Spekulatius

Chamath just embarrasses himself….” Blanket the world with drones”. WTH? Time for quick take from Ackman…

Battleships don’t exist any more inactive duty, none were build since WW2. The US Navy is going to need a lot of ships to counter China which is building a lot of ships.

Another one I own that reported today AD Holon 7745: https://andholon.com/wp-content/uploads/2025/02/holdings_tanshin_20250207_en.pdf There is a VIC thesis on that one and it made a nice run after it posted and then came all the way back. The business while underperforming some expectations has performed quite well in absolute terms. The semiconductor growth segment (e- beam metrology for litho masks ) has very good profit margins, exceeding 30%. The stock trades at 9x earnings.

4368 FUSO chemical numbers look pretty good to me: https://fusokk.co.jp/eng/wp/wp-content/themes/fuso/images/ir/summary_of_consolidated_financial_results_250207.pdf They made already 260 Yen/share in 9 month, but kept their forecast for annual earnings at 259Yen.. As I mentioned before, they seem to have a lock on high purity polishing material ingredients for semiconductor manufacturing for nm scale nodes. I think I am buying motor of this bugger if the stock doesn’t move.

US Defence spending :$820B US GDP: $2.7T. Now I would subtract ~$100B from Defence spending because it is really welfare (veterans healthcare etc) which in other countries with universal healthcare comes out of a different bucket. If you don’t believe me, check the Pentagon budget breakdown. So call it ~$720B net which is 2.7% of GDP. Tell me where I am wrong. https://www.defense.gov/Multimedia/Photos/igphoto/2002099941/ Yes, the USA spends more because it is a bigger economy.

Yes, they don’t pay enough to retain employees, plain and simple. I think their old contracts implied labor rates that are not realistic any more. COVID-19 was a factor as it increased wages far more than historical norms. I do think that this looks attractive here, the Navy needs ships. Doge may go after them but this is not something that can be fixed with a few mouse clicks. I think I buy a few shares despite not liking the business. I think management also needs to be refreshed here, they share a large part of the blame.

Fully valued, imo.

They are actually a monopoly for aircraft carriers. These take 5 years to build. I think the contract sr basically time and materials with some escalators for inflation etc. The design come from Navy eggheads and most high tech companies like the power plant from other suppliers like LMT, Raytheon, BWXT etc. So if they are off too much on time (hours worked ) most likely due to delays then it starts to eat in the contractors margin at some point. I think COVID-19 has to do with it, but these shipyards are union shops and those seems to have an easy time with this outfit. I think GD’s Electric Boat operations are better run.

HII is just a glorified welding shop that happens to produce ships and submarines for the Navy. Its not a well run shop either.

Trump will make volatility great again

Sold Renesas, JCI and reduced NTDOY

ThenUS aid is far less than $300B - I am not sure where this number is coming from. I think the goal disbursals are roughly $100B This is particular true if you look that much of USA aid are donations of obsolete US equipment. However, that’s not that material to what Nielsen says.. The material thing is that Trump rips up long standing agreements, threatens allies and has questioned article 5, which is at the core of NATO. That undermines NATO and sooner or later will lead to a test incident. As I said, MAGA is really more the USA going alone as Peter Zeihan predicted.

I pretty much agree :

Sold JCI in my tax deferred account. Also sold The small position on Linamar (small loss). While I like the business, it’s just too vulnerable to tariffs.

What about opening an account with library and get online access for free? Part of my stingy me dies when I see people spending on things that are freely available.

Politics matter as the decisions can have economic impact and drive markets. The problem is that threads tend to get derailed in drivel and become worthless for investment purposes. I created one topic recently that went so far of the rails that I asked @Parsad to delete it. Fact is - nobody’s else gives a damn about your opinion but you.

Why sell federal land? They could create a monster TPL from it. An irreplaceable asset that ever goes out of style and going to beat inflation.

I think Monish peak coal was a few month ago- it has faded a bit with the met coal and stock prices. It’s wasn’t a bad idea actually, but I think he overstayed his welcome.

No. VAT does not hurt business like tariffs do.

I keep an eye on everything that is on my watchlist but it’s a bit early imo. There is a real risk of a Smoot Hawley like tariff spiral . Not that I think that a Great Depression is likely but there could be a substantial reset. if this were to unfold, stocks would go way lower. So far, the 2% decline in future is peanuts. Remember, EU is up for a tariff review on April 1st, I think and it’s likely there will be tariffs on exports from the EU as well, as well as a corresponding counter tariffs.

I think the damage that the USA has done with contract breach and covert bullying to its reputation cannot be repaired any more. The USA is not a reliable partner any more as every agreement like NAFTA has been broken. The problem with Trump’s Art of the Deal is that it only works once. I don’t think the result gains will be worth it, a reputation gained in decades has been shot in days. Peter Zeihan has it right and will be going it alone. Japan, Canada, Europe, UK, Australia need to chart their way too separate from the USA and perhaps better together than separate. Welcome to the multipolar world.

The things up during Trumps presidency so far are : 1) shitcoins 2) egg prices 3) oil prices 4) interest rates 5) Elon’s arm Rest is all down, go figure

Mr Bond Market will let us know tomorrow how he thinks about it. Could go either way, imo.

Yes, i agree, but this takes time. Retaliatory tariffs are an immediate repose , building the economy for a world much less centered around trade with the USA needs to be done but takes years , if not a decade. It also requires consensus within Canada. This is the world that Peter Zeihan predicted.

While the tariffs slapped on Mexico and Canada makes the most headlines, China also gets an extra 10% but equally impotent the de minimus provision seems to be gone come Tuesday. That means that Shein and Temu are probably finished in the US: https://www.cnn.com/2025/02/01/politics/mexico-canada-china-tariffs-trump/index.html