Category Archives: economics 101

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Post the Volatility crash – next leg up? + new stock idea to benefit

Isn’t it amazing how forgetful market participants can be? Not even a full month ago, sentiment was as if the (financial) world were about to implode. Just a week later the panic-induced market losses were already gained back and three weeks later the crowd is smelling new all-time highs again. What I’m concerned about is expectations seem to be that nothing unfortunate will happen again. I have become a bit concerned, as complacency seems to be EXTRAORDINARILY high. In such an environment, small shifts are enough to cause a market panic – there are a few signs to be aware of. And a new stock idea for my members to capitalize on that, too.

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A second look at tobacco stocks after BAT’s gigantic write-down

One the most heavily watched and discussed stocks last week was British American Tobacco after it released a trading update. While the headline read relatively okay-ish, on the following pages they admitted to take a hefty 25 bn. GBP impairment on their US operations with the next earnings. While many see this as a non-event due to not affecting cash flows, I’m looking at it differently. I rather feel confirmed with what I wrote earlier in the year about Altria.

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Why I don’t care about the Lindy effect

There are many rules of thumb and well-intentioned advice for younger investors. One such “rule” says that it is better to buy stocks of older and proven companies. While I do not disagree with this on an isolated basis, I am missing the second part, namely that every business has a certain life expectancy. There comes inevitably a time for every company to either step into the background or to disappear altogether. History is full of examples.

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Why I stayed away from REITs until now + new research report

Real estate investment trusts have been a favored asset class of many due to enabling property ownership without enslaving oneself with mountains of debt and without betting just on one horse. Other factors like liquidity, the ability to sale fractions of your ownership and often great shareholder returns have been other arguments. I was avoiding them on purpose – but there’s a sub-sector that could be interesting just right now.

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A silver lining for Argentina? A look at YPF + new research report

Argentina is mainly known as a nation being in perpetual crisis mode. Besides beef, wine and tango, among the first thoughts that likely come to one’s mind are debt, economic hardship and hyperinflation. Needless to say that in such an environment you won’t find a booming economy. However, many Argentine stocks or those with a vast exposure to this market, have been rising over the last months. Is a (massive) turnaround in sight?

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The Panic of 1907 – a financial chain reaction

With this Weekly, I am finally writing my first book review. The book I now finished, is about the financial panic of 1907. However, it is not just a short-lived event with a simple crash in stock markets, limited to that particular year, as the title might suggest. Furthermore, it is about a sequence of events that caused a chain reaction of significant relevance, laying the foundation for the creation of the Federal Reserve Bank (although not what you know today).

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What you should know about the SVB collapse – my premium members were warned

As I am publishing this Weekly, already a week has passed after the collapse of not just one bank dealing with startups – that was the 16th largest bank in the US – but indeed three banks. After emotions calmed down a bit, we can have a look at what went wrong and what you should be aware of. My Premium Members already knew about the risks “hidden” on the balance sheets of banks, as I’ve closed an investment case on a profit a month ago due to these risks. And no, this is not a buy-the-dip occasion!

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Beware the next hype – Helium Producers

In recent months, I’ve been reading more and more about a hot new topic: helium production. Helium is an essential gas in medical as well as industrial applications. The key message being spread is that this so far opaque market is about to become more transparent, as many small exploration companies seem to be embarking on promising projects. Is this really the next sector you should bet on, or is it too much hot air that will deflate, bringing headaches like too much inhaled helium?

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Debt and high inflation – money for nothing or looming meltdown?

Who would complain being relieved of their debt burden? With inflation reaching a 40-year high in many regions, it seems that not only is the purchasing power of money eroding, but so is the burden of debt, measured in real terms. But is it really wise to buy stocks of companies with a lot of debt and hope they pay it off with cheaper money?

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The massive power of monopolies – and why Warren Buffett likes them

Who doesn’t know the boardgame Monopoly? What is either boring or very exciting to its players, has an important message for real life investors, like us. In today’s Weekly, we look at the origins of this game, what you can learn for your investment journey and why Warren Buffett likes such structures. By the way, as an investor you should, too!

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