WM 24 June 2023

Quotes

    

Stan Kroenke owns the Rams (NFL title recently), the Denver Nuggets (NBA champion) and the Avalanche (Hockey champs)

Lessons & thoughts

Solutions to a complex world

Cut loss but run with your profit: winners keep on winning

Fibonacci retracement

Chart patterns

Example of great stocks

Trading plan

Risk management

Baruch advice to the young investor

Life stages of a company

For start-up = P/sales

For hyper growth =P/sales + EV/EBITDA

For self funding = EV/EBITDA + PEG

For operating leverage P/E + P/BV

For capital return P/BV

For decline 

IBD momentum guideline focuses on high growth/momentum stocks

Minervini

Munger

Buffet says

Chris Hohn

Charges 1.5% gives back 0.5% to charity. Delivered 19% CAGR from USD 490m in 2004 through a concentrated portfolio (can have up to 20% of his portfolio into 2 stocks) of quality growth large cap oligopolistic companies where activism can be exercised opportunistically (eg Japan Tobacco, Airbus etc). He actually used to do special sits in lower quality sectors and companies but in 2008 a 45%+ drawdown led to a refocusing of his strategy on quality.He became a billionaire in the process with a fortune estimated at USD 6bn and run TCI with 12 sector specialist analysts.

Why quality works?

Data vs narrative

Goals

Change is accelerating: average life span of SPX company falling to 12-13 years

Humour & happiness

Recycling elderly bodies as coffee table. 

    

Writing the Hemingway way

- master simplicity= straightforward prose, avoid intricate language and unnecessary complex sentences. Simple words. Short sentences. 

- use vigourous English, clear and direct style. go straight to the point.

- bleed onto the page: pour your heart and soul into your writing to augment emotional appeal

- write drunk, edit sober. let creativity run wild then cut and edit. 

- Kill your darlings: If it does not serve your purpose even if beautiful delete.

- never empty the well: always stop for the day while you still know  what will happen. This way you start in the morning with momentum.

- Embrace sollitude

- Never stop writing. Keep on writing even if faced with hardships etc

- Iceberg theory: deeper meaning of the story should be implicit, not evident on the surface, use the power omission

- write honestly: use emotional and experiential truth, dig in your own experiences

-show, don't tell: let the characters and their actions as well as the surroundings reveal the deeper truth of the story

Yes I can: front cover jinx did it again

Macro news

Money

GDP

Liquidity leads GDP    

Lead economic indicator

Europe

ISM

    

Paper board

Is recession already priced in and market looking beyond it? Remember that bear markets slide on a slope of HOPE

Socio-Demographics

    

Confidence

CPI

Yield curve

FX

EM

Precious metals

Bitcoin: pop! Bitcoin reacting to news of large ETF funds preparing to get approval by SEC

  

Fixed income

Real estate

US commercial property USD 1.4tn debt time bomb

German housing in trouble

US housing

Equities

Liquidity

Inversion

Economic

Valuation

SPX vs Gold

Nasdaq vs yield/bond

Japan

Bear market rallies

    

Or bull market correction soon?

Sentiment

Bear market rallies

MACD

Dumb money

A/D 

High / Low

New highs

Divergence World vs US

Put call ratio

Volatility: danger zone

    

    

Seasonality

Holding period

4-5 year "presidential cycle" bullish

Long term bullish? Real vs Nominal

Commodities

Copper: enabling electrical and e-mobility transition

Rare earths

Coffee

Themes, Sectors & Corporate news

Industrial sectors

Tech

   

AI disruption

Space

Family owned companies: skin in the game and cost consciousness, long term investment horizons and and higher risk aversion: 10.2% CAGR vs 7.9% for non-family companies