Loss Horizon

I like the language of the top newspapers like WSJ. I can see they put extra effort to make everything sound neutral and never use loaded and emotional phrasing. Even for controversial events, it's always "who did or said exactly what, when, according to what source". The lack of emotions and drama gives it less entertaining value comparing to others and it's sometimes hard to read. But I appreciate that approach a lot, almost nothing at that level of professionalism exists in Russian, sadly.

Thank you, that is very kind! Nazi is the most famous and atrocious organization, but I've seen more recent and immediate examples. I watched my country turning isolationist and ultra militaristic. I never watched or read BBC, MSNBC and CNN. My main newspaper for the last 10 years has been WSJ. That is in my opinion the best newspaper in the world. This year I tried to change to FT, and I'm a bit disappointed so far.

No need to declare a war. It could be let's say Special Military Operation. An executive order should be enough.

I see that almost 3 million people work for the US government: https://usafacts.org/articles/how-many-people-work-for-the-federal-government/ According to your logic, every time the US President is changed from one party to another, he shall commence an ideological cleansing among 3 million workers. I would expect the workers to do their job with no regard to their personal political beliefs. But I'm not an expert in the US politics.

https://www.ft.com/content/db1c00d8-1118-474e-8230-c7139b981556 (sorry paywall) "Why Maga hates Europe: Trump takes the culture wars across the Atlantic" This article finally explained to me existence of this forum thread. Europe is a new major ideological enemy of "MAGA" movement. Also I finally understood the meaning of "Deep State" - it's all government employees, who are not aligned with "MAGA". The goal of "defeating the Deep State" means to replace everyone with loyal to "MAGA", so nobody is sabotaging any actions of the Trump's administration. I feel that once most of the employees are replaced, and US Army and Navy are also replaced with "MAGA", the attack on Europe could not only be economical and political, but also directly military. A full scale military invasion will not be out of question, as ideological base is already prepared: "MAGA" would invade Europe to "defend traditional European values" and in general to fight "liberals". A good target, relatively weak defenses with US weapons, which can be disabled remotely. Russia could take a part on the East.

Folks, you wouldn't believe how tiring it is to argue with people who are following online media about climate change problems and technology. They are 100% set that bureaucrats and politicians are slowing down energy transition and adoption of electric cars because of corruption, stupidity and being too slow, including in Europe. Ironically, Musk who championed the cause of saving humanity with electrical cars and antagonized the Big Oil and Legacy Auto, sensed change of the wind, and entered the cultural war becoming biggest anti-woke figure. Interesting that both camps love China. It's at the same time anti-woke authoritarian and leading in solar/wind energy and electrical cars.

If you used gas prices up to December 2025 I would believe that you are interested in the topic and invested time into analysis. That's the most important thing happening in the last years. Russia played the card of cutting of the gas suddenly and completely, sacrificing its biggest source of revenue, aiming to destroy European industry. And many believed that it will do a critical blow, because dependency was too big. But the bureaucrats managed to resolve gas supplies quickly and brought the prices down in a couple of years without Russia, which was not considered possible. Europe quietly won the energy war, somehow preventing recession and gas shortages. I would say more about other parts, but I don't believe you are interested in the discussion.

Everyone is a fascist when put in the right environment. I don't see a reason to argue, I know all the talking points very well. "Immigrants", "transgenders and gender studies", "welfare state", "bureaucracy", "overregulation", "lack of technology and innovation", "bad politicians" - that one has no limits, "censorship and lack of freedom of speech", "laziness", "liberals", "eco terrorists", "green agenda", "Islam", "socialists", "economy stagnation", "Covid Hoax", "free riding on US defense", "replacing of white Europeans with people with darker skin". There is probably more coming up every day, people are very inventive. I have of course my view on some issues. However none of them ever took any attention from Warren Buffett and Charlie Munger, whose company is in the name of this forum. I don't know why it's here.

I can totally understand you folks. Having a strong and unstoppable national leader who you think is acting in your interests is a most intoxicating feeling. I wish I could feel that ever again.

This is essentially a copy of Soviet and Russian propaganda about the West. The West under leadership of the US was always in permanent civilizational and moral decline, it was called "rotting West". The workers in the West were mistreated and suffered from capitalists, unlike well-off Soviet workers. Every single crisis was blown out as a sign of the forthcoming collapse. People stood in food lines, didn't have running water inside, and believed in superiority over the West for almost a century. Soviet Union also had some strong leaders, who had unlimited power and ruled by executive orders, to do "the right thing for the people". That didn't help economically and socially long term unfortunately. I guess for a strong leader the biggest threat is existence of successful societies where top leaders don't possess full power personally.

That's a good question. What exactly is the nature of the war? On the first day of the full scale invasion Russia sent not only the army, but also massive columns of riot police with no battle grade weapons. Russia thought that Ukrainian army would be too scared and would not fight. Russia saw the main problem in suppressing civilian unarmed protests. When Russia briefly captured Kherson, what did they do first? They built a network of torture prisons, as a way to suppress resistance and protests. Russia captured large parts of Donbass in 2014. What has happened to them since then? Complete economic and social devastation. The current head of that area Pushilin is a former head of a major ponzi scheme. The previous leaders were even worse. A majority of adult men from the captured area were drafted into Russian army and died on the war against the rest of Ukraine. Most people on the West have an idea about wars that soldiers need ideology, motivation and high moral. The Russian war is completely different. Russia built a well optimized pipeline of sending people to death against their will. The front line units are staffed with the most cruel and unhinged folks they can find, and their role is not to fight the enemy. They form the skeleton crew and send soldiers to the battle at scale, using nice talking, pressure, violence, torture, executions, whatever is necessary. The war censorship and propaganda tries to hide that, but it leaks systematically on social media. Back to the question, what Ukraine achieved in the last 3 years and thousands of combat deaths? No network of torture prisons and riot police units, no economic and social devastation which would come with Russian rule, no forced draft of all Ukrainian men to the Russian army for the next war in East Europe. Only millions of refugees to Europe, instead of tens of millions fleeting the whole country of Ukraine. That's some of what they fight for.

It's highly unusual for one person to quickly undo 80 years of state politics legacy, even in such a powerful position as POTUS.

Generations of Republican Presidents systematically strengthened military US presence in Europe and antagonized Russia. It's kind of understandable that Europe expected that to continue, or at least that US would not quit such an old and committed alliance so quickly. Europe is acting accordingly now, but it became a crisis because you can't establish and train an army quickly. Soldiers and officers need years and decades to achieve the level of organization that the US have.

The most puzzling for me is that the US administration puts zero value on the whole trade with Europe. Transactional approach is fine. Don't spend money for nothing, don't give money if you don't have anything in return. But the very prosperity of the US stands on trade, and a big proportion of trade is with Europe. If Russia wins, it will continue waging the war further west, deteriorating European economy. Less IPhones, Coca-Cola and Google ads will be bought in the future if Europe is defeated. Did President Trump donate any weapons to Ukraine? I thought he is selling now. Which is quite beneficial for the US? I'm also puzzled that this war is a political burden in the US, as no single US army or navy unit entered the battle. Ukraine needs only three things from the US, which are sadly not quickly replaceable by European allies: Starlink, Patriot, and Intelligence. Starlink will operate regardless of its use in the war, there is not additional cost to that. Patriot systems are now bought by Europe. Intelligence is the only really costly option. But it would probably still operate in this war. The choice is to share it with Ukraine or not.

Hi folks, I'm sorry to intervene in your discussion. I like reading documents like that, it looked very curious. That's the document referred in the press release: https://www.dni.gov/files/ODNI/documents/DIG/DIG-Declassified-HPSCI-Report-Manufactured-Russia-Hoax-July2025.pdf The 90% of the document is a proof that there was insufficient evidence that Russia preferred Trump over Clinton or vice-versa. However I can say that victory of Trump was a massive national celebration in Russia. Both times. It would never come to my mind that Russia would not prefer Trump. They might not have said that publicly, because saving face is important in Russian culture. You wouldn't voice your preference about an outcome you don't fully control, like US elections. Here are state controlled media: https://ria.ru/20161109/1480965810.html - The State Duma greeted the news of Trump's victory with applause. https://korrespondent.net/world/russia/3806129-ynauhuratsyia-trampa-stala-hlavnym-sobytyem-dlia-rossyian-v-yanvare-opros - Trump's inauguration was the main event for Russians in January, according to a poll https://korrespondent.net/world/russia/3808881-tramp-obohnal-putyna-po-upomynaemosty-v-rossyiskykh-smy - US President Donald Trump topped the list of the 10 most mentioned people in Russia in January, according to Interfax, citing data from the Comprehensive News Analysis System (SKAN). https://www.kp.ru/daily/26605.4/3621324/ - Before the election, Donald Trump was generous with his promises to Russia. He said he would help defeat terrorists in Syria and recognize Crimea as Russian territory. The billionaire won the presidential race. Political scientist and Americanist Mikhail Sinelnikov-Orishak and professor at the Academy of Military Sciences Sergei Sudakov told Komsomolskaya Pravda what Russia can expect from the new American president. https://www.bloomberg.com/news/articles/2017-02-16/kremlin-said-to-tell-media-to-cut-back-on-fawning-trump-coverage?cmpid=socialflow-twitter-business

Very good point. That would be a problem only if these CapEx investments don't produce a reasonable profit to cover the depreciation. So yes, it's probably a big problem. But I wouldn't try to predict timing for the end of speculative mania. Maybe when AI fails to deliver, the companies can pump and mine a new cryptocoin with the gigantic useless GPU capacity and report new "profits". And then something else after that.

I knew for a long time that technical analysis can not possibly work in a random walk. If you try to predict price movement based on a chart, it is always possible to find historical charts which look exactly the same to a point, where some will go up and some will go down. Yet I fell for "technical analysis" in Graham's "Intelligent Investor". He described cyclical ascension and fall of the market around some average value. I under invested in stocks in the last 10 years, because the market has been "overvalued" for so long, and lost quite a bit.

SpaceX is currently in the business of exploding rockets. Every explosion advances the valuation.

It feels like "miles driven" and "miles per disengagement" are metrics which shouldn't be used with autonomous driving. I can push a cart downhill and it will drive autonomously for a few seconds until it crashed into the ditch. If I'm obsessed enough I can do that continuously for long time and clock many "miles driven autonomously" and "hours driven autonomously". It will be good numbers, but they won't tell anything about quality of the product. "Miles per disengagement" is scary as hell. If I need to take over an automatic driving system every 2 minutes, it would be easy, because I stay engaged myself. If a system makes a mistake once a year, I will be happily sleeping by the moment it drives me off a cliff. Those metrics assume too much of good faith from the companies who develop the systems. You would think they are all highly skilled, motivated and honest people, so those indirect metrics indicate real progress, and if something goes seriously wrong then somebody would blow the whistle. I hope so. They could also be run by deceitful and greedy entrepreneurs or managers who make riches by pretending. In airline industry, there is a respectable metric of flight hours per fatal accident. But that metric is never a goal by itself and it was not improved by focusing solely on it. It was improved by design of engineering systems to achieve reliability and safety, by specific standards and practices of operating flights, by developing the Crew Resource Management system to reduce human errors in the cockpit. I would love to see specific factors and reasons of why the autonomous driving systems are reliable. So far I only see application of the modern pattern matching AI, which doesn't exactly demonstrate capability of systematic protection from errors and failures.

I remember 3 years ago EUR was considered done for good, it sank below 1 USD. European industry faced obliteration because of the energy war, and sentiment for the currency was so negative. On top of that the dollar paid significantly more interest. Fast forward to now, USD combined with its superior interest was not worth it versus just holding EUR, contrary to all "common sense" forecasts.

I believe the biggest part of the problem is the past decade of ZIRP. When interest rate goes below 1%, asset prices tend to aim for a 100x multiple. Home is a financial asset, so home prices moved towards 100 years of yearly rent. Success of ZIRP would make home ownership physically impossible unless inherited. In reality the prices didn't reach 100x, but what we got is already practically unaffordable. At the same time old home owners enjoyed massive appreciation in price without doing anything. If central banks come to their senses, the prices for homes will go down again to valuation balance against average salary, according to the rate. But if the rate is not above 10% again, we'll never see real estate affordability of 70-s and 80-s. I'm personally hit very badly by the rate policies, but I'm optimistic that the valuation balance will recover in the next years. At least current 10-years rates don't threaten with near-zero any more.

Good point, a timeproof weapon indeed. Some weapons will of course be in use for a long time. But not all. I try not to follow the Russian war closely, I can't handle the horrors. But I already saw that there have been multiple shifts in technology, as it's the first full scale war between big industrial countries since WW2. Tanks lost relevance and importance. During the war, there were zero tanks against tanks battles. Expensive rockets are often less effective than cheapest drones. Traditional anti-air defenses are all developed against big, fast and expensive targets, they struggle against cheap drones. Military-grade encrypted communication systems are too slow, and high-speed digital connections like Starlink are much more important. Jammers against drones are largely obsolete by drones controlled via fiber optics, which China supplies at scale and at low cost, and also by AI path finding. Fighter jets and bombers don't approach the front line any more, they deploy the new gliding bombs from a distance. The war at sea is changed completely by naval drones. Not going bankrupt is not a sufficient reason to invest in a stock, a relatively good return is also necessary. But I wouldn't count on defense contractors not going bankrupt. Their operations might be critical and essential for national security, but their equity is not. They could possibly restructure and wipe out all shareholder equity, and continue the critical operations after that as if nothing happened. According to this article, defense contractors do go bankrupt: https://www.cambridge.org/core/journals/business-and-politics/article/leveraging-national-security-private-equity-and-bankruptcy-in-the-united-states-defense-industry/A6DC30F360EF19EF1BECB9BF2D5EB9A7#tbl1 "Bankruptcy among defense contractors is a rare event. Since 1990, only 207 of 8,658 contractors have gone bankrupt as classified by Capital IQ. The approximately 2 percent of defense companies that filed for bankruptcy is consistent with other economic sectors including consumer staples (2.1 percent, 1,105/ 52,199) and energy (2.6 percent, 795/30,285). Many sectors experience lower levels of bankruptcy than defense, with some as low as 0.1 percent including banking, consumer discretionary, and information technology."

I think Buffett addressed that in the last letter. Yes, possibility of a runaway inflation is a risk. Hopefully, the government will avoid that. However the current inflation is below short term rate, so that pile of cash is beating inflation so far. And because it's short term rate, it's completely liquid and could be deployed instantly if things change. An alternative risk is deploying the money into overpriced assets in overvalued market, which could return less long term.

This is a fantastic read. The second page, a low-key model of growth companies without dividends which I didn't see before. The premium on the growth companies is not only because you buy ever increasing earnings of the future. It's also because your retained earnings are reinvested at "par value", not at the stock market value. For instance, currently AMZN returns around 3% on the market price. But those 3% are reinvested at the rate of equity return of almost 25% every year. (I don't have AMZN and don't plan to buy).

What do you have in mind?