Spekulatius

The news is good, because the expectations were for a flat budged and 1.8% growth is better than flat. The defense contractors don’t really need much growth to generate good returns for shareholders. When you look at historical data, the growth in the defense budget wasn’t all that great (less than GDP), yet through a combination of higher budget share, dividends and stock buybacks, double digit returns have been achieved for shareholders. From current levels I can see returns of about 10% for LHX, LMT and NOC going forward, which I think will be far higher than what can be expected from the SPY.

Thanks for posting. Just based on the numbers cited in this report, the Indian stock market looks like a very poor setup - PE of 23.4 (a 1.6 multiple to EM average) 12.3% ROE does not scream value on a macro level, especially considering the significant inflation. I think there are better deals out there in terms of EM’s. This does not mean that there are good individual Securities available but this is a macro report and on a macro report, I just don’t see India as attractive. One obvious question to ask is why is India ROE so poor (12.3%). 12.3% is a disaster if you have 5% inflation. Who cares how fast the GDP grows in this framework?

Potus defense proposal is out - calls for 1.8% increase. Seems bullish considering the low expectations: https://www.politico.com/news/2021/04/08/biden-pentagon-budget-480476

I am pretty sure those boded parts are a result of a lousy translation. As for Ant financial, I think Jack Ma ran into the issue that once he wanted to take Ant public, he had to disclose a lot of information to the regulator who then took a deep look and didn’t like what they saw. Ant was supposed to be a fintech, at least that’s how it was sold, but it really is much more than that, it is a vast financial empire that’s is highly leveraged that is involved in payments and various loans (including shady micro loans or loans, working capital loans etc) with some of it tied to banks. From that perspective , it is understandable that the regulator takes a close look. In China, the listing in an exchange is a big deal and triggers an extensive look into the operations and apparently Ant/ Ma tripped a few wires here. It will be interesting if Tencent can escape scrutiny, in a way their empire is more complex than Alibaba’s and Wechat as a platform has enormous reach and power.

Just for perspective, Google has paid $9.7B in fines in the EU alone so far. https://www.bloomberg.com/news/articles/2020-09-16/after-9-billion-in-fines-eu-says-something-nice-about-google

Interesting podcast regarding BABA - Business breakdown (a spinoff podcast from invest like the best) https://podcasts.apple.com/us/podcast/alibaba-a-giant-among-giants/id1559120677?i=1000516404582 Meg Faber - background/framework of investing in China, Alibaba, Ant financial: https://mebfaber.com/2021/03/24/episode-296-jason-hsu-rayliant-global-advisors-as-investors-were-always-looking-for-uncorrelated-sources-of-return/ Good stuff to listen to while buying more ?

What I don’t like about sports teams is that there are basically zero owners earnings and the employees (players) can capture the majority of economic returns. They are basically a billionaires collectible. I guess gladiator teams (romans) and jostling teams (medieval) in the past served the same purpose , except the participants back then didn’t do too well.

Sold remainder of my SIMO

Interesting experiment. There is a lot of skepticism about Astra Zeneca's vaccine in Europe and back and forth on approvals, but when Wismar did an open "walk in" vaccination using the AZN vaccine for everyone above 60 year old, there was huge demand: https://www.ndr.de/nachrichten/mecklenburg-vorpommern/AstraZeneca-Andrang-beim-Impfen-ohne-Termin-in-Wismar,coronavirus4838.html I guess people are voting with their feet.

The vaccine will stop the pandemic, but COVID will become endemic and will be around forever, I think. The protection against severe disease is much better than the protection a flu vaccine provides against flu and probably exceeds even the optimistic guesses early on what we could achieve, both in terms of efficacy and speed to market. With such good individual protection provided by the vaccine, I care much less if other people take it or not - if something happens due to getting COVID-19 to them it will be on them. It is undesirable to have the virus floating around in huge numbers because that also means that variants will pop up (evolution is a number game after all) but I think those can be solved with yearly vaccine updates/booster shots. We just need to provide everyone on earth access to the vaccine. The US will probably be fine within two month, but the rest of the world will take much longer.

The mRNA vaccines have proven themselves against the variants. Overall, they seem to work better than the traditional vaccines in terms of efficacy, at least compared to those on the market. I would like to see more data on the Novavax and the Sputnik V vaccine. Novavax showed some very good data. Sputnik V is a bit more of a question mark (who trust the russians?) but there have been some peer reviewed papers published that seem to indicate strong efficacy. they sell a lot of South America so soon we will get epidemiological data on how well it works. I think AstraZeneca < JnJ< Novavax in terms of the ranking with Sputnik having the potential to be equivalent to Novavax. I am recalling this from memory and several twitter threads post4ed by biotech cracks that seem to know what to look for. I think it bodes well to mRNA tech in general. There have been some articles posted that a malaria vaccination based on mRNA is in the works and seems possible. Malaria vaccination has been an elusive goal and what is out there doesn't seem to work all that well. Perhaps with mRNA vaccines, we can get the job done which would be huge for mankind.

BJ’s is strong here in New England. Our family is a Costco members for quite some time. Anecdotal, my wife was able to convert two families we got to know when moving here to Costco from BJ’s simply by taken them along to the Costco warehouses one or two times. My wife also got shown the BJ’s but she think it’s not worthwhile and she found the shopping experience vastly inferior to Costco. It reminded her of shopping at Walmart. When I looked at BJ’s as a stock a while ago, I noticed that it looked optically cheap, however they lease all their warehouses, if I remember correctly. Costco owns quite a few of their locations, so I’d you compare both, you need to take this I to account, which diminishes the valuation gap somewhat.

Thanks for writing down your rationale. I have looked at EW only casually after you mentioned it. It seems too expensive to buy but I think you are correct in holding it. Along the same line, I bought a bit of GMED last year. It is not cheap either , but I qualitatively liked it after the MF’s recommended it, and the valuation seemed reasonable.

I do not know anyone who has gotten the JnJ shot yet, as this vaccine has been hard to get and until very recently only small amounts trickled to vaccine centers. Let us know how it goes. I know a few folks who would prefer to get the JnJ vaccine over the mRNA flavors.

Interesting crowd behavior. I don't think Munger would have anything to add that hasn't been discussed before as far as pro's and con's of BABA are concerned. Li Liu's opinion I think count's more.

Berkshire should buy them. This would solve almost all the problems.

You mentioned EW before - a stellar Long term performer, but how do you square the valuation? A 12x P/S is hard to swallow for a med tech. Even over a 15 year holding period, the starting valuation matters quite a bit, imo.

Add cathiesark and you are all set. Who needs to pay for Bloomberg when all the goof stuff is free? https://cathiesark.com

Yes, it seems the mRNA vaccines are pretty robust against all the variants so far. This makes them likely the weapon of choice against the epidemic. I think we will probably see a “booster” that enhances the profile against variants for those that have been vaccinated already by next year. The P1 strain is still a huge concern for countries that used mostly conventional vaccine or countries that are relying on natural herd immunity, which may not be achieved with the ongoing variants the virus is able to produce to overcome natural resistance.

MU really should pay special dividends from windfall profits at the cyclical top. I believe this will continue to be a cyclical industry , as me work is basically a commodity. The Chinese competitors that are emerging will make sure or that. Buyback at or close to cyclical tops don’t make much sense and at the bottom there are no cash flows to pay for buybacks. That the corundum with cyclical business and I think MU is in the same category.

MRK looks pretty solid to me. Low valuation and basically a Greenblatt stock. Organon spin-off could unlock some value. There are some warts in terms of Keytruda going off patent late this decade and the constant amortization expenses resulting from taken out smaller biotech to refresh their pipeline , but even considering all this, the stock sees like a good bet from current levels. LMT is another one that I think will do OK over the long run. AMZN is a growth stock that isn’t really overvalued and I think an expansion into health care which is slowly happening could create a lot of value.

I actually take it all back. Just for fun, I looked at my old trading records (paper slips) from 1998/99. I didn’t really had much money back then since I just moved to the US (moving to a different country is expensive ). However, I just started a Roth IRA and I quadrupled my money doing some wild trading back then in 18 month basically. So there is that. I do think that I should have bought LVMH later though. Another thing to note is that LVMH’s stock performance wasn’t that great before I posted in 1998. Arnault wasn’t acknowledged as a great manager either yet. The stock was fairly cheap compared to where it has been trading later though, because I understood that this was a pretty good business that will likely do well. Also of note is that this was posted as a “Cash King” in MF recommendation which is the predecessor of the Rule maker, I think as Motley Fool evolved. Again, this is totally unrelated to LVMH.

I like some features of the new site like site stats and also the search appears to be better. I don’t like the site design as it wastes so much screen real estate compared to the old one.

Ok, this is a nonsense post in a sense, but recently I found the first post I ever wrote for the Motley Fool message boards and I recommend LVMH back then in 1998. I wish I had taken my own advice and just held the stock. I think I bought it and then sold it a little later but don’t really remember. I think I would have remembered if I had bought the stock and never sold it. https://boards.fool.com/lvmh-cash-king-10195502.aspx?sort=postdate Ok, back to drinking, it’s Friday night after all.

Isn't that basically Reuters or AP news? From the big networks ABCNews is probably the most unbiased. For foreign news, I have plugged Aljazeera.com before - their curation is surprisingly good and they are fairly unbiased except issues pertaining Israel.