UK

A whopping 1 per cent:). Almost all good for portfolio came from BRK, which was 60+ position at the start of 2022. Almost all bad came from my mistake with China's big tech, which I closed in summer. Continue to hold BRK (still largest position). In 2H bought UMG, GOOGL, META, AMZN and substiantially added to FFH and JOE. Also added some smaller stuff for speculative/basket part of portfolio.

Thanks!

Which one you have in mind? Is it posible to share a link? Thanks!

https://www.economist.com/europe/2022/12/28/ukraines-women-snipers-take-the-fight-to-putin Unlike men of conscription age, Ukrainian women are not barred from leaving the country. An initiative to extend the draft to women working in critical professions was due to be enacted last October, but it was postponed amid popular outcry. That means, for the time being at least, women who fight choose to do so voluntarily. That hasn’t stopped Ukraine’s armed forces taking on an increasingly female face. Ukraine’s deputy defence minister, Anna Malyar, says there are now “at least 30,000” women soldiers serving in the army, or one in five of the official, pre-mobilised number. (The exact numbers in the army now are a closely guarded secret.) Most often, women soldiers fulfil back-line roles as medics, press officers, cooks, secret communications officers, or in the sensitive task of evacuating and treating bodies, dead or alive. But a growing number, at least 5,000, are performing front-line roles. Many dozens are snipers. The women trainees say they have faced resistance at every stage of their journey, usually from men who believed women are fundamentally unsuited to the sniping profession. “We’ve never sought an easy life,” says Phoenix, “but we’ve proven ourselves whenever the question is asked.” She says she is under no illusions about the dangers. Snipers occupy a particular spot in military psychology, and are singled out for demonstrative treatment if they are ever captured. Being female is unlikely to offer an advantage. “If a woman sniper is captured, she will be raped, humiliated, tortured, and then executed,” says Oksana. “A sniper should always be prepared to blow herself up with a grenade.”

AMZN, JOE.

https://www.dw.com/en/russian-lawmaker-dies-after-fall-in-indian-hotel/a-6422200 Antov's death is the latest in a string of mysterious deaths of Russian nationals and businessmen since the war in Ukraine. Alexander Buzakov, the director-general of a major Russian shipyard that specializes in building non-nuclear submarines died over the weekend, the shipyard announced in a statement without offering details. In September, Ivan Pechorin, the top manager for the Corporation for the Development of the Far East and the Arctic, was found dead in Vladivostok, a major Pacific port city in Russia. Russia media said Pechorin died after drowning near Cape Ignatyev in the Sea of Japan. Also in September, the chairman of Russia's largest private oil company Lukoil, Ravil Maganov, was found dead after falling out of a window. Russian media later reported he took his own life. In May, Alexander Subbotin, a former top manager of Lukoil, was found dead in a house near Moscow, according to Russian media. Other Russian businessmen and people with ties to Russia's military-industrial complex have also been reported dead in recent months.

John, naturally I think about all this every day, since February and i am no way a big military expert, but I would like to share with you, perhaps overly optimistic, views. First, in the neat term I think Russia is incapable of any major conventional offense as they are even on defense in Ukraine. Furthermore, I read somewhere that they moved like 80-90 per cent of their battle ready personnel from Kaliningrad and Saint Petersburg regions, including some serious equipment, like S-300 or S-400. I think it is highly unlikely they would open second front anywhere, but especially with NATO, in the near term. Even in Ukraine, today they lack basic ammo, like munitions for howitzers, there are videos online of Russian soldiers berating shamelessly Shoigu and Gerasimov for that. And it seems even in that front Ukrainians starting to gain advantage. Then situation in the Baltic region will improve substantially as soon as Sweden and Finland will be accepted to NATO, probably foregone conclusion. Also, just like with Ukraine, a year ago the line of thought was prevailing, that Baltic states or other countries there would be indefensible in case of Russian conventional attack, discussion was about days or weeks of possible resistance. Not anymore. Nobody today thinks it would be impossible to defend our self anymore. And lastly, our country just made its largest military purchase ever, there are plans to increase active personnel substantially and there are no hesitation to spend or do to whatever it takes to increase our defense capabilities substantially. Baltic states have vary little debt and we can afford a lot to spend and we will spend a lot I am sure. Poland alone, if what I read about their plans are true, will be enormous military force after 2-3 years, not to speak about Germany etc. So like I said, I am no expert at all, but I think a time when Russia could threaten region conventionally has ended. Probably never was, only perception. It seems Russia regime deliberately was weakening and kept its military weak, because of its own insecurities, not to speak about corruption. Ukraine fiasco just uncovered its true state. Maybe I am overly optimistic, but that is how I feel today and it is 180 opposite from a year ago or even 6 month ago:) I agree with Dinar, that much bigger threat to US and the world is China. I have no strong opinion on China, but last year has shaken this idea of Munger, that China is much more civilized country etc. I still think it is, I mean the regime in China is I think perhaps way more civilized than the regime in Russia, but not so sure about this anymore:). I also think, that China and Russia may have enormous inherent tensions between them. Lastly, I have no idea if that is possible, but if somehow Russia and Belarus could become normal and pro western countries again (perhaps after some painful changes at the top), I think that would be wonderful. Would not bet on this, but one could have some dreams:)

I agree with your critique, but at the same time it is quite probable that China only at the start of all its real estate situation adjustment. Info also resonates with interview of Petis above, i.e. that sector and prices are still way above norm, their aproach is to do this slowly vs quickly, and demographics was not even mentioned in both cases. I think all this is important not only for China itself, but because of the size, for global economy also. Maybe that is the reason (optimistic) why Xi wanted to grab so much power in his hands in the first place:). Will be interesting to see how everything unfolds.

https://www.bloomberg.com/news/articles/2022-12-28/-1-3-trillion-china-housing-crackdown-hasn-t-fixed-unaffordable-property-market?srnd=premium-europe China’s challenge is particularly daunting, even for an authoritarian regime with plenty of levers to pull. Home prices in Beijing and Shanghai have jumped tenfold and twelvefold, respectively, this century, according to government statistics, after the economic opening prompted more people to park their life savings in real estate rather than in stocks or other investments. The ratio of median home prices to income surged to more than 25 at the end of 2021 in Beijing, compared with about 20 in Hong Kong and just seven in the US, according to research from Nordea Bank Abp. Nationally, the ratio in China improved slightly last year to 9.1 from 9.2 in 2020, accord to E-House (China) Enterprise Holdings Ltd., a real estate firm. In most Chinese cities, income is nowhere close to keeping pace with the cost of housing—a problem that’s felt in many countries but is particularly acute in the world’s second-largest economy. In Qian’s home of Shenzhen, an apartment typically costs 40 times the average annual salary. That’s quadruple the relative price in cities such as Los Angeles and San Francisco, according to separate data from E-House and Harvard University’s Joint Center for Housing Studies. In Shanghai, China’s business and finance hub, a 950-square-foot, two-bedroom condo sells for almost $725,000. For about that price, a buyer could snap up a one-bedroom unit in Manhattan, where the average disposable income is more than six times higher. More than two years later, China’s efforts to reduce prices—or at least halt the increases—have had limited success. New-home prices fell for the 15th-straight month in November. Yet most of those dips have been too small to make much of a difference. November’s drop of 0.25% in 70 cities was typical: None of the pullbacks has been greater than 0.40%. That steady drip of declines—more than 3% over 15 months—compares with much sharper plunges in other markets as global interest rates surge. Prices in Toronto are off 18% from their peak, while Sydney is down 11%. Sweden’s market is forecast to drop by a fifth from a March peak, according to Nordea estimates. There are signs of steeper declines in some parts of China. An existing-home price index tracked by KE Holdings Inc. shows that values in the less regulated market dropped 7.5% in August from a year earlier. In Hangzhou, near tech giant Alibaba Group Holding Ltd.’s headquarters, existing-home prices are off more than 15% from a peak last year, agents say. The meager national declines, even as sales collapse, partly reflect the quirks of China’s housing market that keep a floor on prices. Some 90% of city dwellers own their homes, according to Goldman Sachs Group Inc. research, compared with about 65% in the US. Ownership is so ingrained, a single man or woman has a much better chance of finding a match if they own a condo. In fact, Beijing may prefer a steady price decline to a sudden crash that could wreak havoc on the financial sector and spark an even deeper crisis, says Orlik, author of China: The Bubble That Never Pops. China is trying to manage down the oversupply of homes as well as prices to bring the market in balance, he says. In other words, a “controlled deflation” of the bubble rather than a dramatic burst. “If you want to improve affordability without having a systemic crisis, you don’t actually want house prices to fall. You want them to stabilize and incomes to rise,” Orlik says. “If prices fall 25% and everyone sells their houses, then you have a systemic crisis.” China is even trying to limit price declines in some areas. Since the second half of last year, at least 20 small cities have blocked developers from slashing prices by more than 15%. That prompted an industry group in the province of Guangdong to petition authorities to loosen restrictions to boost sales, people familiar with the matter say. It’s hard to overstate the importance of real estate to China’s economy, making the crackdown so painful for so many. With estimates ranging from $2.4 trillion for the new-home market to $52 trillion for existing homes and inventory, the size of the sector was twice that of the US’s in 2019. Real estate accounts for about a quarter of domestic output and almost 80% of household assets. Some 100,000 companies operate in the sector, providing 27 million jobs as the nation’s second-biggest employer. Headcount shrank by 15% in the first half of 2022 alone among the 28 publicly listed developers that disclose staff levels, according to data compiled by Bloomberg. Those still employed face steep pay cuts, usually 30% to 50%, says Andy, a 36-year-old who works for a developer in Guangdong and asked that his full name not be used. His monthly mortgage obligations, at about 40,000 yuan, take up nearly 70% of his income. He’s now trying to unload one of his three homes. “I’m willing to sell it as long as I can break even,” he says. “But it’s been a tough sell.” Suppliers are also paying the price, with many fighting to get repaid by Evergrande and others. From construction material suppliers to lunch box providers, thousands of small companies are feeling the pinch from the record housing slump. “Putting on the brakes is one thing, but slamming the brakes on and making the car engine dead is another,” says Qin, a project contractor who’s spent 13 months trying to get paid. He also declined to give his full name. “Evergrande has a huge problem, but it should’ve been a ‘soft landing’ rather than what’s happening right now.” The modest price declines have done little to boost demand, which will be key to reviving the economy into 2023. CMB International Capital Corp. foresees a 30% slump in apartment and house sales this year, topping the 22% drop during the 2008 financial crisis. Morgan Stanley doesn’t expect a sales recovery until the second half of next year.

Merry Christmas!:)

Dinar, thanks for your kind words. I am sure though, that at the time of your visit, not many here felt that different from the rest of the Union:). And then, since almost right after your visit, but especially over the last 20 years, the change was really big and thankfully for the better.

John, nice to know you! No problem, I am from Vilnius, Lithuania. It is some 180 km from Minsk, Belarus and only some 40 km from their new nuclear power plant in Astravets. My mother tongue is Lithuanian, but I also understand and speak Russian well, since my generation was probably one of the last, which still had Russian language on the full schedule at school (and on tv). Actually I love Russian classic literature etc. In my previous job, some 10+ years ago, I also worked on a project in Ukraine (in a town somewhere near Odessa), and my former employer was working on some other projects in a country, including in Mariupol, right until this February. Btw this summer we were visiting Billund, not that far from a place you live, very nice place for a fans of Lego:)

I realise than not everyone here speaks russian, but for those, who can understand, very entertaining interview with former insider: https://www.youtube.com/watch?v=isg4wArJJ28

https://www.wsj.com/articles/putin-russia-ukraine-war-advisers-11671815184?mod=hp_lead_pos7 Russian troops were losing the battle for Lyman, a small city in eastern Ukraine, in late September when a call came in for the commanding officer on the front line, over an encrypted line from Moscow. It was Vladimir Putin, ordering them not to retreat. The president seemed to have limited understanding of the reality of the situation, according to current and former U.S. and European officials and a former senior Russian intelligence officer briefed on the exchange. His poorly equipped front-line troops were being encircled by a Ukrainian advance backed by artillery provided by the West. Mr. Putin rebuffed his own generals’ commands and told the troops to hold firm, they said. The Ukrainian ambushes continued, and on Oct. 1, Russian soldiers hastily withdrew, leaving behind dozens of dead bodies and supplies of artillery to restock Ukraine’s weapons caches. Through the summer, delegations of military experts and arms manufacturers emerged from presidential meetings questioning whether Mr. Putin understood the reality on the battleground, according to people familiar with the situation. And while Mr. Putin has since then gone to lengths to get a clearer picture of the war, they say, the president remains surrounded by an administration that caters to his conviction that Russia will succeed, despite the mounting human and economic sacrifices. “The people around Putin protect themselves,” said Ekaterina Vinokurova, a member of his handpicked human-rights council until Mr. Putin removed her in November. “They have this deep belief that they shouldn’t upset the president.” The resulting mistakes have shaped Russia’s disastrous invasion of Ukraine—from the initial days, when Mr. Putin thought his soldiers would be met with flowers, to recent humiliating withdrawals in the northeast and south. Over time, Mr. Putin, who has never served in the military, has become so wary of his own command structure that he has issued orders directly to the front line. For months, a trickle of Russian officials, pro-government journalists and analysts tried to bring word in person to their president about how his invasion was floundering, according to people familiar with the matter. When one longtime pollster reached out to Mr. Putin’s office about a survey showing lower-than-expected public support soon after the invasion, his office responded, using Mr. Putin’s first name and his patronymic middle name, “Vladimir Vladimirovich doesn’t need to be upset right now,” according to a person familiar with the exchange. In July, as American-supplied, satellite-guided Himars rockets began to strike Russian army logistics depots, Mr. Putin summoned about 30 business leaders from defense companies to his Novo-Ogaryovo residence outside Moscow, according to people familiar with the meeting. After three days of quarantine and three PCR tests, the executives sat at the end of a long wooden table, listening as Mr. Putin described a war effort he considered a success. Ukrainians were only motivated to fight, he told them, because their army was shooting deserters, according to the people. Then Mr. Putin turned to Chief of General Staff for the Russian Armed Forces Valery Gerasimov, who said Russian weapons were successfully hitting their targets and the invasion was going according to plan. The arms makers left the meeting with a sense that Mr. Putin lacked a clear picture of the conflict, the people said. Since March, when Mr. Putin’s invasion began to clearly falter, Western leaders have been puzzled by how a leader so singularly occupied with the status of Ukraine and the restoration of Russia’s military greatness managed to so badly underrate Ukraine’s strength and misread his own. Some of Mr. Putin’s allies concede that information reaching the president was flawed and attribute military failures to poor planning by government officials. Konstantin Zatulin, a senior lawmaker from the ruling United Russia party who supports the war, said in an interview that the president “proceeded from an incomplete understanding of the situation and in some ways not fully correct.” The war planners, he said, “clearly underestimated the strength of the enemy and overestimated their own.” Mr. Putin needed only days to roll through more than a fifth of Georgia in 2008, and weeks to take Ukraine’s peninsula of Crimea in 2014—an operation that his defense minister, Sergei Shoigu, and Mr. Gerasimov, along with Russia’s SVR foreign intelligence agency and others, had advised against. The SVR declined to comment. The Russian president came to see the Crimea operation as a personal triumph. His inner circle gradually shrank down to his most hawkish advisers, who assured Mr. Putin Russian forces would seize Kyiv within days. “He probably forgot that when he was a KGB operative he was lying to his boss,” said Indrek Kannik, a former head of analysis for Estonian foreign intelligence. From inside Ukraine, a Kremlin-connected businessman was telling Mr. Putin what he wanted to hear. Viktor Medvedchuk, a Russia-funded politician, had made Mr. Putin godfather to his daughter Darya. For years, Mr. Medvedchuk had a dedicated line to reach the president—a phone with a Russian number and a secure calling app the Ukrainians called Kremlyovka, in reference to the Kremlin, according to Yuriy Lutsenko, the former head of the Ukrainian prosecutor’s office, which had tapped the phones of people linked to the Kremlin in an investigation into the 2014 downing of a Malaysian airplane above Ukraine. Mr. Medvedchuk assured Mr. Putin that Ukrainians saw themselves as Russian, and would welcome the invading soldiers with flowers, said two people close to the Kremlin. Mr. Medvedchuk, who had been arrested in Ukraine and then released to Russia as part of a prisoner swap in September, couldn’t be reached for comment. Meanwhile, the FSB was tweaking polling data to convince Mr. Putin that Ukrainians would welcome Russian soldiers, according to Ukrainian Security Council Secretary Oleksiy Danilov and a person close to the Kremlin. Other opinion surveys appeared to be entirely fabricated, said Mr. Danilov. War planning fell to the FSB more than the military, according to the former Russian intelligence officer and a person close to the defense ministry. The ministry kept normal working hours in the weeks leading up to the invasion, with little sense of the urgency. Mr. Putin’s spokesman, Mr. Peskov; his foreign minister, Sergei Lavrov ; chief of staff, Anton Vaino; and Mr. Kirienko, the domestic policy chief, weren’t aware of the plans, according to people familiar with the matter. Fifteen days into the war, after his quick strike on Kyiv failed, Mr. Putin scowled in a gold-embroidered armchair as his defense minister briefed him over a video link in a televised meeting. “Vladimir Vladimirovich, everything is going to plan,” said Mr. Shoigu. “We report this to you every day.”

https://www.barrons.com/articles/warren-buffett-investment-aides-stock-market-performance-51671746676

https://www.barrons.com/articles/bill-miller-interview-bullish-on-bitcoin-amazon-51671661918 Some old and new ideas.

https://edition.cnn.com/videos/world/2022/12/22/zelensky-us-congress-speech-full-sot-vpx.cnn

https://www.investing.com/news/stock-market-news/third-points-loeb-says-cathie-wood-has-stonk-hodlers-mentality-432SI-2968787

https://www.bloomberg.com/news/articles/2022-12-21/us-farmland-escapes-real-estate-slump-as-prices-soar-to-record?srnd=premium-europe In the long term, a growing global population coupled with a changing climate makes productive land in the Midwest integral to global food production. Interest from outside investors is also on the rise. Farmland is considered a great hedge against inflation because the commodities it produces usually gain in value when overall prices rise. “Land is a real asset,” Gary Schnitkey, professor at the University of Illinois, said at a conference in Champaign. “Do you want to own a piece of dirt or cryptocurrency? It’s a good way to diversify your asset pool.”

I agree. I was talking about Finland re F35 (they will receive 64) and Baltics re Himars. There will be 20 Himars in Baltics in two years including long range capabilities. It is more than currently are deployed in Ukraine. Finland already owns some 20+ larger versions. And Poland is in the league of its own: https://www.thedefensepost.com/2022/06/07/poland-himars-us/

JOE, AMZN.

https://www.barrons.com/articles/berkshire-hathaway-warren-buffett-board-member-51671476915 Earlier this year, investment research firm MSCI criticized Berkshire’s board composition. “Berkshire Hathaway continues to lag peers in corporate governance. The concerns include board entrenchment (over 42% board members are over 70 years old and 57% have served on the board for over 15 years), lack of board independence and diversity (57% not independent of management and less than 30% women on the board), combined CEO-chairman functions, and high voting power of the controlling shareholder.” Some of the qualities that MSCI criticized, such as “entrenchment,” are viewed favorably by many Berkshire shareholders who like that the board has considerable knowledge of the company and that Buffett wields enormous power. Buffett has suggested that if the board decided to rein him in, he would no longer want to be CEO. Buffett and Vice Chairman Charlie Munger have scoffed at the independence issue, saying board members care deeply about the company whether they are characterized as independent or not. Buffett has criticized corporate directors outside Berkshire who are deemed independent, but garner much of their income from director fees, compromising their willingness to buck management. Buffett noted there were big investors who withheld support for him about 15 years ago when he was on the board of Coca Cola , in which Berkshire held a big stake now worth about $25 billion. At Berkshire’s annual meeting in late April, Buffett said of the Coke episode that the opponents said he wasn’t independent because Dairy Queen, which is owned by Berkshire, “bought some Coca-Cola … I mean, do they think I can add things and if we’ve got billions and billions and billions of dollars (invested) that I’m going to be compromised, but it’s just nutty.” Added Munger: “Well, they don’t want them just independent. Now they want 1 horse, 1 rabbit, 1 cow, 1 whatever.”

John, thanks for your comment. Yes, looking one or two years out, as soon as new Himars, F35s and other stuff will arrive (which will be very plenty) and Sweden with Finland join NATO (foregone conclusion) I am too starting to become optimistic on the ability of the region to stand on its own, even against Russia. https://www.bloomberg.com/news/features/2022-12-18/ukraine-conflict-brings-finland-s-troops-and-tanks-in-from-the-cold-war https://www.defensenews.com/pentagon/2022/12/16/lithuania-signs-495-million-deal-to-buy-himars-atacms/ https://www.bloomberg.com/news/articles/2022-08-30/poland-will-double-military-spending-as-war-in-ukraine-rages?leadSource=uverify wall https://www.reuters.com/world/europe/poland-expected-buy-skorean-rocket-launchers-after-tank-howitzer-sales-2022-10-19/