UK

Quite good writeup: https://seekingalpha.com/article/4546944-fairfax-financial-unfairly-punished-by-investors-significantly-undervalued?mailingid=29398128&messageid=2800&serial=293

Another one on sentiment: https://www.bloomberg.com/news/articles/2022-10-17/small-time-options-traders-bet-big-on-us-stocks-falling-further?leadSource=uverify wall

Thanks. Yes, unfortunatelly I mostly agree with your sombre view. Probably just wishfull thinking on my part.

UMG: https://www.sec.gov/Archives/edgar/data/1811882/000119312521200767/d179734dex993.htm

https://www.wsj.com/articles/whiplash-in-stock-market-shows-investors-are-still-on-edge-11665871144?mod=hp_lead_pos3

https://www.bloomberg.com/news/articles/2022-10-15/uk-fiscal-mess-becomes-butt-of-jokes-during-week-of-imf-meetings?srnd=premium-europe One joke circulating on Twitter went: “Apparently Kwarteng had to fly home first class, as no-one wanted him near business or economy.”

Again, I agree on opportunities, and I also am in a process in changing my portfolio defensiveness. And it is just a discussion on "market bottom". I do not think one should try to time or wait for it too much or care about to much if he is invested in good companies for longer term.

I agree with you on that. I read that now even Klarman finally sees some value for long term investors now:). But I was talking about sentiment which usually marks the bottom and also my surounding anecdotal sentiment, from very unprofessional people etc, and which is probably always late and not that important. However in spring 2020 these pain points were quite quickly checked during the markets darkests hours. And yes, no craziness anymore, but not that big pesimism either. US market and CBNC comentators are probably ahead of that, but I remember Cramer was screaming for rate cuts in GFC, not just telling to sell into the rallies.

This is very good point and I would say we are nowhere near that sentiment, at least around me. Now, like 80 per cent or more people in my country invests only in RE, but in the last 5 years, but especially since pandemic, more and more are discovering equities. These days they still get lots of publicity and, like every day in a local business paper I see articles, how to invest in stocks etc, where to open account, lots of success stories, usually how one invested in Tesla during pandemic etc. So far no fear or apathy at all. Even some enthusiasm. However they already mostly stopped writing about cryptocurrencies and NFTs. Also I have some friends, who usually, like in the worst moment, want to sell everything and swear to do not own equities anymore, or they switch their life insurance from equities to bonds. Not happening yet either. Though recently seems nobody also inquires about how to invest into Chinese EVs and similar stuff anymore:)

https://www.bloomberg.com/news/articles/2022-10-15/torched-stocks-are-about-the-only-thing-working-in-fed-s-favor?srnd=premium-europe Even with Thursday’s big bounce, the S&P 500 has lost a quarter of its value this year. Shocking as that’s been for investors, it’s one of the few things happening anywhere that actually accords with the Fed’s goal of draining the economy of bloat. Recently, the toll in terms of wealth destroyed -- about $15 trillion to date -- has started to approach that of the 2008 financial crisis, when measured against US gross domestic product. And while the stock market isn’t the economy, it’s a signal and an input into it, affecting everything from consumer sentiment to the price of private enterprises. Declines on a par with what’s already happened in equities have been a decent proxy for reversals in inflation more than a dozen times since the late 1950s, according to research from Doug Ramsey, chief investment officer at the Leuthold Group. While painful in the short run, the decline of the equity market’s size relative to that of the economy can be seen as a healthy development for market bulls. Plunging asset prices have finally pushed the stock-market capitalization relative to national gross domestic income out of the top quintile of historical readings, which has preceded equity declines in the next year, three and five years, data compiled by Ned Davis Research show.

https://www.ft.com/content/885865b1-2320-43c0-b41e-10c1d026202a China has insisted it will stick to its strict zero-Covid policies, saying its extensive testing and quarantine apparatus is sufficient ahead of the 20th Communist party congress, which begins on Sunday. On Thursday, leading epidemiologist Liang Wannian said there was “no timeline” for an exit from zero-Covid rules and earlier in the week the state-run People’s Daily newspaper ran a prominent defence of the strategy. Liang added that the country now had the capacity to test 1bn people in a single day. In Beijing and other major cities, including Shanghai, authorities have tightened measures ahead of the launch of the congress and residents need to test negative every few days to enter most buildings.

https://www.wsj.com/articles/how-to-keep-the-ukraine-conflict-from-going-nuclear-11665761260 The U.S. government should be communicating, quietly and often, to the Russian military not to follow any unhinged orders from Mr. Putin to use nuclear weapons. Anyone who orders nuclear use and anyone who implements such orders, they should be told, will be held accountable. Mr. Putin has brought a great disaster upon the Russian military, Russian elites and the Russian people. Washington should be reminding all Russians that a Ukrainian victory in this war won’t be an existential threat to Russia. It would be existential threat only to Vladimir Putin. Mr. Putin has surrounded himself with “yes men” who protect him and tell him what he wants to hear. But the cocoon of loyalty around him is beginning to crack, according to American intelligence sources. Nikita Khrushchev was overthrown in 1963 in part because he displayed such reckless decision-making during the Cuban Missile Crisis. When former NSC adviser Zbigniew Brzezinski was asked, “How come you failed to predict the ouster of Khrushchev?” he replied, “Tell me, if Khrushchev couldn’t predict his own ouster, how do you expect me to do so?” Analysts inside and outside the U.S. government can’t predict exactly when or how Mr. Putin will be overthrown from within. The future of Russia will be determined by the Russian people. But a Russia without Vladimir Putin must be our long-range hope, even if it is not our immediate expectation.

Yes. I am EUR based (btw inflation where I live is like 20+ and we cannot even rise rates ourselves:)) with majority of the portfolio assets in US/Global and so with large, like 60+ percent, USD and other currency exposure. That served well up till now, but those currency movements of lately become so large, that it is becoming hard to ignore, especially also if you do some borrowing in EUR. My long term view is that it is more likely than not, that EUR goes JPY way, with permanently lower rates and depreciation against USD (because of economy, demography, geopolitics, not to mention currently ongoing war and energy issues). But it could be dangerous position in the short/mid term. One more question I do not have a good answer.

https://www.bloomberg.com/news/articles/2022-10-14/summers-sees-more-land-mines-after-uk-warns-on-bond-shut-out?srnd=premium-europe “I doubt we’ve seen the last mine go off. Some of them might be in the private sector. I think more of them may be international,” Summers said. He said he was struck by “countries reporting difficulty in getting market access” at this week’s meetings in Washington. I am not sure if that would mark possible bottom, but how can FED not stop/pivot if situation in credit market gets more seriuos despite of infliation?

https://www.bloomberg.com/opinion/articles/2022-10-14/fed-s-next-crisis-is-brewing-in-us-treasuries Conditions are so worrisome that Treasury Secretary Janet Yellen took the unusual step Wednesday of expressing concern about a potential breakdown in trading, saying after a speech in Washington that her department is “worried about a loss of adequate liquidity” in the $23.7 trillion market for US government securities. Make no mistake, if the Treasury market seizes up, the global economy and financial system will have much bigger problems than elevated inflation.

Good overview of the situation: https://www.bloomberg.com/opinion/articles/2022-10-14/uk-financial-crisis-threatens-to-derail-central-banks-in-global-inflation-fight?srnd=premium-europe Overall, therefore, the British soap opera has sharply increased the chances of the dreaded policy “pivot” for the rest of the world. For reasons of financial stability (a euphemism for avoiding a crisis), more central banks will come under pressure to reverse their course. If Bailey and the BOE hold the line and buy back no more gilts, it won’t end the issue, but it would provide other countries with more hope that Quantitative Destruction and a monetary policy pivot can be avoided.

https://www.bloomberg.com/news/articles/2022-10-13/bitcoin-btc-becoming-less-volatile-than-stocks-raises-warning-flag And even though lower volatility is typically welcomed in the stock market, for instance, the combo could spell trouble for Bitcoin, where there tend to be plenty of speculators who enter the space purely for the thrill of the swings.

https://www.wsj.com/articles/venture-firms-are-betting-on-public-tech-stocks-as-startup-market-stalls-11665653404?mod=hp_lista_pos3 Other firms—including Sequoia Capital and Andreessen Horowitz, two of Silicon Valley’s most high-profile investors—are going further, buying shares in public tech firms they hadn’t previously backed as startups. Venture capitalists say they are taking advantage of a stock selloff that has allowed them to buy shares in high-profile tech companies at a good price for the first time in years. At the same time, they say they have struggled to find good investments in the startup market, where prices for new financings have remained expensive and startup rounds have slowed despite record capital. In the first quarter, Sequoia’s U.S. startup funds purchased over 2.5 million new shares in data-analytics firm Amplitude Inc. and 573,500 new shares in food-delivery service DoorDash Inc., according to public filings, two companies that counted Sequoia as one of their largest shareholders when going public. At the time Sequoia bought the shares, the stock prices of both companies were down more than 60% from last year’s all-time highs. Pat Grady, a partner at Sequoia, said the firm began making lists of public companies to invest in when the market began to dip late last year. Sequoia went through a similar exercise after the 2008 crash, when it came up with a list of 20 public companies. It ended up buying two stocks—in software firms Autodesk Inc. and Cadence Design Systems Inc. Mr. Grady said the firm eventually regretted not having made more public-market bets in the wake of the financial crisis. Purchases of some public shares by venture firms from earlier this year have already tanked, illustrating the risks. Sequoia’s DoorDash investment from March has shed over 40% of its value, even though the food-delivery firm’s second-quarter revenue growth surpassed analyst estimates. Vince Hankes, a partner at New York venture firm Thrive Capital, said his team had long admired the business behind Carvana Co. , a used-car retailer that Thrive hadn’t backed before it went public in 2017. As Carvana’s stock began to crater last fall, the firm took note.Thrive ended up buying 812,713 shares in Carvana in the first quarter and then almost doubled its stake in the subsequent months, according to public filings. “We think about it very similarly to how we make a private company investment,” Mr. Hankes said, adding that Thrive’s goal is to hold its public stocks for years.

Well it seems you are much better informed than me, I just looked at the estimates, assuming they are somewhat right for such a large and well known business and cannot argue and hope you are right. Nothing agaist LVHM, seem wonderfull well performing business.

I see LVMH 2023 EPS estimate 31 EUR?

I do agree, that EU is much more like Japan, than US, however during covid episode, they also printed a lot and fiscal spending was huge, including Hamilton moment and actually these rescue funds from joint borrowing only now are reaching the countries. Spending was mainly done to business, instead of people though. Meanwhile EU has some other big problems and if markets are going crazy about GB, I am not sure how things will go for Italy. If you think that raising rates is crazy or going to fast in US, than it is madness to do the same in Europe, which it seems they will try anyway:). Will be interesting to see how it plays out. And this 10 vs 15 PE, actually if you look more closely it mostly because SNP includes better companies/industries. Nestles or LHVMs are not much cheaper than KO or Apple, and you do not want to touch DB or CS.

Last hope standing for team transitory:)? https://www.bloomberg.com/news/articles/2022-10-12/kuroda-vows-to-keep-easing-to-support-still-recovering-economy#xj4y7vzkg

https://www.bloomberg.com/news/articles/2022-10-11/jerome-powell-s-inflation-fight-recalls-paul-volcker-s Today, with its tough talk and a series of supersize interest rate hikes, Powell’s Fed seems to be trying to show that it, too, is prepared to do whatever is necessary to bring down inflation. But the legend of Volcker, the superhero inflation fighter, often overlooks just how costly that battle was. Years later, in his conversations with me as I helped him write his memoir, Volcker still wrestled with the question of whether he could have done anything differently and caused less harm to American workers and the economy. “Did I realize at the time how high interest rates might go before we could claim success? No,” Volcker wrote in his memoir. “From today’s vantage point, was there a better path? Not to my knowledge—not then or now.” The real test for Powell and his colleagues will be whether they can also persist if the economy and the financial system start to show serious signs of strain. Volcker told me he supported Powell’s nomination as Fed chairman because he liked that his background was in the financial industry and the Treasury Department—experience that Volcker believed would help him better understand the practical effects of monetary policies.

FED and treasury to the rest of the world: drop dead. The dollar has been virtually unstoppable this year, and Janet Yellen just said it’s in the US interest for the currency to be driven by markets. Central banks from Japan to Chile have stepped in to try shield their currencies from the worst of the dollar’s onslaught, but the efforts have yielded limited results. Yellen, who said a “market determined value of the dollar is in America’s interest,” is giving investors little reason to bet against the greenback for now. “I don’t see any imbalances yet that would cause a pivot from the Fed,” Citigroup Inc. economist Veronica Clark said on Bloomberg Television. “The Fed will pay attention to global financial stability concerns, a strong dollar is part of that, but it’s ultimately going to be domestic conditions and what the Fed is seeing on inflation.” Kristina Hooper, chief global market strategist for Invesco, said in a note that while world economy is slowing after rate hikes, there is yet to be a meaningful decline in inflation. “This is an extraordinary monetary policy tightening environment and we are waiting to see if something breaks globally,” she said. “The UK has come close.”