Kuppy on Inflation

[hasilp89]

makes sense from a high level, to some extent though it will be global right, if china shuts down plants it won’t matter if we keep our ports open.

30 minutes ago, Gregmal said:

I definitely would have figured heading into mid terms there would be more focus on solving this. 

I’m sure they’re very focused on it it’s probably just that they are incompetent  and ultimately incapable of fixing it.

 

 

 

 

[Spekulatius]

UPS - this is what pricing power looks like. International revenue per parcel was up ~15%:

 

 

It will be interesting to see the cost trend for Amazon. I  have seen based in brokerage reports that their package unit cost are lower -  roughly in  $5-6 range. This is in part due to smaller  package size though. I am fairly certain that Amazon prime is going up by $20.

[Gregmal]

Timely bumpity, bump, bump. 

 

All you had to do was be open minded. Listen, read, connect dots. Question the current narrative peddlers. Easy peasy. In fact, all you had to do to make boatloads of money on this was NOT sit around peculiarly wondering about what a fund manager thought about vaccines, or whether or not he's ever had a losing trade LOL. And even there, chances are YOU were wrong again. Market constantly teaches us lessons. Be humble, internalize them, and make money on the next opportunity. 

[JRM]

He's a good follow, and has been hot lately.  I cringe when I read his takes on the nuclear power industry.  He clearly doesn't know what he's talking about even if he is right on uranium.  That's true of most uranium bulls I come across, though.  If he's more of a high level macro trend guy, that's fine.  

 

He also took a swing at RSX right before it went dark.  Nobody gets them all right.

[Gregmal]

That’s the thing I think gives away people who get it and people who don’t. Everyone misses. The purpose IMO of investing is maximizing the risk to reward ratio. When you look for certain setups, sometimes the best ways to do it involve risks. If you can lose 100% but can make multiples, that’s what you want if you’re any good at identifying them. People who focus on “he got that one wrong” are doing the equivalent of walking up to a blackjack table, seeing one hand, seeing a guy lose, and exclaiming “he just lost everything”….technically true, 100% loss on the one hand…duh, that’s how the game gets played, but really not accurate in the grand scheme of things and really just revealing ignorance on the part of the observer. 

Edited March 6, 2022 by Gregmal

[Spekulatius]

26 minutes ago, JRM said:

He's a good follow, and has been hot lately.  I cringe when I read his takes on the nuclear power industry.  He clearly doesn't know what he's talking about even if he is right on uranium.  That's true of most uranium bulls I come across, though.  If he's more of a high level macro trend guy, that's fine.  

 

He also took a swing at RSX right before it went dark.  Nobody gets them all right.

His KEDM letter is worth considering,  it is quite an extensive piece of work. I do think his risk management is no nonexistent. There is a reason his track record before 2018 or so disappeared. Also, take his Twitter takes with a grain is salt - first he talks about owning a “fukton” of RSX then it’s just a few hundred BP of losses. He also was long a Kasachstan Fintech that lost 2/3 of its value very quickly.

 

[Gregmal]

Agree. If you have trouble sourcing ideas or are one of the “cash” crowd members….I’d totally say it’s worth the $3k a year or whatever for KEDM. Amazing and extensive set of unique data for idea generation. Much of which is market neutral. 
 

Have also noticed the adjectives tending to change postmortem LOL but whatever. What do I care? I just like hearing unique ideas. No one determines my position sizing but me, so whatever he s doing or not doing isn’t something I care about. 

[Gregmal]

https://seekingalpha.com/news/3812242-meat-13-gasoline-38-lifts-all-items-cpi-to-79-year-on-year

 

Interesting. Still, despite everything the eye can see, theyre saying its 7.9%. And some people believe them. Because Psaki said it and its also Putins fault and called on 3 friendly reporters. Run Forest, run!

Edited March 10, 2022 by Gregmal

[Gregmal]

 

 

Once upon a time people complained about his risk management. Wonder how many of them did that last few years?

 

[CharlesMunger]

 

[gfp]

For those that follow Kuppy's various inflection theses - we do appear to be getting the inflection / breakout / whatever in Uranium prices

 

https://pracap.com/the-bigger-short/

 

https://numerco.com/NSet/aCNSet.html

 

[UK]

26 minutes ago, gfp said:

For those that follow Kuppy's various inflection theses - we do appear to be getting the inflection / breakout / whatever in Uranium prices

 

https://pracap.com/the-bigger-short/

 

https://numerco.com/NSet/aCNSet.html

 

 

I follow this, but more for the interest. However atractive it may sound (and it sounds atractivelly), I would lose my sleep making a big bet on such thing. For big bet I like JOE much better:). Does anyone here think differently?

 

There was also an article about uranium in WSJ yesterday: https://www.wsj.com/finance/commodities-futures/nukes-are-back-but-uranium-is-in-short-supply-44c4ccbf

 

 

[thowed]

3 minutes ago, UK said:

Does anyone here think differently?

 

Nope.  I've been reading about Uranium occasionally for years, but never 100% understood it & prefer stuff where there's a really smart CEO in charge to help things along.

 

I can see Uranium working big time, but I've learned that it's safer not to get involved with stuff you don't fully understand.  I'll stick with my Oil Royalty Cos for now.

 

Edit: Just so everyone is aware, Kuppy has blown up big time in the past.  So while sometimes he gets it really right, the opposite can also apply, so I'd say be wary of coat-tailing him if you don't fully understand it.

Edited September 14, 2023 by thowed

[Saluki]

Uranium is hard to understand.  Apparently there are ways to change the way you refine it which can affect the available supply.  People don't disclose how much they have so although he thinks there is a shortage coming, it's hard to tell. And there are non-economic reasons that people move away from Nuclear, like the Fukushima accident and ESG.  Although nuclear doesn't produce greenhouse gasses, the greens in Germany shut down their relatively new nuclear reactors, and when they didn't have enough electricity, they turned back on their coal generators.  They now have the dirtiest air in Europe except for Poland. 

 

Putin has made a claim that Ukranians want to bomb their own nuclear plant to blame Russia (which is something that Russia usually does before they do it themselves and blame Ukraine). If, god forbid, there is a nuclear incident in Ukraine, which has more reactors than Chernobyl, you could easily see other shuttering their reactors due to public pressure. 

[rkbabang]

Good interview 

 

Kuppy and Mike Alkin “Uranium” Interview at the 2023 World Nuclear Association Symposium

https://pracap.com/kuppy-and-mike-alkin-uranium-interview-at-the-2023-world-nuclear-association-symposium/

[UK]

https://www.economist.com/finance-and-economics/2023/09/21/why-uranium-prices-are-soaring

[gfp]

update -

https://numerco.com/NSet/aCNSet.html

[Gregmal]

Yea but despite those returns I heard he’s had a loser or two…

[changegonnacome]

I’m with Kuppy on this one  

[mattee2264]

There are a few guys out there usually keen on commodities who are talking up the idea inflation isn't dead.

 

Clearly there is a lot of noise in the inflation data and the measures of inflation are imperfect. 

 

But I still feel the short term trend for inflation continues to be lower. 

 

Firstly, companies/landlords took the piss with price increases during the COVID period taking advantage of the extra spending power consumers had with all the COVID handouts and their excess savings and the strong economy and using the supply chain issues and material cost inflation as an excuse. Those price increases are unlikely to stick. And a focus on the rate of change ignores that compared to pre-COVID prices are up at least 20% and double that in many instances and that is going to result in a lot of price resistance and pressure for price cuts. We already saw Black Friday a ridiculous amount of discounting across the board even in sectors that have absolutely nothing to do with retail. 

 

Secondly, while rate increases are pretty weak, they do have a lagged impact so their full impact hasn't been felt which should exert some modest downward pressure on inflation this year. And even in a soft landing it implies weak economic growth. 

 

Medium term though inflation will rebound because emergency fiscal spending seems to be entrenched and once the economy recovers that is going to add far too much fuel to the fire and the Fed is bound to sacrifice inflation for financial stability and slash rates too far and commodity prices will rebound once the global economy (especially China) starts to recover. 

[scorpioncapital]

"Firstly, companies/landlords took the piss with price increases during the COVID period taking advantage of the extra spending power consumers had with all the COVID handouts and their excess savings and the strong economy and using the supply chain issues and material cost inflation as an excuse. Those price increases are unlikely to stick."

 

What landlords? it was and is actually illegal in most developed countries to increase rates even at the rate of inflation nowadays. mandated below inflation rate rises. sure, you can have deflation but only because of totalitarian boot to the head of any economy.

[Santayana]

14 hours ago, scorpioncapital said:

What landlords? it was and is actually illegal in most developed countries to increase rates even at the rate of inflation nowadays. mandated below inflation rate rises. sure, you can have deflation but only because of totalitarian boot to the head of any economy.

A few big cities in the US have rent control, but for the most part there is no legal limit to rent increases anywhere in the US.  It's whatever the market will bear. My town has seen rental rates for single family homes almost double in past 4-5 years.

[scorpioncapital]

ah ok, i was not talking about the US. in other countries you aren't allowed to kick someone out except if you sell the property or do some extensive renovation or for family members to move in. Since that is quite rare rents are capped below or at inflation rate, although there are many landlord scams now where they try to evict for false reasons , re-rent at 100-200% price increase, and the tenant is too scared or unknowledgeable to ever go back and investigate who actually moved in. 

Edited January 17 by scorpioncapital

[Gmthebeau]

Never heard of this guy, but a search on the internet seems to reveal he has totally blown up multiple times.  Apparently does a top notch job scrubbing the internet of it too including wayback machines.  Many small no name funds make up their results so unless you are personally invested in his fund I would take any claimed returns with a huge grain of salt.  Perhaps he has learned from past blunders and improved his process though.  A big red flag for me is that he sells research.  Does Ackman sell his research?  How about Drunkenmiller?  Or Soros?  

Edited January 20 by Gmthebeau

[gfp]

End of year Praetorian investor letter for those interested

2023 Q4 Letter - Final Approved.pdf