Spekulatius

https://www.bundesnetzagentur.de/EN/Areas/Energy/Companies/SecurityOfSupply/GasSupply/start.html#:~:text=Gas continues to be injected,remain at very high levels.

And yet, Germany's gas storage is 87% full, ahead of schedule. Track the data, not the stories.

Interesting - there are several reports out that the Ukrainians have broken through the frontline east of Kharkiv. Apparently the Russian have moved forces out of the area to reinforce the Kherson front, where the well publicized offensive in the south has taken place. Now they are apparently getting rolled in the North. Could be an absolute rout, if some sources are to be believed, but needs more confirmation. Buying ammunition from North Korea is not exactly an indication of strength either. Saw a pic on of a spent Russian Artillery shell dated 1964. That's older than I am.

Almost weekend and looking forward to the new episode drop LOS and House of Dragons. I like where both but after watching the first two episodes the HoD series promises to become a masterpiece just like GOT. Love the tournament melee scene where the Squire is puking in the background watching all the violence. Those little details is what make great movies, imo. E2 convinced more with character and story development than visuals, but I felt both were great. Now we need LoS pick up some steam...

I also went from being a moderate bull on Chinese stocks to being bearish. The stuff is all out there, the well researched DW documentary, Document #9, the spy legislation. It's not a surprise that the performance of Chinese equity has been crappy in general. Now, if you chose to invest in China, you first have to make sure you know what you are buying but also how it fits into the political framework and then there are tripwires like fraud, delisting's and pot sanctions as well as the possibility of another iron curtain rolling up once China tries the Taiwan unification. Seems like a lot of risk for what you are getting. There is certainly opportunity there, but at this point investing in China feels like playing in hard mode.

Bought some PAH3 / POAHY. I did buy some Exor a few days ago when it dropped below 60 Euros as well.

I have spent some time at our friends construction site a lake (no work, just fun) last weekend and couldn't help but look at the brand of engines from the boats cruising around: I counted: Mercury: 9 Honda: 1 That's bullish for $BC (don't own it though) , I guess. Back a few years ago, I recall seeing a lot of Yamaha's.

@mcliu thanks for pointing it out. Didn't know that "Eskimo" has become a loaded term.

I do this for little jobs like replacing car headlights (which can be a bit tricky in some newer cars). Saves me a hundred here and there for little work. Engine work can become quite a project though and you actually get dirty in the process. That's where I draw the line. LOL

Russia selling LNG to Canada is like selling ice to eskimos. It makes absolutely no sense whatsoever.

DCA works if you are starting out. It does not work well, if you have a lot of money in your account and new annual contributions are <5% of the total to put it in a plain number. In the latter case, the performance of your portfolio starts to matter much more than the new contributions. If you are concerned about index funds not performing well, I think you need to find ways to diversify out - maybe international funds, small caps, bonds - pretty much everything that does not hug the SP500 index. I don't think there is another choice really. You could also consider to start Roth IRA's instead of contributing to 401K (if your money is tight, if not you can do both). Or even consider changing the employer to be able to roll over your funds in a self directed IRA, if nothing else works.

The vast majority of employers don't have such a self directed option. I have asked my former employer about this and the HR person responsible plain out told me that they wont do it, because of concerns about liability. They are afraid of employees blowing up their accounts etc. If index funds perform terrible that not their problem - they can't get sued for that.

I think people starting out really need to consider where they should start their career. Maybe the job in area where you can get the highest salary, but also incur the highest cost of living and likely highest taxes is not really such a great choice. If you like the city life then maybe it's worth doing, or you do it for a few years and then move into a cheaper area. I never liked living in cities that much so I always chose my job where I could live in smaller cities / more suburban, which tend to have lower cost of living as well. Not being able to afford a home is more of a lifestyle choice than an affordability issue, especially with WFH gaining more traction.

The area Santa Barbara simply won't have many first time home buyers. That does not mean that the area dies out. It just means that likely other buyers will move to this very desirable area - think retired people, rich emigrants, tech employees etc. The problem existed forever in CA - there are more people moving out (especially in Uhaul trucks!) than moving in the state, yet CA did not die out. The balance is made up with with emigrants.

The next generation will eventually own what the current has, so they can't be poorer in aggregate. it may be more difficult to accumulate wealth from scratch though, if you aren't born in a family with some money. FWIW, the same arguments were made 20 years ago. I think every generation will have opportunities to create wealth but it may not be as easy in some time periods than in others and you may have to pounce on them. For example, if you invested in housing in 2009/2010 in the lost decade, you could have made out like a bandit (I didn't). No stock market knowledge necessary. Generally speaking, a lost decade will occurs when we have a few crisis during this time period and you are starting from a high base. That was the case in the 70's (two oil shocks) and 2000-2010 (dot.com bust and GFC). Every crisis is a huge opportunity to make a lot of money, if you are set up correctly and act accordingly. The current generation also has a strongest labor market since the 1960's going for it. It wasn't as pretty when I started working. Having no risk to stay unemployed is a nice implicit fallback that can be utilized to take more risk, for example. Just a few thoughts and that's how I explain "creating wealth" to my son.

The classical example of index distortion due to a bubble is the Canadian stock market index in 2000, which had a heavy dose of Nortel (which went bankrupt) and JDSU (which went so close to being a zero that it doesn't matter). I think the two together were over 60% of the index at some point. We could see a mild version of this in the US, if Fangs and tech fails to deliver returns. that's the problem with market cap weighing 0 it tends to exaggerate money flows and at some point , you can end up with a bubble because all the bubble stocks dominate the large cap index (think Tesla, SAAS, AMZN, META, GOOGL etc). I don't think GOOGL and META are bubble stocks, but it is possible that they as a group perform miserably. The average Joe will have trouble avoiding carnage in these circumstances. I guess investing in Foreign markets or small caps is a potential way out. As for @Libs statement that it does not matter, I don't agree with this statement. It may not matter for him as an active investor but a lot of us have a portion of their capital in 401K's where you can only chose index funds and maybe some actively matched funds. Many hug the SP500. Also one needs to keep in mind, that for every outperformer, there has to be an equally underperformer, because obviously not everyone can outperform in aggregate.

Lost decades are nothing new - we had already one from 1/1/2000 (SP500= 1469) to 1/1/2010 (SP500-1127). That's a whopping -23% return in a decade for Joe Sixpack investing in index funds. The 70's were worse, after accounting for inflation. I think every couple decades, one get's lost in terms of stock market returns.

Nope, that's not how it works: LNG is up everywhere, because European buyers are crowding out others by bidden more. LNG is a worldwide market, just like oil (with more infrastructure constraints). it's going to be tight for years and probably a better area to invest in than oil. Shell is the biggest integrated player on a world wide scale.

I don’t think the NG will flow from Russia for a long time, regardless of how the war plays out, @lnofeisoneRegarding the weather , what makes you think that next winter will be cold?

Just listened to the odd lot's podcast about China. It does a good job of describing the confluence of factors currently impacting the Chinese economy (real estate, zero COVID, stimulus (or lack thereoff), drought etc.) https://www.bloomberg.com/news/articles/2022-09-05/odd-lots-podcast-tom-orlik-on-china-s-economy-covid-zero-and-real-estate?srnd=oddlots-podcast

I am guessing that GS talks their own book here. One way that 22% inflation could happen is if the GBP collapses relative to the Euro. Since the UK pretty much imports everything (they have financialized their economy), this would lead to rapidly rising prices. My guess is that the UK would protect their currency with significant rate increases but I am no expert on this.

I agree on Nintendo. Sony also benefits from currency effects, but I am a but less sure about their valuation. Sony has some great business franchises like Movies (Spiderman franchise) and Music and PS as well as a leading position in Image sensors. They also have a great track record in capital allocation, where Nintendo is lacking a bit.

The UK economy seems to be in worse shape than the rest of Europe, but where did you get 22% inflation? They are at ~10% right now and I don't think it's going much higher. Europe has issues with energy supply right now, but I think in 2023, the worst will be behind them. Russia, on the other hand is likely to go into a an extended decline that is going to last years.

Russia has a LT problem that their economy is going to hell: https://finance.yahoo.com/news/russia-risks-bigger-longer-sanctions-135601014.html Now they stopped selling NG to Europe and then what? It’s not literally a gas station that stopped selling their gas (they do continue to sell crude oil of course).

I do not like the companies that Buffet bought. BASF is at the heart of Europes energy problem and deeply affect by the NG shortage. They can switch inputs to some extend (to oil), but if their allocation of NG is reduced by 50%, they have to curtail production in Ludwigshafen (their largest money maker). Even before that, the higher NG cost hurt quite a bit. This is a problem that does not go away. It may be priced in at this point and BASF has production in other geographies ( US/ Texas and Asia though ). However, why not buy CE or similar stocks? Allianz and Munich Ruck are insurance, that have been traditionally connect to each other. Allianz is pretty mediocre in my opinion. I feel there are better choices out there. You are correct that many German companies operate in sectors that are capital intensive, but so is insurance.