Spekulatius

I believe the increased valuation in some stocks is due to the rush into compounders. I believe after one of the longest economic expansion in modern history, a lot of companies look like compounders, but are more cyclical than they seem. We will see after the next recession. Since many of them are roll ups (albeit well run roll ups), there is also reflexivity at work, such that a high valuation enables faster growth through acquisitions, due to lower cost of capital. Example are Heiko, ROP, DHR, TDG, ROK. They are well managed companies well worth keeping an eye on, but the valuation is a couple of bridges too far, since investors now discount many years of current growth rates into their stock prices.

They just need to get hold of his blackmail material ( tapes?). I agree it could be interesting. Also, do all scumbags bank with Deutsche Bank?

Much if the US power grid is 2nd world standard at best. Wooden poles leaning over until they fall down, transformers that look they are from the 60’s and high voltage lines strung and cobbled together are the norm. I list power last winter in an apartment I rented for a week. However on the plus side, electricity is fairly cheap compared to Europe when you get it. Most larger industrial facilities have multiple power connections for redundancy.

The freakonomics episode about abortion and crime, where they revisited the thesis formed in 2001 with updated data is outstanding, imo. Freakonomics is one of the best podcast series I am aware of: http://freakonomics.com/podcast/abortion/

In Germany: IKB (Industriekreditbank) and Hypo Real Estate AG were nationalized. https://en.m.wikipedia.org/wiki/Hypo_Real_Estate Yes, that IKB was very strange. The IKB was designed to be a lender to smaller to mid size industrials, but starting in 2005 or so, it couldn’t make a spread any more and started this special investment vehicle in the US, for which it had no mandate to do so and it want disclosed either, as far as I know. I was invested in IKB a long time ago (it was a very sold stock and dividend payer), bit not at the time of the collapse. Same with Depfa, which became part of the Hypo Real empire which later collapsed. It is quite likely in my opinion that European banks looking for ways to generate yield in thenUS bond market right now.

In Germany: IKB (Industriekreditbank) and Hypo Real Estate AG were nationalized. https://en.m.wikipedia.org/wiki/Hypo_Real_Estate

I am not an expert of gaming, but it seem to me that the industry has a lot of tailwinds. The move to digital distribution and having the game essentially in the cloud saves costs, makes them more platform independent and probably over the long haul cheaper to develop. It also increases the game longevity by keeping users engaged with small updates etc. The ubiquity of smartphones allows for more gaming time. EA for example looks like a decent value. They have the FIFA franchise, which has been a money maker forever and probably will continue to be. I am also curious how GOOG stadia platform works out. This could become a nice subscription based business and also be beneficial to game producers.

PACB - betting on a merger conclusion.

I’m also surprised farmland has held up so well. Prices are still above $10,000 per acre in a lot of areas. At $10,000 per acre, even the most productive farmland is yielding less than a short-term government bond. I dealt with this problem a few years ago. We had farmland that had been in the family for over 150 years. It was immaterial in relation to overall resources and generated little cash (in relation to capital value), but my family had a strong emotional attachment to it. It was indeed tough to get past these non-economic factors during the sale. So it looks like at some point AGM is going to be in deep trouble. AGM is farming equivalent of FNM/FRE.

Yes, it seems kind of crazy in Germany to not do some infrastructure investments (housing, rail etc), because in a lot of cities, the supply hasn’t kept up with demand. Fast rising housing is not popular in Germany because the percentage of homeowners is much lower than in US. Germany had a budget surplus, record low interest rates and demand that can’t be met. I instead of bitching over the negative effect of the immigration , there should be much more focus on making use of it and do what needs to be done. Seem like a no brained to build housing for a million people in cities with job growth, rail infrastructure to meet increased demand and get some of new inhabitants to work at He same time, instead of playing financial stimulus that doesn’t seem to do much. But then again, I am not an economist.

The rising rents in Germany were at least partly caused by immigration. All of a sudden, Germany has 1 Million more people they need housing adding in a short period of time. With full employment and starting with a shortage in larger cities to begin with, and little new construction, it’s easy to see why demand outruns supply. The stop gap measure of rent control certainly will not solve the problem, but make it worse. Adding to the supply is what is needed.

It s easy to bash the European bankers and the ECB, but what will happen to US banks and US insurance companies when interest rates go the way they did Europe? US bank8ng has structurally less competition so it might be a bit better, but overall, I would expect NIM to compress to near European levels, which probably means ROE<10% and compressing P/tangible book <1. The US still has a profitable credit card busInes and other niches that don’t exist in Europe, but banks have non-bank competitors in those. Insurers like BHF or LNC with long tail business or even FFH and BRK will be affected as well. Then we have issues with pension fund’s (Hello IBM, GE and many others). The winners are probably utilities (unless their guaranteed returns gets revised down, as happened in Switzerland ), real estate, infrastructure and probably solid growth business with or without capital needs that will command higher multiples.

http://www.kkr.com/sites/default/files/KKR_White_Paper_53_1906.pdf Covers pretty much everything :)

Yeah, the market in 2007 was even cheaper... Of course interest rates were higher back then as well as other issues.

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.