Loss Horizon

Wise words. Again, I'm from Russia. My country is run by one guy and his friends for the last 25 years. All opposition is either dead, in prison, or in immigration. Every elections is fake. The country is in a pretty bad shape, my heart aches. Germany is not that. It is maybe the opposite. The elections are real, opposition is very much active, the politicians at the top are quite diverse in my opinion. People are so much more happy and content.

Politics of the region has very little to do with personality of Mrs von der Leyen. The mistake of shutting down nuclear energy in Germany was not made by a single person or a group, it was a result of many different developments. Multiple big politicians being involved with Russia(btw, members of your favorite AfD are openly close to Russia) and its energy industry, people scared of Chernobyl and Fukushima, apparent success of renewable energy, troubles with building storage for nuclear waste. I have a personal story about that. Russia imported a lot of nuclear waste from European countries for a fee. The material was transported on the same railroad as passengers, where I personally lived. Then it was dumped in a pit somewhere in Siberian forests. I saw the special railroad cars made of lead many times, they had 8 pairs of wheels, with some soldiers always around. Sometimes they were standing on a rail station next to a passenger train. Unlike other countries, Germany has never exported its nuclear waste, which is quite a responsible decision.

I'm curious, do you believe "outsiders" won't be promoting people who make mistakes? Do you believe that "promoting leaders who make mistakes" is an inherent feature of organization "European system" and doesn't happen in other organizations?

Fantastic analysis. I would add a global energy disruption: 20% of global oil and 20% or global LNG are blocked. It will hurt all energy importers, as the market is quite efficient. Europe doesn't import much of Qatari LNG, but its importers are not bound by anything, they can redirect shipments to higher paying Qatar's customers, so the global price is what matters. One short term hope is that China is affected and it could negotiate passing of its ships, which will relieve global prices somewhat. Another result is upcoming wider transformation of warfare. Hundreds millions $ worth of Tomahawks and decades of production capacity have been spent in an instant, with no decisive victory. While cheap Iranian drones are effective too.

Thank you, that clarifies it.

Another writing mistake: "More than one dollar" is not enough, 1.01 is more than one yet less than what cash pays and less what S&P500 has paid historically. Both Buffett and Munger aimed at beating S&P500. A bit of nitpicking from my side, but this is a world class CEO who is going to be compared with his predecessor, including writing. Upd: my mistake, "more than one dollar of market value" = more than other investment opportunities on the market currently

I really hate Mr. Abel's style. Too much corporate speak, repetitions and complex meaningless sentences. Buffett was honest and straightforward and his letters did not read like average corporate nonsense. "Success" doesn't "benefit" from anything. A company may benefit, a company might have success, and the new CEO doesn't have any results yet to qualify as "success". Word "focus" is not a right combination with "alignment". "Alignment" is "ongoing" somewhere? What alignment, what is it ongoing? No context, filler words.

Nintendo Oh, I see it was already mentioned

https://www.economist.com/finance-and-economics/2026/02/17/will-investing-in-russia-really-bring-america-a-12trn-bonanza A good insight, that can be an explanation of why Trump is so inclined towards Putin and Russia. In Russia, formal property rights don't really work. The biggest assets are controlled by one person, with help of his relatives, the "family" of close friends, and their relatives. Putin can easily promise and grant a million square kilometers with deposits of oil and rare metals to Trump directly and personally, with minimal paper trail.

Anyone who takes it seriously has been losing money at least for the last 5 years.

Interesting: Europe is bad because it buys Russian oil, and the guy who buys most of it is good.

Yes. And it was the first nation where the US got involved, which is determined to fight, and which has a popular support for American help. In comparison, when the US spent a fortune on Afghanistan, Afghani folded weapons and surrendered to Taliban the moment US army left. I don't see much difference from Biden's policy here. No US units ever entered the battle, and none will. For Europe and Ukraine, the biggest change of new administration is not only stop of financial help, but also withdrawal of military capabilities, even for purchase. It's not about troops and not about money, it's purely political withdrawal. I understand that the talk about troops is only to make political messages heavier. But in fact, Ukrainian war was never an American war at all, unlike Venezuela, Iran, Afghanistan, Iraq, Vietnam, Korea and others in the long list.

How do you determine, which word from President Trump should be taken literally, and which is not?

The POTUS decided to walk away in the middle of the biggest threat in 80 years. Not before, not after. That's not only about "fair share", that is quite an ugly move. But it wouldn't be so bad if it was actually about money. Right now Europe is paying for mostly everything, but it's missing few critical weapons and capabilities. It will take decades to develop them. And the US is not willing to sell them freely, it's using them as a blackmail. Europe would be so much better off if the US just sent an invoice for the missing capabilities and supply them until they are developed. But it's not happening. That's the end of the alliance and a historical betrayal. I like how the internal policy narrative is going two ways: "It's not our war", and "We shouldn't pay for free loaders, it's not fair". I suppose that covers most of people, those who don't understand the nature of the war, and those who do, but just concerned about fairness. In reality, the US has had a unique opportunity to shape the war in Ukraine. The US chose to do that in the first 3 years, and it helped tremendously. It chose to mostly stop help to Ukraine from the start of 2025. That's fair, it's your money and you can spend it however you want. If you would fully support Ukraine, it won't be losing as badly, and it would save quite a lot of lives on the defensive side. I hope there are more worthwhile causes for you to spend on.

That systemic misallocation of capital surely should become a real problem at some point?

Is this question about Presidential and Parliamentary Republic systems? In the US, the President is elected directly. In many European countries the Parliament is elected directly, and then it appoints the head of state. (https://en.wikipedia.org/wiki/Parliamentary_republic) European Union is built as a Parliamentary Republic. The President is elected by the European Parliament, members of which are directly elected by all citizens. (https://en.wikipedia.org/wiki/President_of_the_European_Commission)

Are there politicians who you mostly support? I'm sure they did that once in a while. Trump, for example: https://www.reuters.com/business/trump-cuts-tariffs-beef-coffee-other-foods-inflation-concerns-mount-2025-11-14/

Democracy works here to high extent, I think? Lobby from companies and worker unions. Protesters, polls, political organizations. Political parties and political discussion. Even elections with "green party" and their opponents. Merz doing his job. Who else needs to rise there? Everyone is participating and always was. Democracy is only absent where strong leaders rule with iron fist. When politicians are weak, democracy is strong. Sounds pretty democratic to me if somebody could have their voice heard? But I don't think that's what happened. I think majority of society wanted nuclear power down. I agree that it was a mistake.

Nothing needs to be done there. It will resolve itself out once people see real world data from industry and the markets. I wouldn't call that 100% incompetence. When it was introduced, majority of people wanted to shift to electric cars in the far future of 2035, and Elon Musk demonstrated that it can be done at scale and with profit (don't pay attention to rotating CFOs). Now as the date is coming soon and the change feels more difficult, people are responding and adjusting for the new reality. A lesbian strong leader is not necessary for that, the mainstream politicians and bureaucrats are changing the course of action as part of their job. I have some critique for EU and Germany, but it doesn't match mainstream Twitter discourse. I think people on internet are aggravated about wrong things. After my Soviet/Russian background, I love Europe and the US with all my heart. They gave me opportunities which lifted me quite high in life.

I did not believe for a second that the 2035 ban of ICEs will happen. It's just not possible technically, economically and socially. I think people underestimate ability of people to change course of actions based on reality, even if it's European regulators. Btw, critics of Trump often make the same mistake, assuming that his administration is incapable of adjusting announced moves. My bet on Toyota is going slightly below S&P500, but at least without AI exposure. Curiously, Toyota is criticized a lot for slow transition to electric cars, but the stock was never too cheap in recent years.

I was following the natgas situation in EU in Germany in 2022-2023 very closely. By the start of the war in February 2022 Putin had EU by the throat. The storage facilities in Europe were mostly empty at that moment. Over 60% of gas in Germany was coming from Russia, the industry was dependent on gas, and homes are largely heated by gas. According to German law, homes take priority, so in case of rationing it was industry which would suffer a lot. By the autumn of 2022 everyone was watching how gas storage was filled in preparation to winter. It was a massive relief when the critical milestone was hit sooner than expected. Then Germany has built its first LNG terminals in 9 months: https://en.wikipedia.org/wiki/Wilhelmshaven_LNG_terminal When shit got serious the government moved rapidly: The market did the rest, as the global market of LNG is distributed and largely independent. The traders noticed high European prices and redirected vessels there. Russia is selling LNG too, but in much smaller quantity, and most importantly, they can't blackmail there like in case with the pipe. -------------------- Interestingly, I was looking to buy an apartment in 2023. I came around a listing where the seller disclosed unusually high heating costs. I looked deeper into the documents and found that it was natgas heating, and the owners were afraid of fuel prices rising even higher. They decided to double monthly prepayment for the year just to be on the safe side. I already knew that the prices are going down, and that the owners will likely get significant reimbursement after the year is closed. But other buyers were scared of that. Sadly, it didn't work out for me for other reasons, but it was a chance to spot a hidden gem, which nobody else noticed.

Good list! I will take a look at those. Nice article. Not all points are good though. The decrease in number of patents in Euro area looks the same as in US, what's the point? The graph of energy prices is missing a very important development, as it happened in this forum thread already. The years of 2022 and 2023 were outliers and it was the peak of the energy war. The EU has transformed the whole energy sector in a couple of years after Russia closed the biggest pipe, and the prices are going down. I would consider it as a major win and a sign of immense capability of the EU countries. Here are more recent prices: https://tradingeconomics.com/commodity/eu-natural-gas Electricity is more problematic and it's a separate discussion, but some good steps are already taken there. People like to blame the bureaucracy for all problems, but I think that relationship with China and developments in China are a much bigger problem, which doesn't have anything to do with bureaucracy and regulation. There is a new big topic in China called "Involution", which refers to over production and overly aggressive state subsidies paid by Chinese taxpayers. China has had a massive boost in immediate competitiveness, but it's not yet clear if their progress is sustainable long term.

Those things probably mean something specific to you, but without context it doesn't tell me anything. What's your top 10 most problematic regulations?

Just defeat liberals and Europe is great again?

My failed bet on https://finance.yahoo.com/quote/SHA0.F/ is suddenly paying out. Looks like China can't do completely everything in industrial engineering and manufacturing after all.