Ferg's Finds
This is a short weekly email that covers a few things I’ve found interesting during the week.
Article(s)
I enjoy re-reading these and 25iq’s blog in general.
Also this one, especially now that I have a two-year-old.
“Relentlessly prune bullshit, don't wait to do things that matter, and savor the time you have.”
Podcast/Video
Investing in Tin 2024: The Investment Case for Tin - Tom Langston, ITA
I continue to love the tin setup (which I went over here), 12 days of coverage is nothing for this tiny market. Things were already tight before Bisie (~6% p.a) ceased production. The SHFE stock will get worked through with Bisie offline, and Myanmar is not due to restart production until Q2 (before considering the effects of the earthquake).
Quote
If a "farsighted capitalist" had been present at Kitty Hawk, they should have "shot Orville Wright down" to save future generations money, highlighting his view of the industry's struggles with profitability.
-Warren Buffett (on the airline industry)
I expect to see parallels drawn between AI and airlines moving forward; both are hugely beneficial to society but a dumpster fire for investors.
Tweet
I love Louis's example of the consumer deflationary boom going on in China.
Charts
My friend Paulos's latest piece is a must-read: Growth Scare Becomes Recession.
I especially liked this section, as it’s the polar opposite of how we have all come to think of recessions.
I honestly don’t know what else to say anymore about oil, except to remind readers that if indeed we are looking at inflationary recessions in the pre-2000 model, it is entirely typical to see commodities sell off beforehand, and then rally during them — we just have to go back far enough:
Something I'm Pondering
I'm pondering this story from Druckenmiller and the parallels to today with emerging markets/commodities: when anything works, investors will be quick to take profits, as they've been rug-pulled so many times. The PTSD is intense, having watched many commodities/energy stocks make full round trips; for example, it still hurts my brain that Seadrill and Noble are now back at their relisting prices.
“Well, you then get into equities, and you become the head of equity research, which was the number two position in the firm. You did it at the age of 25, which is hard to even fathom.
How did that happen so quickly, Stan?
It's more a comment on my mentor than on me. He was sort of like a mad genius, and he liked to do radical things. And I think there were 10 of us, 10 research analysts, and the other nine had MBAs, and I'd say their average age was between 30 and 40. And he calls me in one day and he says, Stanley, I'm going to make you a director of research.
You want to know why? I go, sure, Mr. Drellas. And he says, For the same reason they sent 18-year-olds to war, I looked at him.
I don't know what the hell he was talking about. And he said, yeah, because they're too dumb to not to know to charge.
This was 1978. He said, the rest of us have been in a bear market for 10 years, and we got scars. You can't see him, but we got scars.
Nobody here can pull the trigger. And I need somebody with a fresh mind that's too stupid not to know to charge because I think we're going to have a great bull market.
I hope you’re all having a great week.
Cheers,
Ferg
P.S. This was my favourite section of Life is Short.
“Having kids showed me how to convert a continuous quantity, time, into discrete quantities. You only get 52 weekends with your 2 year old. If Christmas-as-magic lasts from say ages 3 to 10, you only get to watch your child experience it 8 times. And while it's impossible to say what is a lot or a little of a continuous quantity like time, 8 is not a lot of something. If you had a handful of 8 peanuts, or a shelf of 8 books to choose from, the quantity would definitely seem limited, no matter what your lifespan was.”
Where is the photo of ? I have fond memories of pre-adolescent children when they thought mum and dad were “the best” :)
Digging the insights here—there’s so much to unpack about the commodity cycle. Your perspective on past market behavior rings true; it’s all a wild ride. Can’t wait to see how things play out with tin and emerging markets. Keep the thoughts coming!