Loss Horizon

Thanks! I would be happy to contribute to the forum. I really enjoy reading it. Unfortunately, the Value Investing of Graham and early Buffet is obsolete since long time ago, and there are very few communities who still try to look beyond speculation and stock gambling.

In the world of EBIT and EBITDA who cares about taxes. But seriously, Defense Manufacturing is a very risky business. There is no moat, and demand depends on unpredictable events. In a peace time, demand depends on momentary government decisions. In a war, the products are becoming obsolete very quickly. But any manufacturing business needs certain continuity of products to be profitable. The technological race will not stop for a while, even when the active battles slow down and some form of peace is reached. The modern war is largely fought with consumer products, like JDI drones, Discord internet messenger and Toyota trucks. The traditional weapon technology is not the only part of the battle any more, and the share is dropping.

Thank you @John Hjorth ! I'm Russian, I moved to Germany years ago, and have mostly worked for American companies. In "Euro Area" there is slightly lower economy growth. I assume it's temporary, caused by erratic trade before the tariffs. It's been near zero for a while, and the trade war is assumed to keep it that way. The inflation is comparable. The unemployment is slightly higher, while in Germany there is virtually full employment. The trade balance doesn't tell much, also probably skewed by the tariffs action. "Euro Area"'s budget is slightly more balanced, but still with deficit. The interest rates are still weird as they were for a while. In the US most people and companies are all in into equity and debt while cash(deposits or short Treasuries) pays well over inflation, and corporate debt is expensive to maintain. In Germany and Europe the rate is close to zero over inflation but people still hoard cash and companies are relatively conservative with borrowing. Long term rate in the US doesn't bode too well with amount of the government debt, which is going to grow ever higher. I don't follow those metrics regularly. How do you use them?

Interesting thread. It's a bit hard to follow by now. Would be good if there was a summary with key points and references. From what I see some of the models mentioned: Overregulation High energy prices Lack of venture capital Lack of IT companies Focus on machinery manufacturing and lack of electronics manufacturing Lack of successful startups Focus on intangible values like data privacy and reduction of CO2 emissions I don't share some of the common views on the issues, but these are important points. In general, I believe that as long as Adam Smith's model is working, the economy should be fine. Inefficient companies die, efficient ones grow, new products are developed every day. Companies and private property are well protected by the justice system and police. Supply chains and trade are well integrated into the global economy. However the trouble is that the model is not favoring Europe in manufacturing competition against China. The whole European manufacturing might be at the point of the original Berkshire Hathaway when if was a textile maker. It's lost because it was not competitive structurally. Today's China has cheaper energy, cheaper labor, comparable or better supply chains, it doesn't care about exploiting people or producing greenhouse emissions. In China you can make a product with toxic variety of plastics, unsafe electrics prone to short circuits, but quickly and at scale. Fast iterations. In Europe you can only sell what is absolutely safe to consumers, and have to obtain multiple licenses. Very slow. But this is a very simplistic view. I would be interested to look into details of various models. For example, China, while embracing free entrepreneurship in general, violates the model of free market by heavy state subsidies to certain industries. It makes for a visible success now, but not clear how it will play out long term. The general sentiment on Europe is currently sharply negative. The good aspects could be easily overlooked behind it. For example, the whole concept of hidden champions. Another example, the advanced welfare state, while producing its share of troubles, brings in a lot of working age people, including skilled people. At least I see it in Germany. I would even draw a comparison to how the US was growing through centuries with constant inflow of immigrants. The original Adam Smith's model had a bit of a blind spot where it's prone to excessive exploitation of people and environment to achieve better productivity. Maybe some state regulation could be a way to address it without breaking the model. The intangible values, like sustainability, sometimes become real market forces. For example, some people opt to buy more expensive products when they are labeled as "bio", or "organic", or "made in EU".