Spekulatius

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).

Yep, its the same one and a big tax bill coming.

Started to work on my tax return (I am always late because of a K-1) and I hate it. So my new goal is to become a billionaire so I don't have to pay taxes any more.

It is easier to keep crypto hidden and move it with you out of the country than a Monet or a Ferrari or even gold. All these things draw a lot of attention if you pack them on an airplane when you want to get out. Dont shoot the messenger, I am certainly not a laser eye guy. I am just stating that owning crypto if you live in these countries does make some sense.

Russia has wiped out investors before, so has Egypt. Investors in Argentina pretty much lost 90% over the years. Country equity market absolutely can go to zero.

@Packer16 / Bonhoeffer on Twitter provided a link to the paper on equity returns vs country and government type. I took from this that on aggregate you are not paid for the additional risk you are taking. I may remember it all wrong though and I don’t have a link either. This is not to say that sometimes these investments work out well. I do think it makes sense though because these totalitarian countries often seem very stable so it is understandable if people underestimate the risk. I really all it takes from seemingly stable to total chaos though is the dictator waking up one more ring with a certain itch to do something crazy and things go off the rails. This also applies to merging market. I think it was @PlanMaestro who said that it takes just one bad election for an emerging market country to go to chaos.

If you live in Russia right now, owning crypto is not the worst thing in the world. Pretty much everything else would have gone to hell. I bet a lot of Russian money went into crypto.

I guess one thing just leads to another. I hope to get a ride in the buggy this summer, that's all.

Its always in the middle. I do have a particular friend in mind from town ( not on this board) who complained about high gas prices when we met for some drinks lately. He just bought a lake house in NH (second home, heated with oil), a 150 HP Polaris snowmobile, a smaller one for his wife, an off road buggy that is larger than my car and of course a huge truck to haul all this around. Now he is looking at buying a boat in spring because why have a lake house, if you don't have a boat? This is all nice stuff, and he can afford it, but really complaining about high gas prices in this situation? I told him his carbon footprint is perhaps bigger than Al Gores :-). I guess I just like to travel lighter, but each it's own.

Porsche Holding - POAHY. I try to buy another slug in Europe tonight, market forces permitting.

This is true, but those trucks are largely used for other purposes and people commute in them. FWIW, I bet you can tow a boat with a Mercedes diesel car. They do it in Europe. Same with trailers. Also, all those things are big energy sucks by themselves. Instead of trailer one can do camping. There are substitutes for most things that require much less energy.

I think it's cringeworthy when people buy a truck that gets 12 miles/ gallon and then complain about high gas prices. If you have a car that gets 30-40 miles/gallon, the gas prices can go wherever they want and it doesn't matter. Those cars are also cheaper.

A bit more of this (not the car):

After what occurred in Russia, I would be much more inclined to short China. Having a dictator leading a country is not a great setup for the equity market. This is not rocket science - there are studies on this. Why jump over 10 foot hurdles when you don't have to.