Dalal.Holdings

I think a Reagan (Likely DeSantis) will follow this one term Jimmy

Speaking of the 1970s, Joe Biden more and more looking like Jimmy Carter 2.0

Looks more and more like the ‘70s to me And sorry, FAANMG more and more like Nifty 50

The problem is the rulemakers have to create rules for themselves...

80 something year old Pelosi wants to get all she can with her time left in this world Meanwhile we’ll imprison IB interns who trade on material nonpublic info…

I like the returns on capital, I don't like SBC being ~10% of FCF and repurchasing of shares "to offset dilution".

Obviously some iPhones will be purchased by those who drop it in the pool or lose it. Kids getting their first cell phones too. The question is all the "discretionary" iPhone purchases...upgrading because "the camera has more pixels", etc. If you have a 13 or 12, is upgrading to the new 14 as compelling as it used to be? If you need a new phone, can you get away buying a cheaper 13? Furthermore, my point (which I've made in the META thread about Oculus/etc) was that the technology sector might learn a hard lesson here: that technology is often a discretionary purchase and that if you are worried about being able to afford food or heat your home, it's going to be cut back. That includes all the advertising for discretionary purchases that GOOG and META provide (boner pills or crypto wallets) as well.

Depends on whose E you are talking about. Large global source of revenue in the face of strong dollar? Sorry to those who thought AAPL was the impervious FAANG stock... I also have a hard time envisioning iPhone upgrades in the near future for Europeans who are worried about their utility bills. S&P might go down due to its overweighting in tech stocks, but who is here to buy the S&P? My view is don't buy the blue chips and be heavily underweight in tech given the plethora of other opportunities available. Perhaps once you stop hearing from everybody "how screamingly cheap" Google and Meta are is when that might change...

That’s my current working hypothesis: That if we are living in some form of the 1970s, NG today rhymes with Oil in the ‘70s. Back then you had Arab countries with embargo of oil and now you have Russia doing embargo of NG … We’ll see how it plays out but it’s inflationary esp for Europeans. Developing the infrastructure for shale will not happen overnight. USA had lots of preexisting infrastructure and waterways (and low rates) to make shale a reality.

Russia looking to cut off the final gas flows with its announcements of “annexation”. https://www.bloomberg.com/news/articles/2022-09-27/putin-raises-gas-pressure-as-he-moves-to-annex-ukraine-regions

Seeing lots of conspiracy theories that USA behind these or this is not Russia. Always pleases me that there are many people in this world not equipped with the most basic of analytical tools (Occam’s Razor). Shrug.

The capital markets today are markedly different from when folks were handing out capitall to wildcatters, oil sanders, etc to drill baby drill... Not only do you have ESG and liberal heads of state in these nations putting a ding in capital available for fossil fuel generation in Western nations, you have shareholders demanding return of capital over reserve growth. And then you have surging interest rates and high yield paper these firms would have to issue to drill making leverage untenable... I think there is a strong bias in West to not drill and develop fossil fuels & related infrastructure and I think that may lead to an environment that keeps prices higher for longer (esp nat gas). The wild card is demand from China which seems like it will not be in the same league as prior decades; however I think that the world's thirst for this stuff is still strong.

The fact that many investors are hamstrung by their own doing ("ESG") making energy "un-investable" (for them) is a benefit for anyone who does not have such restrictions. It's easy to bash fossil fuels when they are abundant. Not when they are scarce and the winter is cold. "When the Well's Dry, we know the worth of Water" --Ben Franklin I think many are drawing parallels to recent downturns like '08 and March 2020 when energy dived with everything else. I think that today we face a far different beast...perhaps not unlike the one in the 1970's... My own favorite here is $AR Antero Resources which is virtually unhedged to nat gas prices in 2023 and has retired debt maturities thru 2026 with immediate plans to return capital to shareholders...nat gas however has not been friendly to investors for a long time so be wary...

https://www.bloomberg.com/news/articles/2022-09-27/nord-stream-probing-pressure-drop-at-second-russian-gas-link?srnd=premium This is a pretty significant escalation and sign that Russia has no intention of resuming gas flows to EU any time soon...

There are long stretches (decades plus) where energy dominates. Remember, XOM was among the largest market cap stocks for decade plus... I think the past decade or so makes energy seem un-investable for the long haul. It's often periods like that (underinvestment in new exploration, downfall of many players, etc) which are followed by long periods of outperformance. We shall see.

That's the thing. I think this time it's Nat Gas and not Oil that becomes the bigger issue as opposed to the '70s when it was Oil due to Arab Embargo. Now we have a Russian embargo of nat gas which is a big deal (not so much oil). Oil is still available from major producers (Opec and USA) and readily transferrable over wide geographical distances compared to NG which takes a lot more effort to liquefy, transport at -160C on specialized ships, and then regasification on import. Then you need the pipes to get it to end users...

There are several parallels to the 1970s occurring today that I think are driving inflationary winds: -- Geopolitical conflict leading to energy supply shock (Arab Oil Embargo then, Russia-Ukraine now) -- Large bulge population entering home buying/child rearing age (Baby Boomers then, Millennials now) -- Devaluation of Currencies (Nixon Gold Shock then, Covid Fiscal Stimmies/negative sovereign yields now) I'm not ruling out the possibility that we are living through some form of the 1970s. I think the Fed will be more aggressive now due to lessons learned that decade (no one wants to be Arthur Burns), but I wonder if the above 3 things continue to pressure prices how the Fed can mitigate inflation barring demand destruction.

The 1970's beg to differ. I think inflation is the wildcard here and makes comparisons to more recent downturns (like '08) less relevant. Hard to see how consumers cut back on NG consumption. Heating and electricity use seem highly inelastic to me.

Add U.S. Rail Strikes as another potential positive for Nat Gas... https://www.reuters.com/markets/us/us-natgas-jumps-4-rising-demand-renewed-rail-strike-worries-2022-09-21/ U.S. Storage levels are ~10% below 5 yr avg. While EU storage is slightly above their avg, not having gas flowing from Russian pipes this winter will lead to decline in storage and possible shortage. Russia also escalating on Ukraine conflict today. Nat gas is only not hard to produce in the USA. Seems like it's not so easy to produce in Europe and Asia (outside Russia) and yet Europe/Asia relies on it pretty significantly. Fat tails all around.

Just because a piece of data is reported MoM does not make it a coincident or leading indicator... Please feel free to defend this statement with evidence that NFP is the "first data to turn" in economic cycles/inflationary times. I remain unconvinced. As to the Tin Building, sounds like anecdata to me...

$BABA is a lesson in that which many folks continue to refuse to learn... We are moving into a new geopolitical regime vastly different than that of the past few decades (post Soviet dissolution). I think a lot of folks will be surprised by how much of an impact it has on their investments.

I'd be careful using the labor market as an indicator of where we are. Employment is a well known LAGGING indicator.

https://www.bloomberg.com/news/articles/2022-09-17/russia-s-rosneft-calls-seizure-of-its-german-unit-illegal?srnd=premium An obvious escalation in this energy conflict between EU and Russia. Who knows where it ends. If there is any geopolitical lesson of the past few decades, it's that economic sanctions & wars are fat tailed and tend to go on a lot longer than most folks expect...

I'm not sure if I see a blowup or just endless Euro printing to "cap" energy prices. Meanwhile they'll find ways to tax "windfalls" of energy companies. Europe is a bad place for business owners (most especially energy sector) in many ways. None of these moves really matter if you invest in U.S. energy as Europeans will have to pay up (in U.S. Dollars) to import their energy--they'll be forced to do it--even with devalued Euros and Pounds. Europeans have underinvested in their energy and defense for a long time (outsourcing former to Russia and latter to USA) and unfortunately will bear some consequences now. I think this is one area where Trump gets credit.

I agree that European prices are too high to be sustained in the long term; however I also think <$4 per mcf henry hub price of the last decade was way too low, so I'm betting more on U.S. nat gas producers than anything ($AR, for instance). The issue is that pipeline gas (Nord Stream) will always be cheaper than LNG which requires extremely expensive infrastructure and processes (cooling something to negative 160 celsius and storing it there and transporting it across the world will never be cheap like a pipeline). Not to mention if LNG supply is low relative to demand (due to lack of adequate LNG export terminals around the world), it will further increase the price. The other issue is that nat gas is no longer mainly used for heating, but also widely used for power generation year round thanks to the conversion of coal plants. So I think the long term picture for nat gas is highly supportive and it is unlikely we see the U.S. nat gas prices of the last decade (barring deep recession/depression).