Dinar

How do his returns in USD compare to the S&P 500 since inception?

https://www.jpost.com/international/article-728770 Apparently Russia is recruiting mercenaries in Serbia

I agree with everything that you say except for your claim that Russians look upon Putin favorably. I know many people who either came from Russia recently or know people who have. None of them know anyone who looks upon the guy favorably. Millions of people fled Russia. Last week I took a gypsy cap in Brooklyn, the driver was from Yakutia. He and his two sons made it via Kazakhstan to Mexico and walked across the border. According to him, it is not an isolated case. Had Putin been so popular, would he really need to rig every election? As for backing out of treaties, I recall Kaiser Wilhelm saying that treaties were just scraps of paper. I personally do not support this view, but this has been the way of the world for millenia. As for Russia being aggrieved here, spare me. Invasion of Poland in 1919 when Pilsudski stopped them, invasion of Poland in 1939, winter war with Finland. The bully gets punched in the face, cry me a river! I do find it hypocritical when Boris Johnson is incensed about Russian war atrocities, and yet is silent on even bigger atrocities committed by the British in the Boer War. If the West was not run by hypocritical morons - Biden, Macron, et all, they would instead of sending tanks to Ukraine do the following: a) Open borders to Russians fleeing Putin b) Given citizenship to deserters from Putin's army c) Publicize the above in Russia Putin would not have an army in three months.

The importance of countries is not measured by GDP, it is measured by what happens to the world if the country starts acting differently. North Korean GDP is immaterial, but it can nuke Seoul, Peking, Tokyo and Los Angeles, and hence the world pays attention. Russia exports 7MM barrels of oil per day, if it stops, the world's oil price goes to $200+ and the world goes into a deep recession if not a depression. Similar if not the worse story with nickel, titanium, etc... Possibly grain, although I am less certain on that. History is full of examples when an immaterial economic power - the Mongols, Tamerlane, Arabs in 622 AD, took over half of the world, including much wealthier countries. Russia is an a very bad situation, that however does not mean that either Ukraine or the West are in a good situation. Russia by virtue of being a rich dictatorship that does not care about means, has options that we in the West do not consider. What happens if Russia offers North Korean $20bn per each year that 500K North Korean soldiers fight in Ukraine? All I hear on this board is how vulnerable Russia is, and it is. However, good chess players neither ignore the weaknesses of their own positions (vulnerability of electric grid, oil dependence, etc..) nor the options that the opponent has. If the war lasts another twelve months, will American taxpayers be willing to spend another $1000 per family on the war? Will the Europeans during a cold and brutal winter continue to support Ukraine? Will the West run out of ammunition? Both sides - Russia and Ukraine/West are very vulnerable. Sure, if Putin died tomorrow, and a Russian Lee Kuan Yew came to power who wanted Russia to be like Finland/Sweden/Poland/Lithuania/France/Germany, I and the world would rejoice. However, wishing will not make it a reality. We have to deal with the reality, and not what we would like the world to be. That starts with acknowledging the situation, the weaknesses and strengths of both our position, and Russian position. Any rational analysis will show that both sides are in a very bad spot, rather than Russia is in a bad spot because its GDP is the size of Sweden and we are wealthy so we win. Wealth advantage did not help Persia (agains the Arabs), the world (against Mongols), and the list goes on. Stop living in the world of dreams. While you are dreaming, thousands of people are dying. Your refusal to face reality is probably helping prolong the war. What are you going to tell Ukrainians in six months - we are tired of funding your war? We do not have the ammunition anymore? What if the war lasts five more years? And yes, I care, because had I been born a decade earlier, I would have been drafted and most likely sent to my death in Afghanistan.

@John HjorthIf you find truth uncomfortable, keep living in your bubble. It will not make the facts disappear.

Really? Which part? The irrelevance of Sweden? What does Sweden export? Think what happens if Russian oil/gas/titanium/grain disappears from the world market. Russia can exist without the West. The West can exist without Sweden. Sweden cannot exist without the rest of the world. Sweden without the rest of the world will go back to stone age - using wood for firewood, assuming you have enough. What is my nationality? How does that matter? If it helps, assume that I am Assyrian, who speaks Aramaic as his mother tongue and lives in NYC. Now what conclusions can you draw?

This is a faulty analysis. If Sweden disappears from the face of the earth, how will that impact the world's economy? If Russia stops exporting oil, gas, titanium, etc... the world will be devastated. Russia's ability to suffer is orders of magnitude more than in the West. Europeans do not have electricity/gas, people riot. In Russia, there are a lot of villages without either. Europe and the US is very vulnerable to asymmetric warfare - cyber attacks, attacks on electric grids, water supplies, etc... How difficult would it be for Russian special forces to destroy all transformers in say US and Western Europe? That would bring the Western world to its knees. Instead of pontificating of how weak and irrelevant Russia is, think about our own vulnerabilities. The best outcome for all parties, (Ukraine, Russia, the West) is an immediate peace treaty or armistice. The delay just benefits India and China. Time is NOT on the side of Ukraine, do not delude yourselves. Russia has tremendous reserves of foreign currency, gold, etc... Do you realize that it could easily hire 300K North Korean mercenaries tomorrow?

No, because you are assuming zero growth, or growth that is worth zero. (when returns on marginal capital = cost of capital), you are correct. When there is growth and return on marginal capital exceeds cost of capital then that justifies a higher p/e. Technically, we should not even be looking at earnings, but at free cash flow.

Greg, if you do not mind, could you please lay out your NAV calculation for MSGE? Thank you.

The Fed has a big problem, and that is beyond 2023. There are a number of structural factors that will push inflation above 3% per annum on a measured basis starting in 2024/2025 and beyond. They are: a) Transition to green energy is very inflationary, since you need a back up source of power for wind/solar/hydro b) Deglobalization c) Continued left-wing policies in the US (on the federal level + NY+California+NJ et all) that discourage work and encourage idleness (being on the dole) and reducing the size of the labor force. Ironically, in France, Macron is going the other way. d) Demonization by the educated, but without common sense, elites of everyone that disagrees with them which leads to distrust in institutions, drops in vaccinations for things like measles, prevents common sense reforms. e) Rapidly declining quality of education in the US, and hence declining skills of the labor force. f) Too many people in the labor force are employed in producing nothing - diversity consultants, etc... g) Promoting people/hiring contractors based on skin color/sexual orientation, rather than how good they are. I wonder how much money FAA spends per year on diversity/equity/inclusion and how much on testing software? h) Insane government waste. In NYC, for instance, the educational budget per pupil is for $40K per year, yet only $10K reaches the actual school.

Conservative is a liberal mugged by reality. You are right of course, but may be things will change, (Murphy came close to losing in NJ and Hochul in NY), and you are paying nothing for the option. As for Weisselberg, unless I am mistaken, pretty much every university does things he was accused of.

https://nypost.com/2023/01/10/manhattans-population-has-rebounded-in-the-wake-of-covid-19/ NY Post says population keeps growing despite retarded policies. What happens when we get a good mayor and governor? NYC will explode upward

@changegonnacomeWith all due respect, where do you see railroad workers getting 20% annual wage increases? I saw 20% over four or five years, which is 4-5% per annum, not 20% per annum. Would you mind sharing where your data is coming from? Similarly, I have not seen nurses in NYC offered 19% annual wage increases. Would you mind showing the source of information? 19% over 5 years is not the same as 19% per annum. I am very glad for your circle of friends, but I do not see these 9-10% pay increases anywhere, here are a few datapoints: a) My friend has a nanny that he employs - he gave her a 4% wage increase and she was happy - this is in NYC b) A brother in law is a very highly skilled computer programmer - when he tried to leave a few years ago, he was begged to stay, promoted and his pay increased 25%. He is getting a 3% wage increase in 2023 (works for a ratings agency in NYC) c) Private nursery school that my daughter is attending announced zero tuition increase in Manhattan for 2023-2024 year and we were told by friends at a private school that my son used to attend that there will not be a tuition increase, after a 4% increase in 2022-2023 year. Staff at these places is not getting double digit wage increases. d) Wall Street - based on what I read/heard, comp is down 50% at the top level, also banks are firing people. e) Technology - given the lay-offs, hard to expect much/any compensation increases f) NY City employees based on conversations with three that work for NYC are not getting anything above 3-4%.

If you like high dividends, take a look at Clipper realty (I own it.) I think that the dividend will go from 5.4% on today's stock price to around 7.5% on today's stock price in 2025 as first building in Prospect Heights Brooklyn gets fully leased and the second one gets built and leased, which is a late 2024/early 2025 event.

Thank you for a very interesting letter, could you please discuss the Canadian company that provides software for utilities? Specifically, where do you see revenues and EBIT in say 2030, if it is not too much trouble? Thank you in advance

There is an implicit assumption in your analysis that the stock price will not change. Say Altria sees another 7% volume decline, 5% price hike, then revenues are down 2%. If market starts pricing in 3-5% annual profit declines, then using an 8-9% nominal discount rate, then you could see P/e = 7-9, vs 9 today. BTI is not at an 8.6% dividend yield, it is actually 6.63% dividend yield.

SD, thank you for the insights. Are your top plays still Obsidian, Whitecap Resources & Gear energy, or given the moves in the stocks did you change your opinion? Thank you.

They are not doing it correctly. Take EPS for the index, adjust for inflation, and take the average. You will not get 28.45 p/e.

These figures are NOT accurate. Ben Graham/Shiller's P/E has earnings adjusted for inflation. Take a look at S&P 500 EPS over the last decade, adjust for inflation and do the calculation. You do not get 28.48.

Yes, I am marking up assets to markets. Generally REITs do not, the only exception to that rule that I know of are REITs in UK, France, Hong Kong and Singapore which do, possibly Belgium and Spain as well. Investors have to do their own NAV calculations. Depends on the REIT, Clipper does offer excellent disclosure, including addresses and cost basis for each of their properties, as well as rental income, expenses, and net operating income.

When pupil said leverage at 3%, he meant debt bearing 3% interest, and that's what I responded to. We both used sloppy language. Clipper has debt paying about 3-3.75% per annum, but leverage as in Debt/Assets is obviously much higher than 3%. Debt / Assets (marking assets to market in my opinion) for Clipper = 55-60%.

I am sorry, but where do you get average inflation 1995-2007 = 4.5%? According to US CPI figures, average inflation was around 2.7% per annum in that period.

If you want 6%+ MF cap rates + 3% leverage, buy Clipper (I am long.)

If you think that EPRT and other NNN Reits will return 10-15% per annum on a going forward basis, I think you will be very disappointed. Just do the math based on the value of the portfolio (cap rates), cost of financing and you will see.

I would avoid stuff like EPRT and SRC, historically have been lousy investments