Have We Hit The Top?

[CorpRaider]

2 hours ago, Gregmal said:

You must love Faber then. That guy is a true character. 

Nah I don't like him or Roubini, although they both have sweet accents and Roubini has some nuance and isn't a total broken clock.  To me, Grantham isn't saying anything controversial, he even acknowledges the lack of observations available when he's in a longer-form interview.

[crs223]

2 hours ago, LC said:

I joke with my girlfriend that we are going on costco dates where we buy $1.50 hot dogs/pizzas, get some ice cream, $5 rotisserie chickens, 1.5L of french vodka for <$20, etc. etc.

 

She laughs but secretly I can't wait to do it. 

 

Don’t forget the samples!

[crs223]

2 hours ago, ERICOPOLY said:

My wife tells me the food court at the Costco in San Luis Obispo is on the outside of the building so you don't even need a Costco membership to eat there.

 

In Santa Barbara they now require a membership to buy food outside.  Lines dropped by about 90%

[ERICOPOLY]

Costco also has gift cards for sale at significantly less than face value -- like a pack of four $25 gift card for $69.99 to Coldstone Creamery.  Or two $25 See's Candy gift cards for $38.99 (with no expiration date).

Edited September 1, 2022 by ERICOPOLY

[matthew2129]

4 hours ago, LC said:

 

Grantham is tough to like...

 

 

 

4 hours ago, Gregmal said:

I mean its literally clockwork how predictable these guys are. Quiet for a while and then the first 3-5% pullback start cranking up the rhetoric about caution and chaos and doom and all that other stuff. 

Ironic part is that Grantham was calling Nasdaq a "super bubble" in January 2021 while simultaneously being very bullish China and emerging markets. Since then, Nasdaq is almost exactly flat and China is down 50%. And now dude's taking a victory lap. Go figure. 

[Gregmal]

2 minutes ago, matthew2129 said:

 

Ironic part is that Grantham was calling Nasdaq a "super bubble" in January 2021 while simultaneously being very bullish China and emerging markets. Since then, Nasdaq is almost exactly flat and China is down 50%. And now dude's taking a victory lap. Go figure. 

That’s Wall Street marketing for you. Ever hear of Whitney Tilson?

[Gregmal]

A lot of the same people claiming the Fed needs to keep raising because of inflation, who simultaneously are saying housing imploded, are citing the shelter component as the reason inflation hasn’t peaked!

[fareastwarriors]

 

 

My inflation special lunch today. 

 

 

I'm set all for calories and salt for the rest of the week!

Edited September 1, 2022 by fareastwarriors

[Gregmal]

9 minutes ago, fareastwarriors said:

 

 

My inflation special lunch today. 

 

 

I'm set all for calories and salt for the rest of the week!

LOL destroy the economy because @fareastwarriorslunch cost $4 and some fruitloop in NYC paid $13 for a latte.

[Spekulatius]

At least you got the spicy buffalo sauce.

 

Inflation saving tip for Popeye: If you order at Popeye and want sauces with it, ask for them after they completed the order. In 80% of the cases, they won't charge you for it. (they are too lazy to wring up the register again)

 

If you ask for sauces when ordering, they will charge you 50c each.

 

This is how you beat inflation.

 

[dealraker]

Further on Grantham and stock/business prices...or is it values?  Or what are we really focusing on?

 

Business value is often built best or most during downturns.

All kinds of price inflations and price collapses are in the future or present --- and past of course.  

Secular change and cycles are not the same.

 

My family owned newspapers and a.m. radio stations, both secular change disasters that fortunately we didn't fully experience because we sold early enough and diversified.  We also owned several builders supplies, sold all but one and basically indexed in the markets (along with buying a lot of Lowe's because we thought they were superior to us) which turned out bizarre fantastic --- that was 40 years ago.  I was a partner buying and building an insurance broker that we merged with one of the big shots --- mainly because a new guy showed up in town and was cleaning our clock, yes running circles around us and we could not keep up.   But the insurance broker business somehow remains  phenomenal --and we have made many multiples of our merger price- which I'm perplexed with to say the least.  In the end we did far better than the young man (6 years younger than me) who was kicking our butts in town.

 

But who could have predicted that...or anything else?  Not me.  

 

In any event I'm a tad annoyed with the Grantham types and their endless writings that obviously seek eyeballs and admiration.  There's too many things to do other than sit around trying to expert the next 7 or scream bloody murder that this or that is sure to happen --- of course because it happened in the past.  My wife and I own 300 or so stocks (I often begin to count them but lose interest), and most began with outlays of $3000 or so, much like what my Berkshire stock was worth when I inherited it.  Over time?  Oh my, change for the good.

 

Prices to me aren't value.  Value is what you get over time averaging out the ups and downs in extremes.  Grantham discusses stock market prices endlessly and he loves words that if you read them too much?  Well, you're likely to need drugs and counseling and likely both.  Life is great...if you can stand it.  

 

A percentage in cash is a fantastic idea and much needed for living consistently and sanity.   Over time cash heads towards zero in value with a good amount of speed.  If you are the type to hold a large cash position at all times then I'd basically tell you, if you are young, to count that as zero in your net worth calculation.   And if you are smart enough to know when to hold lots of cash?  Well, you are a person I'm not aware of yet.  

[Spekulatius]

If Grantham would change his opinion all of a sudden and became bullish, he would lose 3/4 of his audience. Think about this for a while. He is in the financial doomsday business not in the investing business at this point.

[crs223]

9 hours ago, Gregmal said:

LOL destroy the economy 

 

Who has a more convincing story that the economy is going to blow up and it’s all the fed’s fault?

 

a) @Gregmal

 

b) Peter Schiff

 

c) Grantham

 

 

Edited September 1, 2022 by crs223

[Gregmal]

A lot of people in the market simply dont know or truly believe that they are buying companies or businesses. The feel smart reading general population produced fodder not knowing todays headlines are more or less meaningless. Add in the systematic incentives for creating transactions, and you can see why so many behave the way they do. The majority of the financial world's ecosystem incentivizes transactions, not sound investing. 

[TwoCitiesCapital]

13 hours ago, ERICOPOLY said:

And the other thing you do is put your house on AirBNB and learn how to go camping for free whenever your house is occupied:

 

"Dispersed camping is generally allowed on public land for a period not to exceed 14 days within a 28 consecutive day period. "

 

https://www.blm.gov/programs/recreation/camping

 

I'll be doing this for the winter. Have two bedrooms of my three bedroom condo rented. 

 

Will have a rooftop tent on the car and take it out west for 3-months while the renters clear most of my mortgage. 

 

[crs223]

40 minutes ago, dealraker said:

Grantham types and their endless writings that obviously seek eyeballs and admiration.

 

All authors want eyeballs.  All humans want admiration.  This is not unique to doom-and-gloomers.

 

I think what you are trying to say is that Grantham-types don’t believe what they say.  I’m sure they do.  What’s so unbelievable about  “nonstop money printing is bad”?

 

Of course the doomers have been wrong for the past 20 years.  So either “nonstop money printing is not bad” or there really is no “nonstop money printing”.

[Gregmal]

Well, theres also the notion that people become accustomed to just throwing around terms such as "money printing" when they dont even really understand it or its perceived impacts. Restoring or recapitalizing banks following a systematic failure is a lot different than sending every living soul $1000 a month. So many of these people seem to think doing things to help stabilize an economy(something in pretty much everyones interest) is the same as just handing out freebies all the time. Like who and WTF was talking about money printing and "liquidity sloshing around the system" in 2015? That clearly wasn't the case, yet there was no shortage of people saying that. 

[Spekulatius]

31 minutes ago, crs223 said:

 

All authors want eyeballs.  All humans want admiration.  This is not unique to doom-and-gloomers.

 

I think what you are trying to say is that Grantham-types don’t believe what they say.  I’m sure they do.  What’s so unbelievable about  “nonstop money printing is bad”?

 

Of course the doomers have been wrong for the past 20 years.  So either “nonstop money printing is not bad” or there really is no “nonstop money printing”.

I actually think that Grantham believes what he says. I also believe he has boxed himself in a certain corner of the market and couldn't get out, even if he wanted to.

 

Those people that are known to occupy a certain niche are not really worth listening to, or at least just listen to their arguments and come to your own conclusion, if you do.

 

That's why listening to Druckenmiller and others is much more valuable - they don't really have anything to sell and they do change their opinions, so they have an open mind, and hence they tend to speak freely.

[Gregmal]

Yup. Thats the thing. Some folks just always peddle the same shit. Nothing worth listening to. In fact, I think one of the greatest mistakes people make is that they start giving it credibility when its the flavor of the month, thinking the author is an expert on the subject. 

[crs223]

1 minute ago, Spekulatius said:

That's why listening to Druckenmiller and others is much more valuable

 

Druckenmiller is great.  In one interview he explains how the doom/gloom narrative makes complete sense (gains trust/credibility) … and explains “nevertheless essentially all my money was made being long” (kill shot).

 

He’s like a deprogrammer for the doom/gloom cult.

[changegonnacome]

21 minutes ago, Spekulatius said:

That's why listening to Druckenmiller and others is much more valuable - they don't really have anything to sell and they do change their opinions, so they have an open mind, and hence they tend to speak freely.

 

I'd add to this Ray Dalio - yes still at Bridgewater (a macro fund, so bias towards catastrophe)........but I dont think Ray based on all his activities for the last few years....is really in the doom selling business. He has more money than god and an earnest teachers bent to pay his knowledge forward, you've seen his material........Dalio & Bob Prince I listen to more than Grantham.........it just so happens that Dalio/Prince have a negative view point which rhymes with Grantham's but they have much more balanced & rigorous framework......and like it or not the macro matters right now inflation, demand, money supply, interest rates.............& yes Druckenmiller is the GOAT cause he just runs his own money & he doesn't seem to care one iota about fame, he just wants to make Benjamins & he changes his mind on a dime.

Edited September 1, 2022 by changegonnacome

[ERICOPOLY]

2 hours ago, TwoCitiesCapital said:

 

I'll be doing this for the winter. Have two bedrooms of my three bedroom condo rented. 

 

Will have a rooftop tent on the car and take it out west for 3-months while the renters clear most of my mortgage. 

 

Awesome

[Spekulatius]

Granite state vodka  -$6.99 on sale.

 

Best used mixing. You can create low cost "Desperado's" mixing this with Budweiser. Enough proof to use as a Molotov cocktail. Use to light your neighbors cat on fire or throw one on the roof on neighbors roof who pissed you off a long time ago. These random acts of vandalisms keep real estate prices and taxes low in your neighborhood and benefit everyone.

 

This is how your beat inflation!

 

 

Edited September 1, 2022 by Spekulatius

[Ross812]

10 minutes ago, Spekulatius said:

Granite state vodka  -$6.99 on sale.

 

Best used mixing. You can create low cost "Desperado's" mixing this with Budweiser. Enough proof to use as a Molotov cocktail. Use to light your neighbors cat on fire or throw one on the roof on neighbors roof who pissed you off a long time ago. These random acts of vandalisms keep real estate prices and taxes low in your neighborhood and benefit everyone.

 

This is how your beat inflation!

 

 

 

Your post just made my head hurt. 

[TwoCitiesCapital]

I was a little late to the inflation will persist party. Definitely was on the 'transient' and the deflation is the risk side. Still largely there in the near term, but agree that ita likely to be higher over the next decade than the last.  

 

That being said, I've regularly made the argument equities are not an inflation hedge. They do terribly in periods of elevated inflation. 

 

The attached shows the evolution of CAPE ratios in the US in varying environments of inflation. 1-3% is the sweet spot. Anything above or below that crushes multiples. 

 

 

The red X is where we're at today with inflation ~8-9% and trailing CAPE @ 29.  There needs to be some combination of massive profit growth (to bring multiples down), multiple contraction (to bring multiples down), or a decline in inflation to sub-3% fairly quickly.

 

With corporate profits already juiced from 2020/2021 stimulus, margins near record highs and contracting, and tax rates already lowered in 2017, seems a bit much for me to think it'll be corporate profits growth playing a huge role here. 

 

So multiple collapse and/or disinflation are the plays to get is back to more normalized environments. 

Edited September 1, 2022 by TwoCitiesCapital