Spekulatius

No one is "entitled" to returns. That includes Savers, bond investors, Stock investors, private equity investors, crypto/collectible investors, venture capital, real estate investors and entrepreneurs . At times, every one of these asset classes has performed horribly.

Bottom is not in for $BBBY. -27% SSS. Gheez. https://finance.yahoo.com/news/bed-bath-beyond-ceo-removed-june-2022-122453161.html

Furthermore , it is important to note that Russia officially is not in a war yet. We are still talking about a "special operation here", per Russia's official messaging. So there is zero risk of a nuclear escalation right now.

There is no deficit. Supply equals demand , it's just a matter of price.

Looking at Alleghany's performance, once sure hopes that these guys won't take over. I don't think that Markel has been that great either, especially with their venture / industrial side. I think Abel is the right choice. BRK is so big that it's harder to do acquisitions, so a great operator should like Abel is more important than a pure capital allocator. Abel just needs to continue to buy back BRK shares at opportune times and rip out some weed that has started to take hold in some corners of the Berkshire yard.

Inflation is how a sovereign is supposed to default on their debt.

Biological profits are non cash. You never see these profits. CAM.L was one of those sucker plays I participated with years ago to no avail. Growing tea and other products who know where. Unless they are paying you significant amount of cash, why bother?

I think inflation pressure will ease but the character of inflation will change from commodity/energy driven to wage driven. If we do get from 8% inflation driven by commodities/shortages to 6% inflation riven by wages, inflation will be very sticky and very hard to reverse. it's not a given, but it's a substantial risk.

Oxy is hard drug to withdraw from, once you get hooked on it. I think WEB will find out likewise, if he wants to exit this investment. I don't think he is going to swallow OXY, there is too much cyclicality in this and it likely won't be a great business in the long run.

I like the Zacks market edge podcast series and in particular the following episode: https://www.zacks.com/stock/news/1942453/analysis-are-we-in-a-recession One fact the economics mentioned is that 2% rate hike alone never caused a recession by itself. Even a 2-4% rate hike only caused recessions about 35% of the time in the past. It sure I got all the details, but it was interesting to hear. The podcast isn’t exactly rocket science but brings in some interesting sectors and ideas sometimes.

My own one experience is that infatuation with buying at the bottom is likely not going to work and leads to subpar results. Stock market bottoms are only known after the fact and as much an result of mass psychology than of economical data. You see this again and again when the perms bears actually correctly predict a decline but then double up on their bearish beliefs and predict much more declines and then totally miss the turn when the market turns up again. Then it’s s dead cat bounce or bear market rally and in the end when it’s clear they missed the turn they blame it the money printing from the Fed or something else that bails everyone out. Its much better just to buy stocks that one can identify as cheap knowing full well they can get cheaper on the near term and just live with the fact that you get reasonable results without ever finding the bottom.

I do think a ban on refinery fuel exports would make a difference, if the government looks for a quick fix for the high prices at the gas pump, albeit it with long term consequences. The US is net exporter of refinery products even right now, with refinery capacity being tight. It has been this way since 2010. Looks like we are exporting ~2M brl net with about 18M brl/day in total capacitycapacity, so it’s substantial. I think it would have a substantial impact on the prices at the pump and quite a negative impact for refinery margins, which are sky high right now. I am surprised this has not been floated around, especially with the snarky responses from the industry to Bidens letter. More effective than the gas tax holiday for sure. https://www.reuters.com/business/energy/us-refiners-urge-white-house-not-ban-fuel-exports-sources-2022-06-22/

I think a decline of 20-40% just on Buffett’s passing isn’t plausible. Do you really think a large part of the investor base will just sell? I don’t think so, there is no Buffett premium in the stock price currently, based in SOP or any other ratio. Interesting discussion and the vast divergence of views is always valuable to see. We won’t know until it actually happens.

What makes you think that Berkshire will drop much at all when WEB passes on the baton? I think BRK will drop less than 5% in this case. I would not be surprised, if the fall would be very small (<2%) and quickly reversed.

Kyle is never wrong but always a little early: https://www.dallasnews.com/business/local-companies/2021/10/17/dallas-hedge-fund-manager-kyle-basss-bet-against-the-hong-kong-dollar-fizzles/ https://www.udfonline.com/wp-content/uploads/2019/04/Tab-91-UDF-The-Oil-Glut-Is-Destroying-Kyle-Bass-Hedge-Fund-Hayman-Capital-_-Fortune.pdf

This particular plant (ISAR 2) is still running, so no issue with secondary radiation. I trust a technical report from the TÜV more then hearsay of a politician. I think a lot of preconceived notions in Europe are taking a bath when winter coming.

A few things regarding Europe. The current German government claimed that extending the life of the current nuclear power plants is very difficult , but the TÜV (which is the technical audit institution in Germany) came out with a report saying otherwise. At least some of the Nuclear power plants could easily continue to operate. This report puts a whole lot more pressure on the current government to agree to an extension Imo, especially now with Russia throttling NG supplies already. https://www.spiegel.de/wirtschaft/atomenergie-weiterbetrieb-von-isar-2-laut-tuev-gutachten-moeglich-a-6b41169f-557d-4adc-a2e6-07df79a71a9c More LT and this isn’t widely known, but Germany has likely lots of shale gas. The geology with lots of coal seams suggests so. Now fracking is banned in Germany but who knows. If things get really dire, I think some preexisting notions will change. Wer see this already with the green Habeck agreeing to continue operate the coal plants. I think the chances that the nuclear plants in Germany will get an extension and probably others will get fired up again has tremendously increased.

Ooof:

Fewer abortions=> less women in work force=>higher crime rates long term => higher inflation and Public spent

Yes, I second this. odd lots is a great podcast looking into macro issues. One thing I want to point out is that some snarky responses to Biden's letter are not a smart move. Biden for example could easily slap an export ban on refinery products and reduce the current extraordinary refining margins and lower prices at the pump. This was done before by prior administrations and these things often get resurrected. The US is still net exporter of refined products right now. I am sort of surprised this has not been floated around, since it is a short term fix, albeit with pot. long term negative consequences, but in a time when you want to quickly show results who cares? https://www.energyintel.com/00000180-1f98-d412-a3b2-9ffd68090000#:~:text=Exports of US refined petroleum,in the week ended Apr.

In your ketchup example, it depends on how input costs are doing. We have been seeing indications that Producer input costs have been rising faster than inflation. Producer input prices have been deflationary for a long time, but not recently - if producer input prices rise faster than inflation this means lower margins on aggregate: FWIW, I am seeing a lot of companies in manufacturing who have margin issues recently.

They talk about Apple and Apple play as well. There clearly won't be an Car with a Mercedes Star and Apple software. They do integrate Apple Play into their software. I have ranted about self driving before in the tesla thread. I think some legacy car maker have a better approach to self driving than Tesla , which has an camera only approach because Elon says so. I think the stock is worth looking at. They are currently overearnings on margins, but they could sell more cars if supply chain issues get sorted out. Shares are cheap and they paid a 5Euro dividend for a 58 Euro stock. They recently spun of their truck business, which is interesting on their own merits, but also indicates more nimbleness and more focus on shareholder value. (No position yet).

Just look at ROA and ROE of Italian banks vs US banks. Country frameworks and central bank policy really matters for banks. Europe has crippled their banking system with low interested rates. Now with the inflation surging and the ECB forced to raise interest rates, that may actually be changing, so it’s possibly a good time to take a look at some European banks again. I probably wouldn’t look at Italian banks first out of concern about Italiens weak economy and fiscal policy.

I really enjoyed this one from Verge. They interviewed the Mercedes CEO: https://www.theverge.com/23172839/mercedes-benz-ceo-ola-kallenius-electric-vehicles-self-driving-luxury-tech-g-class Mercedes is an interesting company to look at. They have really transformed from a super conservative company into something far more modern. I think they actually got the lead in self driving vehicles. Going all electric in 2030. I never heard much about the CEO be he sounds very reasonable and quite humble. https://www.theverge.com/23172839/mercedes-benz-ceo-ola-kallenius-electric-vehicles-self-driving-luxury-tech-g-class

Financials don’t have an issue with Inflation. I would argue that financials benefit from some inflation if interest rates increase with inflation as is the case right now. If we get hyperinflation, then this would be an issue for financials as well, but I don’t see this coming.