Sam Colt

836

"Guy that provides the proper Experimental Design"

Something fun to play with. 

https://www.wsj.com/graphics/the-paths-to-victory/?mod=e2twg

 

Thanks @Max Wiethe for reposting the interview with Richard Koo. 

It reminded me that in the past when his book " The Holy Grail of Macroeconomics: Lessons from Japan's Great Recession" was published in 2009 a couple of years later the European governments went for the Austerity policy ( largely because of zeGermans). Austerity had the goal of reducing the debt levels of govs and to reduce spending, exactly the opposite policy of what Richard Koo would have advised doing. 
 

Same graph with a different title form the M&G interview: 

Richard explains how the classic economic theory was based on the assumption that there are no balance sheet problems. Turns out in realty there were quite big balance sheet problems.... And so if understand correctly he said that the policymakers ignored the fact that this important underlying assumption that made the theory useful was violated and so described the wrong policy (medicine) at the time. (This is a problem related to a question I asked with very little response about "How do you deal with "all models are wrong some are useful"")

The whole balance sheet recession idea wasn't (and perhaps still isn't) in the uni textbooks so since most of the people on the exchange went to uni well before '09. I got a couple of papers and recourses for you to read so you can Dig a little deeper into this fascinating idea. 

Dig Deeper:

Balance Sheet Recession as the Other-Half of Macroeconomics  R. Koo

A different policy response argument from the BIS: 

BIS Working Papers No 395 The financial cycle and macroeconomics: What have we learnt?  2012 

An interesting interview (and only 12 min) from 2015 with Mike Riddell from M&G's Bond Vigilantes
 

A lecture he gave at Yale (the RV interview is better but you know maybe you want to listen to this too its on the longer side thos 45 min.) 
 

Recent interview on Oddlots: interesting POV from 12:30 on. 
17:30 we get his POV on the European response. (talking again about the long-known issue that is in the Maastricht treaty)

There is always way more you could read but the interview + those links is probably are enough to have a useful understanding of it. 

 

PS: If possible it would be nice to see Jim Grant interview Mr Koo. ( I cant find his POV on mr Koo's work but i imagine he read his work) 



 

The WireCard story was really big but I feel RV hasn't really digested it or looked into it. It is kind of a shame. With a lot of the dust settled now I think it's time you guys create some content around it. 

Get Dan McCrum on RV he is a good lad! 

Video with @Haley Draznin : 

I Loved the content because I have been reading and looking at Vice stocks before (MO, BTI, any oil company is considered "vice" by some, LMT, SWBI, AOUT). 
But none of those seems to have generated better returns than the overall market 🤷‍♂️ some even make you lose money. So to call it Recession-Proof ....
The facts don't seem to agree (see VICEX performance below). 

The fun thing for the vice stocks is that there is some pricing power and that the product is usually very addicting which tend to generate very sexy cashflows (think of the whole story of the Tabacco company in Barbarians at the gate book). 

I personally think this stuff should be called the "FUN fund" instead of a Vice fund. Change of perception might attract more capital? From what I understand Catherine is investing are the nicotine light products, Rum (alcohol), CBD sparkling water (LOL), Esports and sex toys. I mean that's all really mainstream no? I bet most of you have at least one of these products at home (Rum/sextoy)? 

It's been done Before
As an FYI There are a couple of other vice funds that exist out there based on public stocks. One that was in the news quite a bit is called VICEX. I think it might be the oldest one out there since it was launched in 2002, there have been quite a few PM's since. 
 

Anyway, it's good to see what their returns looked like:

VICEX Results:

The latest Prospectus that is out there one their website is from June 2019 ( a bad sign in my opinion). 

BTW another Vice fun fact porn hub is one of the most visited websites in the world and is privately held by a company called mind geek. I'm pretty sure its a money printing machine BRRRRRRRRRRRRRRRRRR. 
 

On Tabacco: 

Odd lots has a podcast episode out that goes deeper into the Tabacco Stonks:

https://podcasts.google.com/feed/aHR0cDovL2ZlZWRzLmJsb29tYmVyZy5mbS9CTE0yMDA5ODM3NDc3/episode/NDgxMDdlYzAtMGU1ZS0xMWViLTg4YzUtMDdkNDgzNjI2MTBi?sa=X&ved=0CAcQuIEEahcKEwjIhfHUmbbsAhUAAAAAHQAAAAAQAQ

Hey Exchange admin!

I notice there is still a comment section that is alive an well on the RV video website. 
It's a bit of a shame since the exchange has a far better version of commenting (we can add images....and we get notifications if someone responds to our comment).

Basically what I want is to be able to talk about the content in a video on the exchange like I would do in the comment section. Does that make sense?  

My suggestion would be that whoever does the interview can do a post with the video title. There might be better ideas out there but right now i feel this is really missing :) 

Thanks!

Here is Dan Loeb from Third Point (16B AUM) arguing for Disney not to pay a dividend but to instead invest in the DTC content and move towards a subscription/platform business model a la Spotify and SaaS. 
 

Full letter: 
https://www.dropbox.com/s/bfx8nywghxgaix9/Dan%20Loub%20Disney.pdf?dl=0

 

Source:
"Breaking Down the Elements of Passive Management  to Enhance Sophistication: GPIF Initiatives"
 

Currently, we are going through the second wave of infections (schools reopened so it's not really surprising). 

I just realised that the restaurants that seemed to have survived were the ones that could basically offer outdoor dining. With the weather changes and governments restricting movements again, I fear for those remaining restaurants and bars. 

Back to doing takeouts and deliveries, I guess. 
 

https://amp.ft.com/content/d79065d3-b6d4-4991-9033-d48dcc383c68?__twitter_impression=true

Link to the report:
https://www.dropbox.com/s/h6yhn62a1y8anvo/us-2020-elections-policy-and-portfolio-implications_Deutsche%20Bank.pdf?dl=0