Have We Hit The Top?

[JRM]

9 hours ago, boilermaker75 said:

How did shareholders of companies like Mercedes Benz do over this time period?

There are some conspiracy theories that Nazi's had controlling stakes in Germany's industrial power houses like Siemens, Mercedes, etc. and the ownership was allowed to stay intact after WWII.  Something about escaping to South Amernca, and Nazi families still in control of the companies today.

[Gregmal]

14 minutes ago, JRM said:

There are some conspiracy theories that Nazi's had controlling stakes in Germany's industrial power houses like Siemens, Mercedes, etc. and the ownership was allowed to stay intact after WWII.  Something about escaping to South Amernca, and Nazi families still in control of the companies today.

Careful. You’ll get kicked off Twitter for talking like that 

[adesigar]

10 hours ago, Gregmal said:

Always thought an interesting question to ask folks was what they’d do investment wise if an asteroid was reported to be headed towards earth with almost certain probability of impact. 

 

Depends on the size of the asteroid.

[SharperDingaan]

On 1/24/2022 at 7:05 PM, Gregmal said:

No silly questions. Because there isnt really a right answer. I didnt invest through 1987 and 1999 but I immersed myself in material related to those events. Dig up newspapers that give you real time sentiment. Shit like that. BRK letters are good. If you can conceptualize events and then put them in context, you will be ahead of the game. 

 

For certain styles, unfortunately, you really just have to be in the market. You'll never know how truly terrible it is to be in a short squeeze if you've never been short over the weekend and some great news gets released. Shit like that. Overtime, you get that experience by being in a lot of different positions and seeing how they end up playing out. Psychology is one of the most underrated aspects of investing. Markets and cycles are always heavily driven by psychology. 

 

On position sizing, its personal. But if you are young and capable, you can almost never go too big. Up til maybe your mid 30s. By then you need to have something put in the bank. But my biggest regrets were being in my mid 20s and doing it the proper textbook way. Where I diversified and put less than 10% into a big winner by the name of GOOG. Of course, years later simply by earning, the GOOG position and all its success wasn't really relevant. Could I have risked 3-4x that? Absolutely. Even if it went down 50% 3-4x the allocation at that point in my life wouldnt be a big deal. So position sizing, assumptions matter. But project a position against your net worth 5-10 years out and ask if youre really making a worthwhile investment. 

 

Further on that. If you have a 6 figure portfolio in your 30s, but make 6 figures annually, again, a 10% loss can easily be replaced. Whereas if you have $5M and you're 50 and never plan on working again, you're going to go the @Viking route and try to preserve your wealth rather than grow it aggressively. Once you have what you need to live on your own terms, more isnt really more, at least not all the time. The other side of that, IMO, is that once you have what you need, you can have fun with anything over that. The @ERICOPOLY route I guess we can call it. So theres really different strokes for different folks. If you enjoy investing then theres added benefit. 

 

My only real advice is if you're doing it, know yourself, and immerse yourself in it. Ask questions(like you did) theres lots of people here you can learn from. I learn lots from folks all the time, sometimes they probably dont even realize it. 1) stick to quality. 2) size yourself properly. 3) realize where you are in your life and where you want to go. Money is just a means to an end. 

 

Just to add to this ....

 

A new investor needs to recognize that they will have two main 'risk windows'  during their lifetime. When you are roughly between 20-30 and it is just you, and again around 55-65 - once you have your stash.  In both windows, generally speaking - the highest return on your dollar, will be on those dollars spent on yourself. In your 20's - the dollars spent on education, professional designations, shopping for significant other. In your mid 50's - the dollars spent on reinvention to cover your next 20-25 years.

 

You want to be long term greedy; exploitation of the short term opportunities is nice - but secondary. The reality for most is that 'trading' is really just a zero-sum game spanning decades - that 8-10% CAGR over a 25yr period is often 10-15 yrs of heavy losses, offset by maybe 5-10 yrs of big gains.  Out-of-the-box you are utter sh1te, hopefully 25 yrs later you actually know something! (Gladwell 10,000 hours thing) 

 

Lots of ways to be long-term greedy. A great many immigrant communities look to housing - the own 2-3 rentals for retirement income. The more entrepreneurial look to business - buy the building you operate in, pay it off over time, liquidate upon retirement, use the proceeds to fund your retirement plan. The more trades orientated - start their own companies, put their profits into operations/properties that are repaired/flipped, and retire to villas. The professionals look to their firms pension plans, beneficiaries contributing the maximum they can, leaving management to other professionals. All of it a mind-set thing.

 

Obviously, personality plays a part, but it also evolves over time. There are a great many very successful strong-minded people in the world, with varying degrees of 'color' - but almost every one of them is comfortable in his/her own skin. If they weren't, Darwinism would have crushed them a long time ago.

 

The smartest thing a new investor can do is think strategically, pick your swim-lane, then thoroughly enjoy yourself while getting on with it. Obsessing over the 20% of 'investment', while ignoring the 80% of 'real life', really just misses the point of life.

 

Good luck!

 

SD

 

Edited January 28, 2022 by SharperDingaan

[Guest]

7 minutes ago, SharperDingaan said:

Obsessing over the 20% of 'investment', while ignoring the 80% of 'real life', really just misses the point of life.

 

 

A young Buffett would disagree. 

[SharperDingaan]

2 hours ago, stahleyp said:

 

A young Buffett would disagree. 

 

Ah..... but when he was a young man, it was back in the 'olden times' -  last century!

Fortunately, it's a whole different world today 

 

SD

[thepupil]

so i don't mean to be mr. pollyanna bubble chearleader...but have you all seen earnings!

 

MSFT, AAPL, GOOG, XOM

 

It's a freaking orgy of profits. 

 

I can hear an argument for why this won't be repeated or is unsustainable...but damn...

 

 

[Gregmal]

Now imagine if XOM got even a fraction of the rerating benefit those others got over the next decade?

[TwoCitiesCapital]

2 hours ago, Gregmal said:

Now imagine if XOM got even a fraction of the rerating benefit those others got over the next decade?

 

Can't speak to Exxon specifically, but energy as a whole held up VERY well while the S&P itself was down like 10%. Want to say energy, on average, was up double digits in January while S&P was down like 10%. 

 

A spread of 20-30% in a single month is VERY meaningful for comparative returns and attracting flows.  2022 might be the year commodity companies get some credit for massive earnings. 

[Gregmal]

Yea that’s why I’ve been open to swapping out some of the big tech stuff I have. You can very easily see the next decade being kind to the best of breed companies in the energy/commodity sector. Tech? Not so much. Even the FANGs, great companies and all, but I can easily envision environments that are challenging for them. The baton always gets passed when rallies occur sector wide over multiple year periods.    

[thepupil]

 

certianly th case in the short term 

[Gregmal]

I feel like a geezer remembering the days of pre split GOOG(no GOOGL) going nowhere at $500 a share because everyone was obsessed with clicks and all that dumb shit. Now it’s roses and rainbows and that’s nice but certainly the cycle of in favor/out of favor is skewed at the moment. And has been for a few years. Whereas I still don’t see anyone pounding their chests about XOM, FCX, PXD, etc lol. One day we ll see that again too.

[SharperDingaan]

Shush! 

CVE, SU, MEG are up 24%, 20%, 33% since Dec-31 - and this is before Q4 earnings announcements 

 

SD  

 

[Paarslaars]

Gear is up 46%, OBE 62%.  

[lnofeisone]

9 hours ago, SharperDingaan said:

Shush! 

CVE, SU, MEG are up 24%, 20%, 33% since Dec-31 - and this is before Q4 earnings announcements 

 

SD  

 

It's been a hot second since I was excited for energy earnings. Sitting on my CVE warrants at 5% of the portfolio. 

[SharperDingaan]

We all also need to keep in mind the 'stun' factor which is very real here.

 

When BTC was < USD 15,000, very few imagined that it would go much higher - despite the accumulating evidence that significant and material structural market changes were taking place. People just could not imagine, that net money inflows would be so large - that BTC really had nowhere to go but up. It was much more comforting to simply deny, and spout slogans - BTC is rubbish, nothing backs it, etc. Mass cognitive failure, great for the rest of us 

 

It is the same thing with O/G. On our little island, people just cannot imagine the coming change, despite the overwhelming and growing support for it. Mass cognitive failure, great for the rest of us!

 

Every druggie eventually gets to the end of their fix, whereupon the search for the next fix begins. Should the supply be restricted in some fashion, mass cognitive failure turns into mass panic  USD 200/boe forecasts are not unrealistic, they just aren't sustainable - which doesn't matter for an o/g producer. All that is really required at the time,  is a deep and liquid forward market.

 

All of which is just the tide changing.

Anything that can float (turkeys flying in strong winds) does extremely well.

 

GLTA

 

SD

Edited February 2, 2022 by SharperDingaan

[Xerxes]

I don't know what you guys are talking about, i have had a very comfortable 40% return on Exxon in the past six months and about 20% in the past 3 months.

 

I liked that they grew their dividend very modestly last year. They binged on debt to finance their $15 billion dividend and now that has been paid back as well. Very conservative. Granted, it took a few years to exorcise the ghost of Rex Tillerson. 

 

Now with their break-even at the $30s, this is their time, let the operating leverage kick-in and fill their coffers.

 

[Castanza]

*US Jan Consumer Prices +0.6%; Consensus +0.4%

*US Jan CPI Ex-Food & Energy +0.6%; Consensus +0.4%

*US Jan Consumer Prices Increase 7.5% From Year Earlier; Core CPI Up 6% Over Year

*US Jan CPI Energy Prices +0.9%; Food Prices +0.9%

[Gamecock-YT]

What's the saying? General always fight the last war?

[Spekulatius]

Well the Weimar inflation was transitory too. Only lasted about 3 years. The hyperinflation phase lasted less than one year. Yellen should read up on Hjalmar Schacht.

 

[Dinar]

12 minutes ago, Spekulatius said:

Well the Weimar inflation was transitory too. Only lasted about 3 years. The hyperinflation phase lasted less than one year. Yellen should read up on Hjalmar Schacht.

 

Spek, you bring back memories of my German history class.  Rosa Luxembourg and Curt von Schleicher say hello.  

 

[Gregmal]

Inflation is only a problem if you don’t have assets. Keep it comin, I say.

[Xerxes]

To me hyperinflation is when the moment you get a paycheck you need to spend it either on food or other assets, because your paycheck depreciates faster than the food that it buys does. Are we there, not one bit.

 

Six-nine months out for now, things could look very different.

Edited February 10, 2022 by Xerxes

[thepupil]

37 minutes ago, Gregmal said:

Inflation is only a problem if you don’t have assets. Keep it comin, I say.

there's a very unpleasant tipping point where this is not the case (regarding general societal order, rule of law, property rights etc) 

 

I don't think we're anywhere near that, but there are limits to how much my rent and royalty receipts can go up without getting a little scared!  

Edited February 10, 2022 by thepupil

[muscleman]

1 hour ago, Gregmal said:

Inflation is only a problem if you don’t have assets. Keep it comin, I say.

 

Hard assets + good debt is the best inflation protection.