Luke

At a time of tremendous suffering and displacement, wherein countless lives have been lost and massive financial resources spent for the control of Ukraine, this report raises major concerns about the future of land and food production in the country, which is likely to become more consolidated and controlled by oligarchs and foreign interests. These concerns are exacerbated by Ukraine’s staggering and growing foreign debt, contracted at the expense of the population’s living conditions as a result of the measures required under the structural adjustment program. Ukraine is now the world’s third-largest debtor to the International Monetary Fund (IMF)17 and its crippling debt burden will likely result in additional pressure from its creditors, bondholders, and international financial institutions on how post-war reconstruction – estimated to cost US$750 billion – should happen.18 These powerful actors have already been explicit that they will use their leverage to further privatize the country’s public sector and liberalize its agriculture.19 What the IMF wants: https://www.bloomberg.com/news/articles/2024-09-04/ukraine-braces-for-imf-pressure-to-devalue-currency-cut-rates

The report details how Western aid has been conditioned to a drastic structural adjustment program, which includes austerity measures, cuts in social safety nets, and the privatization of key sectors of the economy. A central condition has been the creation of a land market, put into law in 2020 under President Zelenskyy, despite opposition from a majority of Ukrainians fearing that it will exacerbate corruption in the agricultural sector and reinforce its control by powerful interests. The findings of the report validate this concern, showing that the creation of a land market will likely further increase the amount of agricultural land in the hands of oligarchs and large agribusiness firms. The latter have already started expanding their access to land. Kernel has announced plans to increase its land bank to 700,000 hectares – up from 506,000 hectares in 2021.10 Similarly, MHP, which currently controls 360,000 hectares of land, seeks to expand its holdings to 550,000 hectares.11 MHP is also reportedly circumventing restrictions on the purchase of land by asking its employees to buy land and lease it to the company.12 By contrast, small scale farmers in Ukraine demonstrate resilience and a great potential for leading the expansion of a different production model based on agroecology, environmental sustainability, and the production of healthy food.14 It is Ukraine’s small and medium-sized farmers who guarantee the country’s food security whereas large agribusinesses are geared towards export markets Today, thousands of rural boys and girls, farmers, are fighting and dying in the war. They have lost everything. The processes of free land sale and purchase are increasingly liberalized and advertised. This really threatens the rights of Ukrainians to their land, for which they give their lives.”16 FIRE SALE IN UKRAINE!!: https://privatization.gov.ua/en/product-category/mala-pryvatyzatsiya-en/

WAR AND THEFT THE TAKEOVER OF UKRAINE’S AGRICULTURAL LAND The war in Ukraine has been at the center stage of foreign policy and media reports since February 2022. Little attention, however, has been given to a major issue, which is at the core of the conflict – who controls the agricultural land in the country known as the “breadbasket of Europe?” This report addresses this gap – identifying the interests controlling Ukraine’s agricultural land and presenting an analysis of the dynamics at play around land tenure in the country. This includes the highly controversial land reform that took place in 2021 as part of the structural adjustment program initiated under the auspices of Western financial institutions, after the installation of a pro-European Union (EU) government following the Maidan Revolution in 2014. With 33 million hectares of arable land, Ukraine has large swaths of the most fertile farmland in the world.1 Misguided privatization and corrupt governance since the early 1990s have concentrated land in the hands of a new oligarchic class. Around 4.3 million hectares are under large-scale agriculture, with the bulk, three million hectares, in the hands of just a dozen large agribusiness firms.2 In addition, according to the government, about five million hectares – the size of two Crimea – have been “stolen” by private interests from the state of Ukraine.3 The total amount of land controlled by oligarchs, corrupt individuals, and large agribusinesses is thus over nine million hectares, exceeding 28 percent of the country’s arable land. The rest is used by over eight million Ukrainian farmers.4 The largest landholders are a mix of oligarchs and a variety of foreign interests – mostly European and North American, including a US-based private equity fund and the sovereign fund of Saudi Arabia. All but one of the ten largest landholding firms are registered overseas, mainly in tax havens such as Cyprus or Luxembourg. Even when run and still largely controlled by an oligarch founder, a number of firms have gone public with Western banks and investment funds now controlling a significant amount of their shares. This international financing directly benefits oligarchs, several of whom face accusations of fraud and corrupt dealings, as well as the foreign funds and firms associated as shareholders or creditors. Meanwhile, Ukrainian farmers have had to operate with limited amounts of land and financing, and many are now on the verge of poverty. Data shows that these farmers receive virtually no support compared to agribusinesses and oligarchs. In recent years, Western countries and institutions have provided massive military and economic assistance to Ukraine, which became the top recipient of US foreign aid – marking the first time since the Marshall Plan that a European country holds this top spot.7 As of December 2022, less than one year into the war, the US has allocated over US$113 billion to Ukraine, including US$65 billion of military aid,8 which is more than the entire budget of the State Department and USAID globally (US$58 billion).9

Yes, but in that case even better to just own the nasdaq directly if you believe in the longlasting continuity of the tech mega caps, or your favorite tech stock

I think its better to go short EUR and borrow it than USD although i wouldnt mind owning debt in them vs high quality assets that pay a higher interest. Like, a mortgage at 3% in EU is still banger if you reinvest it in good stocks!

Haha! Probably the right move here! But surprising to see such a large sale from high up in the management.

Regarding the state of the US and its future in this trio US-EU-Asia i liked the description by wikipedia on american affairs journal view on the developments in the US: "Production and technical expertise have shifted to China and Asia, domestic capital has flowed into unproductive share buybacks or tech schemes (Uber, WeWork), and America has become a country with a two-tiered service economy, with bankers, consultants, and software engineers at the top and Walmart greeters and Uber drivers at the bottom." "It is hard to look at Wall Street trends over the past thirty years without drawing the perverse conclusion that the most effective use of capital, in Wall Street’s eyes, is to pour it into financial assets or the valuations of software companies. For over thirty years, the PRC has consistently taken the other side of this bet. The PRC evidently believes that hard assets and manufacturing capabilities are good to own, not only for their immediate economic returns but because they bring many valuable intangibles and synergies with them: a highly skilled industrial workforce, faster prototyping cycles, and mastery of supply chains. Thirty years on, can anyone really argue that the PRC bet wrong?" This is also true for other asian coutries, taiwan, India etc. They all have the manufacturing hubs. while a lot of that is still owned by US investors, the design and financial companies owning that infrastructure only provide scarce jobs to a IMO tiny elite while a large majority is in a bad middle income trap and angry. Onshoring IMO is not possible so overall development of the US will not be great but the tech high flyers will probably still do well!

Yeah there are huge challenges ahead but with the right political leadership and reforms of the EU this continent can flourish. Sadly, so far its seems like that this wont happen that fast but the rising right and alternative parties are a small sign of wanted change. The worse it gets, the more voters will switch. But it could very well also be that the train is gone for good and that europe will just fall behind to a rising asia.

First, the diagnosis. In finance and accounting, America has overlearned the lessons of the 1960s through the ’90s. Visionary companies of the time, from Teledyne to Berkshire Hathaway, took the view that the efficient use of corporate capital distinguished good managers from mediocre ones.4 It was undeniable that, at the time, capital was often poorly allocated, and corporate leaders have since made their reputations (and fortunes) by increasing shareholder returns. The drive for the highest possible capital efficiency, however, eventually created bi­zarre incentives. Wall Street’s ideal company became one with no assets and infinitely scalable profits. Great American companies in manufacturing-based, capital-intensive industries, like shipbuilding or steelmaking, were encouraged and finally forced to outsource their manufacturing overseas—not to save on labor costs or improve their output, but simply because outsourcing manufacturing to a foreign third party made their balance sheets look more impressive. If they were unable to offshore, they abandoned product categories altogether, which means the United States entirely lost those industries and capabilities. It is hard to look at Wall Street trends over the past thirty years without drawing the perverse conclusion that the most effective use of capital, in Wall Street’s eyes, is to pour it into financial assets or the valuations of software companies. Some reason for the increasingly high multiple of the SP 500. Question is if this trend reverses a bit with onshoring and anti-China sentiment or if offshoring just slowly changes countries with still chinese manufacturing owners?

Europe is actually a country with tremendous potential if it would have more of its own strategic positioning and a healthy leadership change towards competence and independence. I think that coming decade this political leadership change is forcably going to happen the more previous political mistakes become apparent (energy crisis, migration crisis, leaning too much to the US instead of eastwards, starting to favour own industries, blocking out US tech in favor of own players to get technology independent etc)

If you take Europe in its entirety, you will find many high-quality businesses comparable to US ones. Lots of them are high up in the value chain, too. But I guess it's again this sort of tribalism that Americans have to feel superior above every other country, which is why they like to read about how bad everything else is and how amazing the US is.

Bit too simple @Dalal.Holdings. Europe was historically and is still an important player in tons of businesses. The cliche "innovates, replicates, regulates" is just not the reality although it might sound catchy if you are a newspaper agency trying to sell articles. China is also a more and more innovating emerging power that is on par with western economies. Situation is more complex and your statement doesnt do it justice.

It's interesting what they demand from China is kind of the opposite of what they are doing themselves:

In the perfect world, i would have 500m AUM and would invest all of it in Berkshire, Fairfax, LVMH and Prosus. Then i rent a nice office with huge windows in some capital hub, make youtube posts of how to be as smart an investors as me, read some books, browse the web and cobf and make big bucks for doing nothing EDIT: AND will have YOU guys defending me for doing so!!!

Anyways, to each their own. If you think twice, you don't want to pay someone 20-25% of your gains above 6%. If you are not smart enough to understand investing then i guess give him his money but then i question how you made it to that much money in the first place to even become an investor in this fund. Thats the weird thing. You are already very wealthy and must have brains but then decide to give someone much of your money who invests it in berkshire

I said it's easy money, and I am jealous of them to have that much AUM. I personally don't care what they charge, but it's worth discussing if what they charge, is objectively a fair transaction. Preying on widows and orphans and charging high fees are not the same indeed. Still, one can question the moral character of such actions. If you decide to ONLY see his letter, then that's what you decide to see. Paying someone 2-3% a year for holding a +30% Berkshire position is not only not fine, it's also dumb. What does the finish line mean? If people have enough cash so they can pay him 2-3% of their returns per year they shall do it. To me, it's dumb.

Thanks for sharing, China IMO most interesting Country to follow right now

Yes there are, especially if you are hiring someone and paying them significant amounts of money to do what you can do too, because its easy. But thats the point, holding Berkshire for 10 years is something anybody half reasonable can do. And they will perform the same excl. the costs. Investing in small caps is not style points. Its about outperformance and difficulty. I can invest in BRK myself. I might not be a genius that can invest in the software field small caps and do 25% a year but id be willing to pay someone who could do that. But then again, just owning Constellation Software for 10 years isnt of morally high character either, then just tell your investors to buy it and close the fund. I think investing in Apple needed more guts and DD then investing in Berkshire or other diversified asset managers. If you are smart enough to go to a money manager and not invest in the SP 500 (we can debate that), then you SHOULD be smart enough to not go to a manager who invests the majority of stocks in buy and hold megacaps that are diversified asset managers. What additional service do they charge? Comforting me when markets are down? For ten thousands of dollars a year? While they themselves have no clue how long things will last or how the market will develop? Taking fees and buying a huge berkshire position is NOT an honest thing to do.

Change my mind!

With semper at least you get 60% of the PF in relatively less mega cappy stocks:

But also, if you invest i think 1m then your annual fee drops to 0.5% and higher it drops to 0. But still, id hate to pay 20% of my gains above 6% to some guy who does 0 trades for 8 years drinking coffee at home and reading books Consider this: You give Guy Spier 800k of your money. He takes 1.5% annually of that->12k a year, for investing close to half of his fund into Berkshire, Exor, Prosus and Nestle. So i pay him 500 bucks a month just to hold these stocks HA! And mastercard, bank of america? Are these hard to understand mega cap stocks you need to have 5 years of training to understand when to buy and when to sell? I am envious, he makes bank for doing quite literally nothing Thats why i think Nick Sleep was the best fund manager ever. He told you the truth: Get out of this fund and just buy Berkshire, Amazon and Costco and do nothing. Thats transparent, thats honest and thats of high moral character. And also @John Hjorth, if you want to invest with Semper or Guy you need to prove yourself to be of the right "character" for the fund, they ask you if you panic liquidate etc so you HAVE to have background knowledge in investing in order to get in at the first place.

Did he ever say anything about that?

Yeah well, if you are smart enough to understand berkshire is a good vehicle then you should be smart enough to understand that the best thing you can do is hold it through ups and downs. Thats literally what buffett and munger preached all the time. If you think you need to pay 1.5% insurance+outperformance fees for a case that something at berkshire changes so significantly that YOU dont understand but semper understands then well...pay him the money

Thats not saying that i think investing in a fund is per se bad. There are fund managers that are really smart and significantly outperform and do that by not investing in asset manager mega caps. I respect that.