Dinar Posted December 1 Posted December 1 56 minutes ago, Spekulatius said: It matters because the much of the difference in stock market performance did not come from a differential in economic growth but from multiple expansion in the US and compression elsewhere. Even the economic growth in the US is partly fueled by increased fiscal deficits that are much larger than Europe’s. The difference in returns have primarily been driven by MSFT/GOOG/META/NVDA/SPGI/MCO/V/MA. Can you imagine any of these firms being started in Europe?
SharperDingaan Posted December 1 Posted December 1 The reality is that the European way is not the US way, and Europe is a lot less homogeneous than the US. They ain't about to change and It's just a different approach; if it's not for you ... they'll tell you to get on a plane, and please f*** **f 27 sovereign states in the EU, and a shit show to govern. Yes governance will inevitably f*** ** from time to time, yet despite all the ongoing and material ADVERSE disruptions over the last 50+ years .... Europe hasn't experienced another great depression? The Europeans continued to enjoy a very nice life ... because, just maybe, the Largarde's/Draghi's of the world are actually very good at what they do ?? Just a different PoV. SD
Dalal.Holdings Posted December 1 Posted December 1 Europe has a lot of issues, but when did value investing become just buying Mag 7 north of 30 times earnings? I thought value was buying when there is lots of fear (Europe) and sell when lots of greed (USA). Even Warren has a big cash pile now.
Dinar Posted December 2 Posted December 2 45 minutes ago, Dalal.Holdings said: Europe has a lot of issues, but when did value investing become just buying Mag 7 north of 30 times earnings? I thought value was buying when there is lots of fear (Europe) and sell when lots of greed (USA). Even Warren has a big cash pile now. No, value is buying what's cheap. BP at 10x p/e or BNP at 10 p/e is not value, when BP is dedicated to pissing billions away on clean energy. Buying MSFT at 10x EPS 5 years out in 2019 was.
Dalal.Holdings Posted December 2 Posted December 2 26 minutes ago, Dinar said: No, value is buying what's cheap. BP at 10x p/e or BNP at 10 p/e is not value, when BP is dedicated to pissing billions away on clean energy. Buying MSFT at 10x EPS 5 years out in 2019 was. Oh, I'm not looking at BP or BNP. There are others out there though...
Dalal.Holdings Posted December 2 Posted December 2 3 hours ago, SharperDingaan said: The reality is that the European way is not the US way, and Europe is a lot less homogeneous than the US. They ain't about to change and It's just a different approach; if it's not for you ... they'll tell you to get on a plane, and please f*** **f 27 sovereign states in the EU, and a shit show to govern. Yes governance will inevitably f*** ** from time to time, yet despite all the ongoing and material ADVERSE disruptions over the last 50+ years .... Europe hasn't experienced another great depression? The Europeans continued to enjoy a very nice life ... because, just maybe, the Largarde's/Draghi's of the world are actually very good at what they do ?? Just a different PoV. SD A lot of problems in Europe. I agree. Europeans need to show more urgency in tackling their problems, but aside from a few murmurs from Draghi/Macron, I don't see much yet
Dinar Posted December 2 Posted December 2 1 hour ago, Dalal.Holdings said: Oh, I'm not looking at BP or BNP. There are others out there though... I have been looking and investing in Europe for more than two decades. I am not finding much of interest right now. Aside from Airbus (which I own and would buy today), I own but would not buy today - Safran, L'Oreal, Dior, Ashtead, Hill & Smith, STJ LN. If you classify Israel as Europe, I own, but would not buy today Tel Aviv Stock Exchange.
SharperDingaan Posted December 2 Posted December 2 (edited) UBS should be on there as well. We're a little biased , but if you must own a euro bank, this one also offers the benefits of the forced CS merger as well as the protection of a GSIB condom. SD Edited December 2 by SharperDingaan
Dinar Posted December 2 Posted December 2 7 minutes ago, SharperDingaan said: UBS should be on there as well. We're a little biased , but if you must own a euro bank, this one also offers the benefits of the forced CS merger as well as the protection of a GSIB condom. SD Why? It seems rather poorly run, particularly from the IT side. Why would I need to own a bank? I am happy to own a bank, but I do not need to own one. Why would you not take Eurobank over UBS?
Spekulatius Posted December 2 Posted December 2 (edited) 9 hours ago, Dalal.Holdings said: A lot of problems in Europe. I agree. Europeans need to show more urgency in tackling their problems, but aside from a few murmurs from Draghi/Macron, I don't see much yet If you wait from solution from Lagardère or Draghi or Macron you are looking at the wrong people. I think its more likely they some countries come up with solutions or even more micro level companies will come up with their solutions long before those three will even know about it. Edited December 2 by Spekulatius
james22 Posted December 2 Posted December 2 14 hours ago, Dinar said: No, value is buying what's cheap. Value is buying what is undervalued. That's not Europe. Europe is cheap.
SharperDingaan Posted December 2 Posted December 2 11 hours ago, Dinar said: Why? It seems rather poorly run, particularly from the IT side. Why would I need to own a bank? I am happy to own a bank, but I do not need to own one. Why would you not take Eurobank over UBS? All our UBS was bought at the time of the CS merger; bias as we have a very low cost base, a free put on the Swiss CB, and treat UBS as a CHF denominated cash equivalent. We think the incremental CS benefits still have 1-2 yrs to play out, following which UBS will be pretty much the same as every other major European DSIB. Outside of UBS we would look at the arms merchants, subject to a payback period of < 5 years. Given that NATO is being revamped, and member spending pushed > 2% of GNP/year, even a monkey should do well; the short payback steadily reducing European exposure, should conflict break out early. The hope that nothing happens, but borrow from the pages of German rearmament in the run-up to WWII. Different PoV, SD
Spooky Posted December 2 Posted December 2 3 hours ago, SharperDingaan said: Outside of UBS we would look at the arms merchants, subject to a payback period of < 5 years. Given that NATO is being revamped, and member spending pushed > 2% of GNP/year, even a monkey should do well; the short payback steadily reducing European exposure, should conflict break out early. Any particular companies you are looking at? I've been thinking something similar lately.
Dalal.Holdings Posted December 2 Posted December 2 https://www.nytimes.com/2024/12/02/business/volkswagen-strikes.html The consequences of Germany's many bad decisions over the years are coming home to roost... Quote The automaker is in the middle of labor negotiations with IG Metall, the union representing most of its workers, as the company tries to reduce costs in an effort to return it to profitability. Volkswagen is seeking 10-percent wage cuts and threatening to close factories in Germany, the first such move in its 87-year history. Quote Thousands of workers at nine of the company’s plants in Germany, as well as several other subsidiaries that are covered under a wage agreement with the automaker, staged two-hour strikes on Monday, demanding that Volkswagen guarantee their jobs and keep its factories open. Quote “It is important that we fight and show our teeth,” Daniela Cavallo, who leads Volkswagen’s works council and is a member of IG Metall, told hundreds of workers who were striking at the company’s Wolfsburg headquarters on Monday. Quote “There is no other issue around the dinner table anymore,” Torsten Hasenpusch, a representative for IG Metall in Emden, told the German public television broadcaster NDR. “Will I lose my job? Can we keep up our standard of living? It’s all people can think about.” So VW says it needs to deeply cut structural costs while workers are demanding job guarantees and keeping factories open... Unless a miracle happens, it's going to be a rude awakening for lots of people. This is the ultimate consequence of Europe's stagnation as a result of its poor governance. Eventually, it comes down on the people...for a long time its people have been sheltered from consequences of mismanagement of the continent. With the U.S. providing an umbrella of defense, their pensions and social safety net seemingly untouched by the happenings of the world... Now there is a reckoning.
SharperDingaan Posted December 2 Posted December 2 1 hour ago, Spooky said: Any particular companies you are looking at? I've been thinking something similar lately. Too early for us at this point, as we would fund from a sale of our UBS position 18 mo's out. Preference is for the chemicals, bullets, artillery shells, drone, and rocket consumables ... the cheaper and lower tech the products, the better. Between now and then, a lot of NATO 'Airbus' type standardisation and industry restructuring, and the set-up of production on multiple continents. Big brothers doing most of the hardware and guidance, multiple little brothers doing most of the consumables. SD
SharperDingaan Posted December 2 Posted December 2 It is Germany, the labour force reduction will be achieved via a buyout. Some cash now, the rest via a full pension deferred until age 66, all of it guaranteed by the Bundesbank so that there is no risk of not getting paid. Those young enough take the buyout, and work for someone else ... 'double-dipping' all along the way. SD
TwoCitiesCapital Posted December 3 Posted December 3 8 hours ago, SharperDingaan said: and treat UBS as a CHF denominated cash equivalent. Just out of curiosity - now that I've seen you say both UBS and Bitcoin are viewed as cash equivalents - are there any investments in the portfolio that AREN'T viewed as cash equivalents? How do they differ from UBS and BTC in characteristics?
SharperDingaan Posted December 3 Posted December 3 (edited) BTC is just a different form of money. At this point most people who know anything about it recognise that. UBS is cash equivalent, little different to a TBill. Store of value and unitization but not a means of payment. The difference vs other blue chips is the degree of CB willingness to intervene with market support on the upside. Same as all the other GSIBs, USB is guaranteed by ALL the Basel CBs, but this one also has the benefit of a recent severe f*** ** in Switzerland that damaged a lot of reputations. The Swiss central bank needs to demonstrate a 'Swiss Finish', and heaven and earth will be moved to make it happen. 18 months out they will have done that, after which it becomes just another GSIB, and the money status drops away. Arguably a blue-chip equity marginable at 70%, or provincial bonds marginable at 85% are also a cash equivalent. We just don't think of them that way as it is not accounting convention (asset sale in a liquid market, versus borrow against asset collateral) Thereafter cash is basically fiat (USD), held as a cheap way of paying for things. Portable, and most everyone accepts it, everywhere in the world. SD Edited December 8 by SharperDingaan
Dalal.Holdings Posted December 3 Posted December 3 (edited) https://geekway.substack.com/p/a-visualization-of-europes-non-bubbly What is Ursula's strategy for addressing this massive gap? A vague "competitive compass" and a "task force" of bureaucrats, of course ! No promises to repeal ridiculous regulation, and continued pursuit of "decarbonization" https://www.politico.eu/article/ursula-von-der-leyen-mario-draghi-is-creating-a-task-force/ Quote BRUSSELS ― European Commission President Ursula von der Leyen is setting up a team of officials dedicated to making good on Mario Draghi's blueprint for competitiveness. The task force would aim to turn the former European Central Bank president's recommendations into concrete proposals and potential legislation, according to two European Union officials. Quote Presenting her new team before the Parliament on Wednesday, von der Leyen announced the main initiative of the next five-year term will be a "competitiveness compass" to close the innovation gap with the United States, decarbonize the EU economy and increase its economic independence, with each commissioner told to contribute to these goals. Quote Presenting her new team before the Parliament on Wednesday, von der Leyen announced the main initiative of the next five-year term will be a "competitiveness compass" to close the innovation gap with the United States, decarbonize the EU economy and increase its economic independence, with each commissioner told to contribute to these goals. While her words were a little vague, the concrete side of her announcement is the ongoing work to form a group of officials ― including figures from the handful who helped Draghi write his study and kept it confidential ― to help the Commission’s departments keep the report’s implementation on track. The exact nature of the task force is still being worked out, ahead of the next Commission kicking off on Dec. 1. The group is likely to be within the secretariat-general, which would put it at the heart of the EU executive, meaning it could report directly to von der Leyen. Edited December 3 by Dalal.Holdings
Charlie Posted December 3 Posted December 3 (edited) 18 minutes ago, Dalal.Holdings said: What is Ursula's strategy for addressing this massive gap? A vague "competitive compass" and a "task force" of bureaucrats, of course ! No promises to repeal ridiculous regulation, and continued pursuit of "decarbonization" The German DAX index today reached 20.000 points first-time: https://www.comdirect.de/inf/indizes/detail/chart.html?timeSpan=1D&ID_NOTATION=20735#timeSpan=SE&e& Interestingly The DAX index is not far behind the SP 500 long-term: https://www.comdirect.de/inf/indizes/detail/chart.html?timeSpan=1D&ID_NOTATION=20735#timeSpan=SE&benchmarkNotations=8941848&benchmarkColors=147de6&selectedBenchmarks=true&e& Conclusions? Germanies equities are not cheap (sorry, no gloom and doom) and had a very good long-term performance although being very capital-intensive. Edited December 3 by Charlie
Dalal.Holdings Posted December 3 Posted December 3 20 minutes ago, Charlie said: The German DAX index today reached 20.000 points first-time: https://www.comdirect.de/inf/indizes/detail/chart.html?timeSpan=1D&ID_NOTATION=20735#timeSpan=SE&e& Interestingly The DAX index is not far behind the SP 500 long-term: https://www.comdirect.de/inf/indizes/detail/chart.html?timeSpan=1D&ID_NOTATION=20735#timeSpan=SE&benchmarkNotations=8941848&benchmarkColors=147de6&selectedBenchmarks=true&e& Conclusions? Germanies equities are not cheap (sorry, no gloom and doom) and had a very good long-term performance although being very capital-intensive. Good thing I'm not buying the DAX
Pelagic Posted December 3 Posted December 3 Has anyone been to a notary reading session in Germany to confirm this actually happens? Feels like a law that was put into place 300 years ago and no one has thought to revisit since. https://x.com/nathanbenaich/status/1862208030596636770
Dalal.Holdings Posted December 3 Posted December 3 (edited) https://unherd.com/2024/12/europes-techno-populist-nightmare/ The problem of the EU leadership is it thinks a lot like liberals in America...that "experts" always know what's best...that rules and regulations are always good and that people like Elon are irredeemably bad. It leaves no room for positive tail events/black swans. That's why there's a dearth of Unicorns in Europe. The European Commission is a supranational government that is staffed with technocrats who believe they are the "experts". They have wreaked havoc on the continent and yet Ursula gets to start her second term... Edited December 3 by Dalal.Holdings
Spekulatius Posted December 4 Posted December 4 11 hours ago, Charlie said: The German DAX index today reached 20.000 points first-time: https://www.comdirect.de/inf/indizes/detail/chart.html?timeSpan=1D&ID_NOTATION=20735#timeSpan=SE&e& Interestingly The DAX index is not far behind the SP 500 long-term: https://www.comdirect.de/inf/indizes/detail/chart.html?timeSpan=1D&ID_NOTATION=20735#timeSpan=SE&benchmarkNotations=8941848&benchmarkColors=147de6&selectedBenchmarks=true&e& Conclusions? Germanies equities are not cheap (sorry, no gloom and doom) and had a very good long-term performance although being very capital-intensive. Up 70% since the lows from 2022. So money can be made here. What caused the surge was the appreciation of a few stocks like SAP and Siemens.
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