UK

Why do you think funds will flow out of Canadian equities? And where would they flow, Eastern Europe, Middle East or China:)? https://www.bloomberg.com/news/articles/2023-10-08/how-china-s-rich-are-using-underground-networks-to-move-their-money-abroad?srnd=premium-europe&leadSource=uverify wall

https://www.bloomberg.com/news/articles/2023-10-08/bond-market-pain-is-a-sign-of-interest-rates-returning-to-normal?leadSource=uverify wall Bondageddon:)

Since I am die hard Buffett follower on this subject (productive, non productive etc), I would say he is definitely wrong. Or even if he right in some period, it just is because of the wrong reasons:) Btw, to be fair, Grantham was one of the few, who said to buy (Reinvesting When Terrified) in March 2009 and I think this was not a bad advise:). But generally they were allways to bearish or bearish to early and also made some crazy or wrong calls (on commodities, EM etc). They even made a right call on China's real estate, but if I remember correctly, it was 10 or more years ago:)

Good points.

Here you are: https://www.bloomberg.com/news/articles/2023-10-06/podcast-gmo-s-jeremy-grantham-says-no-one-should-invest-in-the-us The co-founder of GMO LLC says that, while this reckoning recently took a break, it’s now back with a vengeance. Grantham joins this week’s episode of Merryn Talks Money to make the case that—as a result—no one should be invested in the US. In particular, he warns of the Russell 2000, with its high level of zombie companies and horrible debt levels. He calls it “the most vulnerable area” to rising rates. Grantham notes that pretty much everything else is risky, too. With yields at current levels, it would be mathematically reasonable to think the US market as whole could fall by 50%, he contends. There’s trouble ahead if the “magnificent seven,” the few companies that have been carrying the index this year, lose any part of their magic. As for housing, Grantham says that isn’t safe anywhere. Look at the numbers and you’ll see the same crash in action, he explains. The speed of that crash depends on local mortgage markets and borrowing cultures—but the dynamics are the same: rates up, prices down. “Global real estate is universally overpriced,” Grantham says. Just like “farms, forests and fine art.” Fits your description perfectly:)? I saw him on an interview recently, seems almost going maniac, while talking about various doom porn things:). Maybe it is age related, I do not think he was always like that: https://youtu.be/aanwMfrSjP0?si=N7MYX-pHPiMFxFCO Watch from 1:38 min:)

https://www.wsj.com/business/energy-oil/the-oil-patch-is-primed-for-an-era-of-megadeals-3d775398?mod=hp_lead_pos4

Gee...you never know.

I would expect the next 52 Week High to be no less than 1,710.12:)

https://www.wsj.com/health/pharma/oprah-winfrey-ozempic-weightwatchers-new-formula-1ec4e706?mod=hp_lead_pos7 “My position on the use of prescription medication was misconstrued and taken out of context,” Winfrey said in a statement to The Wall Street Journal. “To be clear, I believe that prescription medications are an important and viable option to consider for people who struggle with weight and health related issues. Every person should be able to choose what wellness and good health means for them without scrutiny, stigma or shame.” The stock gyration highlighted a tension within WeightWatchers over Winfrey’s involvement. On Instagram in recent months, she posted photos from travels around the world—dancing in Marrakesh, riding camels in Jordan. Some WeightWatchers employees shared the posts with one another, noting that she looks great, and has clearly lost weight. It seemed the perfect opportunity to hawk WeightWatchers, but Winfrey wasn’t talking about WeightWatchers anymore. Associates from her WeightWatchers days started to wonder: Was Winfrey on Ozempic? ... Morgan Stanley predicts the new class of weight-loss medications such as Ozempic will become pharmaceutical blockbusters, worth a collective $54 billion by 2030. The analog its analysts draw: high-blood-pressure medications, which went from a nascent market in the 1980s to a $30 billion one a decade later. ... WeightWatchers jumped in to the arena March, paying $106 million to buy Sequence, a subscription service that prescribes the class of weight-loss drugs via telehealth appointments. For the first time, that allowed WeightWatchers members to get prescriptions to drugs like Ozempic that the company hoped they would couple with workshops and other traditional offerings. ... The potential upside is significant. Medicare currently doesn’t cover anti-obesity medications, and Sistani said her company stands to benefit if Medicare stops classifying such drugs as vanity prescriptions, as hair-loss medication is. “Last time I checked, nobody’s dying from losing their hair,” she said.

https://www.wsj.com/world/middle-east/saudi-arabia-israel-talks-riyadh-oil-increase-a25d6106?mod=hp_lead_pos3 Saudi Arabia has told the White House it would be willing to boost oil production early next year if crude prices are high—a move aimed at winning goodwill in Congress for a deal in which the kingdom would recognize Israel and in return get a defense pact with Washington, Saudi and U.S. officials said. That understanding is part of an effort to seal a three-way agreement that would also likely include U.S. nuclear assistance and represents a notable shift by Riyadh, which a year ago rebuffed a Biden administration request to help lower oil prices and fight inflation, severely straining relations.

Oh, ok, thanks!

I think so far the talk is more about the possible future impact?

Some estimates from SA: The comments from the nation's largest retailer added some weight to the issue that has been speculated upon loosely for months. Analysts estimate that nearly 7% of the U.S. population could be on weight loss drugs by 2035, which could lead to a 30% cut in daily calorie intake due to the consumption changes for the targeted group. Maybe not so scary and too far in the future, even if true.

https://www.wsj.com/articles/bond-market-10-year-treasury-yields-rise-federal-reserve-8926812a?mod=hp_opin_pos_1 What do you know: The U.S. has a bond market again. That’s the underlying significance of the recent rise in yields for longer-term Treasurys, especially the all-important 10-year note, which is triggering a freakout in much of the financial press. This isn’t to make light of this major economic event and its risks for the economy. But 15 or so years of unprecedented low interest rates and central-bank market distortions are making it impossible for some commentators to recognize “normal” when it arrives. ... This era is over. This means yields are rising in part because they can, since central banks finally are dialing back the monetary stimulus. This is good news. The era of low rates and quantitative easing can’t be described as a smashing success. Central bankers and their academic cheerleaders say they spared us a Great Depression-esque deflation after the 2008 financial panic and the pandemic. But their policies badly distorted investment decisions, pumped up asset prices and fueled some of the biggest peacetime fiscal blowouts on record. Then came the worst inflation in 40 years. Compared to that record, a modestly positive inflation-adjusted long-term interest rate—which is what the U.S. finally has—is no great threat to prosperity. More normal yields will discipline markets in ways that could boost growth over time. Higher real rates are forcing businesses to invest in projects that will generate real returns. People take more care when money isn’t free: fewer investments in SPACs, NFTs and other exotic assets stirred up by low rates and QE; but more investment in areas that can increase productivity and real wages. ... The jolt of higher rates no doubt carries risks, especially for indebted firms or projects that must refinance. Higher rates will squeeze some corners of the economy, such as commercial real estate, where bubbles developed. Some banks are carrying losses on their balance sheet if they didn’t hedge their interest-rate risk, a la Silicon Valley Bank. More cautious borrowing may slow the economy in coming months. Higher rates are also bad news for the federal fisc, which must refinance trillions of dollars in debt at higher rates. Treasury secretaries across three administrations failed to take advantage of low rates by issuing more longer-term debt. The silver lining is that this may provide some discipline to our spendthrift political class as annual interest on the debt nearly matches the entire Pentagon budget. These worries are causing some worriers to urge the Fed to do something. That might mean slowing the pace of quantitative tightening, by which the Fed currently lets $95 billion in maturing Treasurys and mortgage-backed securities roll off its balance sheet each month. Yet to do this now would amount to a form of yield-curve control on the sly because the Fed would be signaling it thinks there’s a correct level for longer yields. This has failed in Japan, where the Bank of Japan continues to push futilely against market signals as investors keep pushing the yield on Japanese government bonds higher. It would also hurt the Fed’s anti-inflation credibility. There may be financial and corporate casualties, perhaps serious ones, as the economy unwinds the legacy of unnaturally low rates. But the market exists to price that risk too. Whatever else happens, it’s welcome news that the Fed at long last is letting the market do its vital work again.

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