Spekulatius

Selling remainder of POAHY (small loss) $BAC and $GS in my tax deferred account (very nice gains on these just 2 month old positions)

Sold $LHX and $CASH in tax deferred accounts.

Bought a starter in $JCI this AM. The stock seems to be down based on their underwhelming forecast for 2024 but other than that it looks like a very solid industrial around commercial building automation / HVAC at a reasonable price.

Sold the remainder of LUV in my tax deferred accounts and my highest cost basis shares in my taxable accounts. Worked out very satisfactory due to averaging down. I have no idea why it went down so much, nor why it went back up so quickly (lower crude prices?).

My guess is once inflation hits about 2.5% run rate, the Fed starts cutting. My thinking is that at 2.5%, they can cut to 4.5% and still have a 2% buffer to being "neutral". Timeline would be the first cut by mid year 2024.

Harris was a great business (satellites ) while L3 was an acquisitive rollup with somewhat subpar margins. I m thinking that similar to the Boeing/Mc DonnelDouglas merger, the junior partner won with LHX and now the business looks more like L3 rather than Harris. CEO Kubacik is from L3 as well and continued the acquisitions after the L3 merger. I particularly see Aerojet Rocketdyne as a questionable fit, since they now compete with customers. I guess AJRD was acquired because they could buy it (LMT or NOC were not allowed to) not because it was a good fit. In any pandemic, case, to me, the IR day presentation does not look all that convincing. I do like that Shaw is not keeping management on a shorter leash.

US overthrowing Maduro is not that easy. It’s not so much Venezuela’s oil production I am worried about but Guyanas. They are small now but the production is supposed to grow over 1.2M BOE in 2028 and that’s significant. If Venezuela does controll the offshore oil fields, none of this will happen.

Checkup on LHX. Looks like they stop deals for a while which should not surprise anyone. https://seekingalpha.com/news/4045760-l3harris-to-halt-ma-activity-for-foreseeable-future I looked at the latest shareholder presentation and quite frankly wasn’t too impressed. very modest margin improvement projected from a bit less than 15% to 16% in 2026. The 2026 FCF target of $2.8N translates into $14.7 in FCF/ share which I think is a bit less than what forecasts are projecting. And all that with quite a bit of leverage also the sale of the commercial pilot training business will reduce this somewhat. The rest of the shareholder presentation was just platitudes (digital factory, cost saving blah blah blah ) https://www.l3harris.com/sites/default/files/2023-12/LHX_InvestorDay_ExecutivePresentations_Final.pdf

I do. It's sort of an irish classic now. Many Irish folk bands play it.

@Xerxes Yemen was always about controlling trade routes for spices in the Medieval times (and probably before) and now for all sorts of things including crude / NG through the Suez canal. Attacking ships is unlikely to make them friends - they get similar status than the Somali pirates on the African side.

if a stock drops a lot, the tax loss can be worth more than the shares you hold. Example - assumed 30% tax rate. Stock drops from $5 to $1, so that's a $4 drop x 0.3=$1.2 worth of tax writeoff. One of the issues with the US tax code is that you can only write off tax losses against gains in the same year or use them against future gains. It's set up asymmetrical that way. In the tax bubble I have seen folks using their house because they were taxed on gains (from equity grants) that they failed to realize to save taxes. After their stock plummeted in 2020, the unrealized gains vaporized but they were still on the hook for the taxes from unrealized gains.

Houthis have been attacking ships including US warships since 2015. These idiots never learn.

The Houthi's in Yemen essentially try to close the Suez shipping route which is one my of the most important shipping routes for trade. My guess is that these cruise missiles come from Iran. My guess is that the US and allies won't let this happen and there will be a price to pay for the Houthi's of doing so.

The Guyana thing seems worrisome. there is a meeting between Maduro and the President of Guyana later this week. Maduro going through all the trouble with a referendum etc and then do nothing does not make any sense. As I mentioned before, he has elections coming up next year and he could lose, even with this militia controlling the streets. there is also a chance that if he rigs the election too overtly, there is going to be backslash from within Venezuela. So he may see himself forced to make a move prior to election to get a patriotic wins. Just because it is stupid and doesn't mean it does not happen.

Has anyone looked at IMO? I have rarely even heard oil bugs mention this one. It's controlled by XOM which owns ~70%. Seems like there is a lot to like - they are buying back shares like crazy with issues bids. There is another one going on for 1.5B CAD right now. Shares are down from 847M shares in 2016 to 566M and with the issue bid, it's going to be less than 550M. They also pay a small but rising dividend and the balance sheet is extremely strong - only 3.5B in debt or ~0.2X EBITDA. On the issue bids, it seems like XOM is selling into those and keeps their stake constant. I do think way back they owned 80% of IMO but not sure.

Same here regarding concentration but I also sleep very well. My best investment was LAACZ. Bought it in 2012 after screening for stocks with high share prices trading on OTC markets. My rationale was that stocks with high share prices were less likely to be crap and OTC stocks were most likely to be mispriced, but there were just too many of them to go through without and initial filter. the high share price was my initial filter. I did a fair bit of research on LAACZ and the owners back then and bought a ~10% position. Stock about doubled until 2015 (~$2000/unit) and then just sat there for years. I started accumulating more in 2018 until 2020 and more than doubled the position over time, adding opportunistically here and there (the units were quite illiquid) because I noticed that fundamentals kept improving and while the unit price stagnated. On the 2020 March dump I got 2 units more around $1350 or so. The buyout offer was for ~$10K in late 2021, so a 10x bagger for my 2012 units and 5x bagger for those I acquired later. My only learning experience from this is that if you own something (or even after you sell a stock) keep tracking it, it likely will become interesting again and some point later. I often keep ignoring this lesson to this day though. It's one reason why I like to buy smaller positions in a stock that I find interesting and reasonably cheap, but don't really have the conviction for larger positions yet. As I own and track it, I might get to the point where I get the conviction to bump up the position later.

Not directly. I discussed the Cholesterol issue with my wife (she is is a nurse) and then with my doctor on my annual physical. I asked for the CT scan and his opinion and he agreed it would make sense. Same for my wife.

Thanks for sharing and good luck with you treatment. My reply to your first post now appears rude - sorry for that, as I wasn’t thinking that far ahead although I am glad I asked. I do agree that those $40 beat everything so far in terms of investment. As I get older, I have found that I do more proactive preventing maintenance even if insurance doesn’t pay for it. I recently had a coronary heart calcium scan done, because I have high total cholesterol and considered going to statins. Result was all clear though, so I am putting this off, especially since the cholesterol went down a little . Insurance doesn’t pay for this, but copay was only $90 and HSA are great for those things.

LOL. I am itching to hear more about this.

Venezuela has plenty of oil and it is likely that the oil field Exxon found offshore Guyana extends into Venezuela’s offshore territory but of course they have no way to unlock this and nobody want to do business there because it has no rule of law. If Maduro does something it is likely his plan to get control of the oil platforms with their small Navy and then starts to negotiate, sort of like a pirate state would. If he moves, it’s likely soon because next year are elections in Venezuela and even with all his muscle from militias , he could lose them.

The Maduro Guyana play to me looks a lot like the Saddam’s Iraq Kuwait gamble in 1990: Grab the oil of your rich neighbor who can’t defend itself. https://www.theguardian.com/commentisfree/2023/dec/10/observer-view-maduro-land-grab-guyana-venezuela

Zeihan has some good ideas but takes them too far by using the most extreme outlier data or sources he can find when they fit his narrative. He ignores other data that does not fit storyline. Take a good idea too far and you are quite likely wrong.

@FCharlie thanks for the background on APA. My view is that Suriname is like a free option that is priced at zero right now. The block 58 of which APA owns 50% but which is operated by Total (they paid for exploration ) has now 700m BOE (350M to APA) but there is likely way more. They also found s9ms oil at the southeast tip of 53 block (fully owned) after having 2 dry wells a few years ago. My guess is they drilled the southwest tip of 53 (Baja) to keep the exploration license alive. In any case 350m BOE is nothing to sneeze at but there is likely far more. Exxons Stabroek hs billions of BOE and Block 58 is an extension off the same trend. I think Block 58 could be worth the entire APA market cap if things go the right way.

@Luca needs to move to China as the future there is so bright that one needs to wear shades. I said this before, what is preventing him from moving from a company with a crummy future like Germany to the rising empire or the East where common prosperity makes everyone rich, just like Karl Marx predicted.

Fact checking Peter Zeihan: I recommend following the Money and Macro Channel. This fellow seems pretty level headed and does a good job explaining economic topics. It should be outed that he has been predicting China surmised since 2010: https://www.businessinsider.com/stratfor-predictions-for-the-next-decade-2010-1?IR=T