Spekulatius

One never knows, but 1.2x book ( which could be falling when things go badly) is not necessarily the floor. I did a small add at $190 in one account . My next buy would be around $180.

Shame on me, I thought that WeWork was a tech company, and it’s just a glorified landlord. Where is the plug for the bathtub?

This is true in the US as well, it’s just that nobody is worried about US treasuries yet. I do think that in some emerging markets, private credit ratings can be higher than the countries sovereign rating.

Bought a few PDER. Starter position. At least, I should get the quarterly and annual reports now.

Europe isn’t necessarily overbanked. Germany for example has less than Hall the number of branches /100K of population than the US (14 in Germany vs 33 in the US) https://fred.stlouisfed.org/series/DDAI02USA643NWDB The problem for banks in Europe is that competition is higher and margins are lower. A lot of banks have lower NIM (~2% vs 3%+ in the US) and fee income is less too. There is little unsecured lending for example with credit cards in Europe. Mortgages aren’t sold off either, since the equivalent of Fannie/Freddie Mac does not exist. I think the lower profits are due to competition from semi state or federal owned saving banks (Sparkassen), Mutual banks (Raiffeisen) and the lower interest rates overall. The banks that are most similar to US banks are British banks. Those also generate better margins more equal to their US counterparts.

^ You always have a choice, Peter.

A billion here, a billion there, and soon we are talking about a serious amount of money.

A lot of countries see agriculture like a strategic asset to ensure a safe domestic supply. I know that Germany sees it that way. Where some countries and the EU goe wrong is that they subside exports of agricultural goods.There, the argument of a strategic assets does not hold any more. FWIW, the US has a lot of subsidies for farmers, both direct and indirect as well.

^ RB, you are correct. My writing was inconsistent. Of course thr US needs to negotiate with the US, but I think they need to avoid negotiating with Trump himself, but rather with the folks that run the machinery. I think over time, most leaders in the world will find out they negotiating with Trump himself is a waste of time.

I think it does not make sense to negotiate with Trump at all, about anything. He changes his opinion by the spur of the moment, and most of what he does is irrational. I think most have figured out that it’s best just to let this blow over and isolate and ignore him, as hard as it might be, since he does preside over the US right now. It is highly likely that Trump either self destructs, or does not get re-elected. It will be interesting so see how that meeting with Kim Jong Un turns out. Kim himself is a bit like a Trump in a sense that he is unpredictable and tends react emotionally with apparent anger an management issues. Maybe these two will cozy up, which will look even more awkward.

Citi has shown in an uncanny ability over time to hit any pothole a bank can hit anywhere in the world.

That probably applies to all US stocks, except the tech stocks they onrnjust needs to own like Apple, Google and perhaps Facebook. Home bias is very real in investing.

I am with Jurgis and others here - people stick with their bank due to laziness and switching costs (or effort necessary to switch) , not due to branding. The product is fairly standardized. I think that other financial products like brokerage/ wealth management or even credit cards have more differentiation and more brand awareness, IMO. The above is one reason why the cost reduction from digitization will be competed away, IMO. I could see that large banks could potential gain an advantage by making now complex processes (like refinancing etc) more streamlined and more convenient, but I don’t see any evidence that this is actually happening. I believe that outsiders and tech companies have a chance to leapfrog the banks here, but the business is heavily regulated, making it probably unattractive, despite a huge addressable market.

What about thr risk of competition from online banks, since branches are less and less important. I don’t think I visit a bank branch more than once a year now. Online competition could crimp the margins over time, same than what is happening to retail. at least I think that most cost savings from digital transformation should be competed away. Also, the online banking makes it easier to bank with credit unions, which have fewer branches. This is what I am doing. Then we have the risk of much higher credit losses when interest rates rise. I see reports that junk bonds are shakier than ever, does the same negligence bleed into bank loans. I don’t think that banks have really moats. Maybe convenience is a moat, but once I have an app on my smartphone, how much more convenient can it get.

I don’t get what Freddie/Fannie receivership and affordable housing have to do with each either. They are two separate issues.

Some the things in management just seem to be fads that over time lose their shine. I feel that way about Jim Collins books (Good to great, Build to last) as well as the more recent “Outsider” fad. in both cases, I feel like findings from interesting cases studies have been generalized too much..

UniCredit has a history of cross country mergers - in 2005, they bought thr mostly Bavarian Hypovereinsbank (once a blue chip bank) in Germany. I don’t think this merger can be advertised as a success though.

A mutual system should have some self interest in serving its members as well as self preservation in the long run. It isn’t a surprise that most mutual institutions are in insurance. There is a simple economic realty that if something can’t be paid because it isn’t affordable then it won’t. The folks running Calpers know this, but can’t tell their members, so they kick the can down the road as long as they can.

I think Scott has been smoking something again. The idea to use other people’s money to build something of value and then default on the mountain of debt that it took to do so, has some merit, although I suspect the devil is in the details. And, I agree that Donald T would be the right person to do so, because he is intimately familiar with defaulting on debts and generally doesn’t overthink complex matters. ;D Back on that matter, I had an inlaw collapsing in the heat on my visit in Germany. he as taken into and ambulance and a few hours in thr emergency room. I prepaid 100€ on his behalf and the whole bill was 400€. It would ave been up to 1000€ if he had to spent the night in the emergency room. This was for an US citizen without health/ travel insurance in Germany. I am guessing the cost would have been 20x if the had occurred to a foreigner in the US. Also for those that state single payer =nationalized medicine - well that’s not necessarily true. The German system is single payer, but resembles a mutual Insurance System rather than a nationalized system.

Gotta get rid of the crypto stuff, if you can’t trade it anymore. In that sense, it makes sense to pay for treatment, with the caveat, that the hospital staff may get infected.

The fine is up 4% of the global revenues. This law does have some teeth: https://www.eugdpr.org/key-changes.html

It is very hard to prove fraud, but it is relatively easy to detect possible or likely fraud.

I agree. Awesome price offered [around 190, or a bit below] for this company by the market on an eventful day. Intrinsic value in the area of 250, or above. It’s still selling for more than 1.2x BV and per Market Analysts like Greg Warren of Morningstar, “Many think” that BRK stock got ahead of itself in 2017. FWIW, Morningstar has BRK.B at $220 fair value and with a 4 star rating right now. Seems about correct.

Bought CUERVO.MX, BRK.b and KML.TO today Long Tequila, insurance and steel pipes.

I read some German articles about the case. Looks like a systemic breakdown of anti money laundry systems caused by a management that seem to discourage to destination bad news upstream. Given this, I am surprised that thet the shares have held up as well as they do, If they had business in the US, they would be in massive trouble and look at hundred millions and probably billion $ in fines. I think the ECB does not wield these huge fines, but there still are going to be consequence. The danish regulators can’t let this slide either, even if they wanted to, because the world and the danish populace is watching apparently.