Munger_Disciple Posted February 8, 2023 Posted February 8, 2023 (edited) 5 hours ago, dealraker said: Individual stocks. It is likely slightly below 13%, maybe closer to 12.5 or so. I have now way of knowing now short of going back to plugging in the contributions that began with $50 a month and then went up towards the 1994 end. I show this to my great neices and nephews. They buy crypto and tell me how "out of it" I am. Think I'm kidding? LOL, they'll learn. They too quote past returns as proof stocks are inferior. @dealraker For simplicity, let us assume you put $30K into the account in early 1991. That's roughy 40X in 32 years which comes to 12.2% CAGR which is in the same ballpark as your guess. What surprises me is that for the first 20 years, it returned 4x which comes to 7.2% CAGR; so it seems like your returns went up massively almost 10x in the last 12 years which comes to 21.1% CAGR during this time! Can you share any explanations for such stunning improvement in your investment results? Edited February 8, 2023 by Munger_Disciple
CorpRaider Posted February 8, 2023 Posted February 8, 2023 (edited) 3 hours ago, thepupil said: So there's a lesson in there for some of the young folks. Max out that tax advantaged untouchable compounding vehicles! Good advice. Also, I've read, they're damn near judgment proof. Edited February 8, 2023 by CorpRaider
rkbabang Posted February 8, 2023 Posted February 8, 2023 2 hours ago, dealraker said: And one more post, mentioning the thing that matters over time regardless of good...or maybe awful cycles of whatever comes our way to slaughter our cherished quotes either for a few months or maybe years. Here goes: On my multi-lined multi-faceted 100 plus year Securities Research Chart framed downstairs, the damn thing is almost 5 feet wide by the way, is a typed note that I taped in the corner that quotes Buffett saying in the year 2000 that (too lazy to go down and verbatim it) "stocks are overvalued such that it likely exceeds 1928". So I think anyone reading my posts for the last 25 years knows that Berkshire and AJ Gallagher dominate my portfolio/outcome. And since Buffett's quote in 2000 I think Berkshire is up 7 fold and AJ Gallagher is up (counting div's or not either is grand) about 10 times that's 10 times it's 22-and-something years ago value. Yea, stocks were over-valued yet about 9/10th's of my net worth came in those 22 years. AJ Gallagher had spiked in 2000, surely it was over-valued.......right? But at a PE of 20 what did I do? I yawned; I didn't sell. So just like those posting up "We tell all our clients that crypto/Bitcoin has beat stocks..." I have an extreme bias just as strong. The difference is I don't come here telling Greg that he has to buy Berkshire and AJ Gallagher, suggesting that not doing so means "he just does NOT understand" how great this must-own entitiy(s) is that he has missed - thus he's out of it and ignorant of the NEW ERA. I come to get introduced to stuff I am unaware of, and I have gotten precisely that! And my choices, whether luck or skill (I'll sure as hell never know) seem to be working. Time will tell. I don't think anyone is saying anyone _has_ to buy anything. The only difference is that you can discuss Berkshire here without someone chiming in that it's Rat Poison. And you can discuss AJ Gallagher here without people coming out of the woodwork saying its all a Ponzi scheme and worth nothing. Some things cause more heated debates than others. I've also owned Berkshire for over 20 years and I've never once had someone tell me quite confidently that it was worthless.
changegonnacome Posted February 8, 2023 Posted February 8, 2023 (edited) Disney to Cut 7,000 Jobs as Bob Iger Seeks $5.5 Billion in Savings https://www.bloomberg.com/news/articles/2023-02-08/disney-earnings-beat-in-first-results-since-iger-returned-as-ceo?srnd=premium&sref=7zqHEcxJ Might be easier/quicker to start listing the companies that haven't done job cuts at this stage! As I've said before - this is playing out as the inflation fixing playbook would suggest.........and again the problem with job cuts done in corporate unison as are being done now to restore underlying earnings that are deteriorating..........is that nobody gets to "save" anything with their cost cutting measures........if EVERYBODY is basically doing it at the same time.......your laid off employee is someone else's customer.......and your customer is somebody else's laid off employee....I should add that recessions of course arent driven by just folks who've lost their job.....they are driven fundamentally by people becoming aware of somebody in their network, friends or family losing their job....which drives changes in spending patterns.......the household sector attempts to "save" too by reducing aggregate spending but doing it unison has issues as per the corporate sector. Ultimately this reduced aggregate demand/spending brings prices in the non-housing services category back to 2%.........the overarching adjustment however the more I think about is that corporates/capital's share of profits as % GDP gets reduced.....margins/earnings effectively......such that labor can enjoy at first a restoration of its pre-pandemic purchasing power from the 2020-2022 period and then as any growing economy should labor gets to expand its purchasing power over time. Edited February 9, 2023 by changegonnacome
dealraker Posted February 8, 2023 Posted February 8, 2023 (edited) 2 hours ago, Munger_Disciple said: @dealraker For simplicity, let us assume you put $30K into the account in early 1991. That's roughy 40X in 32 years which comes to 12.2% CAGR which is in the same ballpark as your guess. What surprises me is that for the first 20 years, it returned 4x which comes to 7.2% CAGR; so it seems like your returns went up massively almost 10x in the last 12 years which comes to 21.1% CAGR during this time! Can you share any explanations for such stunning improvement in your investment results? Without much thought Munger_Disciple for a start there were a few bank stocks in the portfolio that got bought out all the way up to Bank of NC exit in 2017. Had a chunk of that. Explains at least some of the change both lag and subsequent excel. Edited February 8, 2023 by dealraker
Charlie Posted February 9, 2023 Posted February 9, 2023 "So I think anyone reading my posts for the last 25 years knows that Berkshire and AJ Gallagher dominate my portfolio/outcome." dealraker, I have a quote in my working room from Buffett that says: "The most important thing is to be in the right business(es)." With Berkshire and AJ Gallagher you entered the right businesses. I entered only Berkshire, but that worked also.
UK Posted February 9, 2023 Posted February 9, 2023 18 hours ago, changegonnacome said: Disney to Cut 7,000 Jobs as Bob Iger Seeks $5.5 Billion in Savings https://www.bloomberg.com/news/articles/2023-02-08/disney-earnings-beat-in-first-results-since-iger-returned-as-ceo?srnd=premium&sref=7zqHEcxJ Might be easier/quicker to start listing the companies that haven't done job cuts at this stage! As I've said before - this is playing out as the inflation fixing playbook would suggest.........and again the problem with job cuts done in corporate unison as are being done now to restore underlying earnings that are deteriorating..........is that nobody gets to "save" anything with their cost cutting measures........if EVERYBODY is basically doing it at the same time.......your laid off employee is someone else's customer.......and your customer is somebody else's laid off employee....I should add that recessions of course arent driven by just folks who've lost their job.....they are driven fundamentally by people becoming aware of somebody in their network, friends or family losing their job....which drives changes in spending patterns.......the household sector attempts to "save" too by reducing aggregate spending but doing it unison has issues as per the corporate sector. Ultimately this reduced aggregate demand/spending brings prices in the non-housing services category back to 2%.........the overarching adjustment however the more I think about is that corporates/capital's share of profits as % GDP gets reduced.....margins/earnings effectively......such that labor can enjoy at first a restoration of its pre-pandemic purchasing power from the 2020-2022 period and then as any growing economy should labor gets to expand its purchasing power over time. https://www.wsj.com/articles/jobs-hiring-boom-layoffs-employment-11675947399?mod=hp_lead_pos7
Munger_Disciple Posted February 9, 2023 Posted February 9, 2023 (edited) 22 hours ago, dealraker said: Without much thought Munger_Disciple for a start there were a few bank stocks in the portfolio that got bought out all the way up to Bank of NC exit in 2017. Had a chunk of that. Explains at least some of the change both lag and subsequent excel. Interesting. I guess these banks stocks were a big % of your portfolio for it to make such a big difference. Edited February 9, 2023 by Munger_Disciple
fareastwarriors Posted February 9, 2023 Posted February 9, 2023 (edited) Surprised that Yahoo still had that many staff https://www.cnbc.com/2023/02/09/yahoo-will-lay-off-nearly-1000-employees-by-end-of-2023.html Private equity firm Apollo Global Management acquired 90% of Yahoo from Verizon in September 2021. The company had about 10,000 employees at that time, according to PitchBook data. Axios reported that more than 1,600 workers would lose their jobs in the latest cuts, suggesting the company’s current head count is closer to 8,000 employees Edited February 9, 2023 by fareastwarriors
changegonnacome Posted February 9, 2023 Posted February 9, 2023 4 hours ago, UK said: https://www.wsj.com/articles/jobs-hiring-boom-layoffs-employment-11675947399?mod=hp_lead_pos7 Thanks for sharing , interesting read and labor market is a dynamic one- two thoughts here.......first the aggregate spend/income effect of a $250k tech workers losing their job and a $35k hotel cleaner getting hired....is night and day......in both total spend in the economy......and on the income tax side of things if you bring the federal and state fiscal sectors income into the mix. Wealth/wage inequality is such now that every tech worker getting laid off is probably like five service level workers getting sacked in terms of their outsized impact on aggregate demand/spend. Second thought on the hiring boom in leisure is interesting...when one thinks about the other thing I waffle on about alot - which is productivity........these are deeply unproductive incremental hires IMO........why?.....anybody who travelled last summer will know......hotels were producing 'bed nights' at 2019 volumes.....but doing so with skeleton staff......these were very very productive staff working in these hotels relative to bed nights produced......we all experienced it I think......"sorry our usually included breakfast buffett/restruant is closed because of COVID here's a muffin & banana in a brown paper bag"......"house keeping will only clean your room every five days and you have to request them to come in because of COVID".........consumers accepted this in 20/21/22............not anymore.........Hotels are hiring people returning staffing and service levels back to 2019 levels........but not a single extra bed night is likely to be produced by the addition of these staff over 22.......in short on the margins these workers dont increase aggregate output of bed nights......and all things being equal they diminish the average productivity per worker in the industry measured by $'s or bed nights produced.
Parsad Posted February 9, 2023 Author Posted February 9, 2023 https://finance.yahoo.com/news/treasury-yield-curve-inversion-reaches-140649287.html Recession is coming...no idea when, but rarely has the yield curve not been correct. Cheers!
TwoCitiesCapital Posted February 9, 2023 Posted February 9, 2023 5 minutes ago, Parsad said: https://finance.yahoo.com/news/treasury-yield-curve-inversion-reaches-140649287.html Recession is coming...no idea when, but rarely has the yield curve not been correct. Cheers! The when will likely be when thr 2-year Treasury yield starts to crater. It's typically the uninversion of the yield curve that signals a recession is at hand and the uninversion comes from the Fed cutting. And the Fed basically just follows what is predicted by the 2-year yield.
Munger_Disciple Posted February 9, 2023 Posted February 9, 2023 1 hour ago, TwoCitiesCapital said: The when will likely be when thr 2-year Treasury yield starts to crater. It's typically the uninversion of the yield curve that signals a recession is at hand and the uninversion comes from the Fed cutting. And the Fed basically just follows what is predicted by the 2-year yield. 2- year treasury yield is already lower than the fed funds rate
TwoCitiesCapital Posted February 10, 2023 Posted February 10, 2023 2 hours ago, Munger_Disciple said: 2- year treasury yield is already lower than the fed funds rate I'm aware, but it's only a couple of basis points of it's all time highs. What you're waiting for is the 2-year to plunge like the 10-year recently did. That will signal the Fed pivot, the steepening of the yield curve, and the official recession. Stocks may, or may not, move significantly lower before that happens, but that is what will signal the recession.
Munger_Disciple Posted February 10, 2023 Posted February 10, 2023 3 hours ago, TwoCitiesCapital said: I'm aware, but it's only a couple of basis points of it's all time highs. What you're waiting for is the 2-year to plunge like the 10-year recently did. That will signal the Fed pivot, the steepening of the yield curve, and the official recession. Stocks may, or may not, move significantly lower before that happens, but that is what will signal the recession. I doubt very much 4.x% was an all-time high in 2-year treasury yield. Apart from that, how do you define a "plunge" in 2-year yield?
TwoCitiesCapital Posted February 10, 2023 Posted February 10, 2023 30 minutes ago, Munger_Disciple said: I doubt very much 4.x% was an all-time high in 2-year treasury yield. Apart from that, how do you define a "plunge" in 2-year yield? You're right. I misspoke. I meant the recent local highs. Not "all time".
mattee2264 Posted February 10, 2023 Posted February 10, 2023 Are yield curve signals valid when the Fed is manipulating Treasury note and bond prices to a large extent first by making massive purchases and now by starting to unload those purchases?
Spekulatius Posted February 10, 2023 Posted February 10, 2023 (edited) 30 minutes ago, mattee2264 said: Are yield curve signals valid when the Fed is manipulating Treasury note and bond prices to a large extent first by making massive purchases and now by starting to unload those purchases? I think the thought is that it does not matter why the yield curve is inverted, it only matters that it is inverted. There are always different reasons why the yield curve is inverted and while the Fed is a player in this, they don’t necessarily control the bond market. However regardless of the reason , so far the yield curve inversion always has predicted a recession so far. Edited February 10, 2023 by Spekulatius
Gregmal Posted February 10, 2023 Posted February 10, 2023 Why is it that in the finance world, the word recession is like the ultimate punchline/gotcha/drop your jaw and say oh no! situation? Haven’t we lived through tons of them? I’m personally just kind of in the camp that recessions are part or life and subsequently investing and that great companies at good enough prices tend to come out stronger through each cycle.
dealraker Posted February 10, 2023 Posted February 10, 2023 Lower quotes are old age; you become invisible. Avoid at all costs! LOL, but you can't no matter what the effort.
TwoCitiesCapital Posted February 10, 2023 Posted February 10, 2023 (edited) 4 hours ago, mattee2264 said: Are yield curve signals valid when the Fed is manipulating Treasury note and bond prices to a large extent first by making massive purchases and now by starting to unload those purchases? Is there ever a time the Fed ISN'T manipulating the bond market with rate management and/or balance sheet expansion/contraction? Plus, right now they're contracting the balance sheet by NOT buying bonds and letting maturities/coupons rolls off. That should typically steepen the yield curve, not invert it, as it removed the biggest buyer from the system. So the yield curve inversion happened despite the Feds best efforts to steepen the curve with balance sheet management. 4 hours ago, Spekulatius said: I think the thought is that it does not matter why the yield curve is inverted, it only matters that it is inverted. There are always different reasons why the yield curve is inverted and while the Fed is a player in this, they don’t necessarily control the bond market. However regardless of the reason , so far the yield curve inversion always has predicted a recession so far. +1 The inverted yield curve strangles credit creation. That's what slows the economy. It hardly matters WHY or that it's the Fed who is manipulating it - it slows credit extension and the flow of dollars through the economy leading to economic slowdowns. It's probably not just a predictor of recessions - it's probably partly causal to them which is why it has a 100% track record of success. Edited February 10, 2023 by TwoCitiesCapital
mattee2264 Posted February 10, 2023 Posted February 10, 2023 How much of the disinflation and better-than-expected economic data can be attributed to falling energy prices? Early in 2022 the energy crisis was the talk of the town and was projected to plunge Europe into a deep recession and exacerbate the cost of living crisis. That doesn't seem to have materialised. But with zero COVID ending and US running out of strategic reserves to drain a soft landing could sow the seeds for its destruction by pushing energy prices to uncomfortably high levels.
changegonnacome Posted February 10, 2023 Posted February 10, 2023 2 hours ago, mattee2264 said: But with zero COVID ending and US running out of strategic reserves to drain a soft landing could sow the seeds for its destruction by pushing energy prices to uncomfortably high levels. Sure taking oil for granted at these levels feels kind of foolhardy...............before Russia drops the 'big one' when its finally finally out of military options in the Ukraine/NATO war......why wouldn't it play havoc with global oil markets by turning off the pumps for a little while and see how the world likes oil at $140.......it is the worlds 2nd/3rd largest oil producer.........yeah it would suck for their economy and they like those petro-dollars......but at the end of the day its 'war time' in Russia and sacrifice is part of war! Its an unlikely move.......but I wouldn't put the probability of it happening in the outlandish camp.......it represents a genuine escalation path for them to attempt to break Western solidarity with Ukraine.
Parsad Posted February 10, 2023 Author Posted February 10, 2023 8 hours ago, Gregmal said: Why is it that in the finance world, the word recession is like the ultimate punchline/gotcha/drop your jaw and say oh no! situation? Haven’t we lived through tons of them? I’m personally just kind of in the camp that recessions are part or life and subsequently investing and that great companies at good enough prices tend to come out stronger through each cycle. +1! That's the right attitude...I'm just saying a recession is coming. Investors should maintain a strong balance sheet and live within their means whether there is a recession or not...just means being even a bit more careful if there is one. Cheers!
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