Spekulatius

Nope, that's not how it works: LNG is up everywhere, because European buyers are crowding out others by bidden more. LNG is a worldwide market, just like oil (with more infrastructure constraints). it's going to be tight for years and probably a better area to invest in than oil. Shell is the biggest integrated player on a world wide scale.

I don’t think the NG will flow from Russia for a long time, regardless of how the war plays out, @lnofeisoneRegarding the weather , what makes you think that next winter will be cold?

Just listened to the odd lot's podcast about China. It does a good job of describing the confluence of factors currently impacting the Chinese economy (real estate, zero COVID, stimulus (or lack thereoff), drought etc.) https://www.bloomberg.com/news/articles/2022-09-05/odd-lots-podcast-tom-orlik-on-china-s-economy-covid-zero-and-real-estate?srnd=oddlots-podcast

I am guessing that GS talks their own book here. One way that 22% inflation could happen is if the GBP collapses relative to the Euro. Since the UK pretty much imports everything (they have financialized their economy), this would lead to rapidly rising prices. My guess is that the UK would protect their currency with significant rate increases but I am no expert on this.

I agree on Nintendo. Sony also benefits from currency effects, but I am a but less sure about their valuation. Sony has some great business franchises like Movies (Spiderman franchise) and Music and PS as well as a leading position in Image sensors. They also have a great track record in capital allocation, where Nintendo is lacking a bit.

The UK economy seems to be in worse shape than the rest of Europe, but where did you get 22% inflation? They are at ~10% right now and I don't think it's going much higher. Europe has issues with energy supply right now, but I think in 2023, the worst will be behind them. Russia, on the other hand is likely to go into a an extended decline that is going to last years.

Russia has a LT problem that their economy is going to hell: https://finance.yahoo.com/news/russia-risks-bigger-longer-sanctions-135601014.html Now they stopped selling NG to Europe and then what? It’s not literally a gas station that stopped selling their gas (they do continue to sell crude oil of course).

I do not like the companies that Buffet bought. BASF is at the heart of Europes energy problem and deeply affect by the NG shortage. They can switch inputs to some extend (to oil), but if their allocation of NG is reduced by 50%, they have to curtail production in Ludwigshafen (their largest money maker). Even before that, the higher NG cost hurt quite a bit. This is a problem that does not go away. It may be priced in at this point and BASF has production in other geographies ( US/ Texas and Asia though ). However, why not buy CE or similar stocks? Allianz and Munich Ruck are insurance, that have been traditionally connect to each other. Allianz is pretty mediocre in my opinion. I feel there are better choices out there. You are correct that many German companies operate in sectors that are capital intensive, but so is insurance.

The felt the first episode was so so, but I think this might be turning out to be alright. The production and the acting still does feel a bit artificial to me. My hope is that they can bring this alive like Sméagol in Jackson’s trilogy for example.

I think companies worth owning are Deutsche Post, Porsche Holding (POAHY) and Exor Holding for example. For exposure to the German market, I would get an MDAX ETF , which gives you more exposure to Midcap German companies for example. I don’t know French business all that much, but I think choosing the Midcap route may be the way to go. FWIW, most European Midcaps have an international business focus, so they are not necessarily limited to doing business in Europe only.

Most European companies make only a fraction of their business in Europe. The actually numbers depend, but the multinational companies in Europe are closer to a 1/3 Europe, 1/3 NA and 1/3 Asia/ EM business mix than 100% European. So, I think there are great opportunities out there to get a double whammy from both a lower valuation as well as a currency kicker eventually. Likewise, a lot of US companies have significant revenues in Europe as well as in China (both secularly challenged).

Well the other currencies suffer from inflation as well. Also, the USD is going strong in every crisis and especially now. Since the US in energy independent and Europe, Asia, Japan are not. EM currencies are generally the real canaries in the coal mine.

Mauboussin is definitely into updating priors. He mentions this several times and it is also something that I have heard in several economics books that deal with forecasts. I think the expectation investing is a twist to value investing where you try to reverse engineer the stocks value as well, as embedded expectations in a stock. You can apply this such that it’s not directly value investing and I think quite a few growth investors do this as well, It’s similar to a DCF or reverse DCF method- both can give the same result and it’s fundamentally the same method , but require a bit of a different way of thinking. Mungers “invert, always invert” fits the same framework. FWIW, there is a recent podcast interview from Mauboussin: https://podcasts.apple.com/us/podcast/motley-fool-money/id306106212?i=1000578259992

People do get pulled over, mostly for speeding. The type of car matters much more than the color. If you drive a souped up rice racer with low suspension and dark window tints, expect to get pulled over more than driving a minivan.

I am just belatedly watching “Billions” on Prime video and the one guy at the hedge fund brainstorming session got scolded for proposing Apple, because it has “still room to run”. This was S1 E2 in 2016. So far, I like this show.

This episode in business breakdowns about CRWD was pretty good: https://podcasts.apple.com/us/podcast/business-breakdowns/id1559120677?i=1000578011308 Learned a few things about CRWD but also about the cyber security business.

Bought a starter in IAC. Also added to PYCO and CMCSA just a little.

@LearningMachine thx for the summary - I have nothing to add. Have been tracking ALLY on and off for years and whey they IPO'd they actually were a prime auto lender and over time went lower on the credit scale, because that's where the juicy NIM's are. COF auto has always been subprime, I think. Clearly, few of us would consider a car loan from either lenders - we would use the manufacturers lending arm or go to a credit union like Penfed etc.

It's not a matter of losses, it's a matter if the lender get compensated for the risk. The credit environment is currently unusually benign for credit cards, but even more so auto (low default rate and high car prices), so I am more concerned about car than CC. Ally has somewhat dived deeper into the subprime pool in car lending. I also think they have more interest rate risk. Maybe they are both good at this point and certainly look cheap, but I don't like Ally's dependency on just car lending, hence I prefer COF.

It takes about 5 years (until 2027) to bring the Russian gas that has been shipped to Europe to China. this assumes that they start to work on the pipelines now. Until then , the world will probably be structurally short NG, since Europe will crowd out other buyers for LNG by bidding more. Right now, Russia is flaring gas that is currently excess (they they don't ship to Europe), per satellite photos.

What really got my attention is how much stock they are buying back. Share count is down from ~460M shares at the end of 2020 to ~390M now. They are buying back shares at an almost~ 20M/quarter clip. Do this at a 20% earnings yield for some time and good things start to happen. FWIW, COF is overearning a bit due to lower than baseline provisions. normalized earnings (assuming normalized provisions) are probably closer to $15/share, give or take. But with this buyback clip, this number will be going up, because the # of shares is going down very quickly.

AI chips are dual use tech, just like high tech laser components. The latter had export controls for a long time. I think semis are very vulnerable to an escalation of Chinese- US trade war. The exposure of semi equipment companies like AMAT and LCRX is huge. Then there are those with indirect exposure like AAPL.

Most plug in hybrids won't last 50 miles though. I am hoping for a Hyundai Tuscan plug in hybrid (on a wait list currently) but they are more in the 25-30mile range. I do agree that they are a great value proposition, although most of them have lost the federal incentives currently.

it has been a long time since I visited Normandie (early 90's). We also checked out the Bayeux museum (famous carpet) as well as the D-Day landing beaches. After checking out 2 or three I came to the conclusion that the brits screwed over the Americans by choosing the easier to land beaches for themselves. The Normandy is a beatiful area - friendly people, and wonderful windswept beaches. Some of the beaches have enormous tides - more than 10m which leads to wide sand beaches sometimes with steep cliffs. We say people with Land yachts racing them and it looked awesome. Then there is great local food (cheese!) and Calvados. I plan to go full circle back there one day.

Died from “severe illness”. He also got a lifetime achievement award from Putin: https://www.bbc.com/news/world-europe-62750584