UK

I do not disagree with you here (and also comments above re Kuppy) and just prefer not to believe anyone very much on this. Figuring out were we are currently, as Marks proposes, is hard enought for me (yet after minute or two, he is also predicting sea change himself:)). But I will cite another article anyway: https://www.bloomberg.com/news/articles/2023-10-05/chicago-fed-s-austan-goolsbee-sees-puzzle-in-recent-ust-rate-spike Even so, Goolsbee urged market participants to believe the central bank when it says it’s going to do what it takes to bring inflation back down to 2%, citing Silicon Valley Bank as a cautionary tale. “Remember the lesson of Silicon Valley Bank,” he said. “Silicon Valley Bank knew they don’t have a traditional deposit franchise — and they knew they hold a bunch of bonds and that the rates are going up — so I could not for the life of me understand, why didn’t they just hedge?” “They did hedge, but then they thought that the Fed wouldn’t stick it out and that they would make more money if they got rid of the hedges, and so they got rid of them. And that’s yet another in the long line of lessons: Don’t bet against the Fed. That’s not a good idea.” And yet, before he said: That move has rekindled worries over the potential for something to “break” in the financial system. Memories of Silicon Valley Bank, which experienced a run on its deposits in March after taking a big hit on its bond portfolio, are still fresh. Tighter financial conditions could also bring about a larger-than-intended slowdown in the economy. “We absolutely monitor that and are thinking about that, and that could be a blow to either the financial or the real economy,” Goolsbee said. “If there is a credit crunch — if those things materially deteriorate in a way that we haven't seen, but feared seeing, over the last six months — we will adjust, and we’ve got to think about it. By law, we have a dual mandate.” Go figure:))). But maybe: a. don't bet against the Fed b. Fed can adjust and change its mind quite quickly.

https://www.morningstar.com/news/marketwatch/20231005223/one-percenter-depression-and-giant-sector-rotation-how-a-hedge-fund-manager-sees-bond-crisis-playing-out As for the bond market, he says it's "not panicky at all." He said the bottom can't be in while 10-year Treasury bonds are still inverted relative to shorter-term bonds, and said there's no reason why the yield can't go to 6%, a median area for the last 50 years, and then probably overshoot that. "I wouldn't be surprised if it got back to the teens," which he sees happening over time "unless our government has some fiscal sanity," said Kuppy. "Think how ridiculous it is that we're running an effectively 8% nominal GDP, 8% deficits in the boom, probably like teens in the next recession...payroll tax was up 9% year over year for Q3, so the economy is really strong. So how is the 10 [year Treasury yield] at 4% and change? It makes no sense. It should have a 6% handle." But a 6% yield is a problem for the Wall Street guys it will make "insolvent," due to the leverage they use -- borrowing money to trade elsewhere. "And so you have these Wall Street guys crying and crying and crying, but my friends in the real economy, I mean it hasn't been better for them. It really is a one percenter depression, that's all it is," he said. Kupperman sees high yields causing pain at some point because many businesses have to fund themselves. "They did 5-year bonds in 2021 and 2022 and you know they've got three or four years left on it and are putting it back to work in money markets and actually earning a positive carry. That's not sustainable long term." (Positive carry refers to when benefits of holding an asset exceed its costs.) Kupperman says he'd keep close eye on the banks for signs of trouble, noting that Goldman Sachs (GS) "is in freefall" -- the stock has been dropping since September. "You have lots of sectors in the economy that are going to do just fine and you have lots of sectors that are going to be terrible and I think you're not really going to see a stock market crash as much as a giant sector rotation," he said.

Well, to be fair, for quite a while bonds are not very important for BRK, so maybe it was easy for them to not reach for yield and I am not sure they will lock anything in the future for longer duration, at least below 8 per cent level. While at the same time, bonds are bread and butter for FFH. Maybe their timing is not all perfect, but I think so far they did teriffic job and it was harder to do for them, than for BRK. I own both:)

A word one could use for this: mindfuck.

Oh boy:)

Speaking of premiums: https://www.wsj.com/finance/investing/why-8-percent-mortgage-rates-arent-crazy-590d887f This nearly three percentage-point gap is big. The prepandemic average from 2017 to 2019 was under two points, according to ICE data. It has narrowed slightly from earlier this year, when mortgage-bond portfolios of distressed banks were being sold off. Still, that raises the possibility that even without more failures, banks moving just to trim their portfolios to raise cash could help keep that gap about where it is—effectively turning just a 5% 10-year Treasury yield into an 8% mortgage rate. ... However, a more settled path of Fed monetary policy that tamps down volatility could bring in more buyers of mortgage bonds, whose high yields make them competitive with riskier instruments like corporate bonds and, in theory, quite attractive. Longer-duration investments such as mortgage bonds are risky in a rising-rate environment, so once investors get comfortable that rates have peaked, investors could get interested. “Once there is clarity from the Fed, mortgage spreads should tighten,” says Jeana Curro, head of agency MBS strategy at Bank of America. “Those on the sidelines could get involved again,” a group that includes overseas buyers.

I guess I still just do not understand how are equities not outperforming bonds (and other stuff) over really extended periods of time. If you time them or choose one segment over another right, sure you will outperform. But than, you can also do this with equities? But if you were to pick snp500 vs some aggregate bond fund today for the next 10 or 20 years, what would be your choice? Just some random google links: https://people.duke.edu/~charvey/Classes/ba350/history/history.htm https://viniyogindia.com/public/stocks-for-the-long-run-an-indian-perspective/ https://awealthofcommonsense.com/2021/05/200-years-of-asset-class-returns/

https://markets.businessinsider.com/news/stocks/warren-buffett-forbes-400-stewart-horejsi-berkshire-hathaway-wealth-billionaires-2023-10 https://www.bloomberg.com/news/articles/2013-09-19/berkshire-shares-turned-a-buy-and-hold-buffett-fan-into-a-billionaire?leadSource=uverify wall

"careful you must be when sensing the future Anakin, the fear of loss is a path to the dark side"

https://www.bloomberg.com/news/articles/2023-10-03/panic-creeps-up-as-vix-curve-inverts-for-first-time-since-march?leadSource=uverify wall The setup, known as inverted VIX curve, has occurred twice in the past year and both instances heralded market bottoms. “The Treasury yield is really all that matters but a VIX term structure inverting is a sign the stress is being fully priced in,” said Chris Murphy, co-head of derivatives strategy at Susquehanna International Group. “I would want to see a VIX term inversion before I am confident this bout of selling is over.”

https://edition.cnn.com/markets/fear-and-greed

https://www.wsj.com/economy/housing/wall-street-thinks-americas-homes-are-overvalued-435e9c42?mod=hp_lead_pos6 U.S. single-family properties are the only type of real estate that has increased in value since interest rates began to rise in March 2022. After a brief dip in the months after the Federal Reserve’s initial hikes, house prices resumed their climb. Residential property values reached a record in July, based on the latest numbers from the S&P CoreLogic Case-Shiller Home Price Index. ... Listed real-estate investment trusts that specialize in single-family homes, such as AMH Homes and Invitation Homes, have either slowed their buying or become net sellers. For big corporate landlords that want to grow their portfolios, a better option than paying today’s high prices on the open market may be to build new homes from scratch. ... The stock market is flashing another warning sign for house prices. Shares of U.S. single-family housing REITs trade at a 20% discount to their gross asset value, according to Green Street’s director of research, Cedrik Lachance. This is an indicator of where shareholders think the value of the homes in these companies’ portfolios are headed. Investors may be underestimating the housing market, though. There is a shortage of single-family homes in the U.S., versus a potential glut of apartments if all the projects currently in the pipeline actually get built. Rent growth is stronger for single-family homes than apartments. Another reason why apartment values have corrected and single-family home prices haven’t may simply be who owns them. Corporate landlords own 68% of apartments in buildings with 100 or more units but only around 3% of America’s individual family homes. Big institutional investors “are typically focused on cash returns as well as changes in economic and financing conditions,” says Cohen & Steers analyst Jordan Flannery. For regular home buyers, these factors are only part of the purchasing decision.

So I agree with sentiment here, but again, just looking at the markets opinion on NOVO/LLY, not sure it is totally easy to dismiss this as only a fad, although, this is my natural inclination too. But if all people were rational and disciplined, the world already would look very differently? Also: https://www.wsj.com/health/pharma/weight-loss-drugs-obesity-e4bb2173 "Ozempic and similar drugs are transforming the world’s understanding of obesity. It isn’t so much about willpower: It’s about biology." Also: https://www.economist.com/technology-quarterly/2023/09/25/eating-fewer-calories-can-ward-off-ageing But again, the question is not about personal choices or what is best to do for a rational person (as most here are anyway), but if this goes mainstream even for 20 or 30 per cent population level, what would be implications for different businesses, if any.

https://www.bloomberg.com/news/articles/2023-10-03/barclays-recommends-shorting-fast-food-credit-because-of-ozempic?srnd=premium&leadSource=uverify wall "Drugs used for weight loss like Ozempic pose a real risk to companies ranging from fast food restaurants to cigarette makers, and credit market prices don’t fully reflect the potential downside, according to a report from Barclays strategists. Pharmaceuticals known as GLP-1 agonists help people lose weight while anecdotal evidence suggests they also cut urges to consume addictive substances, including alcohol, and cigarettes. The growing popularity of the drugs could hurt demand for companies including PepsiCo Inc., the maker of Pepsi soda and Lay’s potato chips, McDonald’s Corp., and Altria Group Inc,, the cigarette maker, according to Barclays strategists led by Jigar Patel in a note on Tuesday." Not used to think about a lot of these brands/companies as disruptable:). Does all this really could be something real and meaningful?

https://www.aljazeera.com/news/2023/10/3/armenia-to-join-international-criminal-court-wrong-decision-russia-says https://www.barrons.com/news/armenia-has-no-alternative-to-russia-led-security-alliance-kremlin-e442118b

True! But the problem is they are kind of diversified and far from 'pure play' in terms of this 'rate exposure', especially because of their enormous position in Apple?

https://www.wsj.com/finance/investing/dan-loeb-third-point-hot-hand-goes-cold-5a2fb19 Funds at his firm, Third Point, fell by about 1.6% this year through August after tumbling 21.8% or more in 2022, according to investors. Both figures are worse than those of peers and the broader market. Loeb, who oversees roughly $11.7 billion, said he expected higher interest rates to take a bite out of the U.S. economy this year, so he turned cautious. As a result, he didn’t own enough technology shares to fully benefit from the summer’s AI-powered rally that drove stocks such as Nvidia skyward. Compounding the error, Loeb recently boosted stakes in tech and other riskier companies, just in time for those stocks to stumble in recent weeks. ... The missteps highlight the perils of wagering on a market in which interest rates are surging but the economy continues to grow, a phenomenon that has surprised some pros. For much of the year, high-price tech and other risk stocks kept moving higher, ignoring the rate rise, though they’ve faltered lately.

https://www.wsj.com/finance/investing/catastrophe-bond-market-4a96483c?mod=hp_minor_pos21

https://www.bloomberg.com/news/articles/2023-09-29/ukraine-steps-up-strikes-on-crimea-as-offensive-grinds-on?srnd=premium-europe&leadSource=uverify wall For much of the war, Russia has hinted that striking Crimea would be a red line that might trigger escalation in response. But as Ukraine’s attacks have intensified and had increasing success, those threats have not materialized. ... Ukrainian officials suggested at least some of the attacks in Crimea have used the Storm Shadow and Scalp cruise missiles provided by the UK and France, some of the longest-range weapons in Ukraine’s current arsenal. Russian air defenses seem incapable of shooting them down, said the European official. ... Despite the dramatic strikes on Crimea, allied officials remain skeptical that Ukraine will be able to make a decisive breakthrough in the ground war this year as Kyiv’s forces have struggled to punch through the extensively mined defensive lines Russia has built in the areas it occupies in Ukraine’s east and south.

https://www.bloomberg.com/news/articles/2023-09-29/fink-sees-large-opportunities-for-deals-to-transform-blackrock?srnd=premium-europe&leadSource=uverify wall Speaking at the Berlin event, he said he expects 10-year borrowing costs to stay at 5% or higher for some time because of embedded inflation. He added that investors are underestimating how the changes in geopolitics are structurally inflationary. Fink said he has been telling every business and political leader he meets that they need to help create more “certainty” and “hope,” whose absence creates recession. Some economies are likely to enter recession early, he added, without elaborating. The US economy may be entering a recession by 2025, he said. “Whatever recessions we’re going to have are going to be modest, so I’m not that fearful,” he said.

In practical terms, the book’s crowning achievement is its explanation of the “Merton share”. This is a simple rule of thumb for determining asset allocation, which says that allocations should rise in proportion to expected returns, fall in proportion to the investor’s risk aversion and fall a lot in proportion to volatility (specifically, to its square). This is not to suggest the book makes for light reading. The authors prescribe calculations that will appeal to only the most dogged investors, ideally with access to a Bloomberg terminal. Most will conclude that they need a wealth-management firm to help them; conveniently enough, Messrs Haghani and White run one.

:). Karma is a Bitch!

Oh sure. But I was asking you about period and progress eastern Germany made AFTER unification in 1990. So was allowance of it into West and NATO also a mistake, hypocrisy and it supposed to be left for Russia, or at least out of NATO, as WAS promised before unification:)? Btw, quite interesting story: https://www.bbc.com/news/magazine-32066222 And also: https://www.theguardian.com/world/2022/jan/12/russias-belief-in-nato-betrayal-and-why-it-matters-today

My grandfather and father used to do this too! I also remember some kind of version of this drink (egg liqueur) beeing made: https://www.recipesfromeurope.com/eierlikoer/. Also, besides normal eggs, we like quail eggs very much:)

Well of course US would not allow that. And it does the opposite in the South China sea etc. And it is not always because it is right or wrong...but because it can and has power to do it:) But Luca, let me ask, is US/NATO/EU sphere of influence for you is the same as Russia's/China's? I already asked on this thread: name me one country which made substantial progress for the better under Russia's influence In the last 20 or 30 years? I can name you a few which didn't and many, which prospered under NATO/EU. Accidentally, one of them is former German Democratic Republic. Or it was also mistake, hypocrisy and it was supposed to be left for Russia, or at least out of NATO, as WAS promised before unification? It is not foregone conclusion, but Ukraine (maybe not all) has a decent chance to became a similarly normal country, maybe not as cool as former eastern Germany, but way way better then it was or Russia is today. Which would be a huge plus for EU/NATO and of course this is what scares Putin most: truly successful Slavic country right next door. So again: what US/NATO/EU would mean for Ukraine and what Putin can offer? This is why most people of Ukraine supported this whole bloody struggle from its beginning in 2013.