Diederik SCHMULL

Early breakout in the miners. Amazes me how the miners-to-gold ratio still sits at historically undervalued levels. This move is likely to accelerate to the upside. Operating leverage in mining companies during a secular cycle is one of the most powerful dynamics in the market. Investors still seem to believe current mining profits are temporary. I could not disagree more. tavicosta.substack.com/p/early-breako…

Commodity inflation is surging: The Bloomberg Commodity Index is up to 141 points, the highest since February 2013. This index tracks 25 exchange-traded futures contracts across energy, metals, and agriculture. Energy accounts for the largest weighting, at 39%, followed by agriculture, at 27%, precious metals, at 16%, and industrial metals, at 13%. This index is now up +28% year-to-date and it has officially surpassed the 2022 energy crisis peak of 140 points. As a result, commodity prices are now on track for their first annual increase in 4 years. Inflation is back.

Ladies and gentlemens, dignitaries, celestial and extraterrestrial beings…Behold the majestic Schiller PE Ratio (currently sitting at a jaw-dropping 41.24. Yes, you read that correctly. We are now cruising at altitudes previously reserved for the 2000 Dot-Com blow off top. This isn’t “elevated.” This isn’t even “rich.” This is full-blown, lights-flashing, sirens-blaring bubble territory. The chart doesn’t lie. We’ve seen this movie before. The last time the Schiller PE flirted with these levels, the market didn’t just correct it face planted from orbit. And right now, with the semiconductor sector already trading at Dot-Com-era multiples, the entire growth complex is basically daring gravity to do its worst. So while the bulls are still dancing in the streets, the chart is quietly whispering the same dire warning it delivered in 2000 This party has an expiration date. And the hangover is going to be legendary. Schiller P.E ratio

The Federal Reserve is loading up on US Treasuries: The Fed's total Treasury holdings are now up to $4.4 trillion, the highest since July 2024. Since December, the central bank has bought +$237 billion in Treasuries. As a result, Treasuries now account for 65.9% of the Fed's total assets, the highest since March 2008, when this figure stood at 68.5%. This also brings total assets on the Fed’s balance sheet up to $6.7 trillion, the highest since May 2025. The Fed is propping up the Treasury market.

Charlie Munger sat down with the BBC's Evan Davis in October 2009, in the middle of the financial crisis. Berkshire Hathaway was down nearly 50% from its peak. He was 85. The interviewer asked how worried he was. Munger said zero. That zero is the whole interview. Munger spent his life proving that great investors win on temperament. They sit still when everyone else is panicking. The first lesson is that 50% drops are the price of admission. Munger had watched Berkshire halve three times in his career: 1973-74, 1998-2000, 2008-09. If you cannot watch a stock you own fall by half two or three times a century without panicking, he said, you do not deserve to own stocks at all. You will get the mediocre returns you deserve. The second lesson is that capitalism without restraint destroys itself. Munger thought America had spent two decades "puffed up by an idiot boom and idiot expansion of consumer credit." An economy on unchecked speculation, he said, is like a person on heroin. The next three weeks feel great. Then it ruins you. England did the same thing in 1720. The South Sea Bubble cost them a generation of wealth. Without restraints, "gross immorality and extreme craziness" inevitably follow. The third lesson is about admitting you were wrong, a quality almost no one in public life shows. Alan Greenspan ran the Federal Reserve for 19 years. Most of his tenure was treated as final proof that free markets work best when left alone. When the crisis hit, he publicly said he had been mistaken. Munger called him a hero for it. The fourth lesson is that Wall Street rewards what Munger called "locker room culture." The people who thrive there cannot stand to see another firm beat them on anything. That compulsion does enormous damage. The people gripped by it are not very squeamish about how they win. Neither Munger nor Buffett ever felt the pull. They were happy to underperform peers in the short run if it meant winning over decades. Most professional money managers cannot afford to. They get fired before the long run shows up. The fifth lesson is the four-step filter Berkshire runs every investment through. Can we understand the business. Does its competitive advantage last decades. Is the management trustworthy and capable. And does the price give us a margin of safety, a cushion if we are wrong. Munger said it has not spread faster because it is too simple. Investment banks cannot bill million-dollar fees by saying "we just looked for cheap good companies with honest managers." Complexity is the product the professional class is selling. Munger and Buffett spent six decades proving most of it is noise. The sixth lesson is what to do when the filter triggers. When Berkshire decided Coca-Cola was mispriced in 1988, they went big. They bought roughly a third of every day's trading volume for many months. When the math is that obvious, Munger said, you back up the truck. This is the part of the Berkshire model almost no one copies: betting big when conviction is real. The seventh lesson is about mindset. Munger looked at every share as a piece of a whole business. Share price times share count is what the market thinks the whole company is worth. He asked whether a rational private buyer would pay that for the whole company. If yes, Berkshire bought. If no, they passed. That single mental shift removes most bad decisions before they happen. The closing lesson is about succession, what Berkshire shareholders have quietly worried about for decades. Berkshire is the most decentralized large corporation in the world. Each subsidiary has its own deep pockets of talent. Headquarters does not run them, it allocates capital and stays out of the way. Berkshire's contribution after Buffett is gone, Munger said, will utterly dwarf its contribution while he was alive. Succession comes from building a system that does not need a hero at the top. Munger died in November 2023, a few weeks short of 100. He spent the last decade of his life giving interviews like this one and watching the system he built keep working without him. That was the proof of concept.

Bond erosion worsens.

Stock markets do appear to be entering a 'melt-up' phase here...

Leaving your cat alone for an entire day is now against the law in Sweden. According to 2026 regulations from the Swedish Board of Agriculture (Jordbruksverket), owners must ensure their pets' social and emotional needs are met alongside physical care. Owners are legally required to check on and interact with their cats at least twice a day.

The European Union released a study last month about wealth confiscation from the richest of their citizens. The study basically concludes that countries need to have strong exit taxes in place to prevent wealth from leaving as the socialists confiscate the property and money.

Gold and Silver Miners: Once Capital Black Holes, Now FCF Powerhouses ht @TaviCosta

A record divergence: U.S. private sector financial assets = 6.7x GDP. Above 2021 highs, radically higher than the 2000 top, and more than double the 1970s low. When financial markets outgrow the real economy, imbalances follow — and so do consequences. Is this the most dangerous market in history? Read this free report: elliottwave.com/?utm_source=tw…

The US Bond Market has now been in a drawdown for 69 months, by far the longest in history.

That is a very important red breakout, for many reasons. One reason being that it kicked off the 2nd inflationary wave. Been saying for years that we will see at least $250-$300 oil during this commodities bull market. And in the linked post below I raised that target to $369. Oil was at $58.40 in the linked post below. Now at $103. The linked post nailed the low. The 4.5 year red bullish falling wedge is probably a halfway pattern, with a price target of $369 (green lines measured move). Since I called the commodities bear market low almost 6 years ago, I have been saying that this commodities bull market is the best opportunity you will ever have in life to get out of the rat race. When that 2nd pink head & shoulders pattern broke down just before the Covid-crash, I understood that the huge blue head & shoulders pattern was probably going to play out too. And it very much did. That is the kind of guidance that makes a difference. Following the right people is absolutely vital. #joinus graddhy.com #oott #oilprice Check that breakout above red line; a huge gap up above it, then gapfill, then take off. That is stylish price action. And yes, if going to breakout, why not do it in style.

Warren Buffett just warned that the US dollar could collapse and admitted he doesn't understand most of the stock market anymore. 95 years old, sitting on $380 billion in cash, and the first time watching from the sidelines instead of actively investing. And what he revealed at this weekend's Berkshire shareholder meeting is genuinely concerning: On the market, Buffett didn't hold back. He compared it to "a church with a casino attached" and said the casino has never been more packed. On one-day options: "That is not investing. It's not speculating. It's gambling. Totally." He pointed to the Avis short squeeze THIS WEEK. A rental car company that's been around for 50 years getting meme-squeezed in 2026. The same behavior that blew up retail traders with GameStop is back, except now it's hitting boring legacy companies with zero business being volatile. "We have lots more regulation now, but people spend their time figuring out how to get around the rules rather than follow the rules." That one sentence explains more about the current market than every CNBC segment combined. When asked why he's hoarding $380 billion instead of investing it, Buffett said something no one expected: "I understand fewer of the businesses as a percentage of the whole than I did 10 years ago. I have not learned new industries for some years. I'm not going to have an edge on a whole bunch of younger people that have actually grown up with it." Think about what he's actually saying... This is a man who made $140 billion by understanding businesses better than anyone alive. And he's telling you the current market is so detached from reality that even HE can't make sense of what's being valued and why. He quoted IBM's Tom Watson Sr.: "I'm smart in spots and I stay around those spots." In 60 years of managing money, he said MAYBE five were "really juicy." Five out of sixty. That means 92% of his career was spent WAITING while everyone else gambled. And he still ended up richer than all of them. Then the conversation turned to inflation and that's where it gets really interesting: Buffett said America is "not immune" from runaway inflation. He brought up countries that went bankrupt "six or seven times" in his lifetime. Compared today to right before Volcker had to rescue the dollar, when Americans were borrowing at 12% to buy farmland earning 6% because they believed the dollar would disappear. "Cash is trash" was the mentality. Nebraska farmers collapsed because of it. Entire communities wiped out not by a recession but by a BELIEF that the currency was dying. And Buffett sees that same energy building again. Then someone asked the question everyone wanted answered: Do you see a crash coming? "If you saw it coming, it wouldn't happen. The things people are talking about and thinking about? It's not going to happen. But there are things that can come out of the blue." He compared it to the assassination of Archduke Franz Ferdinand in 1914 that triggered World War I. Nobody was discussing or anticipating it. But it changed the world overnight. "That's particularly true now because of the things that can come out of the sky." A 95yo man who has survived every crash, every war, every crisis of the last six decades just told you the market is a casino, the dollar isn't safe, and the real collapse will be something nobody sees coming. $380 billion in cash is his answer because he believes things are about to get much worse.

Berkshire Hathaway $BRK.A has now dumped stocks for 14 consecutive quarters, the longest selling streak in its history 🚨🚨🚨

A new era for the mining industry. Miners are generating roughly 7x what they did at the peak of the last cycle. I’m old enough to remember when this space was considered “uninvestable” by the so-called experts. Game on. tavicosta.substack.com/p/a-new-fra-fo…

BREAKING: Berkshire Hathaway announces its cash balance is now up to a record $397 billion. The company sold a net -$8.1 billion worth of stocks last quarter, marking its 14th-consecutive net quarterly sale.

Agricultural commodities are officially breaking out this week. This is a major move and it’s likely just the beginning of further upside. The implications here are significant, both for policymakers and for society more broadly. tavicosta.substack.com/p/the-food-inf…

Inflation about to take off according to the Bond Market 🚨🚨

Deutsche Bank: $8000 Gold