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birb_cromble  27d ago (text post)   1245 thread views

Qeekly Finance Thread - 2026-09-12

A weekly thread to discuss financial matters - from personal all the way up to global.

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Are you going to invest in Anthropic's purported $2T IPO?

I will wait for the S-1 to make any decisions, but my gut prediction is that I won't be touching it with a ten foot pole. All of the leaked data suggests shaky financials with fickle customers and costs that aren't entirely under their control. That sounds less like a high margin software company and more like an airline.

Fair! Just curious, how did you feel about SpaceX? their unprecedented shareholder restrictions? obviously not the same, but id like to hear your take.

Chiming in, because I am enraged by SpaceX:

It has a very fascinating and appealing component, but with a bunch of unappealing things bolted onto it. All the baggage dilutes and, worse, confuses its exceptional part, which turns it into an Elon fanboi bet.

The shareholder restrictions don't matter and are even good: if you do want to buy Elon, you want undiluted Elon, not a conventional company.

I was mildly optimistic about SpaceX until the S-1 came out. The launch business has legs due to government contracts, but the xAI portion of the business is a giant pit in the ground where they set money on fire. At this point their financials suggests they're a data center REIT with delusions of grandeur. I'm not willing to make a long term bet on that. If the stock price drops to around $70 I'll reconsider, and I'd also do so if the AI portion of their company shows improvements. Until then I'm sitting on the sidelines.

I'll wait for the S-1 to decide for sure, but most likely yes, up to 5% of my portfolio.

Why not more? I have a high degree of conviction that AI will radically accelerate the economy (mod any paperclip effects), but I'm much less sure on who will reap most of the benefits. I could see anything from Ant/OAI/GOOG individually taking it all, to an oligopoly, to it diffusing through the economy with relatively few rents accruing to the labs as intelligence is commoditized. And there is a built in cap to returns: even (or especially) if everything goes perfectly according to plan for Ant, they will become the number one target for redistribution, and short of Dario overthrowing the government, he'll be asked to share with everyone else. Someone's X% ownership of Ant is not going to be getting them X% of the light cone.

If OpenAI went public the same day, would you split that 5% clean in half?

Depends on the S-1s, but I intuitively feel OAI at 1.2T (the most recent rumored private valuation) vs Ant at 2T probably has more upside. Ant having better enterprise numbers for a couple quarters because of coding agents doesn't say that much about the ultimate winner in the case where commoditization doesn't happen and one ends up dominating.

Very tempting to rent them. I'll probably ask for an allocation. Might sell first day.

I've wanted to buy and sell the first couple days a couple times, but it seems that there's a threat you'll be banned from future IPOs. Is that something that actually happens?

No, because my read is that either we have a Butlerian Jihad (and Anthropic loses most of its value, though not all) or we all get paperclipped.

In the extremely-unlikely case that Anthropic actually manages to pull off alignment of neural-net ASI, they could also turn around and stiff their shareholders.

Over the course of this Qeek, I've been learning about the concept of fiscal dominance.

Fiscal dominance is a macroeconomic condition in which government fiscal pressures (high public debt and deficits) effectively dictate or constrain a country’s monetary policy. In a fiscally dominant regime, the central bank’s usual objective of controlling inflation becomes secondary to the Treasury’s budget financing needs, often leading the central bank to accommodate government borrowing by keeping interest rates low or buying government debt. This situation tends to create inflationary pressure

Do you think that we are starting to see that phenomenon in the United States? It seems like the symptoms of said event line up with what we're seeing: stubborn inflation, ripping equities, increasingly schizophrenic Treasury behavior. On the other hand, I'm always suspicious of something that fits a little too well.

If it is happening, what should private American citizens expect, other than high inflation? How would an Argentinian prepare for their fiscal dominance scenario if a time traveler warned them ahead of time?

Same as it ever was, really. People in the last 50 years really wanted to think of central bankers as our modern wizards, fine-tweaking the economy with their monetary policy dials, while we breathlessly hang on every word of their forward guidance. But they've been more accurately caricatured as the kid in the passenger seat with a fisher-price steering wheel & pedals who thinks they're the one driving. The only awkward part is that the adult who is actually driving (fiscal policy of spending & taxing, which have enormous clear 1st-order effects) is often actually looking at the kid and also thinks they're the one controlling the car.

As for "monetization" inflation theories: Anyone who still thinks of interest-bearing government debt in the form of central bank reserves as "money" but interest-bearing government debt in the form of treasury securities as "not-money" has been exposed as having an incoherent understanding of the accounting fundamentals. QE not being stimulative or inflationary broke a lot of those brains awhile back, but people come up with cope or just conveniently forget about it and go back to their old textbook understanding years later ('gasp, you shouldn't monetize the debt, that would be inflationary!'). Some mainstream economists like Summers & Krugman finally came around in the mid/late 2010s to notice that in a zero-rate environment, there is no 'money' difference, and the deficit is effectively printing money regardless of what form it ends up in, be it reserve balances, securities balances, physical coins/notes, etc. They still didn't seem to note that in the post-2008 world, the monetary policy regime switched to hitting their interest rate target by paying interest on reserves directly (a much better & simpler system than using reserve requirements and OMOs to drain all excess reserves all the time from the banking system), so there's no 'money' difference between reserves and securities even if the policy rate isn't zero.

Fiscal dominance for American citizens has been happening for 250 years, so I would anticipate more of that general trajectory. Especially similar is the last 90 years with a central bank that got modernized based on the experience of the great depression, and the introduction of income taxes which are a massive fiscal automatic stabilizer where taxes paid go up & down with the state of the economy without any active intervention needed by congress. Just because it's the water we swim in, doesn't mean it's less important; that's the steering wheel that's actually attached to something.

To the extent that you actually have to check empirically to find that raising the policy interest rate to 50% (meaning the government effectively increases the size of all bank accounts constantly with a bunch of free money), turns out to shocked pikachu drive inflation up to 50% rather than 'taming' it down to 0...well I would say you're learning which 'channels' are more powerful in the real world, free money vs cost-of-borrowing, rather than needing to get too creative speculating about whether we've transitioned between monetary vs fiscal dominant worlds at any given moment. And it starts to click why the Fed couldn't get inflation up to 2% no matter how low they set rates, and now can't get it down to 2% no matter how high they set them. I haven't read the econ blogs in awhile, but I know of at least John Cochrane as still trying to get the 'fisherian' word out that interest rates are positively causally correlated with inflation, as well as MMT's Warren Mosler.

I'm willing to believe. What concrete predictions should one make if this model is correct?

On the surface, it would seem this model implies our fiscal problems are easily fixable by monetizing the debt and lowering interest rates. Once interest payments are removed, the deficit to GDP falls to reasonable numbers.

What do you make of Japan's currency devaluation over the last 15 years?

What are the fiscal problems we're looking to fix? Trying to get inflation back down to roughly 2%, and optimistically try to get unemployment down a bit more, to like 3%?

I would definitely give the neo-fisherians a shot, and try dropping the policy rate to somewhere around 0-1.5%. Cochrane's modeling also supports Bessent's moves to phase out longer-maturity securities in favor of shorter bills, in order for interest rate changes to have fewer conflicting effects. Any debt monetization beyond that is pointless, and under current various rules there are probably enough institutions that prefer/need the bonds that I wouldn't suggest bothering with more QE.

Predictions based on the supposed perpetual dominance of fiscal policy over monetary policy? I guess stuff like the prediction that the eurozone was set up poorly and would dramatically struggle to deal with the first big crisis, that you should prepare for a crash if austerity politicians start winning again and fomenting a fear of large numbers, and that otherwise the US with a demonstrated willingness to keep running large deficits (to supply the desired savings to the domestic private sector and the rest of the world while maintaining solid aggregate demand) is exactly where you want to be for the best economic growth & business investing environment.

No idea about Japanese exchange rates, looks like they started accumulating US treasuries again in '09/10, which would be intentionally devaluing the yen to make their exports more competitive? And this year they finally did a massive sell-off of some of their foreign reserves to push the yen back up? I'm more of a fan of just leaving exchange rates purely floating, but I'm open to some mercantilist wisdom of keeping your industrial base stronger than what might happen naturally.

I have to admit you've given me some interesting food for thought.

What are the fiscal problems we're looking to fix? Trying to get inflation back down to roughly 2%, and optimistically try to get unemployment down a bit more, to like 3%?

Unemployment and inflation are low, so no problems there.

The bigger issue would be a sort of economic constitutional crisis. Government services are supposed to be paid for by taxes. When taxes are inadequate to cover expenses, then Congress is supposed to raise taxes or cut services. At some point debt grows to the point where Congress is forced to confront this. No one ever voted on "let's just keep printing money forever to pay for it".

Using only taxes to pay for services, then there is a hard cap on "Boomer luxury communism". Using taxes + money printing, then this cap is much higher. This money printing is a form of tax, and the government spending is a form of non-productive consumption. In the end, higher taxes and greater non-productive consumption will lead to lower economic growth.

I don't think it's accurate to say central bank policies have no effect. I've heard a lot of talk about zero-interest-rate phenomena and its influence on the tech market scene, for example, and I think that has a lot of basis under it. If you give people access to infinite money with the condition on "give it back some time later, maybe" it will have an influence on the economy, how could it not? I do not deny government spending and taxation has its effects too - I mean, we're talking trillions here, how could it not, and I think nobody would ever deny taxation directly influences economic behavior, and so does subsidizing.

That said, I think the idea that the Fed is only interested in pegging inflation to 2% and nothing else matters is naive at best. The Fed is seen as the steward of the economy as a whole, whatever is meant by that - I am sure they have enough charts for everybody - and the government would reach out to them (either quietly or flamboyantly, in Trump's case) if they want some economic policy to happen. I think that has been the case for a long time, one can call it by whatever term they want, but the government and the Fed have some ideas how the economy should look like, and they use all their tools to achieve it, and the inflation is only one measure among many.

I've heard a lot of talk about zero-interest-rate phenomena and its influence on the tech market scene

All I would say from my perspective is that I've seen quite a lot of people who don't seem to know or write much about banking/accounting/money, still very much took to the zirp 'free money' story as part of any fun narrative-building they wanted to do. It reminds me of narratives about the falling rate of profit in capitalism or peak oil doomerism, where people work in some kind of questionable economic fudge factor for why some dam hasn't quite broken yet in their story.

In the same way that every random redditor "knows" that the Fed was allowing inflation to stay up in '22 and was screaming at them to raise rates to kill that inflation, similarly tons of people "know" about the distortionary impact of zirp as some story for anything happening in the 2010s. I just don't think the story really works like that. The default neutral state is for the risk-free monetary base to be non-interest-paying. It takes active government intervention to artificially set the base risk-free rate at something above 0%, upon which all other interest rates get set at a spread above. And banks don't just give infinite free money out when the base rate is zero, they take their marginal cut for the service they're providing, do their best to price in the credit risk appropriately, and get closed by the government for failing to be run properly. The economy clearly wasn't exactly turbocharged by 0% or negative interest rates, the way the wizard-believers were hoping.

As for other jobs the Fed does, yeah they have a ton of different roles. In addition to being charged with trying to use monetary policy to achieve stable prices and low unemployment, they also run the payment settlement system, do much of the financial regulatory policing, run the Treasury's books (so technically even treasury securities are a type of account at the Fed), and the branches each do plenty of interesting academic research & paper-writing to different audience levels, etc. If this was stemming from the 'toddler thinks they're driving the car' analogy, that was saying that monetary policy really doesn't drive the economy, compared to the overwhelming dominance of spending & taxing. Not that it has no effects, or that they do nothing useful.

Argentina is a basket case. Let's focus instead on a closer comparison: Japan.

Japan's debt-to-GDP is much higher than the US. And they grow slower. And they have fewer children. And they are older. So any problems the US might have in the future, Japan already has today.

How does Japan handle its debt? They monetize it. The central bank of Japan owns roughly 42% of Japan's debt. That means they created Yen out of thin air to buy the government debt. And it doesn't stop there. Another 40% of the debt is held by banks, insurance companies, and pension funds that are legally mandated to own it.

You might think this is bad for Japan's currency and you'd be right. Its value against the U.S. dollar has declined by 50% since 2012. That's a common theme. Almost all currencies decline against the dollar over time. Some decline slowly. Some decline quickly. But, except for the almighty Swiss Franc, decline they must. .

The U.S. will monetize the debt. The consequences of that might be hard to predict. But there is enormous capacity for the U.S. to do that given our extremely strong currency and extremely large trade deficit. It's likely that the damage will fall mainly on countries that rely on U.S. exports for their economic growth.

Long term, the health of the US economy will depend on its economic productivity. The important thing is not to take actions that curtail economic growth as they have done in Europe. Fiscal concerns are secondary.

How would an Argentinian prepare for their fiscal dominance scenario if a time traveler warned them ahead of time?

What Argentinians have always done is to move savings to a stronger currency (which for us was USD, but for you it could be Swiss Francs, Gold or maybe Swedish Krona if you're feeling frisky), but access to global capital markets had been constrained until relatively recently to all but the wealthiest, in reality globally diversified equities that have good pricing power will probably index and do fine, so... Buy Mastercard?

I have finally used up a good chunk of my ISA, and put my money where my mouth has regularly been: In shares of the Vanguard S&P 500.

God knows how long I've been putting that off, it was surprisingly painless when I sat down and did it. Financial responsibility, brought to me by the resumption of dextroamphetamine.

Any advice on further diversification of my portfolio? I am not financially stressed, and I have no immediate plans on buying a house etc etc. The most likely significant financial liability in the near term would be a cheap(ish) car. I don't have to worry about providing for my family back home, at least unless things go horrendously, unimaginably wrong when it comes to their investments and holdings.

I would say I have a decent risk appetite, but I am of the opinion that the market is, in general, more efficient than I am. Thanks!

Hot damn man. I'm glad you're getting some traction.

The best time to plant a tree might be twenty years ago, but the second best time is today.

Thank you. I'm glad I did it, it was one of the most concrete examples of me failing in hard to see ways, my limited energy carefully rationed. Being able to overcome the tendency to procrastinate in some ways, while feeling utterly helpless in others.

I think that was the biggest ticket item. Compared to that, canceling a gym membership I don't use is nothing.

Thanks for the other advice! I am leery of gold or crypto, for various reasons, but general global exposure might not be the worst idea. Shame the Chinese stock market is borderline impenetrable...

Consider VT if you want global exposure with zero fuss. VOO is not a bad choice at all and I wouldn’t worry about diversification past holding it.

The only reason I didn't suggest VT is that a lot of people think it has too much ex-US exposure. VXUS would give him the opportunity to decide his own tolerance levels

Is it not market cap weighted? That's the only thing I would try to balance for. I wouldn't know how to be objective beyond that. But anyway I'm a hypocrite with my core position in VTI.

VXus Tracks the FTSE Global All Cap ex US Index, so outside of tracking error, it should be.

Any advice on further diversification of my portfolio?

Answering your questions more directly, I might consider some global exposure, and maybe some assets that aren't directly correlated to equities. For the former, adding a fraction of VXUS might be a good call. For the latter, you probably want to talk to somebody smarter than me. People make strong arguments for gold, bonds, commodities, and cryptocurrency.

What are people's stock picks looking like these days? I made a mint on Twist Bioscience recently off a twitter tip, but I rotated out already after it rocketed. Wishing I went in with more volume, but it wasn't my conviction, so I went pretty light. Other than that, my individual picks are mostly the usual that have served me well, MSFT, Nvidia, Amazon. I tend to keep about 20% of my funds as 'money where your mouth is' money, but I kinda just struggle to see opportunities better than holding more Nvidia atm. I did grab some SK Hynix after the korean market vomited up its leverage, but I'm already eyeing selling out of that for a small profit, I worry the industry is gonna overbuild in a big way in a 2-3 year timeframe (Plus china). Also recently (Well, 6 months ago) exited my costco position, which was kinda a dual retail thesis, I felt future shopping would trend in either amazon or costco-esque directions. But it's just too expensive for me atm relative to growth potential, even after the dip. Keeping an eye on it to buy more if it falls further though.

I feel there definitely are opportunities in bio/pharma, I'm just not keyed in enough to find them reliably. Most of my wins there have been gleaned from listening to people in the field.

Anyway, thoughts? Anyone got a pick they're pondering?

Ones I recently bought with small allocations:

$CRON – Canadian weed stock. Sector is bombed out. They are profitable. Most of the market cap is in cash. Growing.

$KSPI – Kazakhstani super app

$STNE / $PAGS – South American payment rails. Super cheap.

My top holding:

$SBLK – Bulk shipping. There is likely to be a shortage of bulk shippers over next 5-10 years because there are no ships on the order book and older ships will have to be scrapped. Will make probably earn $5/share per year over next several years. Stock price is $31. Pays out almost all profits as dividends. New iron ore mine in Guinea will be a tailwind as ships have to sail longer from Guinea-to China then Australia to China.

Risky/speculative:

$CHTR. Leveraged play in cable. Bombed out beyond all belief. Trades at a PE of 3.5 but has a ton of debt so EV/EBIDTA closer to 5. Debt is like 4 times market cap so could be in trouble in a couple years if earnings fall and interest rates are higher than now. Cash flow projected to increase by a lot as they pay back debt and have lower capex needs. If so, stock could triple. Risk of bankruptcy is non-zero.

An X user I respect recommends $SNAP with the thesis that all you need for a 5 bagger is them to stop having absolute dogshit management.

$SBLK

Interesting. Picked up a small position to track how it does. That's exactly what I'm looking for, some actual diversification I can feel good about having as a long term hold.

Not sure how I feel about the weed sector. Think the opportunity may have passed there, the numbers just would need to be really good with how limited I feel the overall industry's growth potential is. Will probably still do some more research.

Make sure with $SBLK you are holding in a tax free account because you are going to get over $4/share in dividends next 4 quarters.

$CRON is kind of a special situation and it's definitely not a buy and hold. Market cap is $1.2 billion. They have $800 million in cash. Their last quarter was the first time that they made a real profit. I'd want to see continued revenue and earnings growth. If so it could inflect. Potential rescheduling of cannabis in US would probably cause the stock to jump. I too am not a fan of the sector and have never invested until recently.

KSPI

Interesting. Is this just a bet on Kazakhstan's broader economy?

I had a great weekend in Astana awhile back and think it'll do well as a country in the next decade or two.

Weed firms I am getting vibes are cheap. That never felt like a good business to me with little moat and not much branding. But vibes I’m getting is it’s cheaper to buy say a weed farm in public markets today than it would be to build my own equivalent weed farm. So they probably work. I never got the bubble in weed stocks because I always thought it a no moat type business.

Also like snap. Not sure if I can see 5x as I think the research reports saying that assume monetization at closer to meta levels but most users are teenagers with less disposable income than metas adult users. Actually surprised that company still exists because I know no one that uses it but the revenue is real and cheapish especially if the ran it to maximize profits instead of growth.

Exited Snap a while above 6. I don’t have conviction on anything right now. But have been buying Snap 5.2-5.5 and selling 5.6-5.8 because it does have decent vol. somehow I messed up an order and got short 2k shares at 5.75 which scares me a little and thought about just taking a small loss on it.

If one thinks the electronic banking system might go down for a few weeks (but without loss of data; i.e. the money will be there afterward), how much cash should one keep on hand, beyond the obvious ongoing rent and food expenses?

I think if the entire electronic banking system went down for weeks that you could probably be late on a rent payment with no particular issues. Same with other bills. If no one can pay their utilities short of mailing cash, then that's an everyone problem and the utility companies will likely just defer the issue. If this is a concern, plan for an amount of cash necessary to pay for out-and-about physical world purchases. Say, a month's worth of food, gas, household goods, etc.

Maybe it's my lack of imagination, but I'm struggling to understand how the electronic banking system goes down for weeks without taking out a bunch of other services with it, either from the same source of failure or in a cascade. For example, parts of the power and utility sectors, along with the exchanges and settlement mechanisms they rely on. I guess various executives could suspend trading for a while.

My expectation is that, by week two, we'd be talking about WROL/TEOTWAWKI-type scenarios, in which case I suspect your standard prepper goods (physical gold, booze, dried food, etc.) would be more useful than cash. Why would faith in the U.S. dollar be strong after its banking system had just failed?

Okay, fine, I'll elaborate. I was talking about WWIII, specifically from a country Australian perspective - i.e. EMP very likely, and thus no more EFTPOS, but food should continue being available after maybe a short hiccup* (Australia's food surplus is bullshit-huge) and warlordism somewhat less likely than in the USA. I'm already decently prepped in general - emergency radio, 60m aluminium foil for protecting electronics including said radio, KI pills, 20L bottled water juuuust in case Adelaide gets nuked and the fallout hits us (this is unlikely), bicycle, high-powered bow (also unlikely to see use).

I will note that gold seems a lousy investment; while gold can't hyperinflate from overprinting, it still is for most intents and purposes a fiat currency; it is valuable because people think it's valuable, not because of its actual uses, and will become less valuable when people have less surplus. I'd expect the price of gold to come down in a catastrophe with respect to any currency that didn't fail, and my read is that the AUD wouldn't fail (I'm less certain that the USD wouldn't fail).

*I'm anorexic, so going without food for a few days is something I can live with, although I'd probably stock up a little on non-perishables if I suspect Doom Soon. I know more non-perishables than most people, so I'm not especially worried about "beating the rush".

high-powered bow

Cries in Australian.

Otherwise fair enough. I'd still be more worried about distribution than production. I assume global energy markets will go nuts in a global scale war.

I have no particular love for gold as an investment. I think there is some evidence that people tend to find a default currency when faced with extensive barter. Have no idea what it would be in your scenario though.

And yes, I don't consider basic emergency preparedness irrational. Maybe not stocking three years worth of toilet paper, but like a few weeks worth of non-perishable food.

Cries in Australian.

I mean, I think "literally broke out of mental hospital once" is the kind of thing that makes a firearms licence a bit tricky even in the 'States. But yeah. Actually, the weapons control laws here in Victoria are much worse than you'd expect from "bows are legal, no questions asked"; over half the things that are on the Naughty List aren't even as deadly as a bow.

I'd still be more worried about distribution than production.

As I said, there might be a hiccup, but if all else fails I can survive going hungry for a couple of days. Of course, the more-immediate issue at that juncture is surviving the people who've seen too many movies and think nuclear war and/or a slight food interruption is an excuse to turn into cannibal looters. The police would likely suffice to stop them, but as a contingency plan... well, that's where the bow comes in.

Maybe not stocking three years worth of toilet paper,

I'm just glad I lived in college during COVID - which used commercial toilet rolls, not the household ones that were hoarded.

Henceforth this shall be called the "Qeekly" Finance Thread.

That's qhat I get for posting while doing guerilla carpentry. I qill respect your qishes.

Bi've beard ba bumour bhat boss bemp bummed bordon bamsay (ballegedly).

If you had instead gone with "That's quhat I get", you could claim to just be an old Scotsman.

Seems to be getting more engagement than usual this way!

It's never been a better time to be a Greek shipping magnate with some balls. Oil tankers are making unheard of profits.

The break-even rate for a VLCC (very large crude carrier) is something like $30,000/day. Last year, the market was already tight. I was pretty happy when a tanker company I invest in signed a year-long contract at $74,000/day.

Now, I really wish they hadn't. The rate for a year long charter has more than doubled. But what's really crazy is what tankers are earning when they sail from the Gulf of Oman (just outside the Hormuz) to China. The rate is now over $400,000/day. A round trip voyage takes over 40 days. They can make $20 million for a single voyage. A newbuild VLCC costs $130 million and lasts 20-30 years. Ship owners can earn this back in a single year.

But back to the big balled Greeks.

There's another market that is even more lucrative: The Hormuz trade. This involves sailing a smaller ship into the Hormuz, grabbing oil, and then out again, doing a ship-to-ship transfer in the Gulf of Oman. I have no idea what they are making but it's obscene. It's possible they are paying for their vessel with every voyage. Fuck insurance. What's the point? And Iran's attacks are pretty weak. When a ship is attacked, it rarely does serious damage. They haven't sunk one in ages as far as I know. People are making generational wealth. I hope the crew is compensated adequately.

This is technically a sign to sell any cyclical. It just didn’t work this cycle with AI picks and shovels because demand kept increasing. But in general when you can recoup the costs of a big capital expenditure quickly it’s a good sign to sell the assets because the market will end up overbuilding capacity.

Yes. The key factor for cyclicals is the capital cycle. For shipping, this is the order book. Fortunately we have some visibility here. We know how many ships are coming. Any orders placed now won't arrive for 5 years.

Longer term, I'm bullish about bulk shipping (coal/iron) because the order book is empty.

Tankers are in a medium position.

The container ship order book is full.

So we know the order book. The question becomes how much profit the tankers can make and distribute before the cycle ends. A company like Frontline will pay dividends equal to at least 30 of its share price in the next 18 months. Since everyone in shipping has been burned a million times, the good companies don't rush to buy new ships. Companies like Frontline, Starbulk, Hafnia, and DHT pay out almost all their profits as dividends. This is good behavior in a cyclical industry.

Memory chip investors, on the other end, will likely end up poor. The windfall profits these companies make are not being distributed, they are being reinvested into new capacity. (Note, that I am not an expert on this sector so I am less sure here).

While your statement about cyclicals is true on a general level, its important to understand the dynamics driving each sector.

Fuck insurance. What's the point?

To provide plausible deniability for back-channel diplomatic goals.

In this case, "stop shipping and claim it's too risky as an excuse to try and extract a diplomatic concession from the Americans".

Ship owners can earn this back in a single year.

The risk is now priced in: a company may now buy a whole new ship if the Iranians sunk one (and provide their now-merchant marines appropriate hazard pay, but that's a drop in the bucket compared to that pricetag).

It looks like the fed voted for a 25bps rate hike, with a possibility for more this year.

Even though I've been expecting it for several months now, I'm still surprised it happened. The market is responding negatively to the news

Turkey might be getting downgraded from "Emerging" to "Frontier" market status in some indices. I must admit, I was surprised to learn that they were in "Emerging" status to begin with... I'd always assumed they were reasonably stable, but I suppose if Korea can be classified as "Emerging" in some indices, it makes sense that Turkey would be as well (at least, to my globally financially illiterate mind).

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On The Motte, always attempt to remain inside your defensible territory, even if you are not being pressed.


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If you're posting something that isn't related to the culture war, we encourage you to post a thread for it. A submission statement is highly appreciated, but isn't necessary for text posts or links to largely-text posts such as blogs or news articles; if we're unsure of the value of your post, we might remove it until you add a submission statement. A submission statement is required for non-text sources (videos, podcasts, images).

Culture war posts go in the culture war thread; all links must either include a submission statement or significant commentary. Bare links without those will be removed.

If in doubt, please post it!


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