Spekulatius

Do you see rising interest rates without inflation going up? FERC regulated pipeline tariffs are indexed to inflation + increases. Not all of KMI's pipes are FERC regulated but quite a few are and many private party contracts are mimicked to FERC contracts, I think. So higher inflation may not be bad for them even with higher interest rates. What would be great is higher inflation and low interest rates as the FED actually has indicated they may accept for a while. We can't always predict correctly, but I think probability is high that they will both go up together. The crux here is that interest rates will follow inflation right away, while inflation-indexed revenue will go up year-over-year over many years. To use an example, say inflation went from around 2.5% to around 10%. Interest rates will immediately follow from around 2.5% to around 10%, immediately increasing cost of new debt 4 times. On the other hand, it will take 15 years for income to catch up to 4 times at 10% inflation rate.

I think it was Peter Thiel who wittily replied to the question about "Is it 1999 again?" if it refers the beginning of 1999 or the end? Smart reply, because the Nasdaq index went up ~85% in 1999. The problem with bubbles is timing, since nobody knows how big they can become and when they will pop.

It is not just Jack Ma showing up that bumped up the Stock, it is also the likely absence of Executive Action to force divesture of US investors that helped. For perspective , I was messing with CHL around the time the US trading and ownership was banned ( an epic sh$tshow ) and that stock is up >15% in HK markets, since that episode passed. Got out of CHL flat, but could have made a nice windfall if I had been able to hold on.

I know quite a few people who’s retirement got destroyed in the 2001 crash and things did not come back. other were left with huge phantom gains on company stock that they never realized but still had to pay taxes on. One gal I knew who got rich for 6 month from Cisco stock lost her house this way. History’s almost never repeats itself , but it can rhyme. Besides the monetary there are things that can happen that nobody’s does foresee - like the epidemic this year. Well, we turned out to be fine, but could have been quite different. And true to that, it’s the truck that you don’t see coming that runs you over. Another thing to consider is that adjustment happen quicker than they used to. The trading is partly to blame although we did have a swift crash in 1987 before daydreaming became a thing as well. One thing that I try to do is look at everything I own through the eyes of reflexivity and path dependency. I want to own things that don’t depend on capital markets working well for example. Perhaps the Fed now has backstopped everything, but I don’t think it will last forever.

Lilian Li‘s substack is worth following if you are interested in Chinese e-commerce. She is also active on Twitter.

I think it is a curse especially if you take the analogy too far. Every crash or bubble has its own fingerprint and while some of what we have today is similar than in 1999, it is not quite the same. For example in 1999, old economy quality mid and small cap stocks were very cheap while stocks that were cheap in this crash were of much lower quality for the most part. Back then we had higher interest rates and credit stress, while we now have the Fed intervening to reduce all credit stress and low interest rates just to name a few. Some of the excesses seem the same though. I knew quite a few folks who blew up their portfolio and retirement accounts in 1999 and I think we will the same thing happening now. You can only neglect fundamentals so long and by definition not everyone can sell out before the crash because the sellout is the crash.

I did some more research on this topic and this is what I found: https://www.reddit.com/r/wallstreetbets/comments/kzf0jz/when_boomers_are_proud_of_their_2020_gains/?utm_source=share&utm_medium=web2x&context=3

I don’t own this and never have, but what is the point of owning AT and then selling the stock when they make an acquisition? AT has grown by acquisitions basically, so this is just what they have been doing for decades. I don’t think the Carrefour acquisition looks obviously dumb either and even if it does, I would try to understand their rationale before making a decision on the stock I am going to look into this stock a bit more and see if it is a potential long for me.

It wasn't four days. And the guy's name was Jack Ma. ::) Cats taste like rabbits, I have heard. At least that’s what my grandpa told me, based on his culinarily experiences in WW2.

I bought back in FB as I think this will blow over. The move from FB regarding privacy changes actually sense and doesn’t really affect the user privacy, but they have some PR work to do. The backslash become viral and is real and needs to be dealt with, which is what thy are doing.

I just noticed the cash from the $1 special dividend in my brokerage accounts and noticed they also wrote a dividend letter explaining their thinking: https://ir.oldrepublic.com/news/news-details/2021/Old-Republic-Special-Dividend-Letter-To-The-Shareholders/default.aspx In short - it is all total return..

Recent buys. FB, starters in VMW and RNR. RNR is a reinsurer that has me interested because they have one of the best underwriting records of al, peers and they also manage some third party/ hybrid vehicles. VMW is growth at a reasonable price.

Is there any difference between FNMAS and FNMAT other than higher liquidity for FNMAS?

It's not nuts any more if it works. After the "Big short", we get the sequel "The Big short squeeze". Welcome to the year(s) of reflexivity - 2020 and 2021.

The bubble is not just in story stocks - Look at Deere for example. It is a triple from the 2020 lows, trades st 20x EBITDA and has a stagnating top line. There are many others like this too.

Nobody wears masks in the office???

Always liked the idea of owning SRE given the TX utility and exposure to LNG / Mexico growth stories, but never did more than a superficial look due to the CA wildfire noise. Has that been addressed at this point in the wake of PG&E? How do you get comfortable? SRE never had an issue that caused a wildfire. EIX had some smaller issues but never to the scale of PCG. SRE is the best run of the three (by far) then EIX and last PCG.

Boomers had Janus funds and the Millennials have ARKK.

Bought FB and SRE today. SRE is a well managed utility that I have bought a few times over the year. It trades a t the lower end of its historical valuation range and should be a good low risk trade for 10-15% upside with little risk to principle or longer term hold depending on how things develop.

There is a lot of evidence that opening the schools with precautions and social distancing protocols don’t cause much virus transmission.

Yes, recharge stations will be required, but possibly not at many as people think. For the typical guy who drives to work and back home every day, stops at the grocery store, and then drives his kids to soccer after supper, he already has plenty of battery capacity for daily use. When he gets home from the kids' soccer, he'll just plug his car in from his house electricity and he'll be ready to roll again the next morning. With this type of use as his primary pattern, his behaviour will change from stopping to buy gas once every 10 days or two weeks to instead plugging his car in overnight at home once every 3 or 4 days. The only time when range might be a problem for him will be on weekend trips out of town, or longer vacation trips. Instead of going to the gas station 25 to 40 times per year (ie, every 10 days or two weeks), he might only use a paid-recharge facility 10 or 12 times per year when he exceeds his car's range. There is, however, a group that will be dependent on paid-recharges, and that is people who are living in houses and apartments without private parking. The people currently using on-street parking cannot simply park their car in their garage or on their driveway and plug their car in overnight. In some municipalities these people who do not have private parking spot are not numerous, but in other municipalities such as Montreal, there is heavy reliance on on-street parking. With current technology that requires perhaps 30 minutes for a basic recharge, I don't view existing gas stations as a model that can shift effectively into electric. The better model would be McDonalds, Starbucks, Dunkin, etc partnering with some outfit to electrify their existing parking lot. So, if you imagine yourself taking a trip that exceeds your car's range, you've probably already driven for 4 hours and you need to take a break to drink a coffee, or eat a burger anyway. So you just plug your car in while you take your break. You probably wouldn't at all want to pull into a Shell station, plug your car in and then twiddle your thumbs for the next 30 minutes. But, all of this is a reflection of current battery capacity and current charging times....all of that could be drastically different in five years. However it evolves, the gas station/convenience stores are in a bit of long-term trouble. They make their money from the traffic of people buying gas, not from the gas itself. The price of gas is ridiculously competitive so the margins aren't great, but they just hope that you'll buy a pack of smokes, a couple of lottery tickets and a gallon of windshield washer fluid while you're stopped for gas (the margins *are* great for those items!). When they lose the traffic from the gas re-fills, are all of those convenience stores viable? I don't think so, but time will tell. SJ This is a pretty good framework. assume fewer, but longer stops reg cars and make sure it is worth it. It could see something like Cracker Barrel doing very well if they add charging stations in their parking lots, as ther restaurants are already destinations in a way. Same for McDonalds or open air shopping centers close to highway exits that offer a variety of options to keep folks entertained for the duration of the charge. Smaller standalone convenience stores may suffer loss of traffic though.

I watched Greyhound too. This is also basically an alternative history movie where all the German U-Boot commander collectively loose their mind. Tom Lasso is surprisingly good. Not a premise that interested me at all, but I heard enough good things about it from people who's taste I trust that I check it out, and both my wife and I really enjoyed it. I started to watch To. lasso. it has some classical Yankee - Brit hum out in it, but so far I like it. The Expanse season 5 is pretty good, one of the best one actually. They drop one episode every week.

I don’t think a few thousand people at riots mostly outdoors are going to do much a difference. What does a difference is what is going in people homes firmest (family/household mixing). We are seeing now the fallout from the Christmas and New Years parties which hopefully will wear off in a few weeks. Same story in other countries as well. The most important thing the administration can do is getting the vaccine rolled out as quickly as possible. There should be no amount of $ and effort spared to get it done. Even if it costs $1000 to get one person vaccinated, that would be only $340B for the entire US population, not much compared to the $900B aid packages. Foremost the vaccination directly fight the root cause, the aid packages just the symptoms.

I agree. So I ask myself, if the cash productivity of the business is likely to be at least stable for the next 5-7 years and a large portion of that cash is going to be returned to me (hopefully in a tax advantaged way), at what present cash yield does the risk of increasingly negative sentiment among other people (as expressed by declining multiples) no longer matter? Without really doing any calculation, I would say this may be interesting at a ~10% cash yield. the negative sentiment or exit multiple shouldn’t matter if you intend to hold the investment until sunset. If you buy an MLP like EPD which would be a good example, selling is not a good option anyways because then you have to pay a lot of taxes because of the reduce cost bases from distributions so in way, you should give hoot about Mr Markets terminal valuation anyways.

Yes, Reits are best in tax deferred accounts. Lots of good suggestions in this thread.