Have We Hit The Top?

[Broeb22]

23 hours ago, Gregmal said:

Much of the supply and demand imbalances and thus insane pricing is easy fixable and will be resolved shortly. 
 

On the other hand, it’s gotten so amusing now every 1% market pullback we all seem to be “ready and waiting” for the bear to emerge. WTF

 

plenty of ways to make money right now, if you’re having trouble perhaps just change the focus

 

 

I'm not sure I agree with this take. I think supply, mostly of labor, may be constrained for a while. 

 

In my consumer staple industry, where demand increases with population growth, we have seen orders for 4-5 months 20% above our 2019 pace (we use 2019 as a baseline since it was the last normal year we had). We didn't get better all of a sudden at selling product. Others in the industry can't service the volume, so folks are ordering with us. We can't service the volume and have seen lead times increase from 6 to nearly 20 days within that same 4-5 month period. We have lost bids for major pieces of business only to see that volume come back when the new supplier couldn't service the business. 

 

Our primary reason for falling behind is labor shortages. We are not running some lines right now despite being oversold. It's a crazy situation, and we're just one company, but I think a lot of industries are simply not capable of producing what they once could. Maybe companies will invest heavy in automation since the ROI is better now and this problem will go away over time, but I don't see it snapping back. 

 

There was a guy on Twitter showing a graph with durable goods inflation leading the way, but services inflation (which represents most of the US economy) is starting to tick up and if that is the case then inflation could become more persistent.

[SharperDingaan]

37 minutes ago, Broeb22 said:

I'm not sure I agree with this take. I think supply, mostly of labor, may be constrained for a while. 

 

In my consumer staple industry, where demand increases with population growth, we have seen orders for 4-5 months 20% above our 2019 pace (we use 2019 as a baseline since it was the last normal year we had). We didn't get better all of a sudden at selling product. Others in the industry can't service the volume, so folks are ordering with us. We can't service the volume and have seen lead times increase from 6 to nearly 20 days within that same 4-5 month period. We have lost bids for major pieces of business only to see that volume come back when the new supplier couldn't service the business. 

 

Our primary reason for falling behind is labor shortages. We are not running some lines right now despite being oversold. It's a crazy situation, and we're just one company, but I think a lot of industries are simply not capable of producing what they once could. Maybe companies will invest heavy in automation since the ROI is better now and this problem will go away over time, but I don't see it snapping back. 

 

There was a guy on Twitter showing a graph with durable goods inflation leading the way, but services inflation (which represents most of the US economy) is starting to tick up and if that is the case then inflation could become more persistent.

 

Similar story in the craft beer biz ...

 

We have more demand than we know what to do with, but it is just impossible to reliably get the most basic of packaging - cans, glass, keg components, sealers, labels, C02, etc.  If you are not part of a bulk buying collective, or sharing trucking, you're f****d.

 

We pass the costs on per batch, and try to minimize impact by producing as big a batch as possible. The good news is that customers are telling us they'll pay up to 25%+ more - if we bring back the small batches. Direct feed from the bright tank, $10 a glass in the summer beer garden; $12 if we throw in live music for the afternoon. People are willing to pay, but the price increases are permanent, and materially more than the headline CPI number.

 

Lot of staff are burnt out, and most employers are keeping total pay the same, while cutting hours - to produce pay raises in the 5% range. The loss in hours being made back through higher productivity.

 

SD  

[Spekulatius]

Labor participation took a deep dive during COVID-19 and is only very slowly bouncing back. I think the only thing bringing back these people is better pay. Now consider demand generally above 2019 levels and it is clear there is a labor shortage.

These labor costs surges will not reverse, they are sticky.

[Broeb22]

@SpekulatiusI think the demand is quite likely to be transitory since there was massive fiscal and monetary stimulus pumped into the system, which may have been necessary at the time, but in hindsight some of the spending, particularly the later stimulus bills in the US, was probably wasted and contributed to the situation we're all in now. 

 

But I think the supply, i.e. labor, is where the persistent weakness is. Eventually, the truckers won't miss as many appointments at ports, and people will only buy what they need, but, and I don't have a specific data point for this, there are probably millions of people who are a combination of dead, disabled, forced into childcare and out of work, early retirees who suddenly see their own mortality, and more who won't work again. 

 

I think the solution to the problem, since in my opinion is its a labor problem, would be a greater focus on easing immigration for people who want to work, but I don't want to tread too far into politics since I am trying to make an economic comment about how to stem inflation before it becomes ingrained and not a political one.

[Gregmal]

Man! Where’s @Read the Footnoteswhen you need him? All those experts on psychological analysis declaring Trump a Russian puppet….the fella they voted for seems mighty effective. Ukraine going back to Russia. Arguably where it belonged to begin with as a huge percentage of Ukrainians consider themselves Russian and support Russia. It’s basically been a self serving US/EU initiative to steal Ukraine and the bulk of that region following the Cold War. IMO this is largely much ado about nothing. But the beauty? Nat gas is gonna go through the roof and $120 oil ain’t too far off either. Been debating picking up some $200 CL calls. It’s closer than everyone thinks.

[ERICOPOLY]

22 hours ago, Gregmal said:

Thanks to all who voted for this! 

 

There was nobody else to vote for.  Hopefully there will be a Republican option in the future.

[Gregmal]

Well, until then, there’s futures options available to keep profiting from the continued raping of the most vulnerable. Even shitty QSR type food is getting pricey! Anyone keeping an eye on fertilizer costs? Better stock up. Thank you Brandon.

Edited February 12, 2022 by Gregmal

[Viking]

2 hours ago, Gregmal said:

Man! Where’s @Read the Footnoteswhen you need him? All those experts on psychological analysis declaring Trump a Russian puppet….the fella they voted for seems mighty effective. Ukraine going back to Russia. Arguably where it belonged to begin with as a huge percentage of Ukrainians consider themselves Russian and support Russia. It’s basically been a self serving US/EU initiative to steal Ukraine and the bulk of that region following the Cold War. IMO this is largely much ado about nothing. But the beauty? Nat gas is gonna go through the roof and $120 oil ain’t too far off either. Been debating picking up some $200 CL calls. It’s closer than everyone thinks.

@Gregmal i am assuming you are not serious with your comments about Eastern Europe. You seriously think Poland, Lithuania, Latvia, Estonia, Czech Republic etc belong back under the Russian/Soviet boot? Because that is the way it was in the recent past?

 

You do realize that what is going on in the Ukraine today is not a Disney movie… Lots and lots of people are going to die. 
 

In terms of the Ukraine, have you actually talked to anyone living there today about what they actually want? What kind of future they want for their kids? Do you seriously think a majority of people living in the Ukraine want Russia to come in and destroy the economy and install a puppet government? Seriously?

 

No one can deny that Russia is basically playing the power game. And the Ukrainian people are screwed. Lets not pretend they will enjoy it too. 
 

Lets also be honest and admit that Trump was an absolute train wreck when it comes to US foreign policy. The meeting he had with Putin in Helsinki looked like some twisted porn flick (Trump was so hot to impress Putin). Look at all the people who died in WWII to build a better world… Trump threw pretty much every long standing ally of the US under the bus during his term. Millions died to build a better world and trump simply said… who cares. I only care about me today. So today NO ONE trusts the US. And Putin is LOVING IT. Couldn’t have planned it any better.
 

And 40 million Ukrainians are about to lose their independence. But i get it… they will be waiving Russian flags when the army rolls in. The thousands who die in the war.. well that will be fake news… the economy getting destroyed and the resulting unemployment… well people over there obviously love a shitty economy (just look at Russia’s) and massive unemployment and all the outcomes that has for health. And the parents will be celebrating the future for their children going down the toilet. Woo hoo! Seriously? 

Edited February 12, 2022 by Viking

[Gregmal]

Nah you’re just regurgitating the US centric media spin narrative. Why isn’t the US northeast part of England anymore? The people play a larger role than you think in deciding what they want. Ukraine is massively pro Russia. This all happens and the media gives you reason to get upset but how come none of you are talking about NY rewriting districts for voting purposes with the intent to seize control of areas? There’s this media porn fantasy that folks here love, the stuff liberty posts in the red alert thread….but you’re being played. Have you paid any attention to what’s come out of the current defamation suit against The NY Times? They openly admit to faking and ignoring fact checkers to put out manipulative narratives. Life isn’t about to change super drastically in Ukraine anytime soon. Sure there’s people you see in the street raging because CNN gives you the feed, or twitter shows you pictures, just as there’s truckers waiting for your boy Trudeau….but that too is a peanut in terms of its real life relevance. 

 

But regardless, you guys said Brandon was the answer. Enjoy what you’ve created. He’s so behind and predictable and Putin know it. What’s the career politician going to do to Russia? Impose sanctions that crush poor and middle class Americans via their energy costs? Yup. Brilliant!

[Gregmal]

And for the record I am Ukrainian. Well actually maybe Polish.100% don’t know for sure. The borders changed quite regularly around the time my family members were moving around. Western ideology and media is so ignorant of the rest of the world. You could recreate the “concerned” citizens protesting in Kiev with pictures from a PETA ad in front of a slaughterhouse in Idaho processing ribeyes for Kroger. We re just first worlders needing entertainment and things to be “concerned” about because Netflix is running out of good content and we haven’t had real problems in a while. But now because of a perfect storm of asinine politics and policies, supply and demand imbalances, and capitalism, energy and hunger crisis could very well be coming to NA. Folks reap what they sow. 

[Gregmal]

We see it all the time where these absolutely foolish and fantastically scripted narratives flow throw mainstream NA that ball up and arrogantly dictate how everything about Asian, Eastern Europe, and much of middle eastern culture is wrong and we’re superior. We lecture from our own glass house. And granted, there’s plenty wrong with the way things can happen in all those places, but the same is just as true about North America. Yet we continuously lecture and mind others business when most have no clue what they’re talking about and their limited knowledge of the ways of life of others in those areas come from America centric media. It’s all a joke.
 

We currently have 7%+ inflation, $100 oil a tick away, shortages of food everywhere, housing at the most unattainable levels ever. And everyone STILL wants to act like our own shit don’t stink and preach to China and Russia LOL! But what’s encouraging is that 1) it’s so easy to make money from all this it’s almost unbelievable. And 2) voting and poor policy finally seems to have consequences. It’s earned and deserved and about freakin time.

[Viking]

1 hour ago, Gregmal said:

Nah you’re just regurgitating the US centric media spin narrative. Why isn’t the US northeast part of England anymore? The people play a larger role than you think in deciding what they want. Ukraine is massively pro Russia. This all happens and the media gives you reason to get upset but how come none of you are talking about NY rewriting districts for voting purposes with the intent to seize control of areas? There’s this media porn fantasy that folks here love, the stuff liberty posts in the red alert thread….but you’re being played. Have you paid any attention to what’s come out of the current defamation suit against The NY Times? They openly admit to faking and ignoring fact checkers to put out manipulative narratives. Life isn’t about to change super drastically in Ukraine anytime soon. Sure there’s people you see in the street raging because CNN gives you the feed, or twitter shows you pictures, just as there’s truckers waiting for your boy Trudeau….but that too is a peanut in terms of its real life relevance. 

 

But regardless, you guys said Brandon was the answer. Enjoy what you’ve created. He’s so behind and predictable and Putin know it. What’s the career politician going to do to Russia? Impose sanctions that crush poor and middle class Americans via their energy costs? Yup. Brilliant!

@Gregmal you realize Russia is likely going to INVADE Ukraine. The kind that will kill lots of people AND destroy an economy. “The people play a role…”???
 

Where am i getting my information from? Well, i lived in Europe for a year when i was younger. (Lived in Indonesia when i was younger as well… little village at the of a dirt road rural kind of thing.) Both times i lived with locals and so got the unvarnished view of things - not the tourist view. I have lots of friends who have European background (they were born there but now call Canada home). My wife is Italian heritage (her parents have lots of interesting stories of growing up in Italy in the ‘40’s and ‘50’s). My brother in law is German (all of his family is still in Germany). I did a political science/economics/business degree in university. One of my hobbies (since i was a kid) is reading history - and Russia/Soviet Union was a focus. I read lots of European newspapers. Recently, i have founds some really interesting panel discussions on Ukraine on Youtube from people who live in that part of the world. What is going on in Ukraine is not too difficult to put together. 
 

Why do you attempt to label those who disagree with you? Why not simply debate the ideas? I don’t really care where you go to get your ideas. And I have no desire to label you in any way. That is just stupid. (I call it lazy brain… no thinking required.) What i do care about is your logic? Why do you believe what you believe. And the more detail the better. Because that might actually TEACH me something. Because i fully understand i do not understand the situation in the Ukraine very well. I am open minded to what others have to say…

Edited February 12, 2022 by Viking

[Gregmal]

Because as fun as it is making money off this stuff the stupidity and inefficiency of it all is highly aggravating. I don’t know why, it just is. I guess because I believe people should be forced to be accountable. After spending 4 years literally fabricating issues and hoaxes we now have 100% real and consequential ones and they’re largely the result of the whiny establishment/academic gated community crowd and the poor ones that just don’t know any better and need the system that feeds them to continue doing so. I mean even COVID….it was what you made of it. Last year I did the exact same thing as the year before, the same thing as this year. Hotels and resorts that were $60 last year and shut the year before, are $900 a night now. Why? Because it took some people 2 years worth of fuckin up to realize they shoulda just left shit alone to begin with and now all that stupid policy and economic decision making has to unwind. The energy issue is totally avoidable but we want to lecture about saving the climate or whatever that means. And now as we rewrite districts and try to reinvent election rules we want to pretend to be interested in “humanitarian” issues in china and Russia LOL. 
 

Not sure exactly how this relates to the exact title of the thread, but it’s a derivative; the top was last January/February and that’s not really debatable, but as things progress this is all relevant to not making more problems than necessary. Tech is largely a first world luxury. If we continue to ignore the biggest issues we ve faced in some time there’s virtually no way many of these companies can continue benefitting as they have in the past.

[cubsfan]

Holy shit Viking - you're delusional!  Biden is a total disaster with foreign policy.

Putin feared Trump, as did the Iranians, Chinese and North Koreans.

 

Deterrence is what these tyrants understand. And the loss of deterrence under Biden is 

train wreck. Idiots like Obama and Biden use their therapeutic approach to tyrants and these assholes laugh at them like Hitler laughed at Chamberlin.

 

Only a fool thinks US foreign policy is anything but a travesty.

[RichardGibbons]

1 hour ago, Gregmal said:

Ukraine is massively pro Russia.

 

Ukraine is a democracy. Surely if it's massively pro-Russia, the people would vote to join Russia and be done with it, rather than have a bunch of tank roll in, killing their people, destroying their infrastructure, and smashing their economy.

 

So what am I missing?  Ukraine isn't a democracy? People in Ukraine aren't massively pro-Russia? People in Ukraine are too stupid to vote for something a massive number want and would prefer to have their lives and livelihoods crushed instead through a violent annexation?

 

That said, the outcome of this is completely out of my control. So, I think you're 100% right that people on this board should focus efforts on making money off it. For my part, that's through fertilizer. I still own UAN and UAN calls, and a bit of CF.

 

It's hard to imagine that one of the key grain producers in the world can be annexed without it impacting worldwide grain supplies. And higher grain justifies higher fertilizer use and prices. Plus, this conflict could potentially lead to a further reduction of natural gas shipments in Europe, boosting NG prices. This could make their fertilizer production non-economic, which would advantage North American fertilizer producers where NG is cheaper.

[Gregmal]

Divine right inspired land grabs are much more complicated than either side fighting for them can convey. And they’re too hard as you said to really break down beyond certain levels. Thankfully, this is far from an Israel/Palestine situation. The majority of those people can’t agree on anything whereas much of Eastern Europe is very much ideologically on the same page. So it might create minor fireworks but I think the real impacts will be from EU/US actions and sanctions.

[Viking]

32 minutes ago, cubsfan said:

Holy shit Viking - you're delusional!  Biden is a total disaster with foreign policy.

Putin feared Trump, as did the Iranians, Chinese and North Koreans.

 

Deterrence is what these tyrants understand. And the loss of deterrence under Biden is 

train wreck. Idiots like Obama and Biden use their therapeutic approach to tyrants and these assholes laugh at them like Hitler laughed at Chamberlin.

 

Only a fool thinks US foreign policy is anything but a travesty.

@cubsfan Putin feared Trump? Trump had an open love affair with Putin. The french kiss in public kind of romance. Didn’t even try to hide it. Just watch the actual video footage of the times they got together. Trump looks like an undersexed teenage male who finally gets a date with the girl of his dreams…

 

That behaviour made Putin fearful of Trump? 
—————

Now did the generals in the Pentagon understand Putin? Yup. Did Trump’s fawning etc make them vomit? Yup. 

Edited February 12, 2022 by Viking

[cubsfan]

You don't have a clue Viking. 

 

When Putin tried to push the envelope with Trump in Syria - Trump smoked 200 Russian mercenaries in 1 day - and all of Putin's aggressive nonsense stopped.

 

Same when Trump flatten ISIS. Same with the Taliban when they got a taste of the MOAB.

 

The fat little dictator in N. Korea took notice, as did the Chinese.

 

"Speak softly and carry a big stick".

 

 And now, of course, Biden has destroyed deterrence, which will be terrifically hard to regain.

[DooDiligence]

a constant stream of straw men stuffed with ad hominem attacks by the willfully ignorant who stand on the sands of shifting burdens of proof

[rossef2]

HIstorian Victor Davis Hanson had a good piece on Russia and the earlier spat they had with Europe in 2016 (?) when Europe was trying to get the Ukraine into the EU and move western influence closer to Russia. At the time Putin was called all sorts by the media in Europe for annexing the Crimea however Hanson questioned what America would do if, for example, Canada and Mexico voted in Pro Russian governments. 

[cubsfan]

3 minutes ago, DooDiligence said:

a constant stream of straw men stuffed with ad hominem attacks by the willfully ignorant who stand on the sands of shifting burdens of proof

 

Listen to you -- talk about adding no value.

[Gregmal]

Hey it is what it is. Everyone is entitled to opinions and I respect infinitely more the opinions of people who put their money where their mouth is and over time some people just happen to be right more often than others. If your money is where your mouth is that adds up pretty quickly and if you’re wrong then you learn just as fast and those faulty opinions can quickly resolve themselves. And if there’s nothing on the line who gives a shit about that opinion anyway as it’s by definition, worthless.

[Spekulatius]

Russia regard their involvement in Syria as a success, the fact that some mercenaries got lost there doesn’t matter, because in the end. Thr US pulled out there.

I also think they regard the US retreat out of Afghanistan with Schadenfreude. Russia got their ass kicked there in the 80’s so they sure like to see others getting the same treatment.

 

I don’t think anyone understands what Putin is up to but what is clear is that he has become way more aggressive during the last year in particular. it could be because he is emboldened by the successful quasi annexation of Bellarussia or he just feel he need to act now for reasons unknown to us.

 

Anyways, the Politician who understands Putin best is the Finnish President Saudi Niinistö. Finland also has been threatened somewhat by Russia (potential NATO entry is the issue). They ordered just a bunch of F-35 jets from the US, which is a clear signal and not to Putins liking.

Edited February 12, 2022 by Spekulatius

[Viking]

26 minutes ago, Gregmal said:

Hey it is what it is. Everyone is entitled to opinions and I respect infinitely more the opinions of people who put their money where their mouth is and over time some people just happen to be right more often than others. If your money is where your mouth is that adds up pretty quickly and if you’re wrong then you learn just as fast and those faulty opinions can quickly resolve themselves. And if there’s nothing on the line who gives a shit about that opinion anyway as it’s by definition, worthless.

Oil was my number one ‘equity’ pick back in December. Oil was by far my largest holding in January (Cenovus and also some Suncor). The developing Ukraine situation just became another factor driving oil pricing oil higher. 
 

i have immense respect for Russia and China. They are playing chess while much of the West plays checkers (and this has been going on for years). It is just frustrating to me that they are so under-appreciated as adversaries. 
 

But, yes, lets get back to investing. The next geopolitical hit spot will be Taiwan. After the Olympics my guess is China will get busy with bringing the island back into the family. How the West responds to Russia in the Ukraine will inform China what to expect when they put the screws to Taiwan (spoiler alert; the Chinese are going to learn the West will do little. But my guess is China already understands this). 
 

What are the investment implications? What is the new oil? Semi-conductors. The question is how do you play the risk of a semi-conductor mayhem/shortage? My early read is get long semiconductor companies that are not domiciled in Taiwan. At a minimum companies who do not have a majority of their production in Taiwan. Hello Intel? I am an idiot when it comes to the semiconductor industry. Any suggestions from board members of best way to get up to speed?

Edited February 12, 2022 by Viking

[SharperDingaan]

The reality is that a large portion of the Ukraine  population is pro Russian, and that population largely lives near the Russian border. However they are a minority within the Ukraine, and the majority of Ukrainians choose democracy. So ..... if you can't get your way, and life would be better for you under Russian rule ... what do you do?

 

Even the US thinks Russia has little choice but to invade, and that they very likely will take some territory. Then Russia has to keep it, NATO has to demonstrate its chops, and the end goal is regime change without triggering nukes. The fighting stops when the Ukraine is no longer worth the cost, and there is a graceful way out. The hostilities stop with Putin in a box, as the next 'ace of spades'.

 

All one can do is stay as far away as possible, and position oneself for volatility. CNN isn't going to be reporting on the killing fields until well after the event, and it is going to be both heavily sanitized and censored. This isn't Disney .... What do think happens if/when the hundreds of tanks discover there is no gas one day in? at the same time the night killing begins? What do you think happens when the Russian oilfields, pipelines, refineries, loading facilities, and storage (including tankers) are severed, at the same time that Iranian sanctions and US drilling restrictions are lifted?

 

We're pretty sure o/g will do very well. 

 

SD

 

   

Edited February 12, 2022 by SharperDingaan