tede02

100%. Originally, a lot of them said if the strait didn't open by the end of April all hell would break lose. Now it's June/July. Obviously no one really knows but it is notable that sharp drawdowns of inventories are starting to show up in the tracking stats and companies are warning of shortages in across industries. Will be interesting to watch it play out.

I've been soaking up knowledge from commodity people like Jeff Currie, Rory Johnston and Amrita Sen for the past two months. What's striking is how people in the energy world are saying things like, "we've never seen numbers like this," and the rest of the financial world is totally complacent. Makes me wonder if the current moment is analogous to Jan/Feb 2020 as the pandemic was spreading country to country. Didn't matter until it did. I don't know the answer but their are similarities. Seems like consensus is forming in the commodity world that shortages are going to hit globally in the next 1-2 months but no one knows precisely. But there definitely are signals. In recent days, reports of motor oil suppliers in the US are warning auto manufacturers and retailers of potential shortages. That's pretty crazy! Although I had been thinking about this for some time, in March I bought a 300 gallon tank and filled it with diesel (I live on a little farm so it's handy to have regardless). The price is looking pretty good right now. Also been buying some E&P ETFs. Steve Eisman just had a commodity guy on his podcast. Was a good discussion for those without lots of knowledge in the space. One interesting point the guy made about the oil majors in the US is the companies are well run and throw off tons of cash to shareholders via dividends and share buybacks. Because of this, he said one way to think about them is they are comparable to TIPS conceptually. If they are paying 2-3% dividend plus buying back stock, you end up with a decent real yield even if oil prices don't do much. If prices do go way higher, that can really juice your return.

2022 was a fun year for both equities and fixed income. On the fixed income side, I grabbed some TIPS when real yields surged past 2%, a bunch of CDs at 5%+ and a Doubleline bond ETF that was yieldling like 12% at the time. I'm still bummed I missed Facebook at the bottom in November 2022. Had a limit order in on long calls that just missed getting hit.

Fun thread to read. I'm in my early 40s now with over 20 years of investing experience. One concept I've come to appreciate much more with experience is sizing bets. When I was younger and hadn't suffered through big losers, I bet way too big. There's always an element of chance in investing and you have to respect it and things that are unknowable. That's what I've learned at least. I was also struck hearing Druckenmiller say that George Soros wasn't necessarily great at making big predictions, but he was a master of knowing when to bet big and when not to.

10 year yield is back to its high for the year. Pretty remarkable with rates up and oil moving up materially, equities just keep shrugging it off. No big deal.

I'm starting to consider short-term TIPS (probably via STIP) for idle cash. Real yields are 1-1.4%. If CPI does push north of 3.5%, that would be pretty attractive.

LOL. . There is SO MUCH irony in politics it's unbelievable. I'm constantly amused. Watch as the guy who hates electric cars, wind turbines and solar resurect sales growth of every one of them.

Saw that today. Pretty much what one would expect in terms of an uptick. Next 3-6 months will be very interesting. It is peculiar how different the CPI numbers are from the Truflation figures. I haven't studied the methodology of each to any significant extent but it is a bit curious.

I guess I wouldn't be totally shocked but that would be pretty wild and shake things up around the AI narrative!

Do you think inflation will rise above 4, 5, 6% over the next 24 months? The elephant in the room is the Hormuz situation which has dramatically raised energy and input prices globally. But even before the war the US was running a massive budget deficit, the labor market has been constrained due to aging population and imigration policy, tariffs (on-again, off again, etc.), and on top of that, you have the Fed expanding its balance sheet. It's not helicopter money but it does seem like a potent mix for rising prices. What are you seeing out there?

Some of the structured products in an ETF wrapper which track bitcoin have piqued my interest. The funds with start dates in October are way down so you can buy today with no downside (in the outcome period) but with big upside.

My 5% treasuries that were purchased in 2022 & 2023 are maturing. I've been re-directing cash into some of these AAA CLO ETFs which are currently yielding around 5%. Interesting that yields came down today despite the higher than expected inflation report. It is peculiar that the truflation stats tell one story while the BLS figures tell something different. The off again on again tariffs are probably going to keep the picture murky for the foreseeable future. I met with a guy this week that runs a $1 billion division of a manufacturing company with global operations. Asked him how tariffs have affected his business. He sighed and said it has been a major pain in the ass. Impossible to plan around.

Interesting perspective from Jensen Huang on AI pressure on software companies. He makes the case that software use may actually increase saying that AI agents will increasingly be working with humans and those agents will have the ability to use more tools. That raises the question, how will these companies adapt their pricing models? If I have an AI assistant that I want to use Salesforce or Factset, do I have to buy a separate license for "it?"

Just started Ken Rogoff's, "Our Dollar, Your Problem." I recently finished Lyn Alden's book, "Broken Money." If you really want to understand the basic history of money, banking and how the current fiat systems work, I'd highly recommend it.

Like others have said, you can't just buy any land and expect it's going to protect your purchasing power and provide a real rate of return. Don't get me wrong, I live on 35 acres and love it. But I wouldn't be surprised if marginal land in rural areas provides no real return over the next 50 years. One thing I think about a lot is demographics. The projections vary but it looks very possible the global population is going to peak by 2050. Deaths are expected to exceed births in the US starting around 2030. Demand for property in the southern US will probably be strong for decades to come as the population ages and people migrate to warmer areas. But in rural areas in the northern states, man, where is the demand for land going to come from?

I bought two companies that have been on my watchlist for years, FDS and MORN. Both have been crushed in the software sell-off. They look fundamentally attractive but AI may be a real risk which is why I'm keeping my position size small.

This makes me a chuckle a little because I started my career in finance in 2007 just as the GFC was starting. I've done well and it's been a pretty fun career. But I grew up in a blue collar area and was very hands-on in high school and college. Enjoyed working on cars and trucks, doing carpentry, etc. Worked some construction labor-type jobs during college summers. Very easily could have gone into one of the trades and started a business. Fair chance I would be making more money than I am now if I would have stuck with it and built a business (but I can't complain). On a similar note, my two highest earning clients are in the trades (one as a business owner and the other as a non-owner president of a mid-size contractor). It is ironic to some extent that people in white collar work generally have done well since the GFC but now they are walking on egg shells a bit while those who work in the physical world seem to have more job security.

Software businesses have seen their stock prices hammered. The narrative driving this is A.I. will displace them. I'm trying to understand this. I'm a user of of Microsoft Office, Salesforce, YCharts and some Intuit products for example. I've also used Factset and Morningstar. The notion that AI is going to replace all these tools is confusing. If these products went extinct, where would all my user data live? Why would AI rebuild all these existing tools from scratch? Why wouldn't the existing companies incorporate AI into their own products to compete?

For people that really want to understand the history of money and banking...and an extremely reasonsed case for bitcoin, I'd suggest reading Lyn Alden's book, Broken Money. I just finished it. Exceptional read. One thing I realized reading this book is if you've lived your entire life in the US (like me), you take the financial system and the fact that the dollar is the global reserve currency for granted (it's all you know). Likewise, if you're in the top 20% of income earning households, you usually don't have trouble accessing the financial system or obtaining credit. But for a huge percentage of the world, access to credit or a currency that isn't constantly being inflated away rapidly isn't there. This was eye opening to me. Again, if you're in the developed world with a good job, you don't even think about this stuff. Additionally, much of the world lives under authoritarian regimes where privacy and the ability to move one's own money around isn't a given. I've followed the bitcoin story for at least 10-years in financial media passively. I finally understand at least some of the substantive arguments for a decentralized, non-sovereign money.

For those of you that have read Ray Dalio and Neil Howe's work, do you think they are largely describing the same thing? That's my takeaway. Dalio's work is extremely quantitative...lot's of charts, etc. The Fourth Turning is more narrative, weaving together historical events into a big story. Regardless, they both seem to paint a similar picture.

Earlier this year, I really flared up my low back while training for some mid-distance races. In my early forties now, but have dealt with back pain on and off to different degrees since my 20s. In search of answers, I ultimately found Dr. Stuart McGill who is largely considered the world expert on back-pain (especially low back pain). McGill has written lots of articles and books for the academic world. His book, Back Mechanic, is written for the lay person. It's relatively short and hits on the foundational aspects of his study of back pain, myths surrounding it, and solutions. There were some key things that I've learned: 1. Back pain is never non-specific, although that is a common diagnosis. There is a root cause and McGill provides at least a starting point for people to diagnose what is mechanically happening in their back to casue pain. 2. Beware of generalized advice for back pain. McGill emphasizes that every sufferer of back pain should be treated as an individual. As a result, more often than not, generalized prescriptions for back pain, such as, "do yoga, or pilates," can often cause as many or more problems than it fixes. 3. Low back pain is usually caused by some kind of instability in the lumbar area. Specific exercises are prescribed to strengthen and stiffen this area. 4. For low back pain sufferers, stretching often makes things worse! Certain stretches, such as bending over to touch your toes, puts lots of pressure on the disks in your low back. If you have a disc bulge or herniation, common stretches will make the problem worse! This was a huge insight for me personally because I was doing lots of stretching inconjunction with my race training. Counterintuitively, by just stopping most of the stretching I was doing, this alone has helped my low back significantly. McGill has also been featured, at length, on many popular podcasts including with Andrew Huberman and Peter Attia. My back isn't 100% yet, but it is improving and I attribute it to what I've learned from Dr. McGill.

Seems like the consensus number is more like $350 billion which isn't chump change...I mean, it moves the needle on the deficit. That said, I won't be surprised if long rates don't move a ton but I could also see a scenario where they jump 25+ bps.

Polymarket currently says there's a 73% chance the Supreme Court rules against the Trump tariffs. If that is the outcome, do you think the bond market reacts with rising rates under the assumption the deficit worsens materially with the lost revenue? That seems like a real possibility. Then again, I wouldn't be totally surprised if the market kind of shrugs either. Been on my mind.

I've been thinking about this A LOT. The question about what to own, and not to own, seems more clear than the timing of when a reckoning will occur. Something that is staring us down in the US is the insolvency of Social Security which is going to hit in 2032/2033. If we face a recession before then, could move the date up. I see the coming entitlement crisis, which isn't far away, as one potential trigger for the markets to start checking fiscal policy. What that looks like most likley is rising long-term interest rates which we seem to be getting some early signs of now. Reading Dalio's books and just observing what is going on in the UK and France right now (related to their fiscal problems and their inability to address them politically), I've come to accept that nothing is going to be done voluntarily in the US to the right financial ship. It's going to take some kind of shock or crisis to force policy makers to make the hard choices that no one otherwise will. And one principal of Dalio's that I completely agree with is when the crisis comes, the central bank will print money/debase because the alternative is too much pain for the public to take (the alternative basically being austerity which would likely include debt defaults and restructuring). The main thing I'm avoiding now is long dated bonds and have been getting more interested in short duration TIPS ETFs for my reserves that I don't want exposed to the equity markets. Also interested in gold and bitcoin.

I found Lyn Alden's recent piece on alt-coins super interesting. Analogizing ETFs and market exchanges to utility blockchains was the most cogent and logical explanation I've seen. Her view is that most crypto coins are unlikely to generate significant value to the coinholders themselves despite potentially creating a lot of utility for users of applications that operate on the rails (stablecoins as an example). The point she makes about the miniscule revenue generated by ETF providers and exchanges, despite billions and trillions of trading volume, really struck me. What are the counterpoints? https://www.lynalden.com/why-most-cryptocurrencies-wont-accrue-value/