Jim

It is amazing to me how many people seem to have lost their reasoning ability because of their dislike of Trump. It infects their views of politics, economics, the stock market, and actually makes them root against their own country. The good news is that this distorted thinking does create greater price inefficiency in the market.

Você alavanca 10x achando que vai ficar rico mais rápido. Matematicamente, está fazendo o oposto. Em 1956, um engenheiro da Bell Labs chamado John Kelly Jr. resolveu um problema que ninguém tinha formalizado: qual é o tamanho ÓTIMO de uma aposta? A resposta mudou cassinos, hedge funds e mercados de previsão. 🧵

TOM LEE: Markets will see ‘one of the best periods in our life’ in the next 1.5-2 years @seekingalpha @fundstrat @fundstratdirect

Touching thread

This is very interesting. I think the younger generation has been trained to have more of a gambling mentality because of the huge growth in sports betting, cryptos, and assets with no inherent value. They see stocks as just another trading vehicle and ignore valuations. This creates greater opportunity for investors that focus on value and can find mispricing.

It's insane how U of I admissions have gotten. Tribune did an article a few years back on how many students from China are being admitted to U of I b/c they're attracted to engineering/computer programs at U of I & they pay full out of state tuition (many are sons/daughters of China's wealthiest citizens)

@Jamesiesta @OregonMills *Can't get into U of I #FixedIt It is a fixture of my conversations with neighborhood parents about college that their kids can rarely even get into U of I. Which grinds their parental gears palpably.

This presupposes that the primary function of some colleges is for the actual students to be rural town job creators.

@OregonMills @chicagobars EIU was a popular college choice 20 years ago. All sorts of kids from Chicago area viewed it as a party school where they could get a decent education. Seems like EIU has been losing out to places like Mizzou and Iowa for kids who don't want to go to U of I

@chicagobars Charleston did a poor job at supporting EIU’s growth. Hostile police presence at times.

@2024dion Yes, nearby towns of Mattoon and Paris are already economically depressed. Lots of unemployment, meth use. It's sad. EIU provides well-paying jobs to lots of people (everyone from professors to registrars) and a lot of these people will have a tough time recovering

EIU is the largest employer in its rural 17,000 resident town by a country mile. The decline of college enrollment is going to crush so many viable small towns in this country. It’s really sad.

Breaking: Iran re-closed the Strait of Hormuz. IRGC fired on tankers. The US is sending Vance, Witkoff, and Kushner to Pakistan for round 2 talks. Iran's state media says they won't participate. Iran's parliament speaker says there's progress. Contradictory signals everywhere. Here's how Grok's portfolio is set up: Defense at 42.9% of the book (LMT, NOC, GD, BWXT, AMTM, KBR, PSN). Direct beneficiaries of escalation premium. LMT earnings Thursday with $77-80B sales guidance and a $4.7B PAC-3 contract already in the bag. Energy at 11.5% (DVN, NRG). Tight exposure but real torque if oil gaps. Power/nuclear at 15.8% (VST, TLN). The AI demand thesis is secular. These don't care about Iran either way. AI at 24% (MU, AVGO, MSFT). Some headwind risk in a risk-off tape. AVGO is +25.8% since first entry so there's cushion. Healthcare 5.7% (UHS). Defensive. If the bear case fires (oil above $130, SPX crashes to 6,100-6,350), roughly 54% of the portfolio is positioned to rally. If talks restart and the ceasefire extends, the AI sleeve catches the bid. Either way, the barbell does its job. LMT Thursday is the tell. Your money, your call. Not advice.Breaking: Iran re-closed the Strait of Hormuz. IRGC fired on tankers. The US is sending Vance, Witkoff, and Kushner to Pakistan for round 2 talks. Iran's state media says they won't participate. Iran's parliament speaker says there's progress. Contradictory signals everywhere. Here's how Grok's portfolio is set up: Defense at 42.9% of the book (LMT, NOC, GD, BWXT, AMTM, KBR, PSN). Direct beneficiaries of escalation premium. LMT earnings Thursday with $77-80B sales guidance and a $4.7B PAC-3 contract already in the bag. Energy at 11.5% (DVN, NRG). Tight exposure but real torque if oil gaps. Power/nuclear at 15.8% (VST, TLN). The AI demand thesis is secular. These don't care about Iran either way. AI at 24% (MU, AVGO, MSFT). Some headwind risk in a risk-off tape. AVGO is +25.8% since first entry so there's cushion. Healthcare 5.7% (UHS). Defensive. If the bear case fires (oil above $130, SPX crashes to 6,100-6,350), roughly 54% of the portfolio is positioned to rally. If talks restart and the ceasefire extends, the AI sleeve catches the bid. Either way, the barbell does its job. LMT Thursday is the tell. Your money, your call. Not advice.

Jon Rahm's long term golf caddie Adam Hayes just listed his home in North Carolina for almost $14 Million The 5,435 square-foot house sits on 100 acres of land roughly 20 miles northwest of Charlotte - WSJ

Somehow it gets ignored, and people love to hate on it, but $AAPL has an incredible business. You can make a real case it’s the best in the Mag 7. It constant reports massive free cash flow with very little incremental capital, which is what actually compounds and where your returns come from. This is a business that converts scale into cash better than almost anyone. And instead of blowing its money on stupid pet projects I call “never ending black holes”, its capital allocation strategy is elite. It simply bets on itself by buying back shares. At the end of the day, there are very few companies where you get this combination of growth, margins, and durability all at once, and that’s why you can argue it’s the best business in the Mag 7. 🌹

The wait is finally coming to an end

@WSJ $BRK.B looking more and more attractive, especially with the buyback restarted. intrinsicvaluepershare.com/berkshire-valu…

back in 2014, Alice Schroeder (wrote "Snowball" about Buffett) did a Reddit AMA "I was fortunate to have spent 10 years getting to know Warren Buffett by spending days and weeks with him." some really good excerpts in there, I'll pick 8 1. on how little common equity investors know "Before writing The Snowball, I was an analyst at several firms on Wall Street, a regulator, a CPA, and now I invest, and serve on corporate boards." "I've been inside the sausage factory and know how complex business is in the real world. In that context, a lot of investor opinions display a high level of confidence based on a relatively sparse set of facts. So as you develop your skills its important to be mindful of the risk of overconfidence. This is where the margin of safety and circle of competence have done wonders for Warren. I would look at how he's applied those in investing and really think through the implications of "don't lose money."" 2. time management "Warren is a master of time management. He knows how to ease people off the phone without making them feel dismissed. He is great at saying no and I learned a lot about saying no tactfully. That's an important time management technique. Also, he manages his energy, reading when it's optimal, talking on the phone when he's got the right energy for that and so forth. It's fairly compartmentalized and he does not multitask through his day." 3. valuing a company "Warren's way is very simple. I have copies of an envelope or two where he did his calculation on the back - literally. If the margin of safety is wide enough, it almost doesn't matter what method you choose. I know you want something more specific. I have to generalize, a lot, but hopefully this is helpful. Essentially it's a three step process. one: Is it an addressable investment? He rules out a lot of stuff that has too much tail risk, or he has no edge on the market. For example, thinking you can be smarter at buying Johnson & Johnson than everyone is essentially market timing. Warren rules that out unless he has some insight he is convinced no one else has. He may not always be right but it's the right approach and works over time. two: Downside protection. He looks for multiple ways to avoid losing money. If you look at the preferred stock deals he did after the financial crisis, he fenced in these companies and built in so many ways to avoid losing money it was almost funny. He will pass on huge upside opportunities if he can't get downside protection when its an investment as opposed to a bet such as March Madness deal. three: Capital generating power. His focus is on how much capital an investment can produce that can be reinvested either within the business or elsewhere. He prefers the easy route (reinvestment) however, ultimately he's agnostic, money is money and for a dollar he puts out he wants x% back. The x% has declined over the years with Berkshire's size and falling interest rates. 4. anecdote from 2004 / foresight "Here's a good one. I bought a house in 2004 and when I told him he was aghast. That's when I knew we were in a serious housing bubble. Finally he said, well, don't worry, you'll be able to sell it in ten years, so just hold on until 2014." 5. re: "what is your favorite Buffett quote/memory?" A: On who influences him: "When I get up in the morning I look in the mirror, and at that point, everybody's had their say." 6. on books/reading "I like books from business history -- anything by Galbraith, Keynes, John Brooks. Mark Twain said history doesn't repeat but it rhymes and that's really true. Warren stressed to me over and over how much studying business history has helped him. I would also recommend Generations: The History of America's Future by Strauss and Howe. or its follow up, The Fourth Turning. Apart from books I think you should know what is going on that will affect the future. Not in the sense of forecasting. But for example, I was at a conference and asked a successful entrepreneur, "How do you get ideas to start businesses" since he had started quite a few. His answer ... "I look for big companies that have a lot of employees, and I figure out ways to get rid of the employees." 7. info filtering/process "Warren does his reading in the morning. He had cataract surgery not long ago and it's made things much easier for him. He starts with the newspapers. He looks at them page by page but doesn't read every article. He is very interested in news about companies and less interested in general news. Warren is outstanding at pattern recognition and prefers to do his own synthesis so when he reads he's looking more for data points rather than other people's conclusions. The annual reports -- he reads them for the most part as they are received. He's been following some companies for fifty years or longer and as noted earlier he's got quite a memory, so the process of reading annual reports is pretty efficient for him. He can go through one in an hour or less and get what he needs. On the other hand, say when Google went public, he spent more time on their filings because it was new information. He reads a lot of annual reports of companies he would not buy to expand his knowledge. The filtering is informal. His friends will send him something they think he will find interesting. Or he will read something in the paper and ask for the report. He isn't systematic nor comprehensive. That's today though. When he was younger, he filtered using Moody's, Value Line etc. reading everything about every company, then got the reports for the ones he was interested in. That's probably more relevant to you than what he does today. Does he spend 500 hours. Well, he spends a lot of hours if it's something totally new. That said, Warren's investable universe is somewhat limited now by Berkshire's size which means he's already familiar with almost every investment. So he has probably invested that time, but it's cumulative over many years." 8. re: Weschler's "500 hours due diligence before making an investment" "My understanding is that Ted's process is similar to Warren's and the amount of time sounds right. Let's say you work 50 hours a week, that's ten weeks of work. You could spend a large part of that time reading filings and articles about the company -- and its competitors -- and the industry. Then you do scuttlebutt on the people running the company, which can quite a bit of networking. Ted has a big network, I assume he works it for information. Then there is the garden variety information gathering such as channel checks, meetings with management, plant tours, visits to retail stores. Add to this the time spent every day reading relevant news, and the various conferences that investors attend. The valuation takes time -- early on you have a hypothesis and spend a lot of time testing and refining your assumptions. 500 hours is very reasonable. The main effect of being in the sausage factory is to make me humble about the state of my knowledge. I am slower to pull the trigger and I pay attention to every bit of nuance I can find. My process is not that different from anyone else's. I do a few extra things. For example, it's useful to do a line by line comparison of press releases and filings over time to identify the "ins and outs." You can learn a lot from this. (Companies are trying to be more concise these days; even so it's amazing how often things disappear from sight when news is bad.) I also look at who is on the board and audit/risk committees. If you had looked at JP Morgan's risk committee composition along the way and seen the head of a museum on it who had no business experience, that was a signal. So I look at this sort of thing. The advent of Reg FD has created a situation in which companies are forced to, essentially, lie to investors. So a company is not thinking about a divestment until the day it is suddenly announced. Loan loss reserves are adequate, and management has unshakeable confidence in that, until the day they are suddenly increased by a walloping amount. Inside the company, there are teams of accountants, consultants, bankers, executives and ultimately the board working on the projects that lead to these surprises. Most big events develop gradually over time. Companies used to do more signaling that helped investors adjust timely to changes rather than the present requirement to throw investors over the cliff. I think that in preventing companies from giving inside information to favored people, Reg FD pushed the system too far the other way." -- last...a non-investing anecdote "Dining with Warren is such an experience. Once, we were at a restaurant and Warren ordered a steak. The waiter offered him truffle sauce. The look on his face was priceless. it was as if someone said, would you like some arsenic, Mr. Buffett?"

lol who did this.

i don't want to sound overly bearish or alarmist, but with all the news we're getting - especially the tanker being attacked - i think monday we may see the market down as much as 30 bps

Nobody in the "credentialed class" ever thought any American President could get the Strait of Hormuz opened. Dozens tried, yet they all failed: until now. Trump somehow did it. I never thought I'd live to see the day when the Strait of Hormuz was OPEN to movement of oil.

The homes of our first ten presidents 🧵: (Look for 11-20 soon) 1. George Washington, Mount Vernon

My far left millennial brother in law loves what's happening in NYC. He gets his views from Twitch (Destiny, Hassan, etc) & Reddit, so I'm confident he's similar to other leftists. I picked his brain and here's what I can tell about the normies on the left: 1) He's glad not to live in NYC and pay those taxes. He admits this is completely hypocritical. He seems to view the state as a means to punish enemies. 2) I told him these types of tax seizures have failed in every country when tried, over all of human history. He doesn't care. I'm unclear if he can't think of 2nd order effects, or the punishment of his enemies is the point. 3) He plays dumb / pretends not to understand when there's something that makes liberals look bad. "Huh, I don't know about that, ." I don't know where liberals learned this, but it's weird when you trip it. 4) Woke not only isn't gone, it's stronger than ever. The difference now is liberals don't share their opinions as openly as before. I think they understand, on some level, their views can't withstand reality. I experience this when traveling, too. Liberals keep their thoughts to themselves if they hear I'm from Florida. They'll wrap up their mentally ill conversations when I walk up. In previous years, they assumed everyone held their views. 5) DEI is still their god. My brother in law was a huge Kanye fan. We made fun of him because Ye came up in every other conversation somehow. So when seeing him recently, I asked when we were going to a Kanye concert to HH as a family. My brother in law disavowed ever liking Kanye. And then the conversation got contentious. 😅 (BTW: defending Kanye's song HH directly to a liberal is some of the most fun you'll ever have. Highly recommended.) My overall impressions talking with him and other IRL liberals recently: -They don't care about the destruction they're causing. They just want others to feel pain. -Liberalism is their religion, and they pray daily. Every interaction or conversation is a chance to reaffirm their liberal beliefs and spread the word. Nothing deters them on their holy mission. -Modern liberalism is about tribal allegiance, not outcomes. I don't think they believe good outcomes are even possible. They never mention this utopia they're striving for, only the pain they inflict on others. -They don't believe fraud is real. They believe the government is a righteous organization that also has perfect accounting. The only flaw of government in their minds is non-liberal views are allowed to persist. My conclusion: we can't share a country with these people. And we won't. Conservatives have long held their beliefs quiet, and now liberals are doing the same. Less dialog with each other only leads to diverging views. The smart will eventually lead an exodus, likely when the nation-wide wealth tax comes (they're already planning it!). We see that with tech bros abandoning the west coast. CA lost 1/2 of it's billionaire wealth in literal days, and the CEO of Starbucks left WA the day they introduced an income tax. I don't think Balkanization happens (the breakup of the country), as it would just lead to the federal government seizing any leader who tried to propose it. Liberals love what's happening in NYC. Soon it'll be in your town. Plan your escape now, anon.

🔥NEW: Clarence Thomas — full remarks on progressivism, its foundations, history, and impact from his appearance at University of Texas at Austin: “Stalin, Hitler, Mussolini, and Mao were all intertwined with the rise of progressivism, and all were opposed to the natural rights on which our Declaration is based.” "Many progressives expressed admiration for each of them shortly before their governments killed tens of millions of people." "It comes as no surprise that the progressives embraced eugenics... It was only a small step for Wilson to resegregate the federal workforce." "It was only another step for the government to launch sterilization programs on those deemed by the experts of the day to be unfit to reproduce." “European thinkers have long criticized America for remaining trapped in a Lockean world, with its weakened, decentralized government and strong individual rights. They say our 18th-century Declaration has prevented us from progressing to higher forms of government." "But we were fortunate not to trade our Lockean bonds for the supposedly enlightened world of Hegel, Marx, and their followers. Fascism, which after all was national socialism, triggered wars in Europe and Asia that killed tens of millions." "The socialism of the Soviet Union and the People’s Republic of China proceeded to kill tens of millions more of their own people. This is what happens when natural rights give way to higher-good notions of history or progress, or, as Thomas Sowell has written, the visions of the anointed." "None of this, of course, was an improvement on the principles of the Declaration. Tocqueville's Democracy in America is largely about how America owed its superiority over Europe to its conscious decision to reject central planning and administrative rule, root and branch." "Progressivism, in other words, is retrogressive.”