Looking Backwards …
LB #1
Forgive and indulge me for this first part that is called reading greatness acknowledging greatness.
“Charlie Munger – The Architect of Berkshire Hathaway Charlie Munger died on November 28, just 33 days before his 100th birthday. Though born and raised in Omaha, he spent 80% of his life domiciled elsewhere. Consequently, it was not until 1959 when he was 35 that I first met him. In 1962, he decided that he should take up money management. Three years later he told me – correctly! – that I had made a dumb decision in buying control of Berkshire. But, he assured me, since I had already made the move, he would tell me how to correct my mistake. In what I next relate, bear in mind that Charlie and his family did not have a dime invested in the small investing partnership that I was then managing and whose money I had used for the Berkshire purchase. Moreover, neither of us expected that Charlie would ever own a share of Berkshire stock. Nevertheless, Charlie, in 1965, promptly advised me: “Warren, forget about ever buying another company like Berkshire. But now that you control Berkshire, add to it wonderful businesses purchased at fair prices and give up buying fair businesses at wonderful prices. In other words, abandon everything you learned from your hero, Ben Graham. It works but only when practiced at small scale.” With much back-sliding I subsequently followed his instructions. Many years later, Charlie became my partner in running Berkshire and, repeatedly, jerked me back to sanity when my old habits surfaced. Until his death, he continued in this role and together we, along with those who early on invested with us, ended up far better off than Charlie and I had ever dreamed possible. In reality, Charlie was the “architect” of the present Berkshire, and I acted as the “general contractor” to carry out the day-by-day construction of his vision. Charlie never sought to take credit for his role as creator but instead let me take the bows and receive the accolades. In a way his relationship with me was part older brother, part loving father. Even when he knew he was right, he gave me the reins, and when I blundered he never – never –reminded me of my mistake. In the physical world, great buildings are linked to their architect while those who had poured the concrete or installed the windows are soon forgotten. Berkshire has become a great company. Though I have long been in charge of the construction crew; Charlie should forever be credited with being the architect.”
Warren Buffet in his annual letter to shareholders. Mr. Buffet, we here at the C Thomas Printer Cooperative will not forget.
LB#2
From people with high credibility and a strong reputation to people with a poor reputation. That would be most of America. There is a saying that it is easier to ask for forgiveness than permission. I believe that is a business, political, and social strategy right now. Wendy’s, the hamburger chain, has announced that they will pursue dynamic pricing. This better aligns supply with demand and has been used by airlines, hotels, and ball teams on ticket rates and hotel stays. When we are hungry it is going to cost us more now and when it isn’t time to eat it will be cheaper. People were outraged and the story and company got slammed. Wendy’s got the memo and backtracked on their new pricing model. This is just how Bud Light got slammed for thinking that having a crossdresser would help them sell beer to blue collar people. Huge mistakes. At least these mistakes were made in an open market where the invisible hand could determine what would or wouldn’t be successful.
If we look at the world of politics, we have to look no further than a ZeroHedge article about the voting in Nevada. It turns out that people weren’t voting but in fact they did vote in the recent primaries. “Las Vegas resident and registered Republican Daphne Lee told the outlet that her family checked the secretary of state’s website on Sunday to look up their voter history after hearing about the issue. The site showed that she and her family had voted in the primary despite none of them having done so. She attempted to opt out of future mail-in ballots and was unable to do so – with a message saying she was not currently registered to vote, and that her voting history no longer existed. ‘Numerous’ Nevada voters were shocked to discover that they voted in the Feb. 6th presidential primary, despite not having done so – the Las Vegas Review-Journal reports.”
We made a mistake. Oops we are sorry. I’m trying to figure out if they are sorry they made a mistake, or sorry they got caught.
Mike Shedlock writes on his blog Mishtalk about the Biden cost overruns on the Inflation Reduction Act. “The cost estimate of Biden’s Inflation Reduction Act coupled with EPA mandates, just jumped by $466 billion. The Inflation Reduction Act that Biden told us would pay for itself, not only delivers negative benefits “across all time frames” in reducing emissions, it is now expected to cost $466 Billion more over 10 years.” Oops sorry we made a mistake, but it has passed, and we will have to live with it. That’s almost half a trillion dollars and it just started. Damn that Congressional Budget office for doing some back of the envelope math.
LB#3-
Bari Weiss of the Free Press interviewed Harvard Economics professor Roland Fryer about his experiences with the woke institution. Fryer did a study on police officer shootings after becoming interested in the topic after the 2014 Michael Brown shooting in Ferguson, Missouri. Here is what his study found, “The study found that police were over two times more likely to use physical force, such as manhandling or beating, against black and hispanic individuals compared to people from other races. On the other hand, the findings also revealed that police were 23.8% less inclined to use firearms against black individuals and 8.5% less inclined to do so against Hispanic individuals, compared to whites.”
Fryer was warned not to publish his findings by the progressive academic community. When he did, he needed an armed guard for weeks afterward. Fryer was then suspended in 2019 for two years for alleged sexual harassment by Claudine Gay, the ousted president of Harvard University after her plagiarism allegations. When asked by in the Weiss interview if he believed in Karma, he said “I hear it is a motherfucker.” Whoa language! I’ve attached a link to the interview through ZeroHedge. We warn you not to showcase facts, we threaten you when you do so, and then we attack your credibility and your livelihood. Please tell me again how this country has freedom of speech and expression?
Looking Forwards…
LF#1
Not only are the Red Sea and Strait of Hormuz vital shipping lanes in the Middle East for energy and ocean cargo, they are also key lines of communications. Literally. The Wall Street Journal’s Drew Fitzgerald reports “Most internet traffic between Europe and East Asia runs through undersea cables that funnel into the narrow strait at the southern end of the Red Sea. That chokepoint has long posed risks for telecom infrastructure because of its busy ship traffic, which raises the likelihood of an accidental anchor drop striking a cable.” The Houthis have vowed to destroy the cables. However, from the report on Feb 24, three of the cables dropped service. They weren’t completely severed but did interrupt service, if this is caused by an anchor, think what a proper demolition could do? Banking, communication, safety and other important tasks are highly reliant on the internet, which we take for granted. What good is bitcoin with a rotary dial telephone? How prone are we to an internet attack? Do you realize the large number of American women that would be unable to buy shoes online if that were to happen? The thought is truly chilling.
LF#2
I am anxious to see what the following week brings in the ongoing saga that is commercial real estate. I said NYCB would be out of business a couple weeks ago. We go to Zero Hedge where it turns out NYCB was hiding something. They filed a regulatory report saying that they had identified material weakness in its internal controls. They are also unable to deliver their Form 10-K on time. This after they took a $2.4 billion charge for goodwill impairment in the 4th quarter. We talked about their chairman Alessandro Dinello stepping in and buying the stock, well he just got made president and CEO effective immediately. Their stock was down over 25% on Friday making a new 52 week low.
Meanwhile the Canadian Pension Plan Investment Board recently sold its stake in a Manhattan office tower redevelopment project for $1. That’s right, a buck. Just get me out. They have recently sold Vancouver properties and a business park in Southern California at a large discount. But a dollar? The trickle is gaining volume, and this will soon turn into a torrent. Once these properties start making their way to market, the banks will be forced to realize that market price now is far different than the price they are holding these assets on their books. If the regulators make them update their valuations, many and I do mean many, will be gone. If buildings are trading for one dollar, the losses might be larger than anyone is even considering.
Canadian Pensions get out for a $1
LF#3
Matt Taibi wrote an interesting piece on racket news this week and has a youtube video to boot. After the Gemini woke disaster that caused Google’s stock to drop over 4% in one day, he set out to cancel himself evidently with an assist from the future technology that will save the world. He asked Gemini for some controversies about himself. Gemini responded that in 2010, he received criticism for an article that turned out to be inaccurate. Here is what happened next. “I scratched my head, not remembering this. “When was Matt Taibbi accused of inaccuracy in 2010?” I asked. Gemini’s answer:
In June 2010, Matt Taibbi faced criticism for an article he wrote for Rolling Stone magazine titled “The Great California Water Heist.” The article alleged a connection between conservative donor Charles Koch and a left-wing activist group called the “Compton Pledge.”
However, investigations by other journalists and fact-checkers later revealed that this connection was inaccurate…Following the controversy, Taibbi acknowledged the error and issued a correction on his personal website.
None of this happened! Though it sounds vaguely like a headline for an article I might have written, there was never a Rolling Stone piece called “The Great California Water Heist,” and I’d never heard of the “Compton Pledge.”
What is the Compton pledge? No shootings during Laker Games? Taibi continued and AI produced fake after fake after fake including accusations of racism and bigotry. After watching the stock market add trillions of market cap because of the AI gold rush, I see this nonsense and it hit me. We are here. Forget months, we are now weeks or days away from this bubble popping. The EV is already popping and taking billions of malinvestment with it. Commercial real estate is popping. AI is next. Conduct yourselves accordingly.
Sincerely Yours,
C Thomas Printer
The Dow Jones finished trading at …….39,087.
The 10-year Treasury bond is at …4.186%.
The price of Brent Crude is … $83.55 per barrel.
The price of gold is … $2,091/oz.
The price of silver is … $23.34/oz.
Thank you for listening today and you can find all of our articles and more on our website cthomasprinter.com.