Dalal.Holdings

A lot of these were trading at 40x or more multiples last year. That's in the vicinity of Nifty Fifty. And when I talk about multiples, I'm talking about FCF after SBC or real GAAP earnings, not the B.S. "adjusted earnings" or "adj EBIDTA" you see these days that did not exist much in the '70s.

May have to think further back than 2018 to come up with how bad it can get for tech and for how long, I’m afraid. i’m finding great opportunities outside megacap tech. Why would I invest in the sector with wretched excess from the dying bull?

Employees of a long unprofitable tech company who stole from owners of the business over the years with massive amounts of Stock Based Comp about to realize what Winter is really going to bring. Another harbinger of doom. Winter is Coming, and for these folks it's going to be the hardest.

Don’t forget—these monopolies are ripe for antitrust actions. When your valuations reach in the trillions, you’re flying too close to the sun, Icarus

How ‘bout them tech stocks. Guess you can only sell so many ads for boner pills, crypto, and weed https://twitter.com/CundillCapital/status/1585278664958218241P

Amazing how all Europe needs is a crisis that directly impacts its core (France & Germany) to suddenly cut through layers of bureaucracy and regulation.

That's helpful. Thank you

I am still struggling to understand why VTIP is down around 8.5% last 12 mo. With TIPS, the par value should increase, correct? So $1000 par becomes $1085 par with 8.5% CPI? With escalating par value of 8-9% I would expect something like VTIP to be up or not down as much…

I wouldn't buy any fixed income w duration greater than 5 years due to rate risk. If there is a repeat of the '70s and '80s where Fed went sky high with rates, you'll be decimated. I-bonds are good choice obviously but limited. I think cash is often derided with inflationary times, but guess what? S&P 500 is down 25% YTD (nominal terms). Cash at 0% return YTD is beating the market by a whopping 25 percentage points. Bonds haven't done as well either. I guess that's what they call "alpha".

VTIP appears to be short duration TIPS (less than 5 yrs)...and it's down 8.5% in the past yr ??? Not what I would expect in inflationary times. I'm not sure I understand TIPS well

i’m not comparing to ‘08. The whole point was re: Aswath’s contention that index earnings cannot decline more than 30%…they have in 2001, 2008, and 2020. I found 3 counterexamples to his statement in the past 20 years. I think it shows how academics are often wrong in this field. We are not in 2008, but it might be 1973-74…

I think the overall point is that fwd earnings (even at the index level) can be highly unpredictable which Aswath seems to dismiss arrogantly. I'm more in the Taleb school. No one knows nothing. Trust forward projections at your own peril. Ignoring LEH is like the portfolio manager who ignores their losers when calculating performance ("my overall investments are down, but this one account I manage has beaten the market!")

Lehman Bros became a "discontinued op" in '08. It doesn't mean it didn't hurt those owning indices that had LEH as a constituent. I'm sure Citi and AIG and GE also labeled their blowups as discontinued ops. Management can just have a business unit that does badly, call it "discontinued" or "bad biz" and then adjust them out of your earnings... I don't care about backward looking indicators like "continuing ops". After all, what matters to me is what happens from this point going fwd. I can't adjust out future blowups in my portfolio.

I think Aswath is just wrong. In '08 big bank operating earnings (which were large S&P constituents) went in the negative 10's of billions from positive billions the year prior. Companies like AIG and GM and F were way down too. To say index earnings can't decline more than 30% and forward analyst projections for the index aren't off by 5% or so is plain hubris. 2020 is another example. Earnings down 33%. If Fed hadn't intervened in Mar 2020 what then ? Did analysts coming up with 2020 S&P earnings projections late in 2019 foresee covid 19? I don't think adjusting for operating earnings makes a difference. What were Citigroup's/GM's/F's operating earnings in '08? I think there are a few things where he is wrong, but when you are an academic, there is no real accountability. I also don't make investment decisions based on operating earnings. What matters to me, the shareholder, is the after tax income/FCF that flows to me. Even if I buy the index that's what matters. I have no idea what Aswath's investing track record is and I'd love to see an unadulterated performance record. I do know this guy used DCF to model things like TSLA 10 years ago which struck me as Man with Hammer Syndrome

Wow. This guy is arrogant worthy of an academic. He confidently says that index earnings don't go down more than 30% to the interviewer (even in deep crises) and seems ticked that the young interviewer implies as such. Starting at 16:50 on the video. "It's not hard to estimate fwd earnings for the S&P 500" "In my 30 years of tracking the index earnings, you will not be off by more than 5% unless you have a true shock like 2008...earnings collectively for 500 companies will not drop 30% below expectations even in 2008 and 2009 the collective earnings of index were down 20%" LOL.... And yet: S&P earnings were down: 75% in '08 50% '01-'02 ~33% in 2020 https://www.multpl.com/s-p-500-earnings/table/by-year He's dead wrong yet very confident... That's the thing about academics. They're not practitioners. No accountability for being wrong. Add in the macro focus and it gets even murkier. Hope those DCF models and "cost of capital" framework of thinking work out for him...

So where is the Bottom? I'm looking at some of the tech bro favorites-- SHOP SE COIN All down >80% from their ATH hit less than 12 mo ago... Can't believe folks went balls deep in these. Is the bottom here? I'm not sure it's here for some of these...

SS might not be under Biden’s decision but his administration has led fiscal policy that had poured fuel on the inflationary fire. Hence the loan “forgiveness” and the ironically named “inflation reduction act”. Reminds me of “patriot act”

Maybe Joe can provide more loan “forgiveness”

USB under 40

https://www.bloomberg.com/news/articles/2022-10-08/firewood-demand-is-surging-as-europeans-return-to-world-s-oldest-fuel?srnd=premium Tell me how this is not an energy crisis on par with the one in the '70s... This is what you get when you overdose on ESG and let inept EU officials chart your energy and security future...

Detective is working on "windfall tax" on oil companies which will surely lower prices at the pump...

Watch out, Gavin Newsom going to get to the bottom of why fossil fuel costs so much in his state. Hope this detective can figure it out...

That's how it was in the '70s. NYC was nearly bankrupt and the cities were full of crime and drugs because the boomers moved to the 'burbs to raise their kids... Then Nancy Reagan came along: "Just Say No..."

Instead of lining up at the Gas Station, Europeans are hoarding Firewood for the Winter... For the ESG folks: is cutting down fresh trees and then burning them in a furnace cleaner than nat gas ?

Nixon Shock and Covid Printer going 'Brrrr are similar IMO. Millenials are the new Boomers and they are forming households, demanding higher wages and spending that paper on home/kids. Arab Oil Embargo recurring in Russian embargo of gas to EU/West and ESG causing chronic underinvestment in fossil fuels past decade... If you invested in the Go-Go stocks of Polaroid or Xerox (FAANMG) like Gerald Tsai (Cathie Wood), then they might be good businesses but not nec good returns...