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scorpioncapital

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Everything posted by scorpioncapital

  1. what kind of Bs is this selective quote about war and WW2? over 75 million died in WW2 globally out of a 2.3 billion global population and so far 3 million worldwide for covid out of a much larger world population of 8 billion. spending is beyond WW2 levels for much less deaths. there is just no comparison.
  2. Deficit spending IS higher taxes...unless you want hyperinflation..which is also a tax. Therefore it is always a higher tax.
  3. If inflation is or is likely to be 2 to 3% as the Fed wants, wouldn´t 1.8% be below inflation growth rate, thus a decrease in real terms? True it´s only for 1 year but already we can say it is negative real growth rate. I guess you could hold defense stocks as bond equivalents but it isn´t very ambitious. One could expect perhaps a slight positive return, better than holding say government debt but that isn´t saying much.
  4. this is exactly the dynamic I'm very worried about. best case flat for a decade or small return for high valued stocks even if Inflation should help the m. it would seem one still wants to own these companies but only on a rolling basis as multiples compress and the masses get bored of watching paint dry or not finding it financially rewarding. in disgust they may move to steady bond income, and then stocks would be great buys. it happened in the 80s. time had a cover page "the death of equities". in today's version I can imagine reddit and the robinhooders just totally silent.
  5. do you know why house prices rose during the 70s and 80s when carry costs were so high ?
  6. I suppose the idea is that the expenses must not increase as fast as the Increased commodity revenues which requires less people and less other fixed costs. probably there are some exceptions like insurance or digital banking.
  7. Thank you. It is quite accurate. I am puzzled by this one though, "That's why most commodity companies aren't a great hedge against inflation, because most of the time they need a lot of capital to earn some money and therefore fall under the asset-heavy class." Is the idea of commodity companies though that while the costs go higher, so does the base commodity they are selling due to inflation? In a way, bitcoin, gold, and commodities would seem to be in a similar category. They all rise as symptom of a finite supply (real world for the latter and man-made for bitcoin).
  8. Anyone who has 1 million+ has the luxury of not using debt to get ahead. Not so much for others, unless they have an amazing job. I sometimes wonder why government has chosen to subsidize housing with long-term fixed loans but not owning businesses like stocks. I have yet to hear of a fixed rate margin loan but I actually think it would be an interesting idea! Perhaps you could pay more for it but it would subsidize business ownership as a new wealth. Sure we have tax free investing accounts, but principle residence is already tax free too - and has 15-30 year fixed mortgages available. If I understand the current intentions of the fed, it is that inflation should initially rise much faster than loan rates, thus forming a benefit even for variable margin loans, in fact quite dramatically if you think businesses have more growth potential than houses. But longer term, when the tables are turned, interest rates may have to match or exceed inflation, leading to both higher carrying cost and asset deflation. A fixed mortgage would only expose you to the latter maybe.
  9. I imagine that CPI is the tool government uses to underestimate real inflation and by doctoring stats like this is able to justify any theft by even calling it a gain! For example say you receive transfer payments from the government. Say one day all the people under the poverty line receive a government payment. It may be tied to a false statistic hence the populists who voted them into power on the back of poorer folk who were promised endless checks may, themselves, through the backdoor of fake stats be getting not what they wanted anyway. After all, you can't make 1+1 = 4.. Regarding debt, I imagine inflation helps fixed debt but not variable. many corporations have not long-term fixed debt but mid-to short unless they are literally as solid as the government itself. Many individuals have either line of credit (variable) or margin loans. I would think in this situation, if you have variable debt that holding cash savings would be prudent for the day when those rates rise.
  10. why are royalty companies good since they have a fixed %? Doesn't it depend on what the royalty is? If the parent royalty declines or can't be increased, neither will the royalty holder's income scale.
  11. even 10 years i wouldn't be so sure is predictable )
  12. clearly permanent loss of cash purchasing power can't be good for savers, rich or poor. why do nations and people accept it ? why wouldn't they just not spend or lock their money away even if it earns little ? isn't there a human tendency toward deflation as a protection of one's savings? or is the issue that the vast majority of people have no money at all so any handout or income, inflated or otherwise, is better than nothing?
  13. wouldn't it be more lucrative to invest in use-case space businesses , like subscription service blacksky that gets recurring revenue instead of one time launches?
  14. IBKR is very bad for service. Often their staff won't even respond or are just incompetent. If you look at reviews , they tend to get under 3 stars. Clients aren't very happy. Sure costs are cheap, but it takes a certain type of person to be bought off with money at the expense of other important considerations in life.
  15. one day, they will just call for a reset of the price level on the back of all the measures over the years. it happened in soviet times and eastern europe. one day they just cut off a few zeroes from the currency. old people had it very bad.
  16. People maybe don't see that the manipulated market is a symptom of a kind of controlled communism - yes even in the West. It would not be possible to suppress rates like this without a kind of taking over the most important cost in capitalism - the interest rate and many aspects of a free market. Check out this interview with Jim Grant - Regarding the point about debt costs going up for corporations, yes it's bad for indebted companies with no pricing power. But for superior companies it's just a 'frameshift'. However higher rates will be a headwind even for them because generally making money more expensive closes the pocket books. And while the manipulation and low rates are the first phase, the second phase, the inevitable tightening is also certain. But this may take a decade+ to play out. For those who believed in money and savings it does feel like a rude awakening what is going on. They are being forced to take risks and cannot get a safe return without taking risks. It seems the modern age has adopted the philosophy of do whatever you can do not run out of money before you die and hopefully run out of of road only after, and with the government taking a large chunk of it from your inheritors.
  17. - inflation is not about assets not going up, it is about them not going up enough in relation to the general background costs of living. Therefore, like Einstein's theory of relativity, you are going up a down escalator. - from what I've seen, inflation occurs from a high base - after a reflation of wages and assets. It is hard to get inflation when everything is scraping the bottom of the barrel. That is why an argument can be made that it takes some time before these forces are unleashed. It could be a year or two or three or a decade. - lots of debt is already higher than the fed rate. corporations are borrowing at 2/3-7% depending on credit quality. So inflation would have to start going up to a point where re-rolling future debt will be discounted at a higher rate and affect those asset prices. Plus the market would also assess the revenue side of the equation in valuations.
  18. he's waiting to see what develops next 2 months and maybe feels he would be overtalking with all the 'market action'.
  19. Is chasing full employment a chimera in an age of automation? Or rather, is it full employment of a constantly dwindling labor force? 100% of 20% is different than 100% of 80%.
  20. position sizing is more art than science. However if you start to get a zoo, and start to feel uncomfortable because tending to the animals monthly takes too much time you might want to consolidate or question your thesis about the space and how you participate - or if you participate at all.
  21. you will make mistakes. but remember the psychological studies: people hate losses much more than gains. think of future losses in a bubble market , even if you lose some upside. be aggressive if you don't think you know the position so well, if you use margin, if you don't need so much wealth because you can say this is enough. most important is to genuinely ask yourself if you really really know this problem , field or stock well. most of the time you'll feel better selling if you think this way.
  22. welcome to the austerity inflation future in western "developed" nations. no service. no staff. expect the robots online to serve your needs, very badly. and pay top dollars for it.
  23. It depends if the government/cbs are manipulating the currency or allowing a free market. If it's a free market, the question is how bad one nation gets against another.
  24. Not that I can see. Growth will always be more valuable than value and or value traps.
  25. Is that realized and/or unrealized gains? It's a huge difference. I wouldn't exactly say paper gains are real until taken.
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