tag:blogger.com,1999:blog-5389144729834496735.post3296895021611462754..comments2024-03-17T05:15:55.634-04:00Comments on The Brooklyn Investor: Bubble Yet?Unknownnoreply@blogger.comBlogger19125tag:blogger.com,1999:blog-5389144729834496735.post-17293885438526464932020-03-10T13:20:11.792-04:002020-03-10T13:20:11.792-04:00Okay, I saw that this blog have so much value to g...Okay, I saw that this blog have so much value to give and so much valuable content. But I'm still amazed that why the author of this blog, whomever he or she is why he hasn't created his blog like other professional bloggers did on wordpress and why the author hasn't shared his name any where in the blog.Ghani Mengalhttp://www.ghanimengal.comnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-27083727061055377582020-02-07T12:33:11.978-05:002020-02-07T12:33:11.978-05:00Oh yeah, and this all goes back to what Soros talk...Oh yeah, and this all goes back to what Soros talked about in his Alchemy of Finance book. He rants against conventional economics as it's based on the tendency towards stability driven by rational market participants. His view was the opposite, that humans drive economies towards disequilibrium and instability due to self-reinforcing nature of trends, causing booms and busts.<br /><br />A lot of fund managers operate under the assumption of mean-reversion. There is a tendency for mean reversion for sure (especially in the very short term and very long term), but mean reversion models break down due to this reflexivity that Soros talks about. <br /><br />But anyway, that's a whole other topic... kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-27289507154324010292020-02-07T12:23:33.408-05:002020-02-07T12:23:33.408-05:00Hi,
Not really. An update is long overdue, but no...Hi, <br />Not really. An update is long overdue, but nothing really too exciting to update. First of all, from an investor standpoint, this coronavirus is a nonevent, as if you are interested in what a business is worth 5 or 10 years out, then this is just noise. Won't matter over the long term, unless this is one of those end-of-the-world type viruses that will leave us in a world like the Walking Dead... but A. that's probably not going to happen, and B. if it did, then nothing will matter anyway, lol... <br /><br />Otherwise, I tend to think these bad news things are enormously bullish as long as it doesn't end the world. Whether it's the fiscal cliff, trade war, coronavirus, brexit, they are all insanely bullish for the simple reason that the Fed / govts tend to overreact to make sure we don't go into a recession. That's just the way it is. This will work, of course, until one day it doesn't. But you can't really make a living betting that we are at the end of the line and that there are no more ways to kick the can down the road, or stimulate the economy... <br /><br />But until then, every crisis is just another event with predictable responses by the govt which will overcompensate. <br /><br />Plus, we are in no way a real bubble zone in terms of valuation. if it's true what Paul Tudor Jones said on TV the other day that this is a historically unprecedented era of stimulation that may be matched by a historically unprecedented bubble in stocks, then stocks should be a LOT higher... At least double what it is now, I think. <br /><br />Now, this is not a forecast or prediction, and this is not what I would bet on, of course. But it would not surprise me if we did see such a bubble develop in the next year or two. <br /><br />As I said in earlier posts, I think it would be completely within historical norms if over the next ten years, long term rates averaged 4% and the P/E ratio averaged 25x. It would be completely within historical range (based on relationship between rates and PE). <br /><br />If that is so, then the current market is not even overvalued at all... <br /><br />When you think of it this way, it's kind of scary. I would NOT want the market to enter a bubble as I would fear what's on the other side. But history tells us that this might happen. <br /><br />I do not actually understand people who are short, and I am baffled that guys like Einhorn got caught up in the TSLA squeeze. If a stock is ridiculously overvalued, usually, there is nothing to stop it from getting even more ridiculously overvalued... I thought he lived through the internet bubble (which tarnished Druckenmiller and Robertson's records) and would know better... It's a cliche but true, the markets can stay irrational longer than we can stay solvent... <br /><br />kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-85163424302218976922020-02-03T18:10:00.499-05:002020-02-03T18:10:00.499-05:00Hey KK. Any updated thoughts on the markets, valua...Hey KK. Any updated thoughts on the markets, valuation, coronavirus, yield curve inversion, and recession? Thanks.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-80020648363885188042019-11-07T12:49:59.760-05:002019-11-07T12:49:59.760-05:00Love your blog. Please post more! Have learned a l...Love your blog. Please post more! Have learned a lot and always find your posts informative, thought provoking and full of insight. Thank you!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-60915451749231075212019-10-28T10:33:22.727-04:002019-10-28T10:33:22.727-04:00oops, meant to say smaller as a percentage of tota...oops, meant to say smaller as a percentage of total AUM... kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-12946315810066389662019-10-28T10:32:50.670-04:002019-10-28T10:32:50.670-04:00Yes, I tend to like the good private equity guys. ...Yes, I tend to like the good private equity guys. Only issue over the really long term is their AUM. They are just getting so big, and their main area of expertise, pure private equity, gets smaller and smaller as they get into real estate and other areas. So as usual, great businesses looking back, but not so great going forward, probably. <br /><br />I do tend to think they are well-managed, though. This includes APO and BX... kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-63547733763109493672019-10-23T05:25:49.046-04:002019-10-23T05:25:49.046-04:00Hi, for example KKR seems very cheap at the moment...Hi, for example KKR seems very cheap at the moment... <br />In sum, at ~$27 per share, we pay for the value of the investments on the balance sheet, plus a conservative value for the recurring revenue business. <br />The market does not price in (i) value of the carried interest from current AUM (and any additional AUM to be raised in the future); (ii) AUM already committed but not yet generating management fees; (iii) any management fees above a growth rate of 6% into perpetuity.<br />Very curious to know your opinion about this.<br />Many thanks!<br />RoccoGhttps://www.blogger.com/profile/15986898466890621022noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-477268821382237122019-10-10T14:08:21.152-04:002019-10-10T14:08:21.152-04:00Actually, yes. I do worry. The Japanification of i...Actually, yes. I do worry. The Japanification of interest rates around the world is worrisome. At this point, it just seems like people will just have to work longer, which is fine with me. I always thought retirement seemed a little long for many people. So getting older people more active and participating in the work force will be an issue going forward. <br /><br />In terms of markets, I am not so worried at the moment as I don't see a big bubble. As we see in Japan, rates can remain low for a very long time. <br />kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-30883814165830697582019-10-08T13:30:05.957-04:002019-10-08T13:30:05.957-04:00Does it concern you that the developed world is de...Does it concern you that the developed world is dependent on elevated risk assets with little hope for safe income at a time of aging demographics in most developed countries? The average older person needs dependable income. Pools of money that require safety (no risk) earn less than 2%? S&P Yield is 1.9%, price to sales ration near all-time high. Seems like high potential for a bad outcome for pensions and individuals next time there is a significant decline for any reason. Just thinking!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-79923433055506732172019-10-02T23:50:34.823-04:002019-10-02T23:50:34.823-04:00I think Yang’s strategy at the debates was to focu...I think Yang’s strategy at the debates was to focus on the Freedom Dividend because he gets so little air time from the moderators. He has loads of policies on his website and hopefully as the field narrows, he gets more time. Right now, it’s about introducing himself and the big idea first.<br /><br />By the way, did you ever look at E-L Financial (ELF.TO)? I thought you mentioned you would previously. I also like Terra Firma (TII.V) in Canada these days. Both relatively unlevered illiquid financials trading at giant discounts to book/liquidation value with decent ROEs.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-89969621612341696762019-10-01T21:08:41.811-04:002019-10-01T21:08:41.811-04:00Never trust anybody that ages and moves left.Never trust anybody that ages and moves left.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-12845984353462579492019-10-01T10:05:36.056-04:002019-10-01T10:05:36.056-04:00Hi, sorry, the email seems to be broken here at bl...Hi, sorry, the email seems to be broken here at blogger, so there is no way at the moment to follow.kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-21344299891568017352019-10-01T10:04:09.052-04:002019-10-01T10:04:09.052-04:00how do i get your posts on my mail?
how can i foll...how do i get your posts on my mail?<br />how can i follow your blog ?<br />thanksamithttps://www.blogger.com/profile/09256583340059617752noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-25594117026976167232019-09-30T13:28:52.198-04:002019-09-30T13:28:52.198-04:00Hi, yes, good question. Asset managers are tough. ...Hi, yes, good question. Asset managers are tough. I tend to like the private equity guys but with AUM growing so much, I wonder how they will achieve the high returns they used to get. Also, the ones with a lot of fixed income is problematic too, with such low rates... Can't really charge much with rates so low.<br /><br />So that's my dilemma with the asset managers. If you are good, your AUM grows, and then your returns suffer... How do you deal with that? As a business, asset gatherers are much better, like Fidelity (not public), Blackrock etc. but they face the same issue... How do you keep growing AUM? Not sure. <br /><br />I don't have a strong view either way at this point, even though the passive/active argument is interesting to me. Passives will have issues and the pendulum will swing, somewhat, back to active, but not all the way as even in the pre-index/passive era, managers rarely outperformed. <br /><br />So that's the other thing; who is going to keep outperforming? Not sure there either... (again, mostly due to the size issue... if you are good, you get big. Then how to do outperform with the new, bigger AUM?). <br /><br />I should think about this more as there may be something interesting to do... I will post something if a light bulb goes on... <br /><br />Thanks for dropping by... kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-91099725229211032572019-09-29T11:25:01.452-04:002019-09-29T11:25:01.452-04:00Hi kk
It has been a while since your last post!
...Hi kk<br /><br />It has been a while since your last post!<br /><br />One area of the market which is prima facie not in a bubble, are beaten down and cheap active asset managers. I know you have written extensively about some examples in the past. What are your thoughts about them at this point in time?<br /><br />The big asset managers seem to be a in long, bruising, and losing battle against passives. However some companies that operate in niche areas (such as PE funds) or are specialists (such as Ashmore Group in the UK) seem to be bringing in AUM still.NerdLibrarianhttps://www.blogger.com/profile/16564002074744305912noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-63440974728785175052019-09-28T11:21:31.456-04:002019-09-28T11:21:31.456-04:00In Poland you can find companies with more cash th...In Poland you can find companies with more cash than their valuation. P/bv for a broad market is below 1. And no one is interested in stocks. To diversify I started buying value stocks in US: Weyco group, Nucor Corp, Domtar, US steel, Kraft Heinz. I'm aware that some of these companies can face real problems but from outside they look like opportunity in long term.dedekhttps://www.blogger.com/profile/16548043307351885973noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-35795113148268248352019-09-28T00:27:28.142-04:002019-09-28T00:27:28.142-04:00Hi, Yang seems to be popular and I like him, but a...Hi, Yang seems to be popular and I like him, but after watching the debates, he sounded more like a one-trick pony. OK, he will give everyone $1000 per month. But what else? He didn't seem to evolve and develop but kept saying the same thing, so not sure he can get the nomination. As for dollar shortage, I don't know. I am not all that interested in the mechanics of the short term money market (unless there is a real problem somewhere...). <br />kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-60962172232260971352019-09-28T00:14:02.485-04:002019-09-28T00:14:02.485-04:00I always appreciate your perspective, thanks. I...I always appreciate your perspective, thanks. I'm curious what you think about Andrew Yang's chances of winning the nomination and his policies? Also, if you have any views on the dollar shortage theory?Anonymousnoreply@blogger.com