Always thinking about Financial Markets, Self Managed Super and Personal Investments
Brisbane, Queensland
Joined November 2012
- Tweets2.2K
- Following538
- Followers381
- Likes2.7K
Mark Beveridge retweeted
Whenever I hear about some new AI threat I can’t help but think of these words from C. S. Lewis
You wouldn’t know it today, but someone else is also quietly launching low cost rockets for satellite deployment.
🚀 The H3 Launch Vehicle No. 6 (H3-30S) was successfully launched from the Tanegashima Space Center this morning –marking another milestone in our contribution to space utilization. The launch reflects our end-to-end capabilities in launch vehicle manufacturing and services, and our continued role in supporting reliable access to space.
Together, we returned to the sky. Together, we will continue our journey toward the space.
For more: mhi.com/business/products-se…
#MHIGroup #MoveTheWorldForward
Mark Beveridge retweeted
What's happening right now in our capital markets is going to DESTROY the retirement savings of millions of Americans.
Anyone of good conscience needs to rise up and say enough. This must be stopped.
I don't say that lightly. I've been doing this for 45 years, and what's happening right now to the integrity of our capital markets is unlike anything I have ever seen.
This is not about Elon Musk or Donald Trump. This is not about whether you like rockets or hate rockets.
This is about the systematic CORRUPTION of the financial system that every American depends on for their retirement.
In the entirety of its existence, Tesla has generated approximately $36 billion in cumulative profit. That includes over $20 billion in government emission credits and tax subsidies. The company is valued at $1.7 trillion and its CEO is the richest man on the planet.
I'm not talking about the stock price. I know the stock has made people money.
That's the popularity contest.
I'm talking about whether this company creates enough economic value to JUSTIFY the capital invested in it. And it doesn't.
The returns on invested capital have been chronically below what any serious investor would demand. That's not wealth creation.
So the product here isn't the car. The product is the STOCK PRICE.
Elon Musk is selling hopium and an entire generation of investors is buying it without even knowing what a PE ratio is.
I posted two pieces recently on Tesla and SpaceX. Each got over 1.5 million impressions. Thousands of hate replies but NOT ONE response with an actual argument. Not one.
It was all "Libtard" and "Elon derangement syndrome." You would not get past a first-round interview at Fidelity thinking this way.
But Tesla is just the opening act...
SpaceX just filed for a $1.75 TRILLION IPO. $15 billion in revenue but no profit in sight.
The private valuation was walked up from $200 billion to $400 billion to $800 billion to $1.75 trillion in two years. And Reuters has confirmed that SpaceX made early inclusion in the Nasdaq-100 a necessary condition for listing on the exchange. Nasdaq obliged by adopting a "Fast Entry" rule in March that lets mega-cap IPOs join the index after just 15 trading days, completely exempt from the normal seasoning and liquidity requirements every other company had to meet.
And this matters because over $600 billion in passive funds track the Nasdaq-100. Unlike the S&P 500, which still requires months of seasoning and stricter float thresholds, the Nasdaq-100 is now a 15-day on-ramp for trillion-dollar IPOs.
Every ETF and mutual fund benchmarked to that index will be FORCED to buy SpaceX within weeks of it going public regardless of whether the valuation makes any sense.
Your 401(k) is literally the exit liquidity. You don't even get a choice.
The structure of the market makes you a participant whether you want to be or not.
That's what makes this different from every other bubble in history...
You can't opt out.
And the agencies that were supposed to protect you from exactly this? They're doing NOTHING.
Peter Lynch would always say the product is not the stock and the stock is not the product.
Show me one Hall of Fame investor who ever made his fortune chasing hype.
Lynch, Druckenmiller, Soros, Buffett, Griffin, Cohen. Not one of them managed money this way. It's only the cult on X who thinks momentum and greater fool is an investment strategy.
As Buffett said, in the short run the market is a popularity contest. In the long run it's a weighing machine.
This popularity contest has gone on longer than any I've witnessed in my career. But gravity always wins. And when it does, the people who forced your pension fund into a money-losing rocket company at 120x revenue will have a lot of explaining to do.
This must stop. And it WILL stop.
The only question is how much damage gets done first.
Are you listening?
Good listening here about AI and investment markets with Rob Arnott. youtu.be/N0A7RVSk__Y?si=TMBt…
Tell me you’ve never sunk your own capital into building a long term asset without telling me you’ve never sunk your own capital into building a long term asset…
New Australia Institute polling shows more than three in five Australians support a flat 25% tax on gas exports!
"We have got corporations making windfall war profits while people's energy prices are going up. It is indefensible."
- Senator @stephhodginsmay
#auspol
Seems like this gold move is about the Fed becoming a branch of the Trump empire. Run it HOT. 🔥
Buy physical they said. Don’t buy paper they said. Meanwhile eat this 20% spread.
$SLV very difficult to sell silver eagles at spot prices...
xitter.cf/SilkLifeMedSpa/status/…
Mark Beveridge retweeted
Why would you pay 3Gs for that
Here’s my pdf copy for free
Just comment and repost and I’ll send you a copy
Why this easing cycle may be different for infrastructure. 4dinfra.com/insights/article…
Mark Beveridge retweeted
I’m just going to say it - RBA should hike 50bps in December and send a message. We are cooked til 2028 if they do nothing, because the Labor govt has proven they will not stop spending or importing people. Monetary policy is the only viable lever at this point imo.. #wearefucked
Mark Beveridge retweeted
Sounds like a funded Ponzi or Pyramid scheme to me, but heck, what do I know about arbitrage...... I have only spent my career as a bond trader focusing on fixed income arbitrage involving synthetic swap spreads, positive carry models, yield curve modeling, basis trading, and synthetic basis trades (understanding the embedded optionally in the cash vs futures relationship in terms or rich vs cheap, changes in CTD, and horizon analysis to delivery).
Timely reminder here from @TihoBrkan that sample size matters and recency bias can blind us.
Just like you, we focus on quality companies as well. However, the bias here is that the sample size is very tiny, leading to the overconfidence effect and the recency effect.
Here is why. 👇🏽
As investors, we are all trying to build an accurate picture of reality using limited evidence. Evidence is raw material needed to form a belief. For example, both of us hold the belief that investing in quality businesses is wise.
To arrive at this belief, we need to develop a high confidence level in a particular hypothesis by gathering and evaluating evidence.
The assumption is that this process is singular. In other words, we pull up the evidence, and voila, there is the proof. However, this is fallacious. The process is actually two-dimensional.
To correctly evaluate evidence, we need to consider both the Strength vs Weight of Evidence. The accuracy of our conviction comes about from how well we combine them.
The strength of evidence refers to how extreme, loud and decisive the evidence appears. In your chart, it shows a vivid example that in most (better said, recent) years, the quality factor has outperformed. Example: If a coin lands on heads 7 out of 10 times, the strength of the evidence is high (70%). The assumption is that this is reliable on its own.
On the other hand, the weight of evidence refers to the credibility, reliability, and most importantly, the volume of the evidence. It applies critical thinking by asking: "How much can I trust this data?" Our task turns to examining whether 70% of heads (strength) came from 10 or 10,000 flips (weight).
Daniel Kahneman found that more often than not, our brains allow the strength of evidence (its vividness) to dominate our thinking while neglecting the weight (the sample size, base rates, credibility, etc). He concluded that this leads to overconfidence and recency biases.
Any student of history who has done the work with an extensive sample size (weight of evidence) would know that the quality does not always outperform. There are periods, such as 1973-1984, where quality underperformed for 11 years following the bursting of the Nifty 50 bubble. It trailed the S&P 500 almost every single year, as it mean-reverted.
To make a full circle back to the beginning, both of us hold the belief that investing in quality businesses is wise. However, what differs is that I do not think it outperforms in "most years". This is just not factual as the sample size increases.
JQ @JetstarAirways just charged me $75 x 2 because my cabin bag + laptop bag were over 7KGs. Charged on both flights even though on the one booking? While the 130kg guy in front of me walks on with no surcharge. I’ll take things that don’t make sense for $150 please!
A few reminders of @Jetstar (JQ) vs @VirginAustralia (VA)
VA checks your bag right through on a OOL MEL HBA flight. With JQ you have to collect the bag in MEL and re check it.
VA has aerobridges. JQ doesn’t.
VA allows 7KG cabin bag + unweighed personal bag.
JQ is 7KG total.
Mark Beveridge retweeted
Blood on the streets?
We did see a two-day panic, but there was no blood on the streets.
Consider the following:
• S&P decline by -18% from peak to trough
• only 29% of S&P stocks made new 1-year lows
• valuations are still quite expensive and earnings expectations are ridiculously high
Historical reference...
• in 1929, at the start of the Great Depression, over 55% of S&P stocks made new 1-year lows with an index decline of over 80% (peak to trough); by the end of 1932, valuations were at rock bottom
• in 1962, during the Cuban missile crisis, almost 80% of the S&P stocks made 1-year lows with an index decline of 27% (peak to trough); valuations weren't expensive
• during the oil embargo of 1973/74, over 50% of S&P stocks made new 1-year lows with an index decline of almost 50% (peak to trough); by the end of 1974, valuations were at rock bottom
• during the 1987 crash, over 70% of S&P stocks made new 1-year lows with an index decline of over 35% (peak to trough); valuations weren't expensive
• in 2008, during the global financial crisis and banking meltdown, over 80% of S&P stocks made new 1-year lows with an index decline of almost 60% (peak to trough); by the start of 2009, valuations were at rock bottom
• and finally, during the Covid pandemic in 2020, almost 70% of S&P stocks made new 1-year lows with an index decline of 35% (peak to trough); valuations weren't expensive