Spekulatius

The semi downturn may last a while. on the business, I agree, it looks like quite high margin. And. decent ROE. I put this on my watchlist.

Why is the stock down 15% today?

Referring to your earlier post, have you ever seen a recession that was priced in? I agree that top down doesn’t work. Analysis of individual companies prospects is where the money is made, but at the same time, the prospects are dependent on the macro environment to some extend. Or one can take the Howard Mark point of view and just try to assess broadly where we are in the macro cycle and go from here. Most would agree that we are more likely late in the cycle rather than early. My own thinking is that there are a lot of political risk too, our current administration, as well as the election in 2020 represent a risk of a substantial paradigm shift with unclear, but most likely adverse impact on the market. Then we have Iran, Brexit and a host of other things like trade wars and crummy start ups to worry about. It isn’t clear to me they any of this is priced in the market they is just 3% of its high and at a historical high valuation. Average valuation is a skewed number as there are certainly quite a few of stocks with low valuations around. but then again, if the broad indices are selling off, it seems to me that this means that at least for mid and large caps, pretty much everything will sell of, perhaps simply because Indic selling is indiscriminate. So my point is that this is a time to be more opportunistic than bullish and simply wait until Mr Market gets one of its fits again and presents great opportunities like in late 2018. I am inclined to believe, that those opportunities I’ll very likely represent themselves, perhaps in the near term future.

RV’s are supposedly a good measure because strong RV sales indicate a lot of consumer confidence (since it is large outlay for those who tend to buy them and it’s totally discretionary ) as well as easy to obtain credit (most are bought on credit). I think boats are similar and their sales also have weakened recently.

Well, there is worldreginfo, which I have found useful in some cases: https://www.worldreginfo.com/

You know what Venezuelans said about Chávez early on: “ He runs the country like his hacienda”. The problem with the tariffs and the game of chicken that is played are the knock on effects on confidence. Now China is slowing down, Europe is slowing down and now the US is slowing down as well. How much of this is trade war and how much is just the long economic upturn petering out is hard to know. I don’t think that interest rates and rate cuts at this point are going to make much of a difference, rates are already too low to matter, imo.

Considering what happens on the other side of this is one of the scariest parts of the rate conundrum. WSJ articles will start referencing convexity a lot more frequently. Yeah, it’s a one way street. Once we are in that zero or negative interest rate hole, we can’t get out of it, without bankrupting virtually the entire financial system.

Sounds like negative interest rate is a surefire way to destroy the banking system. I guess we will find out if US Banks follow the zombie apocalypse if their Japanese and European peers. The US banking system has less competition, so It won’t be quite as bad , but I could see a world of permanent sub 10% ROE and valuations below tangible book.

The guy's an ass clown. China never confirmed that negotiation for a new trade deal have restarted after Trump tweeted that “China wants to do a trade deal badly”. I guess Trump probably just wanted the markets to stop tanking after he had been overzealous bashing China and ordering companies to stop doing business in China. https://www.cbsnews.com/news/trump-china-trade-latest-trump-says-china-called-u-s-trade-team-twice-and-wants-to-make-a-deal-as-companies-are-leaving/

I wish puts were cheaper, but with a VIX if 19, puts are a no- go for me, so I raise some cash instead. I do share the aforementioned concerns.

I believe they most Chinese believe that their government has done a good job. For once, the for average workers have increased tremendously, it’s not just the super rich, average Joe have seen double digit increases in buying power. They have slowed down, but they still far exceed what US or European worker bees get. https://images.app.goo.gl/k4Ej4ZLE4U83uECt7 I think it gives them goodwill to fight for a while.

Bought a few hundred shares of 4624.T too. Looks like you can only get a fill when the mood in the market is a bit shoddy. I also gave back all my gains in 9142.T (GARP railroad stock) after they published a 5 year roadmap plan with more Capex even taking up debt. There was also an activist investor in it to no avail. I guess just scraping the bottom of the barrel avoids much downside. Lately, the Japanese stock market has been a bust for me. Isamu Paint (4624.T) is the only position I’m am holding right now.

I agree they the manufacturing they went to China won’t come back. Vietnam is a joke, because their economy is running hot already and it’s basically a Chinese colony economically. I do think that Mexico could be a major beneficiary, since it is a friendly state. The biggest thing about China is theft of IP, by means of forced Jv’s which are basically forced IP transfer. Just concentrating on the IP issue, getting Europe, Canada and Japan behind it would have been a way smarter way to conduct, with much less risk, imo. Interesting side note - Trump talks about “fair trade” now, not “free trade”. He is a neo mercantilist.

Awesome post. It gives us a great idea what BHE is worth right now. 9-10% return forever is a great deal and I think the longevity is what WEB is after in this case. A lot of business die over time or need to reinvent themselves, which sometimes works and something it does not. BHE probably doesn’t need to reinvent itself for the next 50 years.

Yeah, interesting that the Triffen dilemma is brought up. I heard about it, it never looked up what it means., until now. The US$ can’t be reserve currency with the US running a trade surplus at the same time. The US needs to export US$, or cease to bet the reserve currency of choice , presumable this can be achieved via debasing it. I knew that a reserve currency tends to be overvalued (the GBP in the 19 century had this issue) which is really the same thing. https://en.m.wikipedia.org/wiki/Triffin_dilemma

The secondary market for US debt exists, it’s the Eurodollar market. The US Fed has no control over it. Like it or not, the US is the main reserve currency. That pretty much guarantees a negative trade deficit in my opinion.

Some people like their thuna with a bit dolphin meat mixed in. Jerky chicken is great. I had some persistent coldcaller a while ago who wanted to drum up some funding for animal rights. Nothing really wrong with this, but I hate persistent cold calls. She asked me if I liked animals or not. I told her, it depend on how they taste like. That was the last cold call I got from her.

The valuation is OK, but it doesn’t exactly take an advanced valuation method to determine that BRKB is undervalued. Even just looking at the chart gives you an idea. Traditionally, BRKB stock prices hasn’t always moved its the intrinsic value as ai see it, there wer periods, when the stock price stalled, while the IV increased. Typically, those periods lasted about 2 years. As I see it, they were from 2010-2012 ($70/share), 2014-2016 ($130) and 2018-???? ($200). simply put, since 2018 BRK has been building up “stored energy” in terms of earnings power, float, and cash (which will eventually be deployed) which at some point will lead to a rising stock price. On a side note, Wilson has a funny typo in his slide - “Fort Know”

BRKB, MSG, WMB, FOX ( adds) and a starter in UNVR.

Got to admit that it is fun to watch a “presidential meltdown”. Will pop a beer tonight and turn on Fox News.

^ Texas needs another one or two elections cycles to turn blue. We would be better off, if Trump just goes golfing for the remainder of his presidency.

LOL. Sounds like Trump overdoses his Adderrall ( or whatever he is taking) today. Saw a sign today at a neighbors lawn: “Any functioning grown up 2020”. It’s a tall order though.

Powell hasn’t mastered the art of Greenspan doublespeak to say nothing , but phrase it in a way that everyone can take away whatever they like. However given what we know, why would we even care what he says?

So what does screwing up mean in your opinion? I guess it’s the choice between no cut and a 0.25% cut. My odds would be 50/50. I honestly think it doesn’t matter.

100% I'm concerned with it, but at the same time both Europe and Japan are worse than the U.S. in that regard and nothing bad has happened yet which emboldens policy makers to continue making unsustainable decisions. When will it stop? When it can't continue. Europe are not worse in terms of deficits. Germany actually runs a surplus and even Italy’s deficit is 2.1% if GDP vs US at roughly 4.5%.