Sunday, 25 February 2024

SHOULD I CONTINUE TO INVEST IN THE "MAGNIFICENT SEVEN"?

25 February 2024


https://youtu.be/qLDMv2POHiE?si=qh429ZBRrVOy3vuF

Who are they:

The “magnificent seven” are Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla. Also can include Netflix.

Questions:

They are mainly why the S&P 500 has done so well. Why is this? Will it continue? Should you invest? Or should youtime the market by staying out when prices are high, and get back in when they revert to lower trend prices?

Performance:

The Magnificent Seven have fundamentally driven the rally in the S&P 500, accounting for about 28% of its market cap, 19% of its profits, and 11% of its revenue. Their high profit margins contribute to this significant influence.

Future Outlook:

Ramin thinks these companies are likely to continue their dominance due to their innovative products and services, substantial revenue and profit generation, and global appeal.

Valuation Perspective:

A critical analysis based on Aswath Damodaran's valuation models (I know The Dean of Valuation from Simply Wall Street) suggests that most of these companies are priced reasonably in line with their fundamentals, except Nvidia and Microsoft, which appear overvalued - probably because they are at the epicentre of the AI Revolution.

Investment Strategy:

So no reason to avoid these giants. Very difficult for us amateurs to move in and out and back into the market in a way that beats the index.

Instead, carry on investing as their success and fundamental strengths will continue to make us shareholders money, at least for the next 2, 3 or 5 years.

Answer:

Stick with the world index by market cap.

A BRIEF HISTORY OF THE WAR IN UKRAINE

24 February 2024

A brief history of the war in Ukraine. 

On the second anniversary of the war in Ukraine here is a brief summary of events leading up to the tragic situation today here.

1. 1991 Breakup of the Soviet Union 

Marks the beginning of significant turmoil for the newly independent states, with Russia facing a decade of weakness: economic struggles, political instability, official kleptomania and corruption, and reduced global influence.

2. 2000 Vladimir Putin's Ascension to Power 

Putin comes to power with a mandate to restore order and strength from the chaos of the 1990s, aiming to reassert Russia's standing on the world stage.

3. 2004 Orange Revolution 

A significant political event in Ukraine, where mass organised protests led to a transition of power after a disputed presidential election. This movement reflected Ukraine's growing divide between pro-European Union aspirations and those favouring closer ties with Russia, setting the stage for future tensions.

4. 2000s Putin's Interest in NATO Membership 

Early in his presidency, Putin expresses interest in Russia’s joining NATO, aiming to build closer ties with the West and ensure security cooperation.

5. 2002 US Withdrawal from the ABM Treaty 

Signals the start of increased tensions over missile defence in Europe, affecting the strategic balance between the U.S. and Russia.

6. 2008 NATO Summit in Bucharest 

The summit discussions on extending NATO membership to Georgia and Ukraine significantly heighten tensions with Russia.

7. 2014 Maidan Revolt 

The coup in Ukraine with CIA encouragement (Victoria Nuland) leads to a change in government, exacerbating tensions between Ukraine and Russia, and deepening the divide between NATO and Russia. Russia seized back Crimea.

8. 2015 Minsk Agreement and Its Failure 

Despite the agreement's aim to resolve the conflict in Donbas, Kyiv resumes shelling in the region, leading to approximately 14,000 civilian casualties over the next eight years. The guarantors, Holland French PM and Merkel, German chancellor have admitted that Minsk was a purely delaying tactic to give the West time to arm the regime in Kiev.

9. 2019 End of the INF Treaty 

The U.S.'s termination of the treaty further strains relations and negatively impacts European security.

10. December 2021 Putin's Security Guarantee Proposal 

Putin proposes security guarantees to prevent NATO's eastward expansion, reflecting Russia's security concerns. This proposal was simy ignored by the West.

11. February 2022 Russian Intervention in Ukraine 

Citing the protection of Russian speakers in Eastern Ukraine as one of the reasons, Putin's intervention marks a significant escalation in the conflict which began in military terms in 2014.

12. March-April 2022 Peace Accord Initiatives and External Influences 

A peace accord between Ukraine and Russia shows promise for ending hostilities, but external influences, particularly from the U.S. and UK Prime Minister Boris Johnson, encourage the continuation of conflict.

13. Early 2020s Global Alliances and Divisions 

The world becomes increasingly divided into competing blocs, with the U.S., EU, and NATO on one side, and a coalition led by China and Russia on the other.

14. Impact of the Ukraine War 

Amidst failed diplomatic, economic and military strategies, the ongoing conflict presents broad challenges for Europe, necessitating a re-evaluation of European security and defence strategie and the role of America in European affairs today. 


References:

https://www.youtube.com/live/Ptaya7stymw?si=wcS1928QuySbw3Vl

REVIEW

https://youtu.be/U21-RrB8E6Q?si=XSkbQKABp5Wr51np

1. **NATO Expansion Eastward**: Post-Cold War, NATO began expanding eastwards towards Russia's borders. This was perceived by Russia as a threat to its security, especially after the inclusion of former Warsaw Pact countries and Baltic states into NATO.

2. **Orange Revolution (2004-2005)**: Ukraine's Orange Revolution marked a significant political shift towards pro-Western sentiments. This period underscored Ukraine's growing divide between pro-European Union factions and those favoring closer ties with Russia.

3. **EU Association Agreement Controversy (2013)**: Ukraine's decision to suspend an association agreement with the EU, under pressure from Russia, sparked mass protests known as Euromaidan. These protests eventually led to the ousting of President Viktor Yanukovych, a pro-Russian leader.

4. **Annexation of Crimea (2014)**: In the aftermath of Euromaidan, Russia annexed Crimea following a controversial referendum. This move was widely condemned by the international community and marked a significant escalation in tensions.

5. **Conflict in Eastern Ukraine (2014-present)**: Shortly after the annexation of Crimea, pro-Russian separatist movements in Eastern Ukraine declared independence, leading to ongoing conflict with the Ukrainian government. This has resulted in thousands of deaths and has been a focal point of Russian-Ukrainian tensions.

6. **Minsk Agreements (2014 and 2015)**: Attempts to resolve the conflict in Eastern Ukraine led to the Minsk agreements, aimed at ceasing hostilities and establishing a political framework for the conflict's resolution. However, these agreements have largely failed to stop the fighting or lead to a lasting peace because they were not implemented by Ukraine.

7. **Increased Western Military Support for Ukraine**: In the years leading up to the invasion, Western countries, including the US and members of the EU, increased military support to Ukraine, further aggravating tensions with Russia.

8. **NATO's Continued Dialogue on Ukraine's Membership**: NATO's ongoing dialogue regarding Ukraine's potential membership further strained relations with Russia, which views Ukraine's accession as a direct threat to its security.

9. **Build-up of Russian Forces (2021-2022)**: In the months leading up to the invasion, there was a significant build-up of Russian military forces along the Ukraine border, signaling the possibility of an impending military operation.

10. **Invasion of Ukraine (2022)**: Russia launched a full-scale invasion of Ukraine on February 24, 2022, marking a significant escalation in the conflict and leading to widespread international condemnation and the imposition of severe sanctions against Russia.

Tuesday, 20 February 2024

AMERICA'S HATRED OF RUSSIA EXPLAINED

21 February 2024

Here's a pretty good explanation of what's really going on.

https://www.youtube.com/live/Ptaya7stymw?si=evknlWk_APXa_e5o

Everything tracks back to Russia being America's Public Enemy Number One. It used to be that Russia was the main threat to American worldwide hegemony, but these days Russia must first be weakened andwill then serve as the example to China of what will happen if it doesn't submit.

Judge's "battering ram" gets at the intention more clearly than Mearsheimer's "bulwark of Liberal democracy". After all, spreading liberal democracy at the  trumped-up demand of local people is the cover story for coups and wars in support of maintaining global hegemony.

THE FUTURE OF NATO AND THE EU AFTER THE DEFEAT OF UKRAINE AT AVDIYEVKA

20 February 2024

https://youtu.be/SX4mGgGrt3M?si=x9dMYta5gTk8s6FN

 Mercouris makes certain predictions for the consequences of defeat at Avdeyevka and general Russian military superiority, on NATO and the EU, which are totally plausible but also completely irrational.

He anticipates a re-evaluation of energy policies and a stronger push for energy independence from Russian gas and oil,  whereas the rational thing to do to would be to recognise the business flight from high-cost Europe and reopen the pipelines.

He also foresees a more unified EU strategy to deal with external threats ie accelerate an EU defense union and more collaboration on defense procurement and research. This implies growing independence from America in the military field. That's got to be a good thing but let's be realistic - in an earlier post here, we talked about the original EU axis being West-East France and Germany, and that now with EU expansion the axis looks to be North-South Germany and the former Soviet states, with France and Germany suffering bitter relations as a consequence.  For example at Airbus where Germany is taking most of the new work away from France, or where Germany is procuring from the American defence industry, which is strangling the French Armaments industry. So don't expect a collaboration which might re-ignite the French defense and aerospace industries.

What to do about this split between France and Germany? It goes right to the heart of the EU, thus proving once again how useless that organisation is, not fit for the purpose of pursuing European interests. 

The subject is Peace and Conflict Resolution In an increasingly uncertain world comprised of more and more powerful nation states. If America is the aggressor and the EU is completely neutralised and cannot deal with what is seen as threats from Russia, perhaps the debate should move more properly to the United Nations. 

But anyone who thinks like that would want to see some strong action in the short term from the UN over the situation in Gaza ...and be dissapointed ... what can the UN do about breaches of its resolutions, of international law, about aggression and territorial disputes, about non-state actors even, when Israel, backed by the US, says "Hague Schmague"? 

This is why we are back to Alexander Mearsheimer and his "structural offensive realism", which means balance-of-power geopolitics and individual states tackling head-on their perceived security problems because there's no one else willing to. 

And yet this is a recipe for the next World War as it just pushes nation-states that are increasingly anxious about the intentions of others in a uncertain world, to join into hostile alliances led by wannabe regional hegemons.

Saturday, 17 February 2024

GDP, GDP PER CAPITA, VOTER SATISFACTION, PUBLIC POLICY

18 February 2024

https://www.visualcapitalist.com/wp-content/uploads/2023/06/GDP-per-capita-Nominal.png

https://youtu.be/azRGcWhJqi8?si=2ZTDEc3rC7fy_eiG

... this week, Joseph "hello my friends" Wang answers the very point we, as native peoples, are concerned about....

In pt 3, (he always prepares three points, he is a brilliant analyst of weekly markets) he talks about countries that use mass immigration to continue raising their GDP, though this may NOT raise the living standards of their populations, lookedat on a per-capita basis.

Well hello-oh you Anglo-saxon countries, what will you do about declining public goods and services, and consequent civil unrest and lack of respect for, and trust in, the country's institutions?

He doesn't explicitly get into what it means for native peoples' (we the poor bloody, long-suffering, hosts!) satisfaction with life, nor the inevitable consequences for public policy, but you know very well what he's getting at (in a completely apolitical, data-driven, analysis of course...).

Monday, 12 February 2024

SHOULD I TAKE UP THE NATWEST SHARE OFFER?

13 February 2024

https://www.msn.com/en-gb/money/other/buying-into-the-new-natwest-share-offer-i-ve-suffered-enough-says-alex-brummer/ar-BB1i5QHD

NWG offers a yield of 7.6%. This time last year it was 6.1%. Is that good?

Not when you consider the share lost almost a third of its value in that time.

Well perhaps the worst is behind us?

Revenue grew by 18% to 14bGBP and earnings per share have doubled in the last yr, from 25 to 53 GBp.

Maybe, but according to analysts, earnings are forecast to decline by an average of 6.4% per year for the next 3 years and NW's dividend track record - why we'd buy the stock - has been "unstable".

Interesting account of the sub-prime crisis and sad to read how as shareholder and customer the author suffered a double whammy and so on the basis that "never two without three" he won't be taking up this "rights" offer!!!