james22

Retired two years now, I withdraw ~2.5%/year from equity (my only income source). I've three years in STT I'd withdraw from only if equity down 15% or so. Should last forever (or until marry).

Texas Attorney General Ken Paxton said Monday that he joined a group of Republican state officials accusing BlackRock Inc. Chief Executive Office Larry Fink of relying on sustainable investments instead of shareholders’ profits. A group of attorneys general from 19 US states led by Arizona’s Mark Brnovich wrote a letter last week saying the world’s largest asset manager is pursuing environmental, social and governance investment policies to the detriment of their state pension funds. https://www.bloomberg.com/news/articles/2022-08-08/texas-joins-republican-ags-slamming-larry-fink-on-esg-investment Republicans, if they take back Congress in the midterms, plan to pursue legislation against environmental, social and governance, or ESG, investing, part of an effort to push corporations and the financial sector away from pro-climate rhetoric and make them re-embrace fossil fuels. https://www.eenews.net/articles/republicans-plan-legislative-assault-on-woke-esg-firms/

I was told we've ZERO inflation.

Updates? 45% BRK 5% BAM 5% PLTR 15% Small Value (VSIAX) 10% International Large Value (VTRIX) 5% Energy/Utilities (VGELX) 5% Precious Metals/Infrastructure (VGPMX) 10% STT (VFIRX)

German Chancellor Olaf Scholz said for the first time that his government could postpone the planned closure of its remaining nuclear reactors, as he criticized a decision by Russia to constrain gas flows to Germany—a move that could deal a severe blow to Europe’s largest economy. … On Tuesday, the chancellor broke with a longstanding policy and said for the first time that it “could make sense” to keep Germany’s last three nuclear reactors online. They are due to be shut down in December as part of the country’s transition to renewable energy. https://www.wsj.com/articles/nuclear-power-plants-could-stay-open-says-germany-11659533181?mod=djem_EnergyJournal Heh.

Entertaining, thanks.

5% in Vanguard's Global Capital Cycles Fund (VGPMX) which holds ~25% in precious metals and mining securities. So, ah, 1.25%...

To be sure, history shows that grand energy transitions are possible. The key question today is whether the world is on the cusp of another. The short answer is no. There are two core flaws with the thesis that the world can soon abandon hydrocarbons. The first: physics realities do not allow energy domains to undergo the kind of revolutionary change experienced on the digital frontiers. The second: no fundamentally new energy technology has been discovered or invented in nearly a century—certainly, nothing analogous to the invention of the transistor or the Internet. https://www.manhattan-institute.org/green-energy-revolution-near-impossible

While sustainable investing continues to gain in popularity, economic theory suggests that if a large enough proportion of investors choose to favour companies with high sustainability ratings and avoid those with low sustainability ratings (sin businesses), the favoured company’s share prices will be elevated and the sin stock shares will be depressed. Specifically, in equilibrium, the screening out of certain assets based on investors’ tastes should lead to a return premium on the screened assets. The result is that the favoured companies will have a lower cost of capital because they will trade at a higher price-to-earnings (P/E) ratio. The flip side of a lower cost of capital is a lower expected return to the providers of that capital (shareholders). And the sin companies will have a higher cost of capital because they will trade at a lower P/E ratio. The flip side of a company’s higher cost of capital is a higher expected return to the providers of that capital. The hypothesis is that the higher expected returns (a premium above the market’s required return) are required as compensation for the emotional cost of exposure to offensive companies. On the other hand, investors in companies with higher sustainability ratings are willing to accept the lower returns as the cost of expressing their values. There is also a risk-based hypothesis for the sin premium. It is logical to hypothesise that companies that neglect to manage their ESG exposures could be subject to greater risk (that is, a wider range of potential outcomes) than their more ESG-focused counterparts. The hypothesis is that companies with high sustainability scores have better risk management and better compliance standards. The stronger controls lead to fewer extreme events such as environmental disasters, fraud, corruption and litigation (and their negative consequences). The result is a reduction in tail risk in high-scoring firms relative to lowest-scoring firms. The greater tail risk creates the sin premium. However, returns are not all that matters. Investors also care about risk and thus risk-adjusted returns. The research, including the 2019 study Foundations of ESG Investing: How ESG Affects Equity Valuation, Risk, and Performance, has found that companies with high sustainability (environmental, social and governance) scores exhibit less risk, typically having above-average risk control and compliance standards across the company and within their supply chain management. Because of better risk-control standards, high ESG-rated companies suffer less frequently from severe incidents such as fraud, embezzlement, corruption or litigation cases that can seriously impact the value of the company and therefore the company’s stock price. And less frequent risk incidents ultimately lead to less stock-specific downside or tail risk in the company’s stock price. https://www.evidenceinvestor.com/who-owns-tobacco-stocks/

But this is off-topic. Let's agree to disagree, SD. Have the last word if you'd like and let's return to energy as an investment.

Sure it is. Get rich now, deal with the problem (made inconsequential) later. Yeah, yeah: Green on the outside, Red on the inside.

Every reliable poll of European newsrooms from Germany to the Netherlands show that climate change is a much more important topic for journalists than it is for ordinary people. https://www.newsweek.com/popular-uprising-against-elites-has-gone-global-opinion-1722653

Yet you were less picky (found more opportunities) before the market was off (more overvalued)?

Do you believe it coincidence you can't find extremely good opportunities when the market is off? When they should be more likely found than when the market is doing well?

Sorry, that was Lazurus'. But like him you know you should you try to be logical, yet still 'have a hunch' and agree with his disclaimer: Will be there another time in my life when I would be so confident that the $hit is about to hit the fan...?..I don't think so... With the possible exception of Buffett, I don't know how anyone can be confident in their market hunches. And the thing is, "ultra great investments" are rare. And they don't look like "really easy to understand, extremely attractive" bets at the time. But if 80/20, you're only talking about investing at the margins (where's your confidence?). That's not what Lazarus (50/50) is struggling with.

Why didn't you act in 2020 then (the Fed having liquidity)? Because you found some other reason not to. You've found your reason to not act now. And you'll undoubtedly find reason to not act in the future. What's the point of realizing you're a perma-bear pessimist about markets (and that it is a huge flaw) and then immediately disclaiming it? Climb the wall of worry.

Better investments than found in 2009? March 2020? If you didn't act then, why believe you'll act now?

You've got to get it through your head that confidence is risky.

There are always cross-currents. The Two Most Underappreciated Forces Driving Markets Today 1. Demographics 2. Flows https://awealthofcommonsense.com/2021/04/the-two-most-underappreciated-forces-driving-markets-today/ I assume the Dow 36,000 argument is at work as well. https://en.wikipedia.org/wiki/Dow_36,000

Want to bet on that? https://en.wikipedia.org/wiki/Simon–Ehrlich_wager

Nah. If you wish to improve the environment, you need economic growth (Kuznets curve). For economic growth, you need energy. Today, that means oil & gas. It's a bad thing to curtail that.

European Commission Declares Nuclear and Gas to be Green https://wattsupwiththat.com/2022/07/07/european-commission-declares-nuclear-and-gas-to-be-green/ Like dominoes.

Newly retired, I'd much prefer a 2 year popping of the Everything Bubble to a 10 year slow leak. I've cash to ride out the short-term, SRR would really hurt if it dragged on longer. A million Bogleheads suddenly cried out in terror.

Still this.