Spekulatius

There are a lot of ways to play a boom on housing, besides home builders. The distributors are one way - they have benefited from higher demand but also structural changes (consolidation). Then there are material suppliers like OC, which basically doubled their margins on top of a demand increase. is this margin boost permanent - that's the big question here. I do like OC and the stock is cheap (~12%+ FCF yield) . It's also a green play in the way that insulation products help with energy conservation. I think most of their revenues go into building updates not new construction, so probably much steadier than a homebuilders business. https://investor.owenscorning.com/investors/overview/default.aspx

The russian black sea fleet being damaged is important because they currently blockade the last and most important Ukraine harbor, which is Odessa. this is imporant because grain shipments are typically coming via Odessa. Ukraine a while ago stated that 2/3 of the fields were seeded this year, so there is a chance that a decent grain harvest is possible and that this grain can make it out. I think sooner or later, NATO will force the Russian fleet to abandon the blockade if they don't go away by themselves or as part of a peace deal. Will be interest to find out what exactly happened and if it's true that Russian ship defenses can't handle more than one incoming target. Again I said it before - if your army/ navy / air force has bought a lot of Russian material, I would seriously consider how much that is worth. Turkey for example has some pretty good stuff, if you need it cheaper than US/EU/UK can provide. With Russian tanks popping turrets, IFV vehicles exploding after getting hit from bombs dropped from consumer grade drones, Helicopters getting into Russian air space and ships getting damaged because the defense system was overwhelmed means you bought a bunch of obsolete scrap.

Fake news. Kremlin: Moskva destroyed Ukraine drone, completed fire drill. All Russian sailors who evacuated the ship are safe.

@changegonnacome I disagree that working from home is a gamechanger for LGIH. While WFH shifted demand, it probably isn’t something permanent especially with the kind of jobs that first time home buyer are having. I think there is a pent up demand for the homes that LGIH offers right now, but once that demand surge from this pool of buyers is satisfied, it’s probably very cyclical again.

Very convincing:

Yes, the gap between CPI and PPI seems to imply margin erosion. Some of it can be compensated with productivity gains and salaries (an important input cost) growing slower than inflation, but overall it does not point to great pricing power.

Yes, there are videos around on reddit that look authentic. The siege of Mariupol is on it's last legs.

Yes, the psychological aspect should not be underrated. In fact if anything , it has caught many by surprise that people actually do care (just read the early comments here) about Ukraine. Politicians see this too and adjust accordingly. Classical reflexivity at work here - perception can change the outcome. This applies to investing and even more so to politics or even wars.

I agree. The very real aid that the US and the Europeans gave to the Ukraine is changing the outcome. I also think that dumping the Russian NG in the long run will change energy policy. This is not virtue signaling. The US has fought many wars and some were worth fighting and other were not. This one is worth fighting, imo.

Oh boy 11.2% producer price increase after 8.5% increase for CPI: https://www.cnbc.com/2022/04/13/producer-price-index-march-2022-.html

Navalny is irrelevant, Imo. I don’t think he makes a difference. There seems to be a documentary out that is going to stream on HBO: https://en.wikipedia.org/wiki/Navalny_(film)

I think it is retail and probably traders as well trying to latch on retail trends and scalp them. There are certainly institutional traders in meme stocks for example. The narrative explanations behind market moves are mostly meaningless. You often see headlines in CNBC for example that market is down because of XX and in reality the market is already green again.

Russian drone breakdown. Has a Canon SLR for optics. No Russian without a bottle. LOL: @Pelagic I agree one drone effectiveness. I think the Azerbaidzan - Armenian war showed already how effective relatively cheap drones are. Stingers and Javelins are much more complex than these loitering drones and they have a rocket propulsion, so much faster. they can take a 50-$100M jet fighter, so a 50-100K price tag may actually be a good value. The Ukrainian Stugna anti tank missile which is seen in a lot of Ukrainian clips is wire controlled (80's technology basically) and allegedly costs $20K as another point of reference.

Switch blades drones are not that expensive - about $6K/ unit. High end consumer drones are 3K and are worse for this purpose (slower, don't have payload, not compatible with other weapon systems). Not everything made for the military is expensive. You would be surprised how little GPS controlled glide bombs cost - I think it's a only few thousand $. That's a lot of bang for the buck.

@Broeb22 I believe it is correct that the home owners business model has not changed in the last 15 years. My favorite metric - Inventories/ revenues ( a measure of capital intensity) is actually worse now than it was in 2005 for DHI (to my own surprise). For me, it's clear that home builders likely would lose a lot of money in a severe housing decline. However, keep in mind that DHI always was a quite well and efficiently managed builder, so all this may not apply to the entire industry.

I suggest a consumption based model. Order Satellite images for free - its on you to identify target - and order the drone strike with a button. Pay once you see the destroyed target.

If you think retail doesn't matter just look at how stocks are trading right after they announce a stock split (TSLA, AMZN, GOOG, SHOP) are recent examples.

I don't. I do work in the industry and knew some people who worked on high end drones and satellite optics specifically a while ago. I am sure there is some material out there, but the exact capabilities are certainly classified.

Well, what you describe are essentially the Switchblade suicide drones. The Israelis (Elbit) have a similar design, I believe.

Yes, homebuilder stocks lost 90%. The SFH decline was much dependent on location. East coat was probably ~30% from peak to trough, but others areas fared worse. My home went from $325K (2002 / purchase) to ~$550K ( Mid 2005) to ~300K in 2010, so a ~45% decline. It would have taken me until 2012 to break even on my purchase price and until 2019 if bought at the peak. This was in the California North Bay area. So stuff can happen. I checked some old reports from DHI to see if the business model really has become more capital light and I don't think it did. In fact, based on my quick Inventory/ revenue metric, it has was asset lighter in 2004/2005 than it is now (DHI inventory / revenue ratio was 62% vs 67.4% now): They do have less debt than they did back then, so the balance sheet has changed, but i don't think the business itself has changed.

Gold.

I think the bear case for SFH is all the institutional money piling in. Many here think it's bullish and maybe it was in the beginning, but institutional money become dumb money really quick. institutional money is also much more likely to sell once the tide turns than a homeowner living in his property. When the time comes, they may find that selling is not that easy because liquidity can disappear quickly in a housing market. I think that even the homebuilders buying their own product is a head scratcher. Does anyone know how many SFH homes are owned by institutional investors and what percentage of the houses they buy currently?

Well, if you bought a lot of Russian weapons, you may want to ask for a refund. It's difficult to blame this disaster on operator error entirely. Turkey for example will sell a lot of drones for sure. The Bayraktar is basically a simpler Reaper drone at 1/4 of the price and with twice the payload (due to using non-powered glide bombs rather than hellfire missiles). Turkey has a lot of good stuff in terms of military equipment (small tanks, infantry fighting vehicles, rockets). I bet it will sell like hotcakes since the Turkish lira is also cheap. Also keep in mind that the US shares satellite surveillance with Ukraine so it is exactly known to them where, with what and with how much the Russians will be attacking. I know for fact that the Maxar pics we are seeing in newsreels are not state of the art. The real mil grade surveillance is much better than that using high resolution optics, IR and what not. State of the art satellite imagery can likely read a license plate if it points upwards.

Yes, Paul Giamatti is great and I love to see him in movies ever since he portrayed Pekar in "American Splendor" - a great indy movie. @cubsfan loved "Nobody as well". That bus fight scene is worth watching the movie alone: I come to like "Station 11" that HBO doomsday series. Great acting and the storyline jumping back and forth in time makes for great engagement.

I agree on this. Putin miscalculated and now his only real off ramp is in a coffin and that's not likely to happen He is trying to create facts on a battlefield, moving the tip of the spear to Donbas and create a breakthrough there. Donbas is better for him from a military POV, because supply lines are shorter and the land is more open. This should be an advantage for large tank armies and artillery and disadvantage hit and run tactics the Ukrainian have been using. Now the war has morphed into a weird version of WW1 with powerful defense weaponary, airplanes barely relevant because of AA defense systems, Spotting Drones and Artillery being a powerful combo ( airplanes were first used as spotters for artillery in WW1) and the Rockets / Javelins neutralizing tanks. Russia needs to break through the Ukrainian front, which most likely will try with a large tank force similar to Kursk trying to overwhelm the Ukraine and create a break through the front. If you study the Russian army doctrine, then you know that 15-20k dead won't deter them from trying and rolling the dice. If this attack fails or even if it only partly succeeds, then this war is going to take a long time. Regardless of the outcome, we are looking at a new iron curtain getting erected between Russia and Europe.