WM 28 August 2022

Quotes

Lessons & thoughts

Julian Robertson

Information

Power and energy

Energy is the ability to cause change; power is the rate energy is moved, or used.In physics, energy is defined as the amount of work that can be performed by force, whereas power is defined as the rate at which work is performed.

If not now, when?

How to sell a product

Everything is relative

Technicals

Time in the market > market timing

The price of time

Finance is all about the transfer of transactions and spending/purchasing power across time

What is an interest rate?A discount rate (the price of money). A hurdle rate (the cost of capital). A risk factor (price of anxiety). Cost of borrowing / price of leverage. Price of use of money over a period of time. Good deflation = productivity / bad deflation = collapse of prices due to end of speculative bubbles.Finance is all about transactions across time. Transfer our spending across time.

Perhaps not time but energy? As time is an illusion

According to Einstein, time is an illusion

Markets news

It was a quiet week, until it wasn't. The summer rally is officially over, just as the Fed confirmed its targets at Jackson Hole. The objective is to bring down inflation by crushing the the economy and asset prices. Expect most assets to feel some pain between now and October.

Biden cancels student loans

Where is John Locke when you need him?

Savings & investments

Tightening cycles and profits

GDP

Inflation

Wages

Powerless Europe

Electricity used to cost EUR20-30/ MwH. It has shot up to above EUR 1000 in France (as half of its nuclear plants are closed for repairs) and averages EUR600/MwH in Europe now. That's equivalent to a price of oil at USD 1000/bl!

Bitcoin

Fixed income

One of the worst bond markets on record

Real estate

Equities

Sentiment vs allocation

CPI vs equity

Don't look down

Bear market rallies

Correction in a secular bull market or secular bear market?

US and the rest

DAX

Note that since 2005, the S&P 500 index (the US best companies) have averaged 1% annual top line growth from 2005-2021 and 3% EBIT growth and 4% EPS growth. MV grew by 6% CAGR and P/S increased by 4% CAGR