Saturday, January 1, 2022

Best of Credit Bubble Stocks - 2021

  • Rethinking Inflation: "'Inflation or deflation?' is a political question; you can't determine the outcome from modeling of macroeconomic variables without reference to what the people who control the central bank want."
  • What Intellectual Progress Did I Make In The 2010s?: "The reason that I had to become an entrepreneur was that I could not get a job for a big corporation doing things that I found interesting because I did not have "experience". There must be so few Americans with the intelligence, curiosity, and neuroplasticity to learn how to do something new that big corporations will only hire people who have done the exact function that they need performed for years on end. When you think about how sclerotic the world is, remember that everyone's neural synapses are now made of oxidized fats from soybean oil." 
  • The Chad Value Investor vs The Virgin "Growth" Investor: "Imagine doing a timber cruise on your logging roads in a manly vehicle like a lifted 4Runner or a Bronco or a Jeep Gladiator. You stop for a smokos break and take a quick measure of merchantable lumber volume. You're a frontiersman, a settler, a pioneer; in the woods in the tradition of great Americans like Teddy Roosevelt and Norman Maclean."
  • A "Wonderlic" Test for Agency (@pdxsag guest post): "When you’re told that something is impossible, is that the end of the conversation, or does that start a second dialogue in your mind, how to get around whoever it is that’s just told you that you can’t do something?"
  • Review of Tobacco: A Cultural History of How an Exotic Plant Seduced Civilization by Iain Gately: "There are now far safer ways of consuming nicotine than cigarettes - vaping and oral nicotine products. It would make all the sense in the world if nicotine made a huge resurgence due to two reinforcing factors coinciding at the same time: a reversal of the moral panic pendulum plus a change in fashion of usage."
  • Re-Nicotinization: "Society is craving nicotine after a few decades without it. If they can get it from reduced harm nicotine products, people might eat less and be thinner and healthier. Maybe more sociable too. And if big tobacco squeezes out smaller vaping competitors, they will print money selling the new delivery vehicle."
  • 2020 Prediction Contest Results: "What seems to happen specifically is that a very rigid set of expectations, a very definite view, a simple narrative, crashes on the rocks of reality. In fact, I am learning to avoid any kind of simple narrative for thinking about the future. Consider predictions such as, "there's going to be hyperinflation / a crash / a civil war" next year. Reality is a lot more complicated. Bitcoin hit an all time high and oil hit an all time low in 2020. What probability would anyone have given that? And does it fit a simple label like "hyperinflation"?"
  • Tobacco Industry Thoughts - Q3 2021: "Altria should reunite with Philip Morris, and together they should buy Swedish Match. Together they would have the #1 cigarette (Marlboro), #1 closed tank vape (Juul), #1 oral nicotine lozenge (Zyn), #1 snus (General), #1 heat not burn tobacco product (IQOS), and the #1 and #2 dipping ("moist snuff") tobaccos (Copenhagen / Skoal). And then... no more acquisitions! All that cash flow could roll on home to shareholders."
  • All Roads Lead to Physical Fitness (@pdxsag guest post): "Whether someone thought to be clear-eyed and intelligent was going to be in favor of Big Government's and Big Pharma's Covid response is predictable based on their physical fitness (or lack thereof)."
  • Sector Rotation Value Strategy: "We are looking for two things: Capital expenditures in the sector are low (at a local minimum, nadir), while at the same time, Cash being generated, and returned to investors (dividends, debt reduction, share buybacks) are high relative to enterprise value and market capitalization."
  • What I've Learned the Past Decade (@pdxsag guest post): "I underestimated perfidy of the financial elite. I naively thought after the Great Financial Crisis regulators would have come to their senses, realized the significance of bullet the country dodged, and undertaken reforms to get the economy off the exponential growth treadmill. Obviously I could not have been more wrong."

Also see Q1 2021, Q2 2021, Q3 2021, and Q4 2021 book reviews.

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