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  1. The corollary is that "value" style is more practiced in credit analysis where guys are focused on minimizing downside protection because their upside is getting their principal back. They underwrite to past stresses and trough profit margins, assuming those will be revisited. "Growth" style is practiced more in the tech world where everybody is trying to invent new things or new business models to move away from the past. We've been living in a period of tremendous changes brought on by the advent of internet and mobile phones - ergo the dramatic underperformance of value vs. growth.
  2. So you mean to tell me that if there was a virus that is very contagious and it make people want to leave densely populated cities with high rent, I am supposed to be shocked at that kind of rationale behavior by the upper middle to rich class? Wow, I would've never thought of that. 2008/2009 was scary as well. People tried to jack my tenants. Every 7-10 years, you have to experience some pain in real estate. It's just life. This is round 2 for me with 2008/2009 being more scary in general but NYC holding up better. This round is more specific for NYC. Back in 2008/2009, I was pretty bearish about NYC because all the revenue and profit center that drove that boom was so tied to mortgage packaging. That was totally going to go away. covid is precipitating trends that are not friendly to NYC. the biggest in my mind is the risk that "front office" as well as "back office" of the securities/finance industry will leave NYC. the latter has already mostly happened. covid is encouraging the former. if NYC loses much of the financial sector, then it will be shot to hell NYC lost the Madison Avenue advertising businesses, (think Mad Man), and it was once the fashion capital of US with its garment district, and the media center of the US with all big 3 broadcasters. Finance is obviously hugely important to NYC today, but there are fundamental forces that give NYC its regenerative capacity. Geography, for one, makes immigration benefit NY more than elsewhere in the US, and so are the transportation infrastructure, education institutions, etc. There's reason why finance was centered around NY in the first place. That said, it's going to be on a down hill for a while, especially with characters like AOC having influence over decisions surrounding Amazon HQ2. It'll take a while, but it's more about how it's run that will determine its future than just finance.
  3. A lot depends on how it's managed going forward. Presumably there were good structural reasons for NYC to have become NYC, capital of the world, in the first place, be it institutional or geographical. Some of those reasons are impaired by the aftermath of pandemic, some are not. But clearly the short term is looking quite grim. Whether it go on for a couple of years or a couple of decades depends on how it's managed and how US interact with the world. Longer term, presumably those same advantages that created NYC in the first place will resurrect it, the same way they did after the 70's.
  4. I have the book in Chinese. The segment on Timberland is actually from a talk he gave at Columbia in 2006, translated into Chinese. It's actually on youtube: The book is really a collection of his writings and talks. A big chunk of it is a discussion of the Chinese civilization in the style of Guns Germs & Steel, ergo the name of the book. Enjoy.
  5. Don't know if you can generalize like that. There are many different kinds of insurance companies, P&C, lifers, reinsurers, etc. And many different types of banks. Global SIFI's, small regionals, super regionals, consumer finance, etc. Much like stock market investing, there are many different ways of making money in it, you need to find the one that suits the current environment and your personality.
  6. I'll throw in a couple of names for kicks: Square and American Express Square because of its small business focus with large end market concentration in restaurants, and still has a $20 billion market cap. Amex because its billing is probably a bit more travel/leisure than typical, and the recent growth area of lending is also a bit more small businesses focused.
  7. Not surprising if you think about the major advertising categories: Travel / leisure Consumer finance (credit cards / auto insurance / mortgages) Local (restaurants, car dealers) The only category that holds up is probably healthcare/consumer products. Even political ads seem to be drowned out by the virus news.
  8. You should watch American Factory which is produced by the production company of the Obama's. It has very little to do with Trump, but simply lay out the experience of a Chinese glass maker trying to build an American factory making glasses fo cars. It highlights the differences, and concludes with the implications of automation. If the argument is simply that this is technological progress, let it run its course, and maybe even use government incentive to bring it about sooner, there will be consequences, quite a lot of it unintended. The communism ideology was born very much as a reaction to an earlier period of rapid technologically driven social changes, and as history shows, it easily gets high jacked by political opportunists. I understand the desire not to be political. But the 2 simply can't be divorced. We are suffering precisely from the political consequence of free trade. In a sense, through free trade, China was able to export a large part of its own political problems, and the US imported it.
  9. The argument for some form of trade tariff isn't specific to China, which just happen to be the biggest trading counterpart with the most impact. So sure, it will go somewhere else, but should be taxed too. The argument is to slow down the structural changes that deeply impact people's livelihood, so they will have time to adjust. Years ago, Buffett proposed some form of import voucher to lessen the U.S. trade deficit at that time, which would have much more draconian impact than just a tax. And critics have long complained about the lack of a coherent U.S. industrial policy. So this argument isn't made simply because of Trump. He's an ass, but as Munger would say, he's not wrong on everything. It's also not true that the same low income people are impacted. Different people are impacted differently. How else do you explain the coast / inland political divide! The argument was always there, and regardless of who the next administration is, it will no longer be easily dismissed, as it shouldn't be.
  10. The economists deal with efficiency, the politicians deal with the consequence of that efficiency. I watched "American Factory" on Netflix over the weekend. The pain of the Midwest manufacturing base is palpable. At some point, the question becomes whether the incremental efficiency achieved is worth the pain that it induces, whether in the form of income inequality or social cohesion of a community. And the election of Trump is a statement that we are at that point. It's one thing to be the beneficiary of lower costs of consumer product, and comment how low skilled labor need to upgrade their skill set. It's another to be fired and told to upgrade your own skillset, especially for those over the age of 45.
  11. In historical context he's absolutely right about that. Prior to the financial crisis, US was arguably more than the Roman Empire in its relative standing in the world. Things have been fraying since. Sooner or later it declines in its relative importance to the world, but the time scale of Roman decline was measured in centuries. One can argue it happens quicker today because of advances in communications technologies, and the speed of information propagation. In geopolitical terms, US is still the new continent. For 500 years, humanity has been migrating from Eurasia to the Americas. There's no reason it stops now.
  12. While general interest rate environment is important for insurance and bank performances, it's not the only factor. Risk underwriting environment, as in delinquency / charge off rates for banks and combined ratios for insurance companies is significantly more important than general rate concerns. You are probably just seeing a relatively benign underwriting environment for banks, and a worsening underwriting environment for insurance companies in general. Life insurance companies have morphed into much more complicated entities over the years, and to the extent mortality / morbidity prediction over large population pools is significantly better than loss ratio prediction for P&C insurance, the asset side, rate environment have become much more important performance driver for lifers. But each business is different. Hard to generalize like this.
  13. Not that I'm any expert at European banking. But I think there's a general perception that Europe is over banked. Each country has their own national champion bank(s), and often times, those national champions are disproportionately large compared to their domestic GDP, relative to the banks in the US. The ultra competitive banking landscape also leads to a less developed euro bond market, and more willingness to finance activities in the emerging markets, which at different times can be a good or a bad thing. Spanish banks roam all over Latin America, HSBC and Standard Chartered feels more Asian than European, both Swiss banks are truly too big to fail for Switzerland. Maybe the one bank that has similarity in geographic mix in the US is Citi. But as noted in the Citi thread, they do seem to have a knack for getting disproportionately caught up in every financial crisis. These are obviously way too generalized statements, and each bank should be evaluated on its own merit. But European banking seems to be a slightly different animal, and a more difficult business than the US counterpart, where JPM, BAC, Wells Fargo all have super-regional, deposit taking roots.
  14. Here's a nice interview for all you fans. After listening to it, I'm a convert. http://investorfieldguide.com/hinkie/
  15. Very interesting line of discussion. I don't think brand loyalty in this context is necessarily that different from other contexts. What's the basis on which one choses Colgate vs. Crest? Pepsi vs. Coke? Tide vs. Arm & Hammer? A huge amount of it is inertia, some of it is pure availability of one vs another, and then there's personal experience (positive or negative), and influence by others around. In my personal experience, branch geography did factor in my choice of banks. I recently had to open an account for my teenage daughter who got her first summer job. I ended up picking Chase for her even though it's not my bank, because I feel like she will be going to college away from home one day, and I wanted to pick a bank that has a shot of having branches around wherever she will end up. As for myself, the last time I changed bank was because I moved to a city pretty far away, and my old bank didn't have a branch in my new city. Even though after the account opening, I hardly ever visited the bank branch again. It would feel strange to me to have my primary bank at a far away community bank that doesn't have any branches in the city I live, even if I could theoretically do it.
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