Notes From All Over -- The Mid-Day Edition -- August 13, 2020

US crude oil supply: coming down. Now down to 35 days but still well above the bullish 21 days or less. 

Hurricanes: we were told this was going to be a bad year for hurricanes. We're reaching the height of hurricane season. It does appear that the industry is rounding up  when it comes to defining hurricanes. In other words, if the wind gusts/sustained winds don't quite meet criteria for a hurricane, the industry says "close enough" and calls them hurricanes. Just an observation. I'm probably wrong.

Nonsense: CNBC is again spending an hour on whether TSLA, AAPL splits make sense. What nonsense. The interesting thing is that none of these "talking heads" have any understanding of human nature, or if they do, they did not bring that up. And we move up.

AAPL: speaking of which, AAPL is up over 2%, up over $10, now trading above $460. Absolutely crazy. 

By the way: I wonder if CNBC folks have the same thing to say about "reverse" stock splits. It seems that if one uses the argument that a stock split makes no difference in total value, then that would also be true of a "reverse" stock split. And yet, I'm pretty sure folks don't see a "reverse" stock split as a "neutral" event." And we move on. 

Coin shortage: from a reader who has extensive experience in the industry --

Almost all the bank lobbies are closed here.  Driveup banking only.  So, a large merchant will have Brinks deliver a coin order and take away a deposit, same as always.  But the mom and pop shops are in a bind.  Normally, they'd take in a bank bag and be served at a commercial window.  Now - they're faced with a pneumatic tube.  Tellers can't send rolls of coin out thru a pneumatic tube and merchants are having to fold their zipper bags to even get them to fit into the carrier for deposit.  Coins are too heavy.  Some locations have an extendable tray that can be accessed thru the wall of the bank - but there will only be one of those per facility and the line for that is ultra long.  I've seen merchants relay the tube back and forth several times because their cash and check deposits are too voluminous to fit thru a single tube.  It's nuts. Wildly inconvenient for independent merchants. And what bank lobbies will reopen for masked "customers"?

So - the "shortage"  is malarkey.  But, the message is widespread just like so much other COVID nonsense.  I often use a contract Post Office at a local convenience store/gas station.  I had a couple graduation gifts to mail.  I tried to pay with a $50 - the clerk pointed to an official "exact change" laminated poster.  He had the bills, but told me he'd have to round up - I'd lose 47 cents.  

Of course, I reminded him he could just give me 47 cents in stamps.  He was genuinely amazed.  This is a fairly pleasant, adult man whom I've seen on multiple occasions.  He wasn't swamped nor rattled.  He'd bought that "exact change" mantra... hook, line and sinker.  These people vote.

Coin shortage: of the twenty or so retail shops -- mostly service stations / convenience stores -- I stopped at on my recent cross-country trip -- about four stores had an exact change policy. Several stores did not have an exact change policy and when I made a joke about the issue they had no idea what I was talking about. 

Back to AAPL and the split: it truly boggles the mind why CNBC would spend such an inordinate amount of time on this subject. Then it dawned on me. Connecting the dots is easy: CNBC --> NBC --> MSNBC --> Microsoft. These talking heads are all Microsoft apologists; it's in their DNA. It drives them nuts to see what AAPL and Apple is doing. AAPL is up another 2% today on no news and yet CNBC has not even mentioned it, except in this discussion on splits.

Peloton: some time ago I mentioned that it was pretty clever of Peloton to re-brand themselves as a streaming / content company rather than as a fitness company. But that moat appears not to be very wide. From MarketWatch today: Peloton's stock falls toward 6th-straight loss after report of coming competition from Apple. 

Apple [is said to be] developing a new subscription for virtual fitness classes, which would rival the virtual classes offered by Peloton and Nike Inc.

Big stories: the two of the three big stories we were watching this week (Biden's running mate selection; college football decision; Uber/Lyft/California injuction) have been settled. The Uber/Lyft/California story is yet to be told. Probably next week.

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. 

Refiners: there are some sectors I have never invested in and said I would never invest  -- airlines and refiners. 

I've broken that rule a couple of times and have not done well, reinforcing my feelings about both. But if the definition of insanity is doing the same thing over and over again expecting a different result, call me insane. I now have positions in two refiners and loving it. The moat is getting wider. Marathon is closing two refineries including a huge one in California, and could close more (including the Mandan, ND, refinery). In addition to closing refineries, no one is building more refineries. They can expand and they can become more efficient but greenfield refineries? Not gonna happen. Yes, I am aware of the "Dickinson" refinery.

Brokers: folks wonder how no-commission brokers can make money when they charge no commissions. They have many other services from which they raise revenue. But think about this. AAPL will pay 82 cents/share and there are in excess of 4 billion shares outstanding. That's about $3 billion, much of which will be flowing to brokers. The average owner of AAPL shares probably leaves that cash in the account for at least a day and maybe much longer than that. It's a book entry for Schwab and certainly Schwab is making money on that money.  

Stimulus bill: Schumer / Pelosi can afford to wait. If Biden/Harris win November 3, 2020, the Democrats will make sure the "lock down" continues, perhaps spreading stories that Covid-19 has actually gotten worse. The worse they can make it seem, the bigger the infrastructure and big-city bailout they can pass in January, 2021. This is not rocket science. They only lose if the GOP can convince Americans that it was the Dems that held up the stimulus program, but with the media on the Democratic side, that ain't gonna happen. Trump and the GOP will be blamed for the stalemate.

Old school. This was a no-brainer. Link to LEGO here. Be sure to watch the video and listen to the presenter who actually designed this model. Absolutely fascinating. Don't tell Sophia. It's a surprise.