Covid-19: Folks Are Misinterpreting Biden's Remarks -- September 20, 2022

Link here.

Medically, scientifically, he's so wrong.

He was speaking politically. And he misspoke. We'll see the administration walk back his comments when it goes to Congress for more Covid funds.

Pay attention to the definitions.

The Wall Street Journal. 

 

Disneyland -- September 18, 2022

A reader sent me a link to an article about how Disney World has "lost its magic." Of course, this is all "fallout" from the current political situation. 

Having lived in Los Angels for four+ years and having visited dozen more times over the years, I've been to Disneyland many, many times. I took the extended family to Disneyland many years ago and stayed at the Disneyland Resort as a high school graduation gift for our younger daughter. 

This is my reply with regard to those who feel Disney World has lost its magic. I've never been to Disney World so I cannot comment on that, but I can comment on Disneyland:

Our younger daughter and her husband plan to take the twins to Disney Land (Los Angeles) when they are eight years old. I will pay for the entire vacation and have already begun budgeting for it. 

 

Planning to go when they are eight means they would go during summer or school breaks when Disneyland is most expensive and most busy.

Disneyland has several parks -- at least three, one of which targets those four years of age to eight years of age. It's actually my second favorite park at Disneyland -- very "un-busy."

I will encourage our daughter to take the twins to Disneyland for their first visit when they are five years old and we can go in the autumn when things are relatively quiet.

For me the best park is the carnival park at night. One can enjoy it without standing in any lines waiting for any rides.

The second best part of the park for me is Main Street. I let everyone else go where they want to go and I head immediately to the coffee shop on Main Street, have an expensive coffee and an expensive croissant and spend about two hours reading The WSJ. Absolutely no one is in the coffee shop when the gates open at 10:00.

A few of the rides have very long wait times, but the vast majority of rides even in the main Disneyland park have relatively short wait times.

For a theme park or a ocean cruise, I honestly don't know of anything that is better than Disneyland. I was never a fan of cruises -- my brother-in-law, wife loves them -- and I no longer care for theme parks in general, but if I have to go, the only one  would go to is Disneyland.

A three-day "hopper" -- allowing one to "hop" from one park to another park whenever one wants -- is the best for a first-time visitor if all visitors are over the age of eight. If the visit is for twins five years of age, I would buy just the ticket to get you into the appropriate parks. I would also stay in the Disney resort itself (very expensive) and pace oneself to enjoy two days of activities over three days. The folks that have the worst experience are those who try to do everything. I would plan on hitting 50% or less of rides / exhibits over three days, and really, really enjoy the ambience.

The shopping by itself is incredible. The shows (bands, music) are all free.

For five year olds, it will be magical. For the rest of us, we've become quite used to all this. But the kids will love it. The important thing is for the parents to pace themselves. Leave the park between 2:00 p.m. and 4:00 and take a nap or go shopping in the "mall."

One last note: the most interesting thing is that the entire southern California experience: San Diego Zoo, Legoland, all the beaches, Hollywood Hills, the Farmers Market; water parks; all the museums -- it really is quite incredible.

You know, it's interesting, if the only thing Sophia got to do at Disneyland today was get her picture taken with "all" the princesses, that's all she would need. She gets all her rides at Six Flags Over Texas -- they have season tickets and go at least once a month. 

The twins will be happy with seeing the "Cars."

I think a lot of folks fail to see Disneyland through the eyes of a child.

The US Economic Sector Graphic -- September 9, 2022

The graphic on this page is amazing, simply amazing. Spend some time looking at it.

My thoughts.

The first part. 

1. If you invest in a mutual fund, pull out the prospectus.

The prospectus will tell you the "rules" of that particular mutual fund: among other things, the relative percentage of investments in bonds vs equities, and in equities, the relative percentage in blue chip, growth, value, speculative, dividend-paying stocks, etc.

Today, there's a big issue with regard to ESG, but that story does not concern us here.

When the "deciders" that determine the mix of stocks and bonds in a particular mutual fund, they have to have some framework with which to begin.

The most elementary beginning is to divide their investments among stocks, bonds, and cash; and, among stocks, the percentage in the various sectors.

Hold that thought. 

2. That graphic is a standard breakout of all publicly traded companies on the US stock exchanges aggregated by sector. The size of the "icon" is "market cap." I assume there are many different such graphics, most of them proprietary. This particular graph? I have no idea where it comes from but I assume it is either the one used by CNBC or very similar too what CNBC uses. Likewise, it is very likely very similar to what mutual funds use. It's the same for individual billionaires. You may do the same thing: you decide whether you want to invest in consumer defensive or automotive or banking or insurance or energy. Whether you realize it or not, you use a graph similar to the one we're discussing.

3. Now, imagine you are one of nine people in a board room of a mutual fund deciding how to invest one's capital. The PowerPoint presentation has eleven slides. Each sector will be represented on one slide with additional sub-sector slides.

4. Healthcare sector (one of eleven sectors), the "drug manufacturers -- general" sub-sector: JNJ, PFE, MRK, about a dozen major such companies. So, when the "deciders" get to this sub-sector they have a finite number of companies from which to choose. A finite number but well more than one.

5. Financial sector (one of eleven sectors), "banks-diversified" sub-sector: JPM, Wells Fargo, Bank of America, again, a finite number of companies from which to choose. Finite, but again, well more than one.

6. Again in the financial sector (one of eleven sectors), "insurance -di" one has a few choices, but by far, the big one is BRK-B (Warren Buffett). Finite, but again, well more than one from which to choose.

7. Now, the guys are sitting around the table and the technology sector (one of eleven sectors) is next up, specifically the sub-sector "consumer electronics." Quick, name the long list of "consumer electronic" companies on this graphic. LOL. That's a trick. There's only one: Apple (AAPL). Sure, there are hundreds of others, but they are so small in comparison Apple buries them all. 

8. Using this graphic, if a mutual fund is "required" to invest 30% of their capital in "consumer electronics" that mutual fund doesn't have much choice. By default, it's AAPL.

9. Okay, that's the FIRST PART.

The second part:

1. For a company to succeed (or beat the competition), at it's most basic it needs to know what business it's in. For years I have wondered what sector or sub-sector I would place Apple. I've often said Apple is in the "fashion industry." 

2. But with this particular graphic, someone decided Apple was in the "consumer electronics" sub-sector of the "technology sector." Not software infrastructure (Microsoft) or communications services (Google) or industrials or consumer defensive. Interestingly Amazon is in "consumer cyclical," sub-sector "internet retail." I certainly wouldn't think of Amazon as "cyclical." It's probably as "defensive" as Walmart, but it wouldn't work to have Walmart, PG, and AMZN all in the same quadrant.

The third part: 

So, good, bad, or indifferent, the "powers that be" managed to put Microsoft, Google, Apple, Amazon and Walmart all in their own little spaces, none of them occupying the same sub-sector. This reminds me of the Pauli exclusion principle in physics. 

This has to have been orchestrated, to keep these four separated. (By the way, "where's Waldo," Waldo being "Facebook" in this case?)

From all of this, much more could be said, but I'll leave it at this for now.

US Economic Sectors

Link here.

The eleven main sectors:

• technology
• financial
• communication services
• healthcare
• consumer cyclical
• industrials
• real estate
• utilities
• consumer defensive
• energy
• basic materials

The eleven sectors with their sub-sectors:

• technology
• software - infrastructure 
• semiconductors
• software --application
• information
• semiconductor
• communication
• computer
• electronics
  
• consumer electronics
• financial
• banks -- diversified
• banks -- regional
• credit service
• insurance - diversified
• asset management
• capital
• financial
  
• insurance
• insurance
• insurance
  
• communication services
• internet content
• telecom services
• entertainment
• elect
• broadband
  
• healthcare
• drug manufacturers -- general
• healthcare pl
• diagnostic
• medical
• biotechnology
• medic
• drug
• consumer cyclical
• internet retail
• auto manufacturers
• restaurant
• home improvement
• specialty
• auto 
• lodging
  
• industrials
• specialty ind
• aerospace
• railroads
• integrated
• farm
• staffing
• waste
• restaurant
• home improvemeent
• specialty
• auto
• lodging
• real estate
• REIT - SP
• real estate
• REIT
• REIT
• REIT
• utilities
• utilities
• utilities
  
• consumer defensive
• household
• discount st
• beverages
• packaging
• beverages
• tobacco
• energy
• oil & integrated
• oil & gas e
• oil & gas
• oil &
• basic materials
• specialty
• gold
• other ind
• agric
• steel

 

"Green Revolution" -- September 3, 2022

It's beyond me how uneducated folks are. 

The WSJ.

Link here.  

"Why energy transition will fail." 

Even if you’re never hit by a 7-ton blade falling from the night sky, alternative energy will fail you. Regardless of facts or feelings about the climate, there are reasons why wind and solar power are not replacing fossil fuels. Wind and solar are also no substitute for nuclear power.

Archived.

From Powerline, August 31, 2022. Will this ever sink in?