Spekulatius

I would seriously doubt that Lehman and a bear sterns failed because of short sellers. Lehman ran at a ~30x leveraged ratio going into the GFC with a lot of impaired assets. There was no way they could remain solvent. They were already dead, they just didn’t know it yet in 2008. Short selling has nothing to do with this.

I think the end game is that the iron curtain is going to go up again, with different borders this time. This is what it’s going to boil down to.

One fellow stated that naked short selling has driven thousand of companies out of business. Can you tell me one that was driven out of business by short selling, and more specifically naked short selling? People are mixing up cause and effect here. Even Overstock or Gamestock were not driven out of business by short selling. Nobody mentions promotes like 90% of the SPAC’s, Chamath and many others in this lengthy TV special.

His KEDM letter is worth considering, it is quite an extensive piece of work. I do think his risk management is no nonexistent. There is a reason his track record before 2018 or so disappeared. Also, take his Twitter takes with a grain is salt - first he talks about owning a “fukton” of RSX then it’s just a few hundred BP of losses. He also was long a Kasachstan Fintech that lost 2/3 of its value very quickly.

I don’t know - many perceived differences wouldn’t survive a blind test. that’s true for many things, but especially spirits. https://www.npr.org/2018/03/01/590022606/is-there-really-a-difference-between-expensive-vodka-and-cheap-vodka

@nafregnum Thanks, I missed that. Very important distinction.

Join a local Angel investing Keiretsu or at least get to know some people from there.

Interesting. Shell buying crude for….$28.5/ brl from the Russians including delivery. https://finance.yahoo.com/news/shell-buys-russia-flagship-urals-161930283.html I don’t think the Chinese and North Koreans will pay more. If this continues, they are sooo screwed.

Any risk due to the Ukraine invasion hiding somewhere within insurers? I don’t think much insurance was written in Ukraine, but business interruption insurance or is insurance for stranded assets like AER planes could require some payouts. Thats not a BRK specific problem, but I think BRK due to their size may see some of this.

We will see. My thinking is that as long as the Ukrainian are willing to fight, we should help them. It’s not that anyone really will put his life on the line, because he gets encouragement from someone else on TV. Yes, maybe Putin can declare territorial victory of some sorts, but I think Russia swallowed a brick and sanctions will have the economy set back for a decade and they become another Iran. As for Refugees, I am going to flip this around and state that this is a great opportunity for any demographically challenge European countries try to replenish ranks and get a lot of hard working people that are way easier to integrate than the million of Syrians.

Expensive vodka is a waste of money. Vodka has no taste basically.

I think a lot of Russian oil will make it to the market, western boycott or not. It will be funneled through Chinese or other sources who buy it at a deep discount most likely. I think we will see Supply reduction from Russia, but it is not like the whole production is just going to disappear. Anyways, Russia oil production is ~11M barrel and consumption is ~3.6 M barrel (daily), so the export gap is ~7.4M , but I think large part of this will make it to the market. I also think that due to sanctions, it is likely that Russian oil production is going to shrink in the longer run. For comparison, the US oil production in 2021 was about the same ~11M barrel.

US production will be back to pre pandemic levels in 2022: https://www.cnbc.com/2021/12/30/us-oil-production-to-increase-further-in-2022-oil-expert-dan-yergin.html Venezuela doubled oil production in 2021: https://www.aljazeera.com/economy/2021/12/27/how-venezuela-this-year-almost-doubled-its-oil-output

Small adds in PAH3 / POAHY, ROST, FYBR.

I think it is important to note that Iraq attacked Iran and not the other way around. I don't think they are that expansionists either, but they do sponsor terrorism (Syria, Lebanon to exert influence ). The Iran sees themselves surrounded by enemies (US, Iraq, Israel, Saudis), even the Russians. They see having nuke as an insurance policy. I believe most of their actions are more defensive than offensive by intent. Not that I think the hardline Mullahs are nice guys, but i think there are a lot of people underneath them that can be reasoned with.

I hope they and their family stay safe and they can relocate to a safe space. @Liberty keep us posted.

Wel wil definitely see some impact from sanctions in many companies. For example, I was surprised that ~4% of VISA’s business is related to Russia and Ukraine (including cross border revenues). European will take the biggest hit - the European car makers struggle with supply chain issues due to lack of wire harnesses, which were produced in western Ukraine. This could well cause a recession there.

@Pelagic thanks for sharing a perspective on how the war goes. It looks like. It jut the Russian economy , but also the Russian military will get wrecked. this will be tough to rebuild too with shortages everywhere.

Fair, my comment was related to the following claim: (a) Likelihood of western nations going in after China with their warships, soldiers, planes etc is close to zero I believer believe the US will absolutely fight for their own interests, The chips that Taiwan are supplying are essay, as is Taiwan from a geostrategic POV. It was @wabuffo who countered this argument.

Yes, China would unlock tremendous value if they were to democratize. Just a few years ago, it very much seemed like it would happen, but now they have been walking backwards and I think the equity valuations reflect this. As for monetary policy keep in mind that with the Yuan pegged to the USD, their monetary policy is tied to US monetary policy. If they want to go on their own, they would need to let go of the currency peg.

Yes, I would be careful with any Chinese entity that tries to play both sides and deals with the Russians. If they get caught breaking the embargo, then they are on the blacklist too and will get the Huawei treatment. They got to decide if it is worth serving the tiny Russian market or do business with the west. The Chinese government can say whatever they want, but have no influence here. I think that's one reason why are going some hero to zero stocks in China as well in the very near term future.

Found this on twitter:

I think you are very wrong with your assessment, but leave it at that. It is impossible to know right now and hopefully we will never find out. I do think the US equities will beat Chinese equities going forward in the long run (>5 years).

The earnings growth in itself is a remarkable result. I agree it has been the main driver of equity returns.

Certainly. An US centric portfolio holds up even better than a globally diversified one. Every time there is an calamity of any sorts somewhere, the save heaven aspect of the US comes into play and both USD and US equities generally outperform the rest of the world. This is true even if the calamity initiates in the US (like the GFC).