Spekulatius

The main reason that Putin is reducing crude production is to reduce the sky high differential to other regular crudes. Increasing the overall crude prices is a secondary effect, but also welcome of course. Ironically, the high differential have been benefiting Russias economic allies China and India the most, as they have been benefitting from being the only buyers left for Rusdian oil and were able to buy Russian at very low prices. So China and India will get hurt more than the rest of the world because less Russian crude supply will mean lower differential in addition to higher prices overall. I do think Putin can do this for a while , but there are problems with shutting in production , as field can be also impossible to start up again. I don’t think China and India will like this move either, so similar to the NG embargo, he plays for short term benefit but damages his position longer term.

Looks like the balloon was indeed a spy / surveillance balloon. The antennas arrays alone indicate so, since a weather balloon would likely have other sensors like pressure equipment, maybe infrared cameras, temperature sensors. https://www.wsj.com/articles/chinese-balloon-carried-antennas-other-equipment-to-gather-intelligence-u-s-says-11675953033?mod=business_trending_now_article_pos1

I think the thought is that it does not matter why the yield curve is inverted, it only matters that it is inverted. There are always different reasons why the yield curve is inverted and while the Fed is a player in this, they don’t necessarily control the bond market. However regardless of the reason , so far the yield curve inversion always has predicted a recession so far.

I had a hunch that the Bing ChatAI combo is making some waves. I also read that Google's AI investor day was a bust. Stock was flat when I reduced and then started to tank. It seems a bit of an overreaction quite frankly.

I think this is a bit nonsense. Your decision may have been a reasonable one, if you assume that Steve jobs was necessary for Apple to succeed. However, once you sold your shares, the mistake may have been that you did not continue to track the company. Apple shares trade every day and you could have bought back the shares, if you came to the conclusion that Tim Cook is a great CEO 5 minutes later, 5 days later, 5 month later or 5 years later. A buy or sell decision is easily reversible (yes sometimes there are tax consequences).

Reduced GOOGL a bit premarket.

@dealrakerThat's is some real good performance. Was this with mutual funds or ETF's or was this with individual stock picking? 13% compounded is some serious outperformance.

Turkey is a terrible country for the average investing tourist to get involved in - terrible currency and economic policy, huge runup in the market, political (and now geological) instability galore, an autocratic government, terrible liquidity, lousy rule of law, lousy governance. The list goes on. To sell Micron (close to the lows) and buy the overbought Turkish equities most be one of the lousiest market calls ever.

The average investor does not need to beat the market to do well. Just matching about the market and he will do just fine. Most average investors though hugely underperform trying to time (badly) or invest in Fomo/Momo stocks at the wrong time. My comment above regarding to own a business should not prevent anyone from trying. I just think that over time most business in tough industries (contractors , restaurants, retail) fail. Most upstarts fail. When I recall the business that I knew in the town I grew up in the 70‘s, virtually all of them are not there any more. Some of the owners just retired and sold out and did OK. Others not so much. This is in a demographically challenged area. I am sure that in a growing area, the results would have been much better and there is a lesson here: Don‘t keep pissing against the wind. One business though closeby was sort of crappy looking machinery business that made it huge, went into international export and got bought out by a public company. I am sure it was a hundred bagger. So, much of the returns are in the tail. Again, if as in investor, you can capture the tails by indexing, even if you no nothing. As an active investor, you can try to actually get exposure to the tail by having better insight. Or you can try the behavioral edge and buy when others are selling out, which may be easier.

Yes, and work smart. If something does not pan out, switch careers and/or move elsewhere and try again.

It depends on the business. Almost all small business are crappy ones where basically the owner just owns a job. My dad was one of them- he passed away last year and basically died broke. Many of his fellow entrepreneurs or land owners went to work for other people over time, as their own business failed. The local economy has a lot to do with it, if you are in a demographically challenged area for example. Survivorship bias is huge with small business, much more do than with mid cap or large cap stocks,

The US can pay 4% interest rates with 5% inflation forever, they are still 1 % negative. Real interest rates have been below zero for a long time and they are still below zero.

Added to $CNC and just a bit to $BTI

Sold $TSN at a very small loss. Not much meat on the bones with this earnings release.

Run the following screen, if you have Tikr for example (or a derivative).

There are extremely cheap smaller banks out there. Think price/tangible book of ~1 and 13%+ ROE or some screen like this, Buy a basket of those and I think it will do well over the next few years, unless the economy totally goes of the rails.

@changegonnacome I don’t think Japans inflation has to do with COVID-19 spending at all. I think some of their inflation is imported and the other part has seeped in the general economy (services etc). I don’t really know for sure. Its quite interesting because if this inflation is here to stay, many Japanese dirt cheap value stocks with huge cash reserves (that now get some interest) and decreasing topline could look much better going forward.

Great talk from Terry Smith:

It should also be noted that even Japan has recently shown inflation. It went to 4% which is a 25 year high as well. The last spike on inflation was from a consumption tax rise in 2014 (causing a one off effect) , but the nature of the recent rise is different in nature. Japan was one economy as deflationary as you can make one up, but not any more.

The real problem with labor force participation is in the south: https://fred.stlouisfed.org/release/tables?rid=446&eid=784070 Alabama, Arkansas, Kentucky, South Carolina, West Virginia, Mississippi . All MAGA land. The only Blue state coming close is Maine

The ballon is just an incident, not a crisis. I don’t think it’s an accident though. If it were an accident, China would have notified the US via intelligence channels and we would likely never heard about it. I think this balloon is literally a trial balloon that China sent to find out what they can get away with and what intelligence they can gather with them. Ballons have a very small radar signature and are actually hard to detect (small radar signature). They can be used to listen to radio chatter or record longer term movement at a certain location better than satellites. China wants to find out what they can do with them, if they get detected and if so what the US does once they are detected.

I first thought this is a SNL skid, but it’s not:

I think the 2010‘s were very different than the situation we have right now. We had several deflationary forces back than - globalization /outsourcing to China etc, Lower energy and commodity prices from (crude went from $90 /brl in 2010 to $50) and labor market slack that lasted until 2018/19. None of these factors exist today, in fact they all reverted. I think it’s unlikely that the 2010 economy repeats, the structural framework is much different now. That doesn’t meant we stay at 6-8% inflation, but the 2% is very hard to reach. I think we will have structural higher inflation now than in the 2010 decade. This requires structural higher interest rates as well.

What is the assumed trajectory of the Fed interest rates here. another 0.25% raise in March and then keep them for the remainder of 2023 there , would be my guess. I do think the futures imply that rates are going to be lowered later this year? I don’t think that’s going to happen.

I think you have to look at what the Fed and the economy is doing, not what they are saying. What they are saying is said with an intent to control the narrative, but a narrative is not necessarily an fact. Also, the Fed does not control the economy.