Parsad

I remember when LotsofCoke bought tons of Marvel for like $2 and $4 for his accounts and his children's accounts. No one at the time could understand what he saw and how anyone would monetize all of the Marvel assets properly. Lo and behold, those assets make up the bulk of theatre revenues every year for the last decade. He was also the one who told me to come to Omaha back in 2000. If I had not gone there, hung out with LotsofCoke and met Buffett, COBF would not be around today! Thanks John...where ever you are and what ever you are doing these days! Cheers!

Greg, I agree that the interest rate hikes are having some effect on the goods and service side. But the FED will act on overall inflation...so they will probably continue to be proactive until they see a broad decline in inflation. Food, energy, etc are still under inflationary pressures. It will end eventually, but will probably be longer than you expect, but shorter than most others expect. Cheers!

You can't compare '08 to today. You had massive leverage from MBS and CDS that precipitated the financial system collapse...100-1 asset to equity leverage in some cases. You don't have that today and the banks have excess capital to absorb normal operating losses from rising rates. You also don't have Jumbo ARM mortgages in the magnitude we saw back then. Combine that with equity in homes, cash on the books for corporations, they will absorb some of the current expected losses fairly well. Doesn't mean operating earnings won't be hurt, but comparing it to '08 is not an apples to apples comparison. The difference here will be prolonged belt tightening to absorb inflationary pressures and higher interest rates for the average consumer...when they shop, when they buy cars, when they travel, when they renew their mortgage, when they carry revolving debt, etc. Cheers!

I've found that the bottom in the past was always when more and more boardmembers (whether on COBF or the FOOL BRK Board) think there is no bottom or start to feel the despair. We aren't there yet, but I've certainly noticed more boardmembers thinking the world is about to blow apart. Cheers!

I would also check cash balances and net worth balances. Apple has $140B in debt, but they have $180B in cash. Apple had little to no debt 10-12 years ago, but they also did not have $180B in cash or $100B a year in earnings. I think most companies in the S&P500 have far more cash today than they did 12-13 years ago...so while debt increased, they have more in cash and equity generally. Consumers also have more equity in their homes, larger 401Ks and lower cost debt overall. Now that may not be the case as they rollover debt, but they can absorb more in inflationary costs and interest costs than they could historically. Cheers!

Doesn't have to be equivalent to 2009, but it can be a more prolonged painful correction. In 2009, and I remember that period clearly, you had systemic failure of global financial institutions. We are not facing that. So I can't imagine it being anywhere near as bad as what we witnessed then, or even March 2020 when you had essentially the whole world (other than essential businesses) shut down. But you knew that with the intervention at every level during both periods, the rebound would be quick. This time, the firepower just isn't there. So while the overall situation is not nearly as bad as those two periods above, the consequences may be longer and more painful simply based on the duration. What if we had a sideways market for 3-4 years...10 years? That is the situation that we are facing depending on how deep the contagion becomes. I think it is 50/50 we get some relief into 2023, but depending where the dominoes are and how they fall, it may be short-lived relief, and we incur bouts of despair and optimism for some time. Think the late 70's to early 80's. Ugly, ugly period where the pain was drawn out over many years to the point where most people had given up on equities by 1981/1982, and the valuations were extremely cheap. Personally, I can't guess what is going to happen. I can only say to myself..."hey, that sucker is cheap, I think I can do well over time, and I would rather own that than sit on cash or own fixed income instruments." That's it! That's the only cognitive advantage I truly have when it comes to investing in the market, and it is a valuable one if I stick to it. Look at all these brilliant investors out there proselyting about what will happen...they have no fucking clue! Average in, average out, and you'll do better than the index over time. Cheers!

USD is high because its the primary reserve currency and investors have fled to cash from equities and longer term bonds with USD providing the best interest rates. As soon as markets start to settle, it is possible that U.S. debt will have to pay up in interest rates to roll over maturing bonds. The demand is there presently...the concern is what happens when demand dwindles. Cheers!

Cathie Woods, the Vanilla Ice of investing: https://finance.yahoo.com/news/cathie-wood-arkk-verge-taking-151314592.html One-hit wonder! Cheers!

Einhorn Says "Value Investing May Never Come Back!" https://finance.yahoo.com/news/david-einhorn-says-value-investing-192102025.html Usually comes back when a numbnutz says something stupid like that! Cheers!

Also take a look at this: https://www.marketwatch.com/story/why-questions-are-swirling-about-who-will-buy-more-than-31-trillion-of-u-s-debt-and-at-what-price-11665507637?siteid=yhoof2 Cheers!

Yeah...ok...! You may want to read below. https://www.bloomberg.com/news/articles/2022-10-10/the-most-powerful-buyers-in-treasuries-are-all-bailing-at-once Cheers!

Record inventory levels. Those with money will enjoy discounted prices this Christmas! Cheers! https://finance.yahoo.com/news/retailers-stockpiles-mean-deep-holiday-000250331.html

One of the potential risks to the U.S. could be their insistence on fighting inflation. If the U.S. continues to raise rates, and other countries are forced to defend their currencies by selling off more and more USD reserves, it means higher and higher rates for U.S. debt issuances as they roll over maturing debt. Cheers!

Only in America, would this numbnutz be allowed to file charges against the player, Rams or NFL! What is the world coming to? Cheers! https://ca.sports.yahoo.com/news/santa-clara-police-protester-knocked-down-by-rams-players-on-monday-night-football-has-filed-an-assault-complaint-194450410.html

Inflation is going to fall just as fast as it rose. Terrific article: https://www.marketwatch.com/story/inflation-is-going-to-fall-just-as-fast-as-it-rose-and-thats-investors-cue-to-enter-the-stock-market-11665072070?siteid=yhoof2 Cheers!

You start to get an uptick before the recession and then the bulk of it occurs during and after the recession. We are seeing an uptick in people living paycheck to paycheck or now moving to credit cards. Many businesses impacted by the pandemic, that piled on debt, have little movement left with stretched balance sheets. But the bankruptcies and hopelessness come after the market indicates a recession is coming. The question is how bad that recession will be. I think it will be bad, but certainly nothing like 2008/2009. And that doesn't mean the markets aren't starting to throw up opportunities. This disconnect for the pundits is usually what ends up being the lag between when opportunities arrive, and when they freely can say "Oh yeah, we think you can buy stocks now again!" Is there room for downside...sure. Is there room for upside...sure. Should I wait until I see the bottom? No one can tell me when that will arrive! Cheers!

+1! Why can't you be articulate like this without the politics and cursing. Cheers!

Interest rates hikes tend to have a more obvious and immediate impact, thus why they get more of the headlines. Your mortgage rates rise, your HELOC rates rise, your credit card rates rise, the rate for the new car you are buying goes up, etc. Cheers!

I didn't see alot of pundits saying "sell, sell, sell" back in November. Today, the pundits are screaming "sell, sell, sell" after a 25% drop in the overall market, and a solid 60-90% drop in speculative areas. And I'm sure once markets have turned up a solid 20%-30% plus at some point, they will be screaming "buy, buy, buy!" Cheers!

Not cheap, but fairly priced. Cheers!

I have 9 stocks in my portfolio and none are anywhere near 18 times earnings other than GOOGL. And the overall portfolio's P/E would be about 11-12 including GOOGL. Cheers!

Yes! +1! Value stocks did very well during mid-2000-2002, while the market dropped overall. Very similar to what we are seeing today, except we also have a strong inflationary environment which is putting up headwinds to the overall market and bonds. But that won't be the case forever! Cheers!

https://www.morningstar.com/news/marketwatch/20221001265/we-are-in-deep-trouble-billionaire-investor-druckenmiller-believes-feds-monetary-tightening-will-push-the-economy-into-recession-in-2023 Druckenmiller believes in a likely hard landing, but he's not ruling out something different. Too many times investors speculate on what may or may not happen, instead of just buying when cheap and selling when dear. Don't pay attention to any of the pundits! Cheers!

I'm a firm believer that history is never the same, but may rhyme. So everyone fearing a Volker like environment is probably wrong. That doesn't mean we don't see higher rates than the last decade, but it also means that we aren't going to see a draconian attack on inflation. The economy needs to slow, not seize. Volker killed inflation, but he also killed the economy at the time. This is a healthy U.S. economy, but one that overheated. The current rash of rate hikes, and possibly a couple more, should have the necessary effect of cooling it, but not shutting it down. The numbers are finally starting to show that. Just like the FED was late to the party, we don't want them to overshoot either. There is a lag between when rates rise and the actual impact to the economy from producers, wholesalers, manufacturers and retail. The FED has often been late...think Greenspan's 12-15 rate cuts in the late 1990's and then sudden 15 consecutive rate hikes between 2000 and 2002. Or their ignorance of what was happening in 2007 and then desperate attempts to save the world in 2008/2009. This is no different. They should have started raising rates gradually a year earlier...you could see input costs rising and supply chain disruptions. Now they've been swinging fast and loose to catch up. Last November, no one was talking about rate hikes or a reset in asset prices. Today, they are panicking that it is the next Great Depression and the market bottom will never be reached. I don't know how this ends, but I know how it rhymes! Cheers!

It looks like things are starting to slowdown nicely...the FED should be careful how much they raise rates from here and how fast. I would imagine no more than a 50 basis point rate hike next and maybe even do a couple of 25 basis point hikes over a couple of months rather than at once. I think if they do this they will maintain a slow expansion...probably not 2% inflation, but acceptable levels of inflation and an economy still growing. Cheers! https://www.yahoo.com/news/u-manufacturing-activity-slowest-almost-140513525.html