Dalal.Holdings

From the report: Onerous regulations (GDPR, excessive privacy controls, AI Act, etc) are probably one of the key reasons. Maybe an anti-capitalistic, tax the uber wealthy might be another disincentive. Not having the right immigration policies (seeking people who are fluent in programming) another problem. No real VC scene, etc another. The thing is, from the 1990s to covid, the gap increased due to Europe falling behind in tech. But Europe still had some key industrial advantages. Germany knows how to do mechanical engineering even if they don't do software engineering as well. The problem is that now--post Russia-Ukraine 2022 energy crisis (shutting down nuclear), China's emergence, and proposed abolishing of internal combustion engines (green agenda), even that core strength in mechanical engineering/industrial areas is under duress. I think the Draghi report has not captured that because it is a more recent phenomenon. That's what makes it more of a crisis now vs pre-2022.

I think Kongsberg Gruppen in Norway looks interesting. I've bought some shares on the sell off this week They announced that they will be spinning off their maritime (non-defense) business in Q2 of the upcoming year

https://www.ft.com/content/22089f01-8468-4905-8e36-fd35d2b2293e UK or Europe, it doesn't matter because both seem to be afflicted with the same disease: From the Draghi Report: https://commission.europa.eu/topics/eu-competitiveness/draghi-report_en

Mississippi is not a sovereign state with its own currency. I can come up with the counter examples of Norway and Switzerland which are thriving while not being in the EU. Unlike the UK, Norway didn’t adopt the crazed green agenda and continues to drill for fossil fuels in the North Sea, is now the major energy exporter to the EU, and has a huge sovereign wealth fund. And that gets me back to the core argument: the sickness that afflicts UK, Germany, France is unchecked left leaning leadership for decades. Greens hampering energy, overregulation, anti-capitalist policies, uncontrolled migration, excessive welfare all resulting in stagnant productivity. Poland, Norway have not had the same sort of conditions.

The UK may be in some ways worse than the EU, but the EU is not exactly thriving either. The UK had reasonable reasons for leaving the EU. In some ways, they are still suffering from the EU: France sending migrants across the channel and their judges adopting the EU human rights issues and environmentalist political stances. You can’t seriously argue that France and Germany are doing well today. Germany has been in recession for a few years and its industry is in a bleak situation while France is a basket-case. The real question you have to ask yourself is why all of Europe has fallen so far behind the U.S. and China. And no, it has nothing to do with isolationist policies. It has to do with the leftist politics of the UK and EU (again, radical environmentalism, anti-nuclear energy, crazy welfare policies, taking in migrants who can’t assimilate, punishing capital, etc). As a result, productivity has stagnated across the entire region. In fact, if Europe opens itself up as a dumping ground for Chinese goods (like cheap EVs), it will lead to devastation of its industrial sector. They need more trade barriers, not less. And you are seeing them do that. You are seeing anti-establishment parties rise in polling in UK, France, and Germany which is a common symptom that tells you all three are suffering the same ailment.

EU politicians are starting to get it--Trump, Putin, and Xi are the forcing functions that squeezed European bureaucrats to have no choice. The rise of the right wing parties in UK, France, Germany have created a sense of urgency among these clowns. Firing Thierry Breton last year was the first step. Draghi report was another (funny that Brussels nerds need a white paper from Draghi to tell them what's obvious). The question is -- is it too late ? China has transitioned from housing boom builder to EV builder/industrial juggernaut and this threatens Europe's core. EU's goal of cutting red tape by 25% is not enough. And the deforestation rule which is insane looks to pass soon too.

It should be like the U.S where each state (country) gets two senators each and the representation in lower chamber/ability to vote for the executive is based solely on population of each state. That way, even if a single state endorsed crazed policies, the rest of the states can easily reject it Right now you basically have Germany running the show with France as a sidekick. It hasn’t worked well

Poland is Europe’s brightest spots. Ironically, polish people in the UK are leaving to go back Poland. Will Poland’s neighbors learn?

If this were to ever happen, then in no way should said Federal EU be run by the current European Commission. It should be ruled by leaders directly elected by the people. It should really just represent the way the United States is structured

If we keep pretending nothing bad is happening, then nothing needs to be fixed !

Mark going for it

I agree with the social/cultural issues being a factor and have argued as such on here. But this being an investment forum, the economic stagnation and productivity flatline are highly relevant and these have exacerbated the social/cultural issues. Even in the Farage interview he repeatedly mentions bringing back the importance of spirit of risk taking, entrepreneurship, PIP reform, etc. It will not be a quick fix but will require deep structural reforms as I’ve stated. An outsider is needed to do this. The funny thing is, the intellectual leaders say they have a solution to the economic problems they created: allowing a bunch of migrants (with questionable actual ability to contribute to the economy or assimilate) in. And they give them lots of handouts and judges prevent anything from being done. The leaders who represent the status quo just keep making the situation worse and worse and wonder why Reform is on the rise.

Well, I'd disagree on the relative importance of Amsterdam to Netherlands, but really no point in arguing this anymore. The UK has a big problem whether or not London is included--unless you consider Alabama an exemplary economy. The bottom line is that the UK has a productivity problem. Its long term stagnation (the result of mismanagement by a series of leaders), along with similar conditions in France, Germany are why you are seeing highly disruptive politicians come to the fore

This is a wild take. BRK is spending capex on things that don't produce income? So you think all the capex META and GOOG are spending will make significant returns. Well, your view is not very different from the market. A lot of those lofty expectations are priced in. Good luck cashing in on them

Surely the more money you invest, your returns must go up, right? Isn't that why Buffett says Berkshire's returns should get better as BRK gets larger ? This is also why capital intensive businesses are superior to asset-light ones, amirite ?

Looking only at gross margins ending in 2024 will not give you an answer. It's operating margins going fwd that matter relative to capex spend

The fact that many regions in the UK cluster at the bottom of this chart is not a good thing:

Why does the same type of relationship not hold when you chop off Amsterdam (the economic engine) from the Netherlands?

You miss the point entirely. I'm not sure you understand what GDP per capita on a PPP adjusted basis means. When London is removed, the rest have much lower living standards--there is a very large gap. The same cannot be said for Amsterdam in the Netherlands nor the top cities in Germany or the USA: Notice that the UK bubbles cluster around the bottom of the chart... Either way, even when you include London (blue line), the UK as a whole is at the level of the state of Alabama in the USA and lower than Germany and The Netherlands. Nothing to brag about even with London included. The overarching point being that the UK is economically stagnant due to a productivity crisis https://blogs.lse.ac.uk/politicsandpolicy/britain-is-falling-behind-the-us-and-productivity-is-largely-to-blame/ I guess you can school this economist from the London School of Economics who says: GDP per capital, when adjusted for PPP is a good marker for living standards: https://gateway.euro.who.int/en/indicators/hfa_34-0270-real-gross-domestic-product-ppp-per-capita/#id=18841

The only thing that matters is the returns generated on that capital. I'm highly skeptical that it works out to decent returns, let alone the massive ROIC software and ads have generated in the past for these firms.

No worries, I'm sure it will all work out

Shut down nuclear, rely on Russian gas, underinvest in defense/infrastructure, and let the EU impose onerous regulations on your core industries while China heavily subsidizes theirs...some of the incredible things German politicians allowed to happen over the years That's what happens when your country is run by intellectuals who are incapable of thinking strategically on behalf of their countries... People like Milei are providing the blueprint for places like Europe to get out of their funk. As an investor in European businesses, I hope the reforms are coming

Unfortunately I missed out on adding to my already great gains in 6637.T by selling out too soon. The thing was a net-net when I originally bought it. If the Iron Lady is going to rebuild Japan's maritime defense capabilities and expand shipbuilding with DJT, it's going to be a sustained tailwind

TKMS debut went swimmingly KNDS will likely try to IPO soon

The place to invest in defense stocks is clearly not in the U.S. today… I’m hoping some of my German SMEs figure out how to transition from being auto to defense suppliers