frommi

Getting inflation is the target of Abenomics, without inflation they can`t inflate their debt away in the long run. Its called financial repression and was done by the UK in the past century. They are not forced to borrow their money long term, when rates go up they can just finance this with short term debt. And short term rates are under full control of the BoJ.

The BoJ just buys the debt, problem solved. Every foreigner selling stuff in japan will just shy away and leave marketshare for the japanese companies. The Japanese economy is getting back on track and finally they get GDP growth. (In a weaker Yen, but who cares?) At that point the Yen stabilizes and everybody is happy. I didn`t want to post in this thread, but i am bored so here are my predictions: (But i don`t put my money where my mouth is here, so who cares?) S&P500 -> up to 2200 and then back to 1800 and up again to the end of the year. Oil -> down to <40$ where it bounces around and at the end of the year it will go up again to around 65$. Gold -> down, up and down again, will end the year below 1100$. 10y Bond Yields -> Up to 2.6-2.8% and then down again, will end the year around 2.5% Deflation will come to europe until Super Mario starts the biggest QE europe has ever seen. As a consequence the €/$ will fall to parity.

http://www.valuewalk.com/2014/12/jim-chanos-says-2014-better-year-short-sellers/ Chanos has an interesting bet running, he is short oil majors and long oil, because one of those is mispriced. Makes sense in my view.

Thats a dangerous comparison in my view. I am pretty sure that banks looked very cheap in the middle of 2008, too. But when you bought back then, it took a lot of time to get back to even (and in some cases you lost everything). WFC at half of bookvalue was a real bargain, but that would compare to buying XOM near 0.6-0.7 x bookvalue. So wake me up when we are there. (Probably never, but who knows.)

While studying Mecham i noticed that you should ask yourself why something is mispriced in the first place or what can change in a business that makes it a mispriced stock at the current price. Often a business that looks expensive is not expensive when you factor in a mean reversion of margins, price increases or something else. Its very often that these things are mentioned in the annual report, so just reading can give you an edge. Kraven made fun of it, but i think one of the safest ways to learn is to make a watchlist with BRK, FFH and MKL and just buy when bookvalue is near 1.1 and sell when it is above 1.7 or whatever number you think is appropriate. Then take the other half of your money and try to find mispriced bets and learn by doing. When you buy something you have to have the conviction to not sell for at least a year. When you can`t get to that point you probably don`t know enough about that business and have to read more.

I found a nice CPI adjusted long term oil price chart and an article from 1986 which covers the story of the saudies going into price war with the britain oil industry, so there are some analogies to today. http://www.larouchepub.com/eiw/public/1986/eirv13n06-19860207/eirv13n06-19860207_004-saudis_price_war_could_mean_5_10.pdf http://www.macrotrends.net/1369/crude-oil-price-history-chart So if history is any guide, below 30$ is a good price to pick up some oil exposure for the long term.

Why don`t you just buy calls or futures on oil when you want to speculate on that to pop? :) Why not buy oil stocks if you want to speculate on oil prices? When oil prices stay where they are for a longer period of time you will probably lose money in oil stocks, because they act like call options on oil. When you then buy call options on these call options you will not make money if oil moves only up a bit, only when it goes back up to above 90$. I don`t know how high implied volatility on oil is, but i suspect its a lot lower than on oil stocks. But that is not my main point. My main point is why speculate? I don`t see this as value investing, because most stocks are now more expensive than 3 month ago at oil prices of 90$. Some o&g stocks are worthless now but still trade at market prices above 0$. And i doubt that oil prices will rebound meaningfull without a big supply contraction first.

9628.JP is my japanese demographic pick, its the biggest funeral service company in japan in a very fragmented industry with an EV/EBITDA of just 3 and stable FCF generation over the last 5 years. http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/9628-jp-san-holdings/msg196526/#msg196526 But it looks like nobody is interested. :)

Why don`t you just buy calls or futures on oil when you want to speculate on that to pop? :)

Do nothing.

NOV, DNOW, HP earnings are dependend on rig count when recall it correctly, so their earnings will be impacted in the short term but its unreasonable to assume that will last forever. Perhaps a good idea to wait for their earnings misses and buy after that.

Well… that’s much easier said than done!! ;) Gio FFH, Intralot, OUTR, 9628.JP, EDHN.CH are stocks in my portfolio that shouldn`t be impacted by a recession, thats already more than 55% of my portfolio. Cable companies, utilities are probably not a bad choice either. Has anybody more ideas?

Does anyone know how Mecham was able to make 12% in 2008? From what i read he was invested in FFH and AZN, but was that all, was he fully invested? Learning from that the answer is maybe be 100% invested but invest into companies that are cheap and where the business is not under pressure in a recession or perhaps even profits from a recession.

So you think that because of china there is no cycle in the car industry anymore?

You said you have your network at your current employer, so don`t you think that its in the companies best interest to keep you contracted in some form? Are you easily replaceable or do you carry a lot of knowledge? I built a software library for other software developers with a colleague that we than sold some copies of. That was a good way to get direct contacts and show that we have the knowledge to do projects. The product itself was not very successful, but it opened some doors and resulted in some multi-year consultant contracts. I don`t know if you can do something similar in your position. Are you a developer or just an idea creator?

I can tell you what i have done. Try to get your employer as a first customer. Build a product as a reference project, preferably one that your current employer needs. Find a company/website that lends out consultants or matches consultants to projects. In germany there is gulp, i don`t know about sweden. There you should be able to see what other consultants in your field and with your experience are earning. Don`t undercut everybody on price here, that way you only get stupid projects on budget limited companies that try to squeeze the last minute from you. Try find find projects that make you happy, its a lot easier to differentiate yourself from the rest when you have fun working. And realize that its only possible to work as a consultant and earn double the amount of money because there is a huge demand for IT professionals and only a small amount of supply each year. But that is not a situation that is guaranteed to stay forever, so forget about only working 6 months and get your ass off to get to FI as fast as possible. Investment returns are irrelevant in the first 4-5 years of savings and since you have found this website you already have a huge headstart.

I don`t say its gone but i know that we are not at the bottom of the cycle. The oil price will sure give sales a kick for a short time, but how do you determine when to get out? There are already signs of a global slowdown, so even when the US has pent up demand whats happening in the rest of the world? Is GM/FIAT a double from here? (I doubt it, but i don`t know it either.) So just ignore me, i have no clue. :)

Thanks, was an interesting read. So is there a living owner operator in the O&G space with a similar success story? (And how much of that was luck when you look at oil & LNG price charts?)

I think one has to look why oil is cheap to decide whether this is good or bad. When its just caused by overproduction its a good thing, but when i recall it correctly we have a demand contraction, too. And this is a bad sympton, because that means that the economy is losing steam. You just have to look at chinese house prices to have an idea of whats possibly coming.

Car producers are looking cheap, indead. But is this not exactly how they look at the top of the cycle? Since i don`t know how to spot where we are in the car cycle i have decided not to invest in car producers. (I was close to make a an investment in FIAT, but that opportunity is gone and i won`t chase it) @ni-co Yes and because of that FFH is still the stock with the best outlook, looking at energy stocks and bonds one could assume that we are in a 2008 style downmove. But when you look at the S&P you think, huu? :) @wisdom Do you have a stock in mind?

Uccmal why should one invest into an O&G company? There is no competetive advantage, and it looks like there is no permanent low cost operator either. Is there a way to value an O&G company that is not dependend on the oil price? If not, is not every investment into an O&G company a speculation?

west has posted a lot of these cheap gems in the Investment Idea section. For example http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/7292-jp-murakami-corp/msg180197/#msg180197

OUTR and more NWH.AX, this is now down to 33% of tangible book. I can`t really believe how fast this has fallen.

I am late to the party, but i am thankfull for this great board, my wife, my work and whatever i forgot that makes up my day and brings a smile on my face. Happy Thanksgiving!

I feel really bearish about the market but at the same time very bullish on my stock picks. Perhaps its just a good idea to avoid cyclicals where the cycle is not at the bottom, banks near fair value, commodity stocks or stocks where you feel that their margins are stretched. I can sleep very well with FFH as a deflation protection. And that is probably the most important thing, that you can sleep well with your portfolio even when the stock market closes for a year or two.