Investing Thread

[Uncle Rico]

As predictable as rain.  From 3 months ago:

https://bsky.app/profile/espiers.bsky.social/post/3lmz2bwrrjc2g

[MU82]

After getting a RIGGED letter telling me a friend died, I had the mailman fired.

[MU Fan in Connecticut]

Oh, I misread.  I read it as company (Molex) HQ in Germany. Wasn't doubting you, obviously, just was confused if I'd missed something.  My cousin had interviewed with them to run a division of theirs at HQ in Lisle 7-8 years ago when he left CAT, but ended up at Martin Marietta instead.  That's why Molex stood out to me, not a personal love of electronic connectors 

Typing on my phone leads to confusing verbiage since rereading and editing draft type 1 is a pain.

[Jockey]

After getting a RIGGED letter telling me a friend died, I had the mailman fired.

Yet, 50 mil people will believe the nonsense including many scoopers.

But the "greatest economy ever" is coming home to roost. Just saw where XMas tree imports are down over 60% from last year.

[TSmith34, Inc.]

Powell's term ends in May next year, at which time he will be replaced by a fully compliant loyalist sycophant. So we have that to look forward to.

It's almost like they are trying to crash the dollar and, I don't know, pump up crypto. For some mysterious reason.

[MU82]

War On Christmas, indeed ...

From Axios:

Companies that import and sell Christmas trees, twinkling lights and other holiday decorations say they've been hammered by tariffs.

Why it matters: Expect higher prices and fewer choices for holiday supplies — with industry leaders warning of shortages.

"There's no question it will be harder to find the exact tree and decor you want this year," says Jami Warner of the American Christmas Tree Association.

Where it stands: Christmas executives (yes, that's a thing) have had to be real Scrooges since President Trump's "Liberation Day" tariffs. They've laid off workers, canceled or cut back imports and raised prices to deal.

One exec said he has a loan of about $1 million, backed by his house, that he may need to tap to pay tariffs.

[rocky_warrior]

It's almost like they are trying to crash the dollar and, I don't know, pump up crypto. For some mysterious reason.

The dollar index is down 8.8% YTD.  S&P is up 6.1% YTD.   #notwinning

[tower912]

War On Christmas, indeed ...

From Axios:

Companies that import and sell Christmas trees, twinkling lights and other holiday decorations say they've been hammered by tariffs.

Why it matters: Expect higher prices and fewer choices for holiday supplies — with industry leaders warning of shortages.

"There's no question it will be harder to find the exact tree and decor you want this year," says Jami Warner of the American Christmas Tree Association.

Where it stands: Christmas executives (yes, that's a thing) have had to be real Scrooges since President Trump's "Liberation Day" tariffs. They've laid off workers, canceled or cut back imports and raised prices to deal.

One exec said he has a loan of about $1 million, backed by his house, that he may need to tap to pay tariffs.

The war on Christmas started weeks ago when it was announced little Sally only gets one doll.

[Uncle Rico]

The war on Christmas started weeks ago when it was announced little Sally only gets one doll.

Central planning

[Skatastrophy]

Market is up on hopes of a rate cut because the economy is continuing to suck pretty hard.

I'm not sure a rate cut makes sense because the economy is struggling due to a period of profound uncertainty (self inflicted) and inflation (self-imposed). A rate cut will exacerbate inflation, and it won't help the uncertainty.

Soon the big boys will go on a buying spree and a period of corporate consolidation will follow. More layoffs, but lots of acquisition/merger business being done. Could be interesting.

[MU82]

It would be pretty funny if the next couple of jobs reports are "beautiful" under the toady hired to cook the BLS books ... and the Fed cites those reports in its decision to not reduce rates in September.

[jesmu84]

Market is up on hopes of a rate cut because the economy is continuing to suck pretty hard.

I'm not sure a rate cut makes sense because the economy is struggling due to a period of profound uncertainty (self inflicted) and inflation (self-imposed). A rate cut will exacerbate inflation, and it won't help the uncertainty.

Soon the big boys will go on a buying spree and a period of corporate consolidation will follow. More layoffs, but lots of acquisition/merger business being done. Could be interesting.

Sounds super beneficial to the average American

[JWags85]

Sounds super beneficial to the average American

It depends, consolidation can drive innovation and helps the agile start ups when bigger bulky corporations can't move and react.  The issue in the past wasn't so much consolidation and acquisition, it was that it was driven by offshoring to reduce costs or in reaction to shrinking industries/markets.

For example, Signet Jewelers has gobbled up most of the retail jewellery chains and companies in the US.  This coincided with a time that was a marked decrease and continual drop in brick and mortar shopping and buying of jewellery.  So it very quickly went to 1 huge chain (with a few names like Kays/Jared/Zales) vs Mom and Pop single store jewellers...unless you wanted to buy online.  Many younger consumers absolutely do want to buy online, and may prefer it.  But for the in person consumer, it was a rough transition with far more limited price shopping ranges and options, and also terrible for the internal distribution/sales for the industry and American diamond/gemstone/jewellery production companies which are vanishing rapidly.

However, you look at some food and beverage CPG companies and its the exact opposite.  When Quaker or Kelloggs or Coke/Pepsico or Unilever start gobbling up newer brands/companies in the space, the total market share shrinks to a few companies, but makes them far less able to invest in innovation and new product trends.  So there is a TON of space for new companies to enter/grow/expand.

The US isn't a single or few industry economy, so broad brush reactions to corporate trends always need nuance.

[Shaka Shart]

It depends, consolidation can drive innovation and helps the agile start ups when bigger bulky corporations can't move and react.  The issue in the past wasn't so much consolidation and acquisition, it was that it was driven by offshoring to reduce costs or in reaction to shrinking industries/markets.

For example, Signet Jewelers has gobbled up most of the retail jewellery chains and companies in the US.  This coincided with a time that was a marked decrease and continual drop in brick and mortar shopping and buying of jewellery.  So it very quickly went to 1 huge chain (with a few names like Kays/Jared/Zales) vs Mom and Pop single store jewellers...unless you wanted to buy online.  Many younger consumers absolutely do want to buy online, and may prefer it.  But for the in person consumer, it was a rough transition with far more limited price shopping ranges and options, and also terrible for the internal distribution/sales for the industry and American diamond/gemstone/jewellery production companies which are vanishing rapidly.

However, you look at some food and beverage CPG companies and its the exact opposite.  When Quaker or Kelloggs or Coke/Pepsico or Unilever start gobbling up newer brands/companies in the space, the total market share shrinks to a few companies, but makes them far less able to invest in innovation and new product trends.  So there is a TON of space for new companies to enter/grow/expand.

The US isn't a single or few industry economy, so broad brush reactions to corporate trends always need nuance.

At least on the Pharma/Med Device side, R&D is a lot of M&A now. Will be interesting to see with the massive research grants and funding cuts how that impacts the behemoths who rely on the acquisition of late stage trial drugs and intellectual property. Low revenue companies valued on clinical trial success will be a much bigger impact.

Not an immediate impact due to the length of the development lifecycle but might alter some of the longer term thinking and behavior. It certainly is going to have an adverse effect on the pure volume of the drug pipeline, as capital disbursements will have to be much more targeted at seeking tangible future returns vs outside the box healthcare research. 
 
If you asked me to theorize, I think you see a rapid increase of portfolio acquisition and disposal in the next 5 years. You already see this pretty commonly but the speed and frequency to juice the returns of the business will kick into overdrive with the decrease of new drug pipelines.

[Jockey]

From Paul Krugman:

The BLS may not be a "household phrase but it is absolutely critical" to the functioning and decision-making of the U.S. government because "everything that we know about what's happening to the economy in the last couple of months" comes from it.

"If you start to corrupt those numbers, if you start to report those numbers as being what makes the president look good instead of what's actually happening, then bad things start happening.

Krugman explained how countries have historically suffered hyperinflation because officials start "ordering the statistical agencies to report nothing but puppies and rainbows. By the time they finally admit they may have a problem, they're already at 80% inflation. This is the playbook. We've seen it many, many times. And now I have to say, faster even than I expected, it's come to America."

[JWags85]

From Paul Krugman:

The BLS may not be a "household phrase but it is absolutely critical" to the functioning and decision-making of the U.S. government because "everything that we know about what's happening to the economy in the last couple of months" comes from it.

"If you start to corrupt those numbers, if you start to report those numbers as being what makes the president look good instead of what's actually happening, then bad things start happening.

Krugman explained how countries have historically suffered hyperinflation because officials start "ordering the statistical agencies to report nothing but puppies and rainbows. By the time they finally admit they may have a problem, they're already at 80% inflation. This is the playbook. We've seen it many, many times. And now I have to say, faster even than I expected, it's come to America."

I think this is all a mess and sets a bad precedent, but if that's Krugman's take and perspective, then maybe Ive been looking at it all wrong 

[The Sultan]

Paul Krugman: Legitmately talented economist...pretty much a disaster when he talks about anything else.

[MU82]

I think this is all a mess and sets a bad precedent

Yes.

[Jockey]

Paul Krugman: Legitmately talented economist...pretty much a disaster when he talks about anything else.

Yes. I'd agree.

So the conumdrum for the new BLS head - do I give the facts or do I wanna keep my job? I'm pretty confident that all of us know the answer.

[jesmu84]

It depends, consolidation can drive innovation and helps the agile start ups when bigger bulky corporations can't move and react.  The issue in the past wasn't so much consolidation and acquisition, it was that it was driven by offshoring to reduce costs or in reaction to shrinking industries/markets.

For example, Signet Jewelers has gobbled up most of the retail jewellery chains and companies in the US.  This coincided with a time that was a marked decrease and continual drop in brick and mortar shopping and buying of jewellery.  So it very quickly went to 1 huge chain (with a few names like Kays/Jared/Zales) vs Mom and Pop single store jewellers...unless you wanted to buy online.  Many younger consumers absolutely do want to buy online, and may prefer it.  But for the in person consumer, it was a rough transition with far more limited price shopping ranges and options, and also terrible for the internal distribution/sales for the industry and American diamond/gemstone/jewellery production companies which are vanishing rapidly.

However, you look at some food and beverage CPG companies and its the exact opposite.  When Quaker or Kelloggs or Coke/Pepsico or Unilever start gobbling up newer brands/companies in the space, the total market share shrinks to a few companies, but makes them far less able to invest in innovation and new product trends.  So there is a TON of space for new companies to enter/grow/expand.

The US isn't a single or few industry economy, so broad brush reactions to corporate trends always need nuance.

Aren't monolpolies/oligopolies born from corporate consolidation? Aren't those typically bad for consumers?

[JWags85]

Aren't monolpolies/oligopolies born from corporate consolidation? Aren't those typically bad for consumers?

Sure buts that's incredibly reductive.  None of the examples that I'm referring to are approaching oligopoly territory.  And outside of the monopoly arguments about Big Tech, the potential waves of consolidation aren't going to either. One of the 3-5 biggest companies in an industry acquiring some of the other top 30 isn't making an oligopoly.  It's not like the top 2 company sets of the top 5 are all merging

[TSmith34, Inc.]

Yes. I'd agree.

So the conumdrum for the new BLS head - do I give the facts or do I wanna keep my job? I'm pretty confident that all of us know the answer.

It'll be a lick-spittle sycophant who utterly believes in alternative facts. Lutnick seems like a great fit.

[Skatastrophy]

Aren't monolpolies/oligopolies born from corporate consolidation? Aren't those typically bad for consumers?

Small to medium sized companies (companies under $2B in revenue) getting gobbled up increases investment into sectors, so there's frequently a pop in the number of young new companies trying to make their millions. Imagine being an investor, it's unlikely to build the next Coca Cola. But if Coca Cola is snapping up young drinks companies (like Phillip Morris has been doing with nicotine companies), investors will start up brands under the hope that they become successful enough to be acquired.

These ecosystems are broad and complex. It's usually pretty hard to have a monopoly because it's so hard to accomplish the regulatory capture necessary to form a monopoly. These days though? Regulatory capture is the name of the game so idk

[jesmu84]

Sure buts that's incredibly reductive.  None of the examples that I'm referring to are approaching oligopoly territory.  And outside of the monopoly arguments about Big Tech, the potential waves of consolidation aren't going to either. One of the 3-5 biggest companies in an industry acquiring some of the other top 30 isn't making an oligopoly.  It's not like the top 2 company sets of the top 5 are all merging

Thank you for the response

[Hards Alumni]

The dollar index is down 8.8% YTD.  S&P is up 6.1% YTD.   #notwinning

It's okay.  Eggs are cheaper, and I've been told gas is way down.