Spekulatius

Brkb still significantly outperformed the SPY over 1,3,6,12 month periods. I bought it cheaper in May last year. The stock was a safe haven until Dec 2018 when it started to crater with the market.

Looks like I am down 5-6% overall. It did feel much worse than that.

Interesting list. I own 5965.T (Fujimak) and 9142.T ( Railroad/ real estate). The performance and moves of Japanese stock made very little sense to me, but there are a lot of cheap stocks out there. Overall I have done well over the years on contrarian buys of decent to good business.

FB May be one of the best “obvious” or plain sight opportunities out there for 2019. I bought a bit more on the last trading day. It will be interesting how they navigate the choppy waters this year. I feel like the reputational damage is fixable. I also think they could surprise on the cost side, relative to their projections in Q3. GOOG is essentially flat in 2018, while the business has grown 20%+, so its significantly cheaper than early last year.

The Redfin chart shows some seasonal cyclicity for real estate prices, but no proof of a downturn yet. It is normal for RE to rise in early in the year and and recede a bit in fall. It‘s clear that RE has slowed, but I don’t think this is visible from the charts yet. Besides that, the Fed supposedly doesn’t care about asset prices, also I think it should at least to take into account housing prices, because they translate into cost of living for the majority of people ( 2/3 of the people in the US own rather than rent). The only central bank that actively looks at RE prices (to my knowledge) is the central bank of Hongkong, probably, because RE is such an important part of their economy.

Wells Advisors has an article for income stockideas for 2019. EPD and DWDP and PKG look interesting to me. Link is for customer only: https://www.wellsfargo.wallst.com/EBrokerageDesktop/Report/2303-f93fdf5576c8400faf98347ebadd353e-40

Which issuers/CUSIPs fit your description? ETP PRC ( a floating preferred) is one that fits my bill and which I own in small quantities. Yielding close to 9% when I bought it. BB+ rated and metrics are improving. The bonds are BBB- rated, I think and also due to for an upgrade. Does ETP PRC generate a K-1? If so, does it have any UBTI - just checking for the IRA. Thx. I believe it does generate a K-1. It should not really create UBTI, so should be Ok to hold in an IRA on reasonable amounts.

Which issuers/CUSIPs fit your description? ETP PRC ( a floating preferred) is one that fits my bill and which I own in small quantities. Yielding close to 9% when I bought it. BB+ rated and metrics are improving. The bonds are BBB- rated, I think and also due to for an upgrade.

The growth comparison during the period and 1913 until today is irrelevant. All 1st world countries show lower growth as they come of a higher base and also be sure population growth has slowed. We simply don’t habe the growth today that we had 100 years ago in any 1st world country.

My best value ideas (risk adjusted) are preferred and selected bonds. You can buy lower grade investment quality or high grade junk with good coverage and pot. forcredit upgrades with around 9% yield. Upside potential is about 20% plus whatever you earn in interest until they recover.

I think Trump needs to own his mistakes. The Fed can own theirs, if it comes to that. Also, where the the conspiracy if a Fed chair elected by Trump raises the interest rates? He could have just kept Janet Yellen, if he likes the low interest rate policy? Anyways, I see this correction more like the one in 1987. back then, we had rising interest rates, a fairly strong economy, the Regan tax cuts buffing the economy and a considerable stock market rout they in the end meant very little for the real economy.

True, a country with a 4% inflation and a 10% growth rate and 14% interest rate would never occur as the data with each other. But such an economy could handle risk free interest rates higher than 4% for sure. a 4% risk free interest rate with a 4% inflation is still free money basically. same with a 2.5% interest rate and 2.0% Inflation, yielding a 0.5% net cost for a borrower. Generally speaking a risk free rate at about the rate of inflation seems to be OK. Any interest rate below the The argument remains whether the rate of change for interest rates is too fast. Now, that we are about level with inflation, further increases need to be more carefully considered. There is also the “risk” that inflation falls with a slowdown, pushing the net interest rate (interest rate minus rate of inflation) up. Then, as I understand it, the Fed doesn’t look at overall inflation, it looks at core inflation, which takes out volatile components like energy. Energy was up huge in October, but has fallen significantly since. Seems like quite and interest set of challenges for the Fed to look at, and getting it right isn’t easy.

I believe that slump is caused by Trump more so than the Fed. For one thing, the “Trump slump” started before the Fed raised the interest rates, which shouldn’t have come as a surprise for the market, as it was well telegraphed. What comes as a surprise is the lack of predictability from the current government and the infighting. That’s the issue that should be addressed and has nothing to do with the Fed. The market has shrugged of the political muppet show for a long time, but not any more apparently. It’s a little bit like the situation in Britain, where politicians continue to shoot themselves in the foot. As far as interest rates are concerned a 2.5% interest rate seems on the low side, if we get 2.5% growth ne t year and 2% inflation. That’s still basically free money I agree with Druckenmillet R that the rate of change could be important , but then again, we are at such low levels in terms of interest rates, that the rate of change starting from zero has to be somewhat significant to actually accomplish something. I am pretty sure that the Fed will change their plan for hikes next year, when the data warrants it. I am not so sure that our president stops digging when he finds himself in the hole deeper and deeper.

I haven’t added either, in fact I sold a few shares when there was a spike to $480 a few weeks ago. My concern is that HWC busy buying low quality assets. there are some dislocations in the credit markets, that they pot. could take advantage of, or perhaps just buy back their own preferreds (if that is possible).

This is getting insane. You'd think we are in the midst of some massive crisis. Or that every listed company in the US is cooking it's books... I know Tepper basically just declared the Fed Put dead, but all the writing on the wall, at least to me, seems to indicate that with a little more pain, a lot of folks are going to start looking to resurrect it. Ouch! I just miss the infamous phrase: “ Our liquidity is strong”. Feels more and more like September 2008 to me when they introduced TARP. They really should keep their mouth shut. Back then there was a problem, now there isn’t, unless they fabricate one.

It’s hard to know what BRK’s excess cash really is. The insurance subs need to hold some of their float in cash. just based on casually looking at some balance sheets, most Insurers hold about 15% of their float in cash and short term investments. Now, BRK is not an insurer, but a conglomerate. They also buy securities in size both at a holding level as well as with cash from their insurance subs.

I depends of how much of the tax cut will get competed away, which depends on industry, market position etc. I expect that most of it will get competed away in commodity businesses. Regulated businesses and those which already enjoyed very low tax rates won't profit very much either. So in aggregate IV certainly has not increased by 20%. The tax rate for many business was already way below the nominal tax rate befor the tax cut. When have you seen the last multiples national pay 36% tax rate? I GE’s tax rate was in the low 29% range before the tax cut even.nSame with tech companies. Domestic companies like insurers, and banks that don’t have that many opportunity to hide taxes benefited the most.

I don’t think a recession can reverse the trend towards craft beer. These brands are dead. Maybe it’s my circles, but no one brings Miller or Bud to a party any more. There best bet is develop or buy craft beer brands themselves, but they don’t come cheap, but I agree they may become cheaper in a recession. The problem is that the fragmentation probably reduces the profitability of the business permanently.

Wall Street is just pi$$ed because their bonus went to hell late in the year. :o

Anyone turned off the lights here yet? FFH has gotten absolutely wrecked. I am not quite sure why, their holdings aren’t of the best quality, but their insurance business is really not affected by an economic slowdown.

It looks like BRK has outperformed in the current selloff, even though the equities he owns haven’t. I also think that due to its larger industrial business, BRK is more economically sensitive than it used to be. I am quite surprised by the relative outperformance, quite frankly. FFH in the same time span has gotten absolutely wrecked.

Also a bit early perhaps? The situation is interesting: there's a number of large (mega) cap good and great companies that are not very expensive. Some even cheap(ish). But also a lot of moaty companies still very highly valued. (That's just from the universe I track... no idea about the companies I don't track.) So on one hand, it would seem we should not get another 20+% drop but on another hand it would seem we could. FWIW, I think markets will rally after the year-end dumping of "losers" ends. So in January. But then there's politics, tariffs, etc., so my prediction is possibly not worth a share of BAC. Yes, too early. however, the selling had been relentless, almost like October 2008. I think a lot of stocks are cheap, unless the economy falls apart. I don’t think that’s likely. I do agree that the selling has more to do with momentum than with fundamental issues.

FWIW, I added to WMB, GOOG and FRPH and Fujimak (5965.T) a bit. Almost out of cash now. I haven’t got anything to sell either, since pretty much everything is in the hellhole.

I wonder how Berkshire Hathaway fared with its investments through the tech bubble and its bursting...Is that old crank Buffett still managing money or did he get a job at CNBC too? Also, note that Druckenmiller has been pushing cloud companies in his interview as an example and he believes they are a better value than banks, because they can grow in anlow growth environment and banks only can make more money at higher interest rates (which IMO isn’t true either). last I checke, the cloud companies arnt soing thwt grsat either, but it’s possible that he changed his mind. anyways, Druckenmillet is a macro trader. I enjoyed listening to his interview and I think he has valid point regarding the forward guidance. Greenspan perfected the art of saying nothing,which may be preferable. They should just state what they do and nothing else. No guidance and just look at the data every time and hopefully come to the right conclusions. Powell seems a bit like a Mickey Mouse Volker, except that Volker brought interest rates to 20% and Powell to 2.5% and yet here we are....

I am bullish on midstreams. It’s very similar to real estate and assets can be moaty. Locations and connections count and there is the FERC to regulate supply. They generate nice cash returns for decades and some pipes run for 50+ years, even though they are fully depreciated. in some cases they can be repurposed. Vulnerability is the same - overinvestment, cash return lag Capex expense during buildout phase and credit markets need to stay accessable for them to work. The E&P is like the airline industry 30 years ago and shale is the worst thing that ever happened to the industry.