Spekulatius

I have some property stocks and a bit of gold. I am thinking of upping gold and probably invest in a gold miner or two as well. The best inflation hedge may still be owning good business with pricing power. Biden’s talk Cleveland from 5/27 ( linked above in this thread) really got me thinking that this time in fact could be different, so I will be watching for broad inflation based on wages rather than those commodity price spikes.

Cash was fine, because you could generate interest rates parking cash. Now, however, the real interest rates are negative ( after accounting for inflation) so it is not likely to do well. Inflation to some extend is good for stocks, but if it goes above a certain point (3-5%), it becomes very damaging to equity multiples. https://youtu.be/HLuiKOllVDY?t=2100 Another thing I would like to point out to those claiming that higher interest rates are not possible, because we can’t afford them. Well, what we can’t afford is real interest rates in excess of inflation, but a 5% interest rate and having 5% inflation is not a problem for the nation. In fact, since it would massively devalue the existing longer duration treasury bonds issues at lower interest rates, it would be a positive from the debt perspective.

And the rest goes broke doing the same thing.

I believe the commodity side of inflation is transitory, the labor side will not be. If you read the transcript of Biden‘s speech in the Twitter thread I linked in above, they are actually trying to create labor inflation. That would be the end of trickle down economics and probably not good for most equities. Thats a total regime change from the economical framework we have been seeing for 40 years, if it indeed occurs.

Wireless doesn’t have a whole lot lot of pricing power, imo. The product is not differentiated and people care more about the iPhone experience than the wireless carrier. There are indeed efforts to make the network operating underneath completely invisible ( Google Fi or MVNO’s). I am with an MVNO and pay less than $20/ month for wireless on ATT. I think subscription services that offer a good value proposition are a case where price increases will be tolerates, especially if the value proposition from a Customer perspective improves over time. Examples mentioned already are Netflix and Costco. Many software companies have customer retention rates exceeding 100% which means that customer pay more for typically enhanced or expanded offerings. This may not be a straight price increase, because the customer gets more for the higher price, but the unit economics of this are very favorable, so it’s almost the same thing from a business perspective.

@CastanzaSome of the above is transitory. I have not noticed much inflation with groceries. Restaurants are getting more pensive for sure, but it seems to be more in the 5-10% range than 50% range. The long term driver for inflation will be wages, not lumber or other commodities. I think we are done with trickle down economics if this thinking goes into action:

I heard about this in Andrew Walkers podcast. Aaron’s thesis is that California is the best area to grow can is because ok the veggies grow there so Marihuana is similar. Glasshouse bought a huge greenhouse near Santa Barbara which they are going reconfigure to Marihuana and then would be able to beat everyone on cost, once interstate commerce is possible. I am unconvinced that CA is going to be the low cost location in the US if you really are going full bore high tech grower, as I think other regions in the US will have advantages in terms of cost, because of lower land prices, lower labor cost ,better access to water and lower taxes. If you follow Appharvest for example they similar argue that their home region ( Appalachia) is a great area to grow tomatoes. Aaron’s thesis assumes that interstate commerce is possible for Marihuana which is still some time off, although I don’t doubt the end result. This might work out regardless, but I am a bit skeptical. I put this on my watch list.

ABNB certainly has the potential to be a great business, but it hasn’t proven itself yet to generate earnings. I am always amazed by the stuff these IPO‘s are spending on for what seems like pretty mature products/ platforms. I have never used ABNB. This is mostly because the cost is too high - we typically spent just a few days in each location and then when we add it up, the various fees makes using ABNB fairly uneconomic compared to Hotels. We have used VRBO several years ago to rent a skiing lodge NAND two years ago, we rented an apartment in downtown Montreal via Hotel.com that was hosted like ABNB. What I liked about Hotel.com is that the fees were included so you could directly compare it to Hotels vs ABNB tagging all sorts of fees on it after you made your choice ( I suspect they do This buy design and it is not customer friendly at all). ( ABNB rant over). Anyways, i keep my valuation discipline. I watch these new IPO and from time to time, I see some where subsequent drops bring the valuation into a range where it makes sense and then I buy a few shares. I haven’t really seen fat pitches from my perspective, but I have seen some where you don’t need 20 years of 20%+ growth and heroic margin assumption to see value.

It should absolutely get investigated what happens in this Wuhan lab at that one and the US should apply pressure tomorrow the Chinese to open the Sarong so to speak. If it want in the lab, we should be able to find the animal host and transfer chain. it should be evident for everyone that after hundred thousands of dead and trillion $ in economic damages throughout the world economy, we need to find out exactly what happened and to prevent this from occurring again. In the meantime, assume Occam’s razor is correct 80-90% of the time. I also think we should support Taiwan and give them the 23M/46Mdoses of a vaccine they need to get most of the population vaccinated. That would send a nice signal to allies and a big middle finger to the Chinese who want to sell their lousy vaccine to countries that don’t have any other options.

The bigger question is why would you want to deal with a stablecoin cryptocurrency at all? It seems like you take counterparts/ collateral risk and inflation risk at this same time. Why not stick with USD? Seems to work perfectly as a means to exchange goods and services.

I agree that ABNB ‘s valuation looks rich here north of 20x revenues. I can make the math work at the IPO price and maybe a bit more, but the math looks challenging around $120 or more.

I don’t think that 3 vs 4 competitors matter necessarily. There is dependency in each industry that determines he amount of competition probably just as much than the current structure. In the US, consumers are used to pay a lot of money for media and communication compared to Europe, where TV and Radio for example pretty much started out free ( or most free) so new competitors also had to start free ( financed with ads only) Once that is set, it is really hard to charge a lot of money and takes a lot of time. Just look at Malone, his success were all mainly in the US ( TCI, Charter, Sirius) and all the international business are relative failures ( LILA, Liberty Media). I don‘t think it’s just management, those other market ex US are just more competitive and hence less profitable.

And here comes the long weekend dump, LOL:

My take - start with what peeks your interest and take it from there. If it's accounting, great, but for 98% of the people it's something else.

Didn't Keith Gill / RoaringKitty load up again when GME dunked below $50? Now back to $250 or 5x in a few month. Frigging legend. As @Gregmalsaid it best - for the rest of us there is value investing.

As an Interfor shareholder, those acquisitions are not what you want to see, imo. The thesis for me would be to get the vast majority of my capital returned via special dividends, in a short time period. It would not be acquisitions as peak valuations.

BLD, MKL, and DVA are unlikely to make the cut, imo. My candidates are : VRTX ( biotech, mini Pharma) ADSK (software) GMED ( med device) PYPL ( payments) MORN (financial info) disclosure: own smallish stakes in VRTX and GMED

Seems like a game of musical chairs with not enough chairs. Fed buying treasuries (in exchange for reserves) then repo'ing reserves in exchange for treasuries. I guess it all makes sense, but does it accomplish anything? I doubt it. I guess someone somewhere grabs a few pennies in front of some sort of steamroller.

^ This is a casino, sir.

Why is that? We never tried UBI. We did sent out the first round of stimulus checks for everyone (similar to UBI) but most of the stimulus was sent explicitly to people not working ( enhanced unemployment benefits). This is not UBI. UBI would be sent to everyone, including those that are working, so it would not deter people from working than the current system.

The Chinese SinoPec vaccine doesn’t seem to work (efficacy is very low) so that partly explains why it was developed so quickly. The mRNA tech was there, but it was obscure and not a single vaccine was approved using this tech. A lot of people were sceptic, but it really proved that it was superior both in terms of development speed ,as well as efficacy. I am certain that this will be used for other use cases too, including very good initial results in Malaria (which has long been an elusive target for vaccines). Malaria is a curse for many countries in the tropics and having a vaccine available would be an absolute game changer.

Slow motion car wreck: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001759008/000110465921072004/tm2117478d1_8k.htm In mid-May 2021, the corporate vehicle sourcing partner that accounted for more than 60% of the cars we sold during the fourth quarter of 2020 and the three months ended March 31, 2021 informed us that it would be pausing its consignment of vehicles to us, with immediate effect, due to the current strength of the wholesale market for vehicles. Lotz is a car dealer without cars apparently. It seems like a Harvard MBA does not help much in the used car business. The stock has a shot at becoming a net-net, imo.

back to the moon at $238.... I'd LMAO if GME now really goes to $500 or $1000 and a hedge fund blows up.

Well, I used to like the podcast, until it became a de facto crypto podcast, then I stopped listening and following it. I think the split was a good idea as there are pretty different audiences. I will probably follow TIP again and see if it‘s back to it’s former self.