Spekulatius

Compilation of classic shorts from Ingmar Bergman movies: Some bear watching again. Absolute classics.

LOL, Joe's ice cream social has the answers:

Yes, i think there is a significant probability that the financial markets between of China HK will be cut of from the western financial system. That means that you may not be able to have access to your HK or chinese shares any more. The consequences of such an invasion would be much more severe than with the Ukraine war, due to the relative size of the Chinese economy vs the Russian economy.

Dependency on one major customer is a big risk, especially in Japan. Also, Toshiba as a company is terrible sclerotic and is has been losing market share for ages in semiconductors. I think at one point, they were one of the largest semiconductor business in the world. now, they are just a shadow of their former self.

This seems it: https://asia.nikkei.com/Politics/Full-text-of-Xi-Jinping-s-speech-on-the-CCP-s-100th-anniversary

CRM and TSM come to my mind as profitable and growing 15% over time. TSM will not make 15% growth next year, but I think they can do it on average over the next 5 years.

I think the Wagner group model themselves after the Totenkopf (skull) SS. SS was basically Hitler Guard. Some of them were elite army divisions (including tanks) others were guarding the Konzentrationcamps like Dachau. Similar to SS being Hitler’s guard, the Wagner units are separate from the regular army and run as a mercenary group directed by Putin.

Imagine going to a Costco in China Wednesday and a Thursday at the same Costco someone tests positive. Now everyone who works or visited the Costco (as a customer) within 2 days before an after the positive case needs to quarantine. That’s a story I was told from an manager whose company does business (with employees) in China this weekend over a beer. This is zero COVID-19 policy in China in practice.

From the SCMP: https://www.scmp.com/news/china/politics/article/3196167/incomparable-glory-awaits-china-world-stage-xi-jinping-tells?module=perpetual_scroll_0&pgtype=article&campaign=3196167 ”incomparable glory” uhh Ooh….

Hopefully not COVID-29. Also, he was indicating the strong possibility of not so peaceful unification. I found the undertone of his speech very unsettling. By the way, I think it was not an coincidence that the semiconductor restrictions were put in place just before the party Congress. I don’t expect a direct answer form China, but there will be an answer. FWIW, the West is in the process of disconnecting security sensitive industries and supply chain from China. If a major international company does not have a plan in place to manage their supply chain without China within a couple of years, they are taking a major existential risk. Really, it does not come much clearer than that. I am curious what companies like Apple are going to do, Producing 2M iPhones in India is not going to do it. As for what he says and what he does I think Autocrats tend to do what they say. That’s basically the reason they exist and how they rule.

Is wasn't in the US at that time, but people were not extremely bearish in 1981 and 1982 either. It was just a grinding bear market and a lot of disinterest. Lots of interest in Gold, silver, oil Yieldcos etc and real estate. Neither of these did great in the 80’s.

It’s not about results, it’s about ideology. His speech at the Congress today sounds like much more of the same, zero COVID-29, peacefully reunification more common prosperity etc, more neo Maoism. https://www.cnn.com/2022/10/15/china/china-party-congress-opening-day-intl-hnk/index.html https://www.wsj.com/articles/chinas-xi-jinping-hails-communist-partys-self-revolution-in-bid-to-extend-rule-11665894731?mod=hp_lead_pos7 Sounds bearish for Chinese stocks, if you ask me.

Biden going against Saudi Arabia is a mistake. It accomplishes nothing. As for the OPEC cut, it is likely that then 2M p/brl cut is not actually going to happen in practice. The reason is simple, the OPEC is quota and many members don’t even meet theirs. While it is clearly a political signal and aspect is trying to keep prices high, it’s not like Biden can really do anything and going against Saudi Arabia is doing nothing. The biggest mistake is not selling them weapon systems going forward. That is first an entirely different topic and I don’t really see how it punishes Saudi Arabia. It’s not even clear that the Brits or the French will adhere to this move. Likewise, I don’t think a price cap on Russian oil is going to work either after thinking about it for a while. It only works, if the world market price for oil is below the price cap, and then the price cap is redundant. The whole idea I think is nonsense.

This is gold: Transcript: So when I tell them that in order to understand Putin they shouldn't really talk to experts from the foreign office. They should go to a crime ridden area to the local police station where any Police Inspector would tell them what a normal gangster is like and how you deal with them

TIPS compensate you for inflation, but they don’t compensate you for the Fed raising interest rates. If the Fed starts stops raising interest rates, Tips should do better.

Bought some TSM. Missed the dump yesterday.

What is the best way to get a summary of the Chine communist party congress that is starting today: https://www.scmp.com/20th-party-congress Arguably the most important event when investing in China.

The UK may be an example where we have seen the limit of MMT. yes, you can have your cake and eat it too to a certain extend, if you are a central bank, but we have seen the rug pull in the UK. The combination of weak economy more proposed spending and tax cuts was just too much resulting in a rout for gilt bonds and the GBP. That's what a failure of MMT looks like. Now, the BOE has to tread very carefully. I see now that the finance minister has already been booted after 6 weeks on the job. Now the question is, who is next? https://www.cnbc.com/2022/10/14/uk-pm-liz-truss-fires-finance-minister-kwasi-kwarteng.html

@dealraker I also have $GE on my to do list, but I have my hands full with stuff I own already and know more about. Years ago, we had quite a bit of discussion about a similar case $DD (was $DWDP, DuPont). Like GE is was a lumbering Gina where new management came in ( Breen) and split up and restructured the company with complex mergers. This was a case that created a lot of brain damage and very little results. It may serve as a cautionary tale to be very careful in these situations. @BG2008 Same with spin-offs lately as most of them have been disasters.

I don’t know how much signal there is in NG European spot prices, but they have gone down to 146 Euro from a peak of ~340 Euro. If I were a betting man, I would bet on these prices going down further and US prices going up. https://tradingeconomics.com/commodity/eu-natural-gas

@Dalal.Holdings Actually Aswath invests as well, partly based on what he teaches. I also think he is talking about operating earnings, not GAAP earnings. Operating earnings indeed don't change as much than GAAP earnings. His equity premium framework is very helpful to understand the impact of higher interest rates on valuations, imo.

I agree on LVMH. For a lot of exporters, the current estimates in Euro have not baked in the exchange rate changes (weaker Euro). I expect to see some surprises, especially for companies like LVMH that see no direct impact from higher energy prices. Even BASF's earnings yesterday weren't that bad even though they sit in the middle of the problem as far as energy prices are concerned.

That has nothing to do with coupling or decoupling with China though. The US needs to keep an open door policy for able emigrants from China and elsewhere. Oddlots podcast has a good episode about China: https://www.bloomberg.com/news/articles/2022-10-13/dan-wang-on-the-extraordinary-moment-for-china-s-party-congress?srnd=oddlots-podcast#xj4y7vzkg 1) doesn't expect much change to zero COVID-19 policy after the big congress on Oct 16 2) Whack a mole everywhere (Property, gaming, Alibaba / ecommerce, education and now even booze !) 3) Trade war started by trump now continues with Biden (semi's etc.)

SS follows a formula indexed to inflation. It has nothing to do with Joe. FWIW these continued hot core inflation prints are proof that the inflation is not all that transitory. We said transitory in 2021 and the Fed acted upon this being transitory, yet here we are with 2022 with almost done and the inflation dragon is still alive. The most important thing the Fed needs to do once it's done raising (which may be soon) is to keep the interest rates high for a while. In my opinion, until the interest rates are noticeable positive after inflation. That's probably the only way to slay the inflation dragon. Of course I do not run the Fed and don't have a Nobel price in economics. I do remember enough about the 70's and my toys getting noticeable more expensive every year.

Looks like the impact is about $7B with the biggest losers being AMAT and LRCX ( not surprisingly) https://finance.yahoo.com/news/applied-materials-cuts-forecast-blaming-202509425.html