dwy000 Posted March 9 Posted March 9 6 minutes ago, Spekulatius said: Wether this war is useless is highly debatable, at least Khamenei is dead and even if this is probably more a symbolic victory it stills sents a message. Also Iran’s military capability for sure is severely degraded. Success in the near term of us depends on re- opening the straight or Hormuz. I think it’s possible, because Iran has only Shahed drones in large supply and they are only good for stationary targets (due to fixed GPS programming) and likely won’t work against ships at all. I think what a Trump does is very risky but it’s not fair to say at this point that this war is a failure or useless. in my opinion, so far the operation has been successful and has achieved as much as one could hope for in barely more than a week. But what has it been a success at? If success in the near term is opening the strait, that is exactly where we were 2 weeks ago. And yes their military has used a bunch of rockets but so has ours and multiple countries in the region have taken damage. The 86 year old hard liner is gone - replaced by a younger more hardline guy. If the goal was making the US safer or even the region safer, none of that has been achieved. This looks increasingly like North Korea where the dictatorship decides the best route to safety for themselves is to ensure.they have nukes as quickly as possible to avoid being attacked.
cubsfan Posted March 9 Posted March 9 36 minutes ago, Parsad said: It's funny how you guys equate one with the other. So because someone is a pedo, but makes decisions you like, makes it ok because the other guy is not a pedo, but is doing other evil things. That's not very sound logic...it's what keeps you in trouble! Cheers! You were supposed to laugh Brother Parsad. We already know Trump is a pedo, thief, blowhard, dictator, NAZI and hates puppies. You convinced us!
dwy000 Posted March 9 Posted March 9 The problem is the same one over and over for this administration. Take a goal that nobody with common sense would object to, put the most incompetent people in charge,.completely and utterly fuck up the execution and then walk away with the situation worse than when you started. Whether it's doge, ICE, trade deals or Iran, it's exactly the same. Incompetence. Everybody can get on board with the idea that Iran can't get nukes. But instead of selling that as the goal and explaining how we were going to do it (both domestically and internationally) we rush in and stumble around like a drunk at a bar. And then stumble out later having pissed off everyone else and not achieving anything.
Spekulatius Posted March 9 Posted March 9 20 minutes ago, dwy000 said: But what has it been a success at? If success in the near term is opening the strait, that is exactly where we were 2 weeks ago. And yes their military has used a bunch of rockets but so has ours and multiple countries in the region have taken damage. The 86 year old hard liner is gone - replaced by a younger more hardline guy. If the goal was making the US safer or even the region safer, none of that has been achieved. This looks increasingly like North Korea where the dictatorship decides the best route to safety for themselves is to ensure.they have nukes as quickly as possible to avoid being attacked. It would significant success to re- open the straight of a Hormuz despite the Iranian threatening to close , because Iran loses leverage over oil and LNG flows and with that a huge bargaining chip. The straight of Hormuz is literally in Iran’s backyard and if they can’t choke the flow through the straight any more, it shows how powerless they are. Irans best chance is to outlast the USA in a war of attrition, but they are taking quite a pounding here and they may not have much left to threaten anyone. they also alienated all their formerly neutral neighbors with their missile and Shahed attacks. The question for Trump is if he goes full bore regime change or tries to make a deal with the current regime or just destroy as much as possible and then leave them be.
dwy000 Posted March 10 Posted March 10 3 minutes ago, Spekulatius said: It would significant success to re- open the straight of a Hormuz despite the Iranian threatening to close , because Iran loses leverage over oil and LNG flows and with that a huge bargaining chip. The straight of Hormuz is literally in Iran’s backyard and if they can’t choke the flow through the straight any more, it shows how powerless they are. Irans best chance is to outlast the USA in a war of attrition, but they are taking quite a pounding here and they may not have much left to threaten anyone. they also alienated all their formerly neutral neighbors with their missile and Shahed attacks. The question for Trump is if he goes full bore regime change or tries to make a deal with the current regime or just destroy as much as possible and then leave them be. Opening up the Strait of Hormuz doesn't really signal a defeat for Iran if the US and Israel stop bombing. As you mention, it's in their backyard so the threat of a shutdown or the threat of sinking a few ships (or actually hitting one) is the leverage. Making the regime more isolated and more defensive doesn't feel like a way to make everyone else safer. At the end of the day the only way to permanently remove Iran as a threat is to have them want that too - by being an active beneficiary of international trade. Whether that is because the citizens force it thru refime change or because the regime adopts that is up to them not us. Fly over bombing has never led to regime change, it just hardens the regimes resolve.
Blake Hampton Posted March 10 Posted March 10 (edited) - A $2.1 trillion fiscal deficit, a $39 trillion national debt - A $1.1 trillion current account deficit, a -$28 trillion international investment position - A system that's leveraged to the absolute fucking hilt, a lot of which was driven by low rates - The biggest stock market and real estate market bubbles in history And Trump is starting wars in the Middle East... Brilliant. Edited March 10 by Blake Hampton
Blake Hampton Posted March 10 Posted March 10 This is a man who graduated from Wharton with an economics degree by the way. It certainly doesn't give me faith in our leading universities.
Parsad Posted March 10 Posted March 10 53 minutes ago, cubsfan said: You were supposed to laugh Brother Parsad. We already know Trump is a pedo, thief, blowhard, dictator, NAZI and hates puppies. You convinced us! I don't think he hates puppies...bigot, but not a Nazi. The rest is accurate, including world's greatest narcissist. I'm pretty sure you've convinced yourself...the hallucinations are quite real! Cheers!
thepupil Posted March 10 Posted March 10 9 minutes ago, Blake Hampton said: - The biggest stock market and real estate market bubbles in history stock and real estate valuations seem pretty reasonable to me. how do you define "bubble"? I forget where I heard it, but someone once said "something that could fall 50% and still be expensive" might be in a bubbly valuation. I can say pretty wholeheartedly that if USA stocks and RE fell 50% (absent some great extreme event), they'd be pretty cheap (~13x trailing earnings 11x forward for some of best companies in world, 10% caps for RE). So i'd say we're not bubble. maybe a touch expensive. maybe a touch AI fueled. maybe a 20% downturn away from good risk/reward. but bubble? nope. not the whole market. I'd regard 1980's Japan as a much bigger bubble than the stock/RE market of the US today.
Parsad Posted March 10 Posted March 10 13 minutes ago, Blake Hampton said: This is a man who graduated from Wharton with an economics degree by the way. It certainly doesn't give me faith in our leading universities. Funny how they didn't defund Wharton! Cheers!
Blake Hampton Posted March 10 Posted March 10 (edited) 27 minutes ago, thepupil said: Stock and real estate valuations seem pretty reasonable to me. The Stock Market The average investor is paying $5.40 for every $1 of equity that has made about 12¢ annually going back basically forever: Fortune: How Inflation Swindles the Equity Investor A lot of what has fueled recent high returns on equity will end with the advent of inflation: The Real Estate Market Real estate has softened a bit over the last couple of years, but my mind is living in a world of higher long-term rates than the ones we currently have. Since the 10-year Treasury yield is the base rate for mortgage lending, this would be devastating to housing affordability. Edited March 10 by Blake Hampton
Blake Hampton Posted March 10 Posted March 10 There is no scenario in my mind where the United States continues on its current path without experiencing some form of fiscal crisis within the next decade or two. This would have an enormous impact on the valuations of essentially every single asset class. Stocks are simply pieces of paper that entitle you to the discounted future earnings of a company. Stocks are NOT priced appropriately if their valuations aren't taking into account the future. Future earnings are literally the underpinning of what makes them valuable. It would be foolish to think that the coming future will look like the past. It will not.
dwy000 Posted March 10 Posted March 10 10 minutes ago, Blake Hampton said: The Stock Market The average investor is paying $5.40 for every $1 of equity that has made about 12¢ annually going back basically forever: Fortune: How Inflation Swindles the Equity Investor A lot of what has fueled recent high returns on equity will end with the advent of inflation: The Real Estate Market Real estate has softened a bit over the last couple of years, but my mind is living in a world of higher long-term rates than the ones we currently have. Since the 10-year Treasury yield is the base rate for mortgage lending, this would be devastating to housing affordability. Wouldn't ROE being at 18% vs a historical average of 12% suggest the market is hugely undervalued? It needs to go up 50% just to match historical avg.
thepupil Posted March 10 Posted March 10 (edited) Okay...here's a quick AI generated (may have errors but directionally right) table. that shows the PE if these companies traded for 2x book. I just wish i would buy AAPL for 1.5x and MSFT for 6.5x...let me know when these get there. these companies are 1/3 of US market...might they be worth more than book value? or 2x book or 10x book? or 43.3x or 28.33x? Edited March 10 by thepupil
Blake Hampton Posted March 10 Posted March 10 37 minutes ago, Parsad said: Funny how they didn't defund Wharton! Cheers! It seems to me that a lot of Trump's support is built on hatred, more specifically by people who are upset with the system and feel victimized by it. It feels to me more like people trying to burn down the house they're currently living in, with no possibility of getting out once it catches fire. Anyways... Watching him attack Ivies was a guilty pleasure of mine.
Blake Hampton Posted March 10 Posted March 10 4 minutes ago, thepupil said: these companies are 1/3 of US market...might they be worth more than book value? or 2x book or 10x book? This is a different conversation, I'm talking about market averages. Return on equity has increased from the historical 12% average to 18% due to low interest expenses and reduced corporate taxes. Higher returns on equity end up fooling people because they simply look at P/E ratios and then call it a day. Here's the Dot-Com bubble:
Blake Hampton Posted March 10 Posted March 10 It's interesting because if you have an entire decade of unsustainably high ROE, even the Shiller Ratio can end up fooling you. I have no clue when all of this will end, no one does. But I do know the players are dancing in a room without clocks on the wall. That isn’t investing, it’s speculation.
thepupil Posted March 10 Posted March 10 1 minute ago, Blake Hampton said: This is a different conversation, I'm talking about market averages. Return on equity has increased from the historical 12% average to 18% due to low interest expenses and reduced corporate taxes. Higher returns on equity end up fooling people because they simply look at P/E ratios and then call it a day. Here's the Dot-Com bubble: the S&P 500 is practically unlevered and saw very little impact in earnings from ST increased rates. further 90%+ of the S&P 500 is investment grade. the wgt average maturity of the S&P 500 Corporate Investment grade index is 10.5 years. I made this argument 4 years ago when it was 12-13 years. and we're a few years into that. it will take a long ass time for increased borrowing costs to matter or be material and corporates can, in the mean time, do stuff like grow/buy back shares/ buy back debt etc to ameliorate any deleterious effects of increased borrowing costs. IG spreads are low and corporate america is in great shape from a credit perspective. and you know what, I've been saying this for a long time and corporate borrowing costs have ticked up a little bit. the typical coupon is 4.3%...it used to be lower...but...it's fine... corporate taxes may go up. i expect they will. and stocks might be worth 10-20% lower if and when that happens. let's say it happens in 5 years. you gonna not invest because of that? i don't know man...seems fine.
Blake Hampton Posted March 10 Posted March 10 Just now, thepupil said: i don't know man...seems fine. Buffett indicator is at 230%. Dot-Com peak was 190%.
dwy000 Posted March 10 Posted March 10 16 minutes ago, Blake Hampton said: This is a different conversation, I'm talking about market averages. Return on equity has increased from the historical 12% average to 18% due to low interest expenses and reduced corporate taxes. Higher returns on equity end up fooling people because they simply look at P/E ratios and then call it a day. Here's the Dot-Com bubble: I'm not sure what Price and Divisor are in the spreadsheet but it looks like ROE dropped during the dot.com bubble because the earnings collapsed not because the share price was too high. Honestly never seen the argument for stocks being overpriced because their ROE was too high! Usually it's the other way around (paying too much for earnings)
thepupil Posted March 10 Posted March 10 8 minutes ago, Blake Hampton said: Buffett indicator is at 230%. Dot-Com peak was 190%. don't know about you but I've never bought a stock based on its market cap to GDP ratio. i'm moderately sympathetic to some of this stuff. in truth, I don't own any US indices. my 401k is bonds and my PA is all individual stocks that are "different" than "the market" (in my humble opinion). but i regard the index and its big constituents as an incredibly fierce competitor, a fast growing unlevered behemoth..to be respected... and the mean reversionist bear stuff (Shiller, mkt cap to GDP, P/B) just doesn't at all seem applicable to large swathes of the stock market. the book value of NVDA is meaningless. that's 7% of the stock market. we can debate the sustainability of NVDA's competitive advantage, the duration of the AI DC buildout; i suspect NVDA is not worth $4.5 trillion and the the PV of its future cash flows is less than that...but do i truly know that? of course not. and it's not because of its market cap relative to what it earned 3,5,10 years ago or the GDP of the US. its because its fueling a revolution of unknown duration and magnitude.
Castanza Posted March 10 Posted March 10 48 minutes ago, Blake Hampton said: There is no scenario in my mind where the United States continues on its current path without experiencing some form of fiscal crisis within the next decade or two. This would have an enormous impact on the valuations of essentially every single asset class. Stocks are simply pieces of paper that entitle you to the discounted future earnings of a company. Stocks are NOT priced appropriately if their valuations aren't taking into account the future. Future earnings are literally the underpinning of what makes them valuable. It would be foolish to think that the coming future will look like the past. It will not. “Decade or two” What really would be foolish is sitting out half your investing career because of some personal hunch. You’re right that the future doesn’t look like the past. History shows us that generally things improve… Sometimes I think you’re allergic to making money…
Parsad Posted March 10 Posted March 10 23 minutes ago, Castanza said: “Decade or two” What really would be foolish is sitting out half your investing career because of some personal hunch. You’re right that the future doesn’t look like the past. History shows us that generally things improve… Sometimes I think you’re allergic to making money… That would be an awful allergy! Especially for a decade or two. I think markets are somewhat overvalued in certain areas...it certainly isn't 2000, but things are skewed. Again, I can't predict the future. Earnings are certainly more real this time around (AI) compared to 2000 (Internet). If I can't find something, I go to cash in my trading accounts like I was the last 5 months...now I'm starting to find stuff again. You always find opportunity...you just have to be patient. Especially for us smaller investors, there is always some opportunity every year. Cheers!
Blake Hampton Posted March 10 Posted March 10 3 minutes ago, Parsad said: That would be an awful allergy! Especially for a decade or two. I hope a U.S. fiscal crisis is a hundred decades off. But with how Trump is currently acting, I'm starting to feel like I won't have to wait that long.
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