Dinar

Keep in mind that for something like Remy Cointreau, profits are much higher than free cash flow because you are selling product that was set aside 10-40 years ago. On a replacement cost basis, earnings would be 10-15% lower, and you can see free cash flow is about 20% lower than net income.

Isn't it half of it housing driven, which goes through with a lag?

Any info regarding private placement life insurance? Any companies that you'd recommend? I agree with you that for an institution, or a moderately wealthy retiree bonds look interesting as a part of a portfolio. I would not want to take credit risk though right now, I do not think you get paid for it. I would buy Treasuries/low coupon mortgages for my fixed income allocation.

Howard Marks claims that double digit returns are now available in credit but that omits impact of defaults, and management fees. Once you adjust for that, his 10% yield turns into 6-8%. Adjust for less advantageous tax treatment, and I do not understand why wealthy individuals would go for credit.

You are probably right, and I wish it would not happen. A ground invasion would be a bloodbath.

Really? Arabs have land in Gaza. Hamas was democratically elected, there are tens of thousands of armed members of Hamas, and hundreds of thousands of their family members. Hot headed would be to invade Gaza. How does Israel's refusal to do the ground invasion is not rational? In your opinion, what is the rational thing for Israel to do?

I disagree. Why would Israel bail out people whose brothers/sons/cousins/fathers murdered a thousand of their compatriots, mostly civilians in cold blood? Who cares what the UN charter says, Lebanon does not follow it, Iran does not follow, Hamas does not follow it, China and Russia do not follow it, why would Israel? How many divisions does UN have? It is in Israel's interest end this once and for all, otherwise what we saw on Saturday will occur time and time again. Iranian rulers have been very rational in the past, and so has Hezbollah, assuming they continue to be and do not miscalculate the war will not widen. Assuming Israeli leaders are smart, they will NOT do a ground invasion, but just use a tactic that is millennia old - starve out your opponent. No horrible pictures on TV/Internet, no bombings, nothing. Until Hamas unconditionally surrenders, and voila, you have minimized your casualties. Then take your time thinking about what to do.

I have been long Safran for a while, but Safran's bread and butter are engines for commercial airplanes, it is not the best play in my opinion on higher defense spending.

Yes, with things like this, you are 100% right. https://nypost.com/2023/10/10/hamas-kills-40-babies-and-children-beheading-some-of-them-at-israeli-kibbutz-report/

In my opinion, either Israel or Iran or both are preparing for war and trying to lull the other into thinking that they are not by saying that Iran was not involved, or either Iran or Israel or both don't want escalation, hence denials from Iran and no accusations from Israel.

You are right, but why do you think Israel will take "measured" revenge? Given that in the past "measured" revenge was taken and did not work, why would it work this time? Something has to change, otherwise what happened on Saturday will keep recurring.

@Viking, why do you think it will become a wider war and who do you think gets involved? Also, why would that impact world economy? @Sweet, what makes you think that Israel will let hundreds of murdered civilians go unavenged? Moreover, there is an argument to be made that past policies did not work and either some drastic has to be done, or the massacre that we saw on Saturday will recur.

There are a number of write-ups on VIC over the last two decades

You are competing with the company - they bought back 0.5% (18K shares in Q3)

Wow, you got some pretty impressive friends. None of my friends have seen net worth 2.5x since 12/31/2019. Hell, I do not think anybody's net worth doubled since then. Most people cluster around 1.5x or below.

Iran is already involved. Keep in mind, as Hamas figures have stated before, Israel is just the first domino. The rest of the world is next.

Why? Ground invasion will cost a lot more in casualties than all the hostages. By the way, here is a take from a Russian paper: https://www.gazeta.ru/army/2023/10/09/17706481.shtml For those who do not read Russian, the military observer for the paper states that the only solution is to destroy Gaza and deport the entire population, otherwise this continue forever. By the way, if you read interviews with people from Gaza and West Bank, they don't want just Gaza and West Bank. They want the entire state of Israel, including all the territory that UN assigned to the Jewish state during the partition. I don't know what the Israeli government is thinking, but how can peace be possible with people who consider themselves occupied as long as one inch of the Holy Land is in Jewish hands? There will always be war unless either all the Jews are kicked out of the Holy Land or all the Muslims are kicked out of Israel, including Gaza and the West Bank. Look, Czechoslovakia deported all Sudeten Germans post WWII, King Hussein did the same during Black September (although he killed like 25K). It is not as if this is without precedent.

@Spekulatius, why do you think defense stocks should go up on this? Heck, if the Israelies are smart, which I doubt, they would hardly need to replace any equipment. Ammunition yes, but no tanks, planes, artillery, et all. Just blockade Gaza, and watch it surrender, tactics used successfully for millennia.

The sad part, aside obviously from all death and destruction, is that Russia has a lot more ability to endure than Ukraine.

Is it really 500K dead? Not that 100K is too little, 100K dead is a tragedy, I hope it is not 500K dead.

When in January of 2020 (before Covid), in NYC, with every block posting job openings offering $20 per hour + benefits for unskilled work, 25% of the city was on food stamps, it has to stop. It cannot continue on this trajectory much longer. Bill Clinton did his welfare reform and was re-elected, Giuliani made welfare recipients clean parks and was re-elected.

The best solution to the government deficit problem is to slash welfare, food stamps, Medicaid and similar programs, including end government guarantee of student loans. The result will be a reduction in government spending (a very substantial one), increase in taxes as employment will increase materially, lower inflation as the wages will not have to compete with very generous social benefits. In addition, it is better for society when people work rather than collect welfare, including fewer children born to unwed mothers.

https://aswathdamodaran.blogspot.com Take from Damodaran

He is absolutely correct, however I think that there are a couple of nuances that ought to be addresses. a) If and when in say five to ten years, you no longer can get ten percent on super high quality private credit, will that cause the equity market to reprice higher, and will the returns be higher in equities over that five to ten year period than in private credit? b) When PM is borrowing at say 6-6.5% for ten year paper, I wonder how good credits are that are paying ten percent plus? c) Lastly, I am not sure that ten percent plus is available for the investors. OCSL, which is an Oaktree vehicle is not generating ten percent on unlevered capital, it is generating much less due to rather high in my opinion, management fees. So he is essentially comparing apples and oranges: credit product before fee (which is only available on a post fee basis) and equity product that can be purchased with no fees (index.) While returns on credit product might be competitive with equities, what investors will receive will probably be much less and not competitive with equities.

@Gmthebeau, sure, if you hold bonds to maturity, you don't lose money in nominal terms, you actually make money. However I presume that most people care about purchasing power=real wealth, and once you take inflation and taxes into account, you can easily end up with a huge loss in real terms even if you hold long term bonds to maturity. TIPS, in my opinion, are a different story.