Spekulatius

You can buy both Ethereum and bitcoin in Interactive Brokers now.

Completely misleading. Yes, changes in the earth orbit do change climate, but they do so over 100,000 of years not the time scales were are seeing here. Go to the source and look up what NASA are really saying, not some amateur website: https://climate.nasa.gov/news/2948/milankovitch-orbital-cycles-and-their-role-in-earths-climate/ https://qr.ae/pv4rYf Sott.net is a site that is associated with the Quantum Future Group, the new religious movement created by Arkadiusz Jadczyk and Laura Knight Jadczyk. Nothing to do with investing either.

Not sure their numbers got that much worse relative to CPRT. IAA spun off KAR in 2019, so that's reduced their revenues. IAA's profit metrics were always worse and I think one reason is that CPRT owns their scrap yard facilities while IAA tends to lease them.

Fed has 3 main priorities: 1) reduce inflation 2) Keep financial markets operating well 3) Employment 3) is not an issue right now. We have full employment. I don't see any issues regarding 2) in the US, but I think the massacre in EM and other currencies could be an issue in some countries with respect to their financial systems. I am not sure how much that matters to the Fed. So focus is going to be on inflation until unemployment starts to creep up substantially. I think the Fed can lift interest rates quite a bit more before something breaks with 2) or 3). A mild recession (we are likely in one already) does not seem to affect labor markets much. I don't think some techie layoffs in cryptos really count, those people can easily get a job at a Fortune 500 company. Where things may get ugly is Emerging markets where credit could become very tight - that's where liquidity gets sucked out first, but that's not the Fed's problem until it affects the US economy.

Thanks, not a bad take. I also think we might not be far from the bottom here for the time being.

I am with @awshere. If you study even tiny bit of history, you will see that the likely hood of solving this situation with a peace deal coming from a position of weakness is very low. My thinking is that we are at war with Russia and the sooner we acknowledge the fact the better. It’s the Ukrainian that are fighting for us (and themselves ) so we don’t have to. If we supply them with the weapons to make a stand and even push the Russians back, it will be a crushing defeat for Putin. If not and Ukraine is lost , we better get ready for another fight somewhere else where we don’t have others to fight for us. There is now a new iron curtain going up in Europe again and elsewhere that will remain in place and determine geopolitics for a long time - think a decade rather than a year.

I agree on capital allocation and it gives me pause many commodity plays. I suspect that a lot of bad decision will be made yet again if they feel flush. With those, I really would like to see a clear capital distribution plan. BHP and RIO for example have that, they just distribute cash. For example going back to RIO which does a lot of copper, it seems that both Copper and RIO are back to 2020 prices. However, before make a sad face for RIO shareholders, you have to account for almost $15 in dividends you have received from them. Nobody can take these away. So if you hold those in an IRA or tax deferred account, they are good investments even with the stocks going nowhere.

No fly zone does apply to the Ukraine but not international waters, where this plays put. The US can sent warships to protect convoys in international waters and warplanes as well. Even if we don‘t care about other countries , we care about Ukraine. Grain exports are a large part of their economy, which Putin want to wreck. We should not allow him to do that. Still think we should give Ukraine enough rockets to soften up Crimea and Sebastopol ahead of this but priorities are probably elsewhere right now.

@Viking What I wrote is nothing else than Mungers Elevator up or down concept in a specific framing. I would guess that it works about 80% of the time. I think one mistake people make is that they buy something with certain issues and after they buy, they think that this issue is going away and multiples increase. In fact, at least with commodity plays, the opposite is happening and as fundamentals improve, the multiple gets lower. It is exactly the opposite that happens with growth stocks (as fundamentals improve, the multiples increase). This makes for a power full Feedback loop with growth stocks, but rarely not with value stocks, especially commodity plays. With commodity plays, you should be comfortable if you can live with just the cash distributions without any multiple expansion or much price improvement over and entire cycle (trough to top). If you get a good return on this, you probably bought at a good value. On CNQ, I agree with everything you said and think it will probably be OK above $80/brl or thereabouts.

@Xerxes The part obout the theft of electronic components in Taganrok is pretty hilarious.

Elevator up and down Syndrom: If oil prices go from $60/brl to $100 brl, underlying oil stock trades at price A Then oil goes to $120, and after that oil goes back to $100 and underlying oil stock trades at B I can almost guarantee you that B < A, most likely significantly so. The reason is simple - probably half the people who owns this don’t have a clue and just play the momentum or the story. They would actually pay more for a oil stock with crude at $80 on an uptrend than the same oil stock with crude $100 and trending down.

With the Euro or Yen declining, and stocks there declining as well, there ought to be some great values available in Europe and Japan. In Europe, the car makers like MBG or Porsche Holding trade at what seems to me very low valuations. They will make tremendous money with their exports to the USA at current exchange rates. Another one with Airbus. I would avoid something like BASF which is heavily dependent from NG gas as an input and likely will have to switch back to crude oil as an input. However, the electric power will not be an issue and most of the NG powered plants (like dryers for automobile paint shops) can be switched to crude. The car makers can sell everything they can build for this year for sure and probably next year for premium prices. MBG stock yields almost 10% (5 Euro dividend) . Porsche Holding May spin off Porsche which covers a good deal of the EV.

Bought a bit more GOOGL for my wife’s account this AM.

Turkey is a NATO ally. As for the Russians destroying grain silos and harbor infrastructure, I think Odessa has a reasonable air defense and it also takes quite a few rockets to do enough damage. It’s not like hitting a fuel tank that is going to explode. The Russians have been using their cruise missiles fairly sparingly indicating that don’t have that many to spare. In addition, the 300km medium range Rockets would bring most of their Rocket bases on the Crimea within reach, so the Ukrainians could pot. wipe them out. Others were fired of from ships ( they got about 40 ships left in the Black sea), so if we can get rid of those by chasing them away from Sebastopol , then they are not a factor either. Russia has some longer range stuff, but they are even more expensive and probably low on those as well.

Yep, Export ban for refinery products would hurt the refining industry but also our trade partners. I think a lot of gasoline is actually going to Mexico, so they could potentially see shortages which could put their already suffering economy over the edge. It is something that would bring prices at the pump in thr US down in the short term, but probably do a lot of damage long term.

I would go as far as ignoring the futures prices for oil if you invest in oil equities. I am not sure how useful they are to predict. it is pretty clear to me that prices should have never shot up $140/ brl because Russian oil is gone from the market - well it isn’t. There we’re some idiots saying that gold would go to $3000/ oz because of banning Russian gold in the EU. That‘s totally ignoring how the Gold market works (totally fungible) and ignoring that new Gold supply is minuscule compared to Gold in circulation. Besides the oil, I think NG is actually the energy source with the larger strategic relevance and probably the higher for longer term pricing. Some companies like SHEL have a huge integrated gas business that will benefit, but SHEL seems to be run in such a value destructive manner that it’s still not really worth investigating until it get much cheaper, Imo.

You can buy similar FCF yields with companies that have very little commodity risk, Examples : GEF-B, WRK and to a lesser extend CE. In my opinion, these may turn out to be better investments in the long run. They have much less ESG headwinds and I would argue secular tailwinds from industry consolidation and substitution (WRK) and electrification (in the case of CE) Or if you like real cash returns ( not promises of cash returns ) look at the miners BHP or RIO. They are currently distributing double digit dividend yields. Those dividends are variable , but they own world class resources (iron ore for BHP etc) that place them as the best quality and lowest cost on global scale. BHP builds a potash mine that is going to be a 100 year life - think about an inflation protected asset here (it will require continued reinvestment but the initial outlay is one time >$7B). It could become a tremendous asset if it operates well (which is TBD). All the above are a much less crowded trade than energy and they have come down a lot from the peak, as have some commodity prices. However I can see that one can get high single digit returns from cash distributions alone without any multiple expansion or price change with inflation at all. Even with modest increases in equity value the returns through the cycle should be double digits. People go gung ho on energy because makes a lot of headlines sind performed well, but there is a lot of stuff out there that seems to scream value and nobody seems to care much. ( I own GEFB right now, but looking at WRK and CE as well). The miners are for later… Edit - if I do invest in this sector, the Canadian oil sands producer would be at the top of list (CNQ, SU) due to have long life resources and likely strong FCF.

The US oil industry is making a huge mistake here, politically. This sort of stuff does not get them anywhere. Furthermore, Biden could actually bring down prices at the pump by bringing down excessive refining margins by slapping on an export ban for refinery products.? Turn out we are huge net exporter of refined Refinery products . Might be quite popular with the average Joe Sixpack. Its not the first time either we had something like an export ban. For a long time, we had a ban on crude exports in place that benefited the refining industry.

I mentioned this before, I think crude goes back to $80-90/ brl which is where it was before the Ukraine invasion. Russian oil has not disappeared from the oil market, they export about the same quantities than before, just to different destinations A lot bulls are getting high on their own supply here. The money here is likely made on the short term we see the same nonsense playing out again and again (looks at semis ) and it’s not better than betting on COVID-19 winners. That said, I do think energy prices will end up higher than before the epidemic , but not as much than bulls think.

That Odd lots shows a solution: https://podcasts.apple.com/us/podcast/odd-lots/id1056200096?i=1000568476294 The US/NATO navy would escort freights ships through international waters like thry did in the late 80‘s in the Street of Hormuz during the tanker wars. I think digits the Ukrainians some longer range rockets (which fit on the rocket launchers deliver to Ukraine I think) would make a lot sense. 300km Range gets from thr Ukrainian coast line to Sebastopol. Destroying some Russian warships right in Sebastopols harbor (if possible) would would be nice victory and likely chase them away where they can’t threaten the shipping routes to begin with. Just taking Putins toys away or make them worthless has a huge strategic value, Imo. It also makes breaking the blockade of Odessa harbor much easier.

I think it’s likely that some tokens have value, but I don’t see much happening that seems interesting. I think we are probably 10 years away from business using the blockchain to produce something that has a significant economic benefit. The focus has been on cryptocurrencies because that’s where the quick money is. It’s also the title of this thread.

Discount or the ratio of price/ book looks like we in the 20% range,not the 10% range yet. During the pandemic, it appears the discount was larger. Welcome to the boards @This2ShallPass!

He has got 30% of his fund in it. If he puts much more in it, why would anyone invest in this fund rather than buying BRK stock himself?

@Parsad I don’t think crypto is that big. All these cryptocurrencies ad up to probably less than $700B in market cap. Then we have various crypto companies like $COIN, Ripple (private) that I don’t think add more than $100B in total, so that $800B. It’s a lot of money, but it really pales relative to stock markets or real estate. FWIW, I do think that at some point crypto was worth more than $2T so the difference to now is at least $1.2T of quantitative tightening in a way. Crypto coins are really money created out of thin air in way, at least as long people accept these coins as money. I do think that crypto is interesting as measure of sentiment. Since there really are no fundamental to speak of (it’s not like a crypto coin can miss earnings) it’s probably a great measure how greedy people feel. I do think if we get a way larger decline than the customary 80% from The top, it might be a good idea to play BTC for a bounce. Or maybe start from the base where the latest bull market started - around 10k for BTC.

The SEC / Fed needs to make sure that our financial system and whatever crypto Defi system exists remains totally segregated. Otherwise I think there is chance that we will get some sort of an overnight crash that takes down financial institution that seemed fine when we go to bed and are wiped out the next morning when we wake up. As long as the crypto guys just blowing themselves up, I am not too concerned.