Spekulatius

Buying a bit more CMCSA here. Painful.

This is correct, I just wanted to point out the magnitude of risk here. Semi equipment sales to China won’t entirely go to zero. For example, the equipment to produce trailing edge nodes for analog semis won’t be affected as I understand it. I think the beneficiaries are MU and even TSM in the long run , because any competition from China is going to get kneecapped. TSM also sells into China (~10%) but I think that entails some re-exports as well, so likely impact is lower. In the long run, their strategic position has become more significant, I think.

ALT investment have been a way to get returns in a ZIRP environment. If you can get real returns with bonds again, then ALT investment would become less attractive and the big institutions would probably shift some allocation to bonds rather than ALT investments. I think the most likely thesis breaker are sustained higher bond yields.

Javier is incorrect- the Saudi we’re all in on the oil embargo in 1974. I don’t think we get a deal with Iran though, except maybe a narrow nuclear proliferation deal. Optics are terrible with the protests and Iran delivering weapons to Russia. I think we see something with Venezuela- much less hostile and dangerous and it’s right at out doorstep.

Yes, LNG tankers are shifted. China for example needs way less LNG. That said, I do not know the supply chain situation that well.

How do you explain that the USD is so high if they are selling treasuries. Do you think they keep it in cash? They sure aren’t buying stocks or real estate.

No, they would not write back the goodwill if PCP as a business improves.

Your logic makes no sense. The USD is at record highs, so it's not that foreign entities are selling it. If anything , there seems to be a shortage of USD and the EM's are going to feel the pain.

Checks to the Ukraine are a great investment. Keeps this particular problem out of our way for decades to come. Energy is tied to this and needs to take into account the shortfall that is mostly NG not crude. The Russians keep selling crude just like they used to, because they have to.

All these foibles around crude and oil are annoying when NG is really the energy source that matters, both in Europe and in the US. Biden should do all he can to encourage NG production in the US to allow exports to Europe and to make sure there is no problem in the US. having high NG prices in the US will cause all sorts of negative externalities, much more so than high prices at the pump.

PAOHY, USB, LEVI, TSM are my latest adds.

@lnofeisone and @ValueHippie you could well be right. I do feel that a lot of pessimism is build in valuations for Euorpean manufacturing stocks. As someone who works in the US in manufacturing it is really hard to compete against Europeans now with the USD- Euro exchange rate as it is. This matters more for France and Germany etc who actually have manufacturing, rather than the UK which has financialized their economy and doesn't really make anything any more and exited the European Union. The UK is in way worse shape than the EU countries in my opinion.

It used to be the case that you could write down goodwill, but that’s not true any more. Goodwill now only gets written off when it does not pass the impairment test. Other intangibles (like customer lists) still can be written off. The ghist or your post is still true. If you buy a high ROIC business, most of your Purchase price is goodwill. if this business keeps growing, Goodwill still will remains the same, only the smallish tangible part of invested capital will grow. Simple example - you bug a business for $5B and it earns $250M, You pay $4B for intangibles and $1B for tangible assets. Business growths and doubles in size over a couple of years. If everything remains the same, then your tangibles will have doubled too, to $2B but intangibles remains the same at $4B So now you own a business that is valued on your balance sheet for $6B and that makes $500M in earnings (assume that earnings have doubled as the business size did). The key of course is that the business keeps growing after you buy it. PCP for example didn’t do this and that’s why goodwill was written down as it didn’t pass the impairment test one year.

I liked Rings of Power so far. Solid and it’s nice to see the storylines converging. I am currently at HOD E7. E7 was solid too. E6 was a bit boring to me and I thought already that HID may become Downton Abbey but with Dragon (and worse actors). I do think E7 is better hope it continues. On nother note, I like the new Pennyworth series in HBO. Love the style, production and the acting. I am only 2 Episodes on so far and hope it continues.

Checked out the Blockwork Macro channel and found the episode with Aswath Damodaran pretty good: Aswath is really a clear thinker and explain how to think about inflation , the impact on equity prices etc. Highly recommended. Some of his points~ stable high inflation is not a problem for business. Companies could easily deal with let say 7% constant inflation. However, high inflation is almost never stable. When inflation is 7% it could be that next year inflation is at 5%, 2% or 10%. That’s what happened in the 70‘s. Needless to say, this uncertainty is toxic for most business. Thats why the 70‘s were all over the place.

LOL. Virtually any train line in Europe is electrified. This is really nothing new.

The FT article seems a bit contrarian but that’s the way I see it too. The elevated NG prices in Europe are about to collapse. They are already down ~50% from this super spike in July when Putin turned off the NG. Spoiler could be an extremely cold winter. https://www.ft.com/content/be331b8e-3a24-4941-b6d0-aa3041f789cf?ftcamp=traffic/partner/feed_headline/us_yahoo/auddev The progress in Germany is summarized here: https://www.bmwk.de/Redaktion/EN/Pressemitteilungen/2022/09/20220901-bmwk-charters-fifth-floating-lng-terminal-while-infrastructure.html

Railroads are not going away. For bulk goods, it is really hard to beat railroads. However I can see the relative competitiveness of trucking improving for if self driving trucks becomes possible, even if it’s on highways only. I have been loosely following the big truck companies in this area and I think we might get self driving trucking way before self driving cars. When speed and door to door handling matters, then trucking is much better than rails. Now self driving trains is possible too, but the relative benefit of a self driving train would be much smaller than for a self driving truck as far as unit costs are concerned. These are all long term trends so I would not sell rail stocks over this, if I owned any. However, it would be a trend that I would start to watch. I am mainly interested in this because I think the truck manufacturers like Paccar, Daimler Truck etc could add enormous value to their customers, if self driving trucking is solved.

@mcliu if actually follow the Twitter thread , you will find out what it really is what you are seeing.

Self driving and electric have very little to do with each other. the problem with RR is that it’s slow and loads needed to go on a truck for the last leg. I could see a hub model for cities where trucks arrive form the longer HSY stretch’s and drives do the last mile thing and drive them to their destination. a self driving on a highway isn’t far off, even consumer cars do a pretty good job with driving assist now on highways. Driving trucks in any road is going to be way harder and that’s why I think highway self driving will come way before self driving in general and it will benefit trucking more than railroads.

Agricultural stocks: KWS.DE has a pretty nice family controlled seed ( non GMO) business. CNHI is a competitor to DE , but much cheaper. They have over time systemically improved the business imo. I also think that their biggest owner (EXOR) is rational and gives strategic direction. CTVA (Seed, crop protection) is a DuPont spin-off , but way to expensive right now. I guess Bayer would fit in here too, but the management is just too horrible.

Blockchain does not solve real world trust problems. You still need to trust that the real world reflects what happens in the blockchain. I can sell you a Ferrari on the blockchain and when you drive to pick it up, you find my 10 year old Hyundai beater. I guess that’s what the crypto brothers calls an NFT. FWIW, Germany after WW2 was a barter economy and with many people scraping by, it was certainly more corrupt than it was later. However, I don’t think Germany as a society was corrupt even back then.

Self driving trucks would shift the moat away from Railroads to trucking. I think self driving trucking on Highways is a solvable problem in the not too distant future. It’s possible that truck drive themselves on highways and then park on exits and drivers will assist with the last few miles. This won’t take away the energy use advantage of railroads but it will take labor out of trucking. This is probably inevitable because we won’t have enough truckers 10-20 years from now otherwise.

If you truly believe that Putin would unleash a nuclear holocaust when his special operation turns out to be a total failure, then Putin would be in the same zip code than Hitler. Can’t have it both ways - believe that Putin isn’t that bad and then believe that he unleashes nuclear holocaust, when he doesn’t get what he wants. Just remember, he isn’t really cornered. He can take his army (or what’s left of it ) and move it back to Russian borders. He does have a choice. Nobody has attacked Russia territory.

The semi equipment companies like LRCX, AMAT, KLAC and others should see a huge hit from this. Revenue % From China per 2022 10-K LRCX: 31.4% AMAT:33% KLAC: 29% TER: 17% Even worse, the percentage of revenues from China has been rising for years. I don’t know how much of thee revenues is directly at risk, but I think it’s substantial. I am guess we will see double digit drops in these stocks.