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Dinar

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    What are you buying today?

    in General Discussion

    Posted

    12 hours ago, thepupil said:

    I doubled down on MAA and CPT yesterday, not by purchasing more, but by converting some holdings held in IRA to Roth, paying >40% taxes for the privilege. it's optimal to wait until low income years to do this, but I just want to build a ladder of liquidity/availability over time, try to do it with the more beaten down names.  

    If you do not mind, could you explain why you like each?  Thank you.

    Bonds!

    in General Discussion

    Posted

    51 minutes ago, thepupil said:

    I sold almost all my individual 20 ish year individual corporate bonds today, having lost 5-10% in a relatively short time frame seemed like a liquid day with very tight bid/ask. 

     

    I plowed all proceeds and more into VCLT w/ some $55 tail hedge puts. this move generated some tax losses, freed up lots of margin, and replaced that which i sold w/ diversified equivalent.

     

    eventually, I'll migrate these to tax free accounts but in the accumulation phase it's just easier to buy in taxable, short term returns dominated by price change whcih thus far is negative/loss generative.

     

    Long term Corporate Index:

    $76, 4.45% coupon, 22 yr wgt avg maturity, duration of 12, yield of 6.5%. 

     

    I'm happy to be early to taking duration risk and am happy to lose money all the way down. Let's go!

    Why don't you take a look at Transdigm bonds of 2029?  I think that they yield over 9% and I think that they are money good (I own the equity, and you got $46bn market cap)

    Energy Sector

    in General Discussion

    Posted

    On 10/10/2023 at 7:04 PM, SharperDingaan said:

    Most of those in Gaza are not Hamas or Hezbollah, they are Palestinian, and have little to do with it; they are simply seeking a land of their own, just as Israel is. Sealing the exits, deliberately cutting off supplies to starve them out, and vowing to 'end it once and for all' (via invasion/disease) is attempted genocide. Something that Jewish people have been very familiar with, for centuries.

     

    Israel cannot expect everyone else to act rationally, when it doesn't do the same. When the US had 9/11, the result was the hunt for and eradication of Osama Bin Laden, not the elimination of the various populations that he was hiding in. Were Israel similarly rational, it would take a similar approach, as it has in past Nazi hunts. Mossad is very good at what it does.

     

    Bar fights happen, but if someone insists on getting into a gun fight, there is little their friends can do. Best solution is knock out their friend as rapidly as possible (saving their life), after that its just try to minimise the body count. Israel is that hot-head insisting on a gun fight.

     

    O/G price escalation is a bet on Israel doing something stupid.

    Hopefully cooler heads prevail.

     

    SD  

    SD, that's just not true.   If you listen to the interviews of people from Gaza or West Bank, they do not want to live in peace in Gaza or the West Bank.  They state that the entire state of Israel should not exist and the entire Holy Land is Palestinian Land, conveniently omitting the fact that Arabs are in fact invaders who came to the Holy Land in the seventh century AD and continued Jewish presence preceded Arab presence by nearly two millennia.  

    Arabs massacred Jews throughout history, whether in Spain, North Africa, Iraq (where Jews have lived for millennia), Arabian peninsula, and the list goes on.  In the Holy Land, there were massacres of Jews in Hebron, Safed, and attempts in Tel Aviv and Jerusalem in the 1920s.  Post 1948, there were constant attacks by Arab fedayeen from Gaza and the West Bank on Israel, with frequent killings of civilians.  Jews by the way were not allowed to worship at the Wailing Wall.  

    Israel left Gaza in 2005 and what happened?  Hamas (whose charter calls for wiping Israel from the face of the earth) won elections.  Rocket fire started from Gaza into Israel.  

    So to say that all people in Gaza want is to be left alone is neither in accordance with what they say they want nor with how they act. 

    GLP-1 disruption

    in General Discussion

    Posted

    5 hours ago, CorpRaider said:

    Want to bat around/track some opportunities that may be created by this move by Mr. Market?  How about distillers?  Let's see we've got: RI.SBF (Pernod Ricard SA, nearly cheap enough imo at ~ 17x earnings, like relation of agents to capital but I'm scared of the societal contract with my capital being in France), 2) BF.A (not cheap enough yet to get serious IMOP; brands are kind of mid; not as likely to benefit from premium trends/growth of wealth/status displays; have family control/potential for someone with skin in game to influence course of action), 3) RCO.sbf (Remy...same as Pernod; not as cheap maybe a little better bidness), 4) DEO (nearly to a market multiple, has a fair amount of mid/tired brands imop, ok with UK domicile but have agent principle concerns).  Who am I missing...2503 JPN Kirin?

    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.  

    Bonds!

    in General Discussion

    Posted

    28 minutes ago, thepupil said:

    I don’t think he’s marketing to wealthy individuals, but rather (mostly) non tax paying institutions.

     

    non wealthy to moderately wealthy people have 401ks/IRAs/annuities etc. very wealthy people have private placement life insurance that remove the tax friction. 
     

    regarding defaults, agree completely the common practice of quoting gross yields in risky credit is somewhat misleading, but I’m not sure of a good alternative because everyone will have dofferent default rates/LGD. 

     

    I agree that 6-8% pre-tax is more or less what’s on offer at this time, most safe stuff I’ve seen being closer to 6 on the long end and 7 on the short end. Extreme safety being ~1% lower then going up from there with credit risk.

     

    pre-tax seems pretty competitive with stocks, when get at computer, I’ll run what % of 5 year rolling periods >7% for stocks, my guess would be like 60%-80% or so but not sure. If you’re starting from “with no knowledge, strictly backward looking, this has 30% chance to beat stocks” and overlaying a little bit of bearishness/caution/relative value judgement, think it’d make sense to own some bonds (and would be dumb to own all bonds /no stocks).

     

    it at least makes more sense now than any time in my short time as an investor. 


     

     

    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.  

    Bonds!

    in General Discussion

    Posted

    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.  

    Energy Sector

    in General Discussion

    Posted

    25 minutes ago, Xerxes said:

    Simple Israeli domestic politics dictates that Israel needs to launch a full ground invasion of Gaza. Bibi’ own political survival may depend on that forcefulness given some extremists in his own government with some very extreme points of views. 
     

    In fact, as someone who campaigned so hard on security issue, he is got to go Gaza or he is got to go (fired)
     

    The civilians in Gaza will be trapped as always. The Israeli civilian captured or otherwise will be trapped as always. And Hamas wins even if it looses, for it accomplished two things (1) MBS was going to leave them behind, no more (2) they shattered the myth behind IDF. 

     

    It took decades to build that, and it took 24 hours to lose it. 

     

    PS: in one of the podcast I posted below, the commentator says this is not 9/11 nor Pearl Habour, it is rather Tet 1968 all over again

     

     


     

     

     

     

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

    Energy Sector

    in General Discussion

    Posted

    24 minutes ago, SharperDingaan said:

    Most of those in Gaza are not Hamas or Hezbollah, they are Palestinian, and have little to do with it; they are simply seeking a land of their own, just as Israel is. Sealing the exits, deliberately cutting off supplies to starve them out, and vowing to 'end it once and for all' (via invasion/disease) is attempted genocide. Something that Jewish people have been very familiar with, for centuries.

     

    Israel cannot expect everyone else to act rationally, when it doesn't do the same. When the US had 9/11, the result was the hunt for and eradication of Osama Bin Laden, not the elimination of the various populations that he was hiding in. Were Israel similarly rational, it would take a similar approach, as it has in past Nazi hunts. Mossad is very good at what it does.

     

    Bar fights happen, but if someone insists on getting into a gun fight, there is little their friends can do. Best solution is knock out their friend as rapidly as possible (saving their life), after that its just try to minimise the body count. Israel is that hot-head insisting on a gun fight.

     

    O/G price escalation is a bet on Israel doing something stupid.

    Hopefully cooler heads prevail.

     

    SD  

    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?

    Energy Sector

    in General Discussion

    Posted

    54 minutes ago, SharperDingaan said:

    Nobody knows how this will go, but most would expect variations of the below;

    • Gaza/Egyptian border opened, managed by Egypt/UN; water/fuel/food/medicine in, people out, and held in camps on the Egyptian side. 2M people live in Gaza, they have nowhere to go, they cannot get out, and per the UN charter; collective punishment is illegal. The people living in Gaza are not animals.
    • Israel is too far in to avoid a mass invasion of Gaza. Record body counts and atrocities on both sides quickly sour support, and create future generations of armed conflict. Israeli coalition government collapses, Hamas and Hezbollah disrupted, but continue to exist.
    • The US cannot support both Israel, Ukraine, stay under its spending cap, and keep all the balls in the air without a new house leader, and quickly. Hot wars burn through munitions at an incredible rate, and US disruption fears are inevitable.
    • US/Saudi/Iran/Israel deals collapse. Oil prices rise, and there is no longer a cap (Saudi supply flood) on how high prices can go. Somebody hits Iranian facilities, they hit Saudi facilities, and oil prices are ....

    Most would expect an overall downward market bias, and a strong upward bias on the price of o/g companies. Add a significant push for windfall taxes on the o/g majors (Exxon, etc), and the weapons suppliers; as they will be seen as war profiteering. Less of a push in Canada as an on-time completion of the TMP expansion is 'salvation'.

     

    Sh1tty way of making a buck, but pretty hard to find a better place than the WCSB.

     

    May we all do well.

     

    SD

     

    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.  

    Defense contractors

    in General Discussion

    Posted

    24 minutes ago, jouni1 said:

    Any educated opinions on European companies such as Kongsberg, Saab, and Safran etc? Saab excluding the fighter jet business seems like they could do well in the current environment.

    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.  

    Energy Sector

    in General Discussion

    Posted

    4 minutes ago, Sweet said:


    I find it unlikely that Israel will strike out in any way which risks its survival as a state.  Going solo against Iran without Western support is an enormous risk.  We will see.

    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.

     

    Energy Sector

    in General Discussion

    Posted

    Just now, Sweet said:


    I didn’t say they would let it go unavenged.  In fact I said they would seek revenge.

    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.  

    Energy Sector

    in General Discussion

    Posted

    @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.  

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