Pro-growth Trump is horrible for markets

There seems to be a slight dissonance in US equity markets with positive price action and a possible pro-growth agenda by President-elect Trump. If his policies do turn out to be fiscally stimulative, it’s going to hurt equities, big league.

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In 12 months, anything related to crowdfunding is going to be radioactive

Wonderful (and ominous) article to mark the top of the first real crowdfunding cycle. It’s going to be ugly, but the model (and at least some of the current players) will emerge stronger and cleaner on the other side with a more mature business model and a more qualified and risk-aware investor base.

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Disney should really create an MLP type yield vehicle for the IP it owns

If there’s a single investment that would be highly desirable for a buy and hold situation for decades to come, and if I could have a say in designing it – it would be Disney IP, based on Disney’s Consumer Products division (FY 2015 revenues $4.5B, operating income $1.7B), specifically on the licensing part of it (FY 2015 revenues $2.8B). It would be sort of like a MLP that owns and operates all the IP ever generated at the Walt Disney Company, with the WDC acting as a general partner.

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More robots and geriatric baristas, OR ELSE…

Happened upon this piece about age dependency ratio, which is (people under 15 + people over 65)/the rest, highlighting the challenges ahead for countries with an increasingly upside down population pyramid. This includes all of the West and then some. This is related to employment population ratio and specifically the increase in old people participating in the labor force in ever larger numbers.

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A long-termist’s view on taxing the rich

Now, I’m obviously not a socialist, nor do I believe in all people being equal. Some are quite a bit smarter than others, some are way more hardworking than most. And if one works smarter or harder, one deserves “more”. I also am a strong believer in capitalism in the sense that it’s the only economic system that takes the character flaws of most humans (greed, laziness, vanity) and make those flaws work for the common good. Those flaws invented the wheel, irrigation and the internal combustion engine. Greed and vanity have always been the counterforce to laziness, and in their perennial fight either more and better stuff gets made or better systems and organizations get created. Communism can never work, because it relies on people being altruistic (examples from history: the USSR, Cuba, DPRK). Altruism always runs out, eventually. Capitalism takes people for who they are, and turns their natural urges into productivity. That’s why it works.

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European dairy bottom is in

While irrefutable evidence is still scarce and it may be too early to call, auxiliary signals like global price developments for dairy products, European product prices (Excel link) and supply drop, indicate that the European dairy market has begun to see signs of life. Some optimists agree.

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The do’s and don’ts of investing in commercial real estate

I’m a HUGE fan of investing in commercial real estate, for various reasons:

  • Predictability of value and cashflows
  • Low beta compared to the stock market
  • Low liquidity is a minor issue for me (money management is something you do BEFORE investing, not after)
  • Perhaps most importantly, smarter people than me have said that real estate is one of the very few industries where mediocre people can succeed 🙂

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Looking behind US (un)employment rate

US centric: I recently read an excellent article on unemployment and supposed full employment, but decided to clarify and visualize the situation a bit for myself by employing different periods than supposed periods of “full employment” and just see, how the employment situation has changed during the last 4 recoveries. Over the 35 year period (1981-2016) the population pyramid has changed quite a bit with life expectancy at birth increasing about 4.5 years while, at the same time, people 65 years and older have been participating in the workforce in significantly larger numbers, but the latter data only goes back to 2008. So, to eliminate the effects of a top-heavier population pyramid and incomplete data on the change in employment population numbers regarding senior citizens, I decided to go with employment population ratio (ages 25-54) (EPR) peaks that preceded the recessions, as defined by the National Bureau of Economic Research (NBER). The present cycle’s termination point is in march 2016, which has shown the highest reading of 78.0, after the last recession.

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Gold as protection against “armageddon” is bullshit

Weird hobbies are fine

Holding gold as a speculative position or as part of a “balanced portfolio” is fine. After all, there are creepier hobbies, like collecting dolls or competitive eating. But holding a significant chunk of your assets in gold to protect yourself against some end-of-the-world scenario is just silly.

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