K2SO

Outside of a few markets (copper, lumber), there doesn't seem to be much concern at all. See the chart below. Until the 10 year rate busts out of this channel the inflation story isn't being taken seriously. What does it really mean for inflation to be "transitory?" In my mind it means that we'll see a blip in inflation due to inventory restocking/supply shortages/reopening, soon after followed by a bust. Deflationary forces return, demand falls through the floor. Maybe what's going unspoken here is that "transitory" inflation means that in the longer run we are f*cked and will have a really hard time paying off the debt accumulated in the past 13 months. Having said that I actually think that inflation is a best case scenario for us coming out of this. Maybe not for asset markets but certainly for the economy. It's fairly easy for investors to position for this by buying value and short duration assets (which are historically cheap) and selling growth (which is stupid expensive).

added PZA.TO. Who doesn't love cheap pizza and a clear path to dividend increases?

Is that to offset the environmental damage he's caused by pumping Bitcoin?

If that's their "only" function it's a pretty critical function. And the cost of a new entrant to replicate V and MA's networks is such that no new competitors will emerge. They own the space and are building services all around it.

Out of his first pump and dump. Wonder if the next 5 will hold up long enough for him to repeat the process. This generation's Buffett. LOL.

Wow, good find thowed, thank you! Will definitely check it out.

LMT

I'm beginning to come around to that idea. Might be 1998. The top isn't signaled by retailers who've never show interest in the stock market getting interested. It's the disinterested retailers getting interested and then getting "rich" that marks the top and I'm not sure we've seen that yet. Maybe another 12 months or so? Still conservatively and cautiously positioned, but I'm beginning to think we still have a little ways to go. I think the next wave of stimulus will be the last big up move in this bull market. Once that is done, and vaccines are more widely distributed, we'll start to see inflation and the Fed talking about raising rates to cool down price increases. With less prospect of monetary stimulus and the fiscal bazooka all used up, we will have passed the point of maximum optimism and begin descending the other side of the mountain.

There's a well-trod path to success for tech VCs over the past 20 years. Increase your profile online. By virtue of your influence, every investment you touch and pump has instant buzz (for an example, look at the latest fad - Clubhouse). This boosts user numbers and valuations. Pump, pump, pump, and then sell to your adoring followers. Chamath is playing this to a T. I think he's obviously a smart guy, and I feel like if he's not aware of the damage his pumping is doing to the small investor, one day he will regret it. If he wants to address inequality, the way to do it isn't to lead novice investors into overhyped garbage like Virgin Galactic and pure speculations like Bitcoin.

LOL. This is so true and not limited to just friends and family. Its why I dont take new clients anymore and why existing and any potential future investment is solely under the condition that theres either a PPM with lockup and vehicle to operate from, or an existing long term relationship, IE 5+ years already in place. 90% of people do the opposite of what you should do during periods of great opportunity. And then once the opportunity has passed almost all of them want to know why they didnt partake in it.....Its so infuriating and early on I had this issue a lot which is why I more or less switched to full discretion and the understanding that you could be constructive in criticism but the second we stop having a productive relationship or the second I'm being second guessed...your shit gets sold and your money gets wired back. Just not worth it. I have an old friend/business partner who still actively runs a FS brokerage biz. Classic story from March-April goes something like "super HNW guy who has a self directed but advisor assisted account. He's been speculating like mad for years and is big on the options and margin. March declines and he starts getting skittish. Gets margin calls and refuses to add money because "we haven't hit the bottom yet"...gets stopped out and still won't make new investments because he's not comfortable doing so yet and wishes he had been advised to go short the whole market in February. In September he is furious because "we should have been buying in March and April, not selling", and "real soon" he's sending a ton of money for some options because "he needs to take control of the account now".... I have no doubts about how that relationship will end... When things are good its "me" and occasionally "we" and when things are bad its "you"... It's absolutely true. I've been doing this since the late 90's and it's amazing how you can tell the bottom just by the clients begging you to sell everything... and less reliably you know things are getting near a top when they're asking you to take on more risk. It's bad enough with arm's length clients, who you can end a relationship with fairly easily. But when it's friends and family it's a different matter altogether.

One thing I learned never to do is to give anyone a stock tip. It's really a no-win situation. I'm not going to remember who I recommended a stock to, and get in touch with them when I think it's time to sell. (And this assumes that I have any special insight into this, timing sales is one of the hardest things to do in this business). And if I say buy and it goes down, what if I change my mind and take a loss? What if I double down? How responsible am I to update this "tip" I gave my friend/family member. I make sure to speak in generalities, such as "there are some Canadian dividend stocks that are attractive right now." As far as having friends and family as clients, I generally prefer not to. As recently as this spring I had a tense exchange with a friend who is also a client who was a) upset that I didn't protect capital adequately in the drop and b) upset that I didn't buy more aggressively when everything bounced back. Frankly he was by far my worst client in terms of handling the volatility and if it was anyone else I probably would have asked him to move his assets elsewhere. It puts a strain on relationships, which should be a refuge from your work. Up to you to decide if the AUM is worth the trouble.

Curious where you're hearing this. I have been loading up on Enbridge over the past couple of months so this would be cool.

SU, CNQ.

Gold stocks can even pass as value stocks right now... earnings and cash flow multiples are very reasonable, with an upside option on the value of gold. You have to assume though that rising interest rates won't crush the gold price. Worth a small allocation, at least.

BPCAP, would it be possible to share your reasoning behind this so that we can learn from your perspective? ...Most are holding out on the belief that banks can return to a "normal" 1% return on assets/10% return on equity. Won't happen without a lasting steepening of the yield curve. Governments can't let that happen. Japan and Europe are bust if borrowing rates even double to 2%. And governments won't let that happen, especially if a rise in rates is due to inflation. Debt and deflation (which are rising) also lower the odds over time of a meaningful rise in real interest rates. And with low rates around the world, U.S. rates can't meaningfully rise. I have a problem with the "governments won't let interest rates rise" narrative. Yes, governments NEED rates to stay low. They needed that in Zimbabwe. They needed that in 1920's Germany. But they didn't get it. The Fed is telling us they will stop at nothing to generate inflation. The same way they told us in the 1980's that they would stop at nothing to STOP inflation. Why don't we believe them? So if they get inflation up to 3%, then nobody is buying a long term bond paying 1%. Except the government itself, I guess. And if they keep monetizing their debt indefinitely, we are heading down the path of Weimar Germany and Zim. The thing about this inflation averaging is it reflects an amazing amount of hubris by central bankers. Yeah, we'll just get inflation up high enough and turn off the taps. Sure. People forget the economic pain inflicted by Volcker in the early years. Govt's can keep short term rates low, but will have a really hard time keeping long term rates low without outright market manipulation and debt monetization. It seems to me inevitable that the yield curve will steepen as we emerge from this recession. I don't know if that will be later this year, or 3 years from now. But it will happen. Caveat: a couple of decades ago I took a course in Macroeconomics. That's the extent of my expertise on the subject. I'm just trying to apply common sense, which I know is dangerous when it comes to this topic.

Let me tell you what my coworkers are experiencing this week. Widespread IT issues working remotely causing serious delays in important work. Communications over email can be abrupt and impersonal. It's causing some tension which I'm guessing wouldn't happen if people were speaking face to face. The longer this goes on, the less appeal it will have to most, in my opinion.

OK here's my contribution to the thought experiment here. High inflation, low rates. Hugely negative real interest rates. At this point, no private investor will buy bonds. The only buyer of the newly issued debt is the government, in the form of printed money. They keep this up for any length of time, and hyperinflation results. I don't care if you're a reserve currency.. there is only so much money printing the system can bear. In this scenario I want to own hard assets, including gold. I also want to own companies with pricing power. I also want to own global companies that can move assets and HQ around because at a certain point you need to worry about expropriation of their property. In this case you prefer companies whose value lies in their intellectual property rather than buildings or mines (which kinda goes against the hard asset argument... not sure how to balance this).

MO

It's not necessary, and won't necessarily make you a better investor, but it could. You'll have a better understanding of how financial statements work, and be able to catch inconsistencies and call out management BS (there is a lot, even with large cap widely followed stocks). Independent thought is the most important aspect to being a good investor, and the better your technical skills, the more valuable your insights will be.

PM

Nothing unethical about "defense." Athough it's a bit of Orwellian wordplay since these tools are just as often used for "offense." And people die because of them. Personally I have no ethical issue owning the stocks, but other people do, and I respect that.

We're not really going to know whether a second wave materializes until late 2020 - even if things quiet down, the threat will be looming over us with the return of cold weather and flu season. So it's hard to justify a runup in the market on that basis. We've got 6 months to kill until then. But every day that ticks by we are one step closer to effective treatments and/or vaccine discovery. And we've already learned a lot about how to treat people and keep them out of ICU's, all of which is positive. At this point I'm seeing businesses closing every day, jobs being lost that will not come back any time soon, and investors that don't seem to care.

As a senior exec, I'm not sure I agree with that. I'm still missing the interaction with others at and above my level, and even more importantly I'm losing the ability to build a strong connection with those who report to me. Especially newer employees. And as those ties become looser, I think their ties to the organization as a whole will also fray, meaning that they will be more easily poached by competitors. Other great points here about the way work from home eliminates boundaries, etc. For any arguments that it's more efficient in some ways, it is damaging in other ways. I think every business is really a number of relationships, and relationships are best built and maintained in person. And this isn't a generational thing. My kids know this... no amount of video calls, phone calls, or texts with their friends is replacing seeing them face to face.

In my opinion this work from home thing is actually proving to me why we NEED offices. You can't form relationships over Zoom. You might be able to maintain them, but you can't form them. You can't truly build trust. You can't learn by watching how someone manages their day. You can't have spontaneous discussions by the coffee machine. Let me take something like Shopify as an example, and many tech firms are in this position. They are saying that in the future they will have more employees working from home. Now I've been to their office. Free food and drink, including alcohol, for everyone, all day long. Once you've given this benefit to people, it's hard to take it away. This is a "get out of jail free" card for them. A way to take away this costly benefit without the blowback from employees. If you have a job you can do remotely, and choose to spend most of your time at home, you are just a step or two away from having your job outsourced to India. Get in the office. Form and strengthen relationships. Learn. Mentor. Lead. You can't do this shit from your kitchen table on Zoom. Sorry, you just can't. Unless you have no aspiration other than to be a cog in the machine.

How about Iran? How long can the regime survive low oil prices and a virus outbreak?