Category: Investing

The current consensus in the markets is that rates are “higher for longer”, which is a change from just a few months ago when the market was sure rates will start declining in Q4 of 2023. Bond yields are now up to historical levels not seen in over a decade.

The questions we need to ask ourselves are: will the fed continue raising rates or will it pause? Are we finally at peak rates and have multiples adjusted to these higher rates?

As far as I can see we pretty much have two scenarios for 2024/2025:

• Rates stay “higher for longer”.
• Something breaks and rates start coming down.

So what’s the investment plan?

• If rates stay at these level and assuming multiples have already adjusted to higher rates, than stock prices of individual companies should track earnings per share growth.
• If rates start coming down than we may even see some extra upside from multiples going up.

I do believe that the fed is finished raising rates for this cycle and so my investment plan is to be long cash flow generating tech companies and add some duration on top.

All the big tech companies extended the useful lives of their servers and network assets in 2022. This will result in a lower annual depreciation on their fixed assets. Here’s a summary:

Microsoft Q2’23 10-Q

In July 2022, we completed an assessment of the useful lives of our server and network equipment. Due to investments in software that increased efficiencies in how we operate our server and network equipment, as well as advances in technology, we determined we should increase the estimated useful lives of both server and network equipment from four years to six years. This change in accounting estimate was effective beginning fiscal year 2023.

Read More

A Real Estate Investment Trust (REIT) is a type of investment vehicle that specializes in investing in real estate assets such as properties, mortgages, and real estate-related securities. REITs allow investors to pool their money to purchase and manage real estate properties, offering them the opportunity to invest in real estate without having to own physical properties.

Read More

This checklist is based on mistakes great investors such as Warren Buffett, Seth Klarman, Peter Lynch, and many more have made. The checklist focuses on four key elements:

1. Industry and business 2. Management 3. Financials 4. Risk factors

You don’t need to invest in any specific company. Your goal is to maximize the odds in your favor so that the potential upside is multiples bigger than the downside.

Always remember that if you lose 50% you will now need to earn 100% just to get back to what you already had.

The full checklist can be downloaded in a pdf format from here.

Read More

Creators in various industries have been collecting royalties on their work for many years. In the music industry there are publishing rights that are paid to the creator and/or their business partners, in the television industry syndication rights allow Jerry Seinfeld to continue collecting royalties each year for his hit show.

For artists in the fine art sector the ability to earn ongoing income from their art ends at the first sale.

Enter NFT creator royalties, which allow the NFT creators to collect fees from resales in the aftermarket that happen after the initial sale of the NFT. This is achieved by a smart contract that governs the NFT. Whenever the NFT is resold, a portion of the sale price is set aside as a royalty payment for the creator. These royalty payments can be distributed automatically through the use of smart contracts on the blockchain.

Read More

What are market sectors?

A Sector is a collections of companies that work in the same field of business. Examples are energy, healthcare and real estate.

Each public company is assigned a sub-industry, industry, industry group and sector according to its principal business activity. There are 11 sectors, 24 industry groups, 69 industries and 158 sub-industries.

Read More