Spekulatius

Added 3 more units to my stash right at the open for $2200.

Race to the bottom continues academically: https://nypost.com/2019/06/30/laffer-federal-reserve-shouldnt-be-independent-from-white-house/

Picked up some MSG too this AM at~$271. I am not sure what caused the sudden downdraft , but noticed that MSGN is doing even worse, is this team related? The Brooklyn Nets just signed a few super stars that will likely draw crowds there. Could possibly have something to do with that. I imagine, Durant and Irving will draw quite the crown in NY. It's been awhile since there was a true NBA superstar in the city. That being said, I'm long MSG. The Knicks are too iconic and so is the stadium. MSG is to America what the Colosseum was to Rome. https://gothamist.com/2019/07/01/kevin_durant_kyrie_irving_headed_to.php Thx, yes this makes sense ( although it economically probably not) . I don’t have a clue about baseball , but I did see the news about Durant, but didn’t connect the investment correlated dots. Anyways, with these sport team related stock, I noticed that a lot of people gamble on these stocks and give way more weighing to recent team results than makes sense economically ( I watch Borussia Dortmund as a stock and as Team). I guess it’s just a form of sports betting.

Picked up some MSG too this AM at~$271. I am not sure what caused the sudden downdraft , but noticed that MSGN is doing even worse, is this team related?

I beg to differ on the long dated call. the ECB will not let a larger bank fail, but they will have no problem to make the equity a zero and run it as a state old bank or put it into the fold of an existing bank. In Europe, having the government own and run a bank doesn’t have the same stigma. If the German government would have to take over DB, nobody in Germany would give much of a hoot about it. If we do get European style interest rates here, the US banks all will suffer greatly from reduced profitability, as will pension funds and insurance companies.

Once upon a time in tech: https://seekingalpha.com/article/4271574-upon-time-tech

^ the above provisions seem easier than the provisions for a conforming mortgage in the US. However on the other hand, who is going to say that with a 1.6% interest rate, a 2.5% cap rate isn’t reasonable? This would presumably make the interest cost of a home the same than owning, even if you include the cost of maintaining the house (~1% of purchase price). There ar pretty cheap (relative to NAV) real estate stocks one can buy in the UK for example. U.K. will probably follow down the EU it’s interest rates over time. Of course banks and life insurance companies are screwed.

Nice! Me too. Bought 2 more units at 2200. What price did you get yours at Spekulatius? 2 units at $2230 and 3 more at $2180. Both executions were from GTC orders. I also got a small execution earlier this year. I always have an GTC Order open as long as I have cash. It’s sort of like collecting. LOL

There are a lot of roll ups in the packaging sector (containerboard, plastic packaging ) that seem to work out well. It seems that economy of scale and a relatively predictable business with a good cash generation are a winning strategy.

I managed to score some LAACZ units today for a good price. It happens from time to time.

Buying bitcoin is like going long human greed, stupidity and short crappy currencies. If you think about this, it seems like a winning strategy :o. The above is pulled from twitter, but I forgot the source.

^ Same here. It’s polite to leave some money on the table for the guy buying the stock you just sold. Igor more than 20% out of my purchase and rolled the proceeds into VNO

Same here. That went well.

What will happen with profits, if we go Japan and Europe with interest rates? It is my belief, that most of the outperformance of US banks vs Europe is not due to better management, but just structurally higher NIM’s. US banks quite frequently generate 3.5% NIM’s but in Europe, the margins are typically <2%, with the exception of Britain. Britain never adopted the Euro and kept their own monetary policy and has only few large banks competing and that’s why the NIM’s in the UK are more like the US rather than the rest of Europe. However, if we go down the same rabbit hole then Europe does in terms of interest rates, my belief that US banking NIM’s will follow and lead to a structurally lower profitability. There are other differences between the US and European banking, but the NIM is the main one.

+1 One more thumbs up for this one.

CTVA

I am not so sure. yahoo’s peak market cap exceeded $100B and it was later sold for just a few billion. JDSU’s peak market cap was $125B and it lost 99% of it. Cisco was $550B and it went to a bit more than $100B. Then there are endless companies who needed 10+ years to exceed their peak before like a couple of semi companies, Dell, Sun, Compaq and MSFT even etc. If you now adjust this for expected market r turns, or just inflation over almost 18 years, the value in today’s dollars will probably not exceeded in the next downturn, but who knows?

Actually, increasing government debt is not a problem when negative interest rates persist. I believe the QE in the next downturn will include unprecedented purchases of corporate debt and probably equity purchases as well. It’s the only thing left to do when the risk free interest rate approaches zero. That’s already the case in Japan where their treasury buys selected equites like Reits. In a way, is a smart thing to do, when the cost of capital approaches zero or becomes negative. Strange new world.

I don’t see any deflationary economics in Europe, the ECB is run by an Italian right now anyways. The negative interest rates should be deeply inflationary, they just don’t seem to work, except creating elevated valuations for assets like real estate. Same seems to be the case in Japan, partly due to shrinking population. It’s difficult to create a boom in real estate prices, when the population is shrinking and there is a surplus in houses in many areas except selected population centers. Same with other things where demand is waning. If we want to create inflation, we need to bump up immigration in a great way. immigration alone is probably responsible for a 1% better GNP growth rate in the US vs Europe.

Is there a reason you are purposely ignoring the bitcoin = gold thesis? Yes, there is. I don’t like gold. I don't either. I do like gold at a 95% discount though. To be fair, the fact that I don’t like gold isn’t negating the thesis that crypto = gold. I am sure for some people it is and that may be good enough. I don’t know where the 95% discount is coming from - the market cap of gold vs crypto?

I suggest a thread to consolidate spinoff stock discussions in the strategy section. I believe that any thread for a single ticker won’t get critical mass.

Is there a reason you are purposely ignoring the bitcoin = gold thesis? Yes, there is. I don’t like gold.

In the past 9 months we've had a 20% correction and a 6% correction (with some sub-sectors moving a lot more than that), bond yield curve is inverting and everybody is talking about a recession... Agreed, not 1999 euphoria at all. Actually increased volatile and sideways movements re often signs of a very late stage bull market. Overall, this does not feel like 1999 however. 1999 had many bubbles they went parallel and were feeding on each other (IT hardware/software for the Y2000 bug, commercial real estate, high end housing, Internet stocks, telecom stocks, semiconductors etc). We have a bubble in tech stocks perhaps, but I don’t see much other bubbles yet. In any case, while boom/bust cycles tend to have some similarities, I don’t think any of them are exactly alike. So 2019 may be a bubble, but I don’t think it will work out exactly like 1999, not like 2008 or 1987.

Market cap to GDP strikes me as one of the poorest metrics I can think of. The reason is simple, in some countries a lot of companies tend to stay private, in others they are owned by the government. The market cap to GDP would be lower, just because these companies don’t trade on the stock market. i would ja it stick with simple valuation metrics, EV/EBIT, EV/ Revenue etc, but market cap to GDP strikes me as a very poor metric.

Anyone has an opinion on SLG, the NYC focused office and retail REIT? They are buying back stock aggressively. Implied cap rate according to their last IR presentation is 7.27%, while NYC real estate of comparable quality goes for 5% it less. I am not bullish on NYC real estate, but this discount is quite large. https://slgreen.gcs-web.com/static-files/8e49a27c-5167-43f8-97e3-656c06eef5fb