Spekulatius

I had a conversation with a fellow who manages people for an US company in the semi space. They have dramatically reduced their business there and let people go and moved operations to the Philippines. He said one thing - there are a lot of underemployed people in tech in China, especially younger ones and in tech/engineering. When you read some articles, the unemployment rate is almost 20% there. He think there is a lot discontent with the CCP party and Xi Jinping there amongst the younger generation that might at some point bubble up and cause unrest. He thinks it’s just a matter of time.

Bakmuth has little strategic value, so the fact that is has fallen doesn’t really mean much. Wagner wanted this as a trophy to show that are capable to do something, the terrible cost in term of losses notwithstanding, while the rest of the Russia army hasn’t been able to do any offensive whatsoever. The war will be decided elsewhere.

I like to watch these trailers for upcoming movies. Oppenheimer and Dune looks interesting and The Hunger games beginning at least visual striking. Lot‘s crap as well (pretty much any movie with Sharks or Jason Stratham, the worst ones have both) Edit - the new Antman - Quantummania on Disney+ is garbage.

It harder to make large leaps with real hardware and systems. Also, the buyer of these are utilities which move very very slowly. Energy parity just means that this reactor puts out more power than you put in. From there , it’s a long way until it becomes commercially viable.

The Chinese as debtors seem to be very hard to deal with. In cases where both the IMF and the Chinese are debtors the Chinese don’t pool and try to cut favorable side deals for themselves on the back of IMF easing debt terms. It’s clear that the belt and road initiate is another one of Xi Jinpings failures and seem to amount to little more than neo colonism.

They more likely implode Japan style than USSR style, Imo.

Europe has a lot of state or local government own institutions. Think Raiffeisen, Sparkassen which is where most individuals bank. Sparkassen have an institution in every larger town, then a separate one for each district and layer on top of this Landesbanken. These banks do create a lot of competition and lower margins than in some countries where banking is more consolidated (Ireland, maybe UK even). I think France is fairly centralized (because they like to centralized and regions tended to have very little autonomy as all roads lead to Paris in France. The US for a long time regulated banking and limited the amount of branches a bank could have or interstate banking. This led to many banks and only the key deregulation in 1980 (signed by Carter) started to change that. So so 1980 deregulation really kicked of the competition and consolidation in banking in the US, and that will continue. that’s not necessarily bad for bank investor either, because banks do tend to get taken out at a premiums. My guess is that we will get to less than 50 banks in the US eventually (one for every state roughly) but probably not in my lifetime. Huge banks like BAC with investment banking, international operations and huge hedge books should be treated different than a run of the mill $5B bank that mostly operates in one or two states with 50 branches. BAC can really take the financial system down while the other one can’t.

If rates remain higher for longer, the long tail insurers ( life, annuity etc) should disproportionally benefit. In the short term, they are taking a hit to book via AOCI losses, but over the long term, the income from investments is much more important and should be higher with structurally higher interest rates. Think MET, PRU, maybe JXN, BHF etc. On another note what drives the hard market and why should it persist. On the past COVID-19 , lower interest rates catastrophe frequency have been mentioned and at least the first two really should it be factor any more. I think inflation is another one. Higher inflation ties into higher premiums as well, but even that factor seems to be reversing slowly. So why should be continue to have a hard market in insurance past 2023?

Same idea - I bought some KW 2030 bonds in my retirement accounts. Yielding more than 10% to maturity. Not the greatest credit but I think they will pay.

Correct - total competition and the CCP trying to flatten out any competitive advantage that a company may gain does not bode well for shareholders. @Luca is correct, China is a brutal market for almost any business. How do you win there as a shareholder? As foreigner, not being tuned in the political machinery that determines the winners it's going to be even harder than for a local.

Zell sounded like he would just going to get started in the last podcasts. I do wonder if he is dancing in his grave now.

@crs223 I don't think there is a single root cause, there are probably multiple causes because the rising mortality is due to such diverse reasons than gun violence & accidents as well as suicides, drugs and even traffic accidents. How likely is it that these diverse causes are all related to the same root cause? I think it's unlikely, just me thinking like an engineer or scientist. I have never done social studies or conducted experiments, so what do I know. if you really want to learn about similar matters, I recommend the "Big Brains" podcast from UChicago. I haven't seen an episode about this topic, but they do have some interesting approaches there , where researches test out their hypothesis and find out what seems to be working and what not.

It's not just an US problem too, the same thing happens with variations in Europe as well. It is also noticeable that these trends toward increasing teen mortality got started before COVID-19 (around 2018 based on the charts) and then COVID exacerbated them. I am not sure what is really happening here, much less have solutions, but looking at this issues should be front and center for politicians and social scientists. The higher mortality for younger people is a large reason why the average life expectancy in the US has declined by almost 2 years. I think it's hard to come up with solutions, if you don't work on the right problems.

PYPL looks pretty washed out and has a good balance sheet. A new competent looking CEO might move the stock. I don't like the high SBC, it is not appropriate for a business growing in the mid- high single digits.

Mortality for your teens up significantly since 2018: https://www.wsj.com/articles/death-rate-children-teens-guns-drugs-54c604f4?mod=hp_lead_pos1 Didn’t know that the trends started before COVID-19. Leading causes: firearms, drugs, driving. Sad.

Same idea, but I bought some KW 2030 bonds in two of my tax deferred accounts. They are yielding a bit more than 10%. KW is overlevered imo but I think they just shed some properties by sending the keys to lenders or raise some equity if push comes to shove.

I would go with an ETF that mimics the SP600 rather than the Russell 2000. SP600 is basically a small cap ETF curated to include predominantly profitable companies, while the Russell 2000 tends to include a lot of crap. i forgot which podcast it was (Zacks?) but the argument for SP600 vs Russell 2000 made sense and I recall it outperformed as well. https://investor.vanguard.com/investment-products/etfs/profile/vioo

No debate on above. I am just providing the fact here, big tech has huge rally here. I suspect it’s based on flows, because pretty much all the big tech stocks rallied correlated with the QQQ. I agree it could down from here, but who knows? I guess you could just trade the chart and momentum. It‘s not as simple as “Fed raises rates, stocks go down” apparently.

I bought a starter in $CSL and $SU.

The other news is that Ukrainian pilots are going to be trained in the UK and France. This makes no sense unless Ukraine also get's western jets.

I am not talking about folks on message board here, but plain vanilla employees that are late in their careers. They are still on autopilot and keep their equity allocation for the most part. I did know somebody who retired in 2007 and had an almost 50% drawdown back then - that was ugly. I recommend to him keep his equities, because if he crystallized his losses back then, he would have had to go back to work anyways. He stuck with his portfolio and recovered his account and never went back to work. Even if you are retired now in your mid 60's like most, you still have to invest for another 20 years on average.

You forgot about the heads I win, tails they don't lose much thing. That's the essence of private equity investment management. If things wrong, they are losing other peoples or their creditors money. Worst case, they are also lose their reputation, but I think most wont get there.

@changegonnacome Since I am almost a baby boomer, I can tell you that you are almost certainly wrong assuming that baby boomer all of a sudden drastically reduce their equity exposure. I am sure some of the funds go into bonds right now, but I think they will keep equity exposure much longer and to much later stage in their live. One of the reasons is that they have been trained that it works out in the long run. I intend to do the same. On the big tech rally, I think it's two things: 1) Big tech is a safe haven - they all beat earnings, great balance sheets etc. 2) Big tech gives you Exposure to the AI boom.

Bottom was in for tech at least. QQQ / big tech is quite on a run:

Philips was huge in Europe but even in the 80‘s, they were already in decline. I think I owned the stock in the late 80‘s for a cyclical rebound and made some money if I remember correctly. I think they would have had better results if they had done the exact opposite of whatever Management decided back then. A friend of meine from University started to work for them (in the lighting division , now spun off) but later changed to a different company over some frustrating issues. The TSMC stake was later sold - of course they would be better off keeping it. The ASML connection is also interesting. I remember some earlier news when ASML struggled. One interesting fact is that Philips had a lot of know how in lighting and that ended up benefiting ASML when they developed the deep UV source.