, lack of water etc. Solutions like clearing and plowing more of the Amazon Basin are meeting resistance. Likewise war and/or famine are unacceptable answers.
Bill gates has been doing a lot to support 3rd world issues. He may have an eye to the developing problems in Africa. However, I doubt that he is not currently leasing the land. I bought some FPI last week since farmland like timberland tends to perform well during inflationary periods. I like the dividend and the commitment to maintaining it. However, I'm not crazy about the amount of leverage utilized to maintain the payout. I've rationalized that if a cash crunch develops the REIT manager can always sell some assets (farms) and trim the Div while still maintaining an attractive payout (at least at my entry point). Since the Fund is trading well below the NAV of the acres held, it seemed like it was worth some investment in the interest of portfolio diversity. It is easier than trying to buy raw farmland.
Regards FL
Fast TAT makes BCART attractive mDx platform, this is especially true in time critical decision making. Major unmet fast diagnosis needs such as sepsis may prompt a lab to make the initial investment in a console/test platform. Once that occurs than the potential to purchase cartridges for other diagnostic tests increases. Since sales just rolled out in the US a little over a year ago, it is early. Just something to watch in the upcoming year.
Regards FL
It worked after I clicked it a couple times.
I can see a case where both a fast test like Idylla are run at the time of biopsy with NGS results at a later date. The cartridges reportedly have a year of shelf life so and the initial console costs $5K to $44K (depending on multi-channel testing capability)probably make pretty accessible for small to midsize labs.
Thanks
FL
I got an error when I clicked the message link. The BART automated method also uses FFPE (the basis for the majority of FMI's assays), which I understand to be the gold standard in mDx. The Oxford tests suggests that Idylla's automated method is quite accurate. I'm sure that pathologists would prefer a greater degree of interaction. I'm not certain that the patient, the oncologists and the payer would not want to start treatment a couple weeks earlier. The question is whether you believe that automation and AI might even influence the field of pathology/mDx. I think it is something that computers and software can excel at.
I realize that Roche has a huge stake in FMI, it would clinch it for me if Roche is the confidential big Pharma CDx agreement that Biocartis cannot disclose. The other CDx pharma have no problem going public with their partnerships. Roche would have the strongest reason to stay quiet if they suspected that an automated method was moving to take a sizable chunk out of lab CDx testing. I guess I want to see the BCART microsatellite panel rollout uptake and watch the trajectories of the FMI vs BCART sales.
Sorry about the lack of proofreading in my posts.
FL
I got authorized for international trading because I believe that BCART.BR has made a vary strong case that they are carving out a strong niche in cDX molecular testing. They have existing partnerships with JnJ, Amgen, Merk Kgba and another confidential pharma. I think a lot of oncologists will decide in favor of the faster TAT and will want to keep the revenue in house rather than sending the samples to an offsite lab and waiting 20 days. If they continue to get EU and FDA approval for the roll out of additional assays, I think they will cut into FMI's business (I may consider FMI as a possible short in the near future).
The company just recently transitioned from the majority of rev coming from partnerships agreements to the rev being derived from product sales. From what I can see on the Fisher Healthcare website, both the consoles and the cartridges are selling pretty well in the US. I'll look for an update of the China distribution agreement at tomorrow's cc. I think the sepsis cartridge (partnership with Immunexpress) which should roll out later this year should make this test indispensable in most hospitals. Sepsis is the 2nd leading cause of hospital mortality and diagnosis time is a critical factor determining whether the patient lives or dies. The Immunexpress test is approved by FDA but has decided to team w BCART to make the results available much faster. Here is a link to the company pp.
FL
https://media.biocartis.com/biocartis-investors/documents/180110%20BCART%20Corporate%20Presentation_Jan2018_FINAL.pdf
Chanos
In my view these programs are probably be the third rail of politics and the party enacting these reforms (if not done well)could slide in next years Midterms. From my thinking, more than likely they would not want to raise the specter of reform before the election. This is where I think Chanos is misjudging the ability of politicians to forestall tough decisions. That said, I see Ryan as being ill equipped to try to cut costs since his cohorts have previously bristled about "death panels" when Obamacare was first proposed. So it's hard to see Republicans moving toward greater government decision making (like Britain's NICE).
If health care is not allocated on a cost benefit approach, I'm not sure the program reform can be successful. My fear is that reform will start with a savings number that they want to achieve and they will work backwards by slashing portions of the program budgets and kicking costs back to the states. Ultimately, a change in the paradigm is required. NVS' approach of payment for Entresto and CarT treatment when benefits are demonstrated is an example of something that should become more widespread. Genomic testing which focuses on treatment and avoiding treatments unlikely to provide benefit is another area where I believe the cost benefit analysis is helpful. It will take a tipping point for some of these points to gain traction. It appears that Biosimilars are finally reaching this point and future cost savings should be realized as a result. Similar progress will need to be made in other cost saving areas.
Medicare and Medicaid not paying for ineffective drugs could result in a "Health Care Winter", but I don't think the current climate of non- government intervention will result in this anytime soon.
FL
Any thoughts on Jim Chanos comment yesterday that "Winter is Coming to Healthcare"?
Chanos is betting with his shorts that the Republicans will get their tax bill thru including removal of the Obamacare mandate. He said Ryan has promised to take a scalpel to Medicare and medicaid in 2018 to cut the $1.5 T deficit resulting from the tax plan. In Chanos' view funding for expensive treatments will be less accessible going forward.
FL
Motely Fool indicates the upside interest in GHDX today is based on a takeout rumor. If that is true, JPM had one of the all time poorly timed downgrades yesterday.
FL
Weird trading on GHDX
Down 7% yesterday on a downgrade, up 20% this morning on no news. Certainly looks like the downgrade was intended to create an entry point for someone.
FL
I'm just pointing out that Vasella was about the same age as Jimenez when he retired. I agree that the Vasella move was well telegraphed after a long tenure. Vasella was far and away my favorite CEO he set many of the directions that have been successful (focusing on biosimilars and more complex generic drugs rather than the commodity products that have had their margins gutted). He also fostered the model of developing drugs for rare genetic conditions and then looking for other indications that might have a similar genetic origins.
Under Jimenez there have been numerous actions that have resulted in questionable shareholder benefits (i.e, the Alcon acquisition. GSK asset swap, and numerous senior staff shuffling/defections.
I sold most of my NVS shares when it reached 100, so I have not followed it quite as closely.
FL
I believe Vasella was about the same age when he retired as CEO at NVS.
FL
Hi wow
I've been pondering this for a while. The underlying technology that the majority of the players are reliant on is lidar. However, it looks like the the players are private Luminar, Waymo and the venture capitalists like Peter Thiel have staked out their positions in a big way. I suspect that the # of patents may not be a good gauge of a company's overall ability. The secret will be in managing the lidar data in fast, efficient, economical manner. This is not a simple task. Some of the lidar guidance systems are sensitive enough to detect a bug moving toward the vehicle. Obviously, you wouldn't want the software systems to act on this data.
Regards FL
Way to flush me out with that sore subject baiting.
I convinced myself a number of years ago that this was in fact a conspiracy. FDA gave Merck a gift as part of a plan worked out to compensate Merck for pulling Vioxx. Vioxx was a major embarrassment for the FDA. Tell me why else would NVS walk away from the largest market in the world without re-submitting.
FL
Hi loss slayer
I saw the cup and handle as well and doubled down in the 8's about two months ago. I now see a reverse head and shoulder pattern which could spring SBS to revisit the 2013 high. I found it helpful to review SBS performance on their website in Reals in order to discount the impact of the dollar. I think SBS could be headed from 33 to around 45 real in the next year (the right shoulder breakout). The problem is that I'm uncertain what the dollar will do as the Fed unwinds their balance sheet. QE resulted in the value of almost everything going up including Emerging market equities. As the end of QE approached in 2014 the EM and SBS tanked. They have re-awakened the last year as the dollar weakened slightly.
Conventional wisdom is that the EM will get hurt as the US continues to tighten rates causing the dollar to strengthen. I don't necessarily agree. SBS and others have restructured much of their debt into local currency. Brazilian rates look like they will continue to decline (from around 10%) thus reducing local currency borrowing costs.
Furthermore the U.S. cost of carrying $20 trillion in debt has not really changed much. The 10 year is still +/-2.3%. Several rate hikes would either push up these rates and increase debt servicing costs or could invert the curve and push the US into recession. Given the demographic backdrop of retiring baby boomers, I think we could be at the start of a secular trend where the dollar weakens. I believe this is a decent backdrop for SBS. The end of the drought, and wind down of large capitol construction projects in the next 2-3 years should also be a plus. Organic growth of at least 5% seems like a given just based on population growth. Plenty of room to expand by acquiring municipal water and/or sewer businesses in Sao Paulo. They just need to be strategic in making these acquisitions at reasonable cost.
Long winded I know, but there are very few boards with intelligent life to discuss one of my largest holdings.
Regards FL
Most commodities are a tale of pain. NIB especially. Dollar relative strength has not helped. I would consider NIB a short term speculation that the low prices will drive a response to plant and invest less in the crop. Perhaps an announcement will be made next week. If it does not play out in the next month, I'll exit.
I did pretty well with CZZ betting on a sugar turnaround. However, I don't like to hold these ETNs for any length of time since the costs associated with rolling the contracts forward forward are a drag on the performance.
Regards
FL
Cocoa futures getting crushed
Following the demographic tailwind theme, one of the early indulgences of emerging markets as they become more affluent is chocolate. Demand growns annually at about 3%. This weak market seems to be entirely based on the oversupply primarily due to great weather/growing conditions in West Africa. It looks like the price is getting below the long term average (see chart below), so I started wading in this morning betting on a mean reversion at some point in the next few years. I bought the Bloomberg ETN NIB.
There are many factors that could restrict future cocoa supply: the main growing areas of Ivory Coast and Ghana seem to be prone to civil war, Ebola, winds off the Sahara dessert, pests. If this does not curtail supply I'm willing to bet the low prices will restrict investment (labor, fertilizer, etc) and reduce the yields in the future.
In a world awash in fully or overvalued assets, Cocoa looks cheap. Of coarse it could get cheaper. I know the adage about falling knives, but given that ICCO (essentially a Cocoa cartel) is meeting next week I'm establishing a position, betting that they will take some action to try to stabilize the pricing free fall.
No recommendation here, just interested in the input of a commodity savvy board. One caveat is that ETNs are subject to issuer risk (in this case Barclays). With the potential Brexit risk, I would not establish a large position.
http://www.tradingeconomics.com/commodity/cocoa
FL
Chanos may know exactly what he is doing. Deere is making headway selling their earth moving equipment. They offer exceptional service. I'll bet their sales are coming at CATs expense.
FL
There are a lot of fairly convincing arguments for gold ownership. Have you seen Jim Rickards video on the IMF voting right re balance resulting in the institution of "World Money" in 2017? When you check some of the facts against the IMF website they do discuss re-balancing based on the BRICs contribution % to the world economy. It does appear to potentially allow 15% a threshold that would allow a shift in the reserve currency veto right. That said many of these foreign entities (China) still own appreciable american assets they don't want devalued overnight.
Where I grow skeptical is it appears that Rickards has made similar claims for most of the last 10 years with other mechanisms being the catalyst for a shift from U.S. dollar reserve currency. I feel that holding geographically diversified stocks can help hedge against dollar weakness. The emerging market hedge hurt right after the Trump election when the $ strengthened but the pronounced dollar strengthening appears to have run its course.
It will be interesting to see the dollar performance in 2017. Too much in the way of tax cuts and infrastructure spending and the U.S. could get another credit downgrade like 2011. Ryan recognizes this, so I don't think Trump will get everything he wants.
Have a good weekend.
FL
I've never been much of a gold bug because the valuation is influenced more by psychological factors rather than tangible factors. For this reason, I got my precious metal and industrial metal exposure in SWC. Think a wrote about it a while ago on this board. It got a take out offer today.
Still like the potential for palladium, but I may have to venture into the physical metal since the majority of the remaining mining stocks are S.African. Unfortunately, they are frequently affected by things like currency, strikes, power outages, etc.
With the apparent EPA changes, Mining may become more profitable in this Country.
FL
Why should NVS be any different from any other long term holder of MNTA. They have seen their 10% stake erode to 5% with the promise of more dilution.
FL
Been out of MNTA for several years but decided to revisit after this weeks Patent news on 40 mg Copax.
I got out about after attending the Annual meeting where Palo Alto partners outlined the ongoing dilution problem (about 5 yrs ago). In the past 10 years the share count has gone from 32 million shares to 70 million. This makes MNTA one of the least shareholder friendly companies on the market.
Even though I like the potential for 40 mg Copax, can anyone convince me that MNTA will let shareholders see any gains?
FL
Sorry about the delay getting back to you. I got an unanticipated update to Windows 10 OS that wiped out saved settings. I've reset my passwords so I'm good now. Would have done it sooner but got busy with work.
I would definitely go back to Praha. Sedlick Ossuary (Aka Bone Church -my son's idea) was macabre but interesting. We were in the Old Town area near the square. Had a lot of fun playing people from all over the US and Europe in Foosball. Great way to meet people while trying out the Czech beers (All Pilsner's that I thought tasted very similar).
I prefer your way of traveling (via Euro-rail). Although, we learned that some of the Czech trains outside the City are prone to mechanical problems. We were keeping everyone in the family happy so we hop scotched around to Amsterdam and Norway) via short flights. As it turned out, Hiking the Fjords of Norway was a welcome reprieve from the heat wave Prague was having at the time.
Looks like I'm going to lose about 10% of my SBS holdings since it is trading well above the July 7.50 calls I sold. I'ts a better strategy when the stock share price was not in such a strong upswing. I thought SBS was due for some sideways action after the quick run up from $3.50 to $7.50. But it appears to be making a strong run to $8.
The rain in June has been a welcome surprise since it is early in the dry season. As I have mentioned before, the supplemental supply from River diversion will go on-line next year. So the water supply crisis appears to be over. While I remain long term bullish, I'm anticipating a summer pullback in SBS and the US market, driven by any number of factors (Fed, Political uncertainty, high valuations, etc.).
Regards
FL