Global Macro Trading Journal

Some good reads on Energy, ESG and the future of investing
https://www.economist.com/finance-and-economics/2021/05/17/green-assets-are-on-a-wild-ride
https://www.economist.com/leaders/2...-rife-with-greenwash-time-for-more-disclosure
https://www.wsj.com/articles/green-...nergy-transition-11621656039?mod=hp_lead_pos7
https://www.wsj.com/articles/americ...-paves-the-way-11615311932?mod=article_inline

This looks like a very significant trend for the next 10 years. I already have a piece of that through my Uranium trade but there might be other ideas out there. Potentially Lithium miners but its difficult because energy is not my forte. On Nuclear, there is no choice but to use Uranium, with EV batteries and Lithium, I wonder if there aren't alternatives. Apparently there are plenty of non-Lithium batteries technologies. They are just not economical now, but if Lithium prices were to rise a lot, wouldn't they become economical then? I dont know so I'm just watching this. But I definetly think there are some opportunities in this space, just perhaps not right now
If the WSJ, and the economist are all excited about this, it means right now its not a good entry price. But perhaps in the coming months there will be something here
 
Daal said:
Some good reads on Energy, ESG and the future of investing
https://www.economist.com/finance-and-economics/2021/05/17/green-assets-are-on-a-wild-ride
https://www.economist.com/leaders/2...-rife-with-greenwash-time-for-more-disclosure
https://www.wsj.com/articles/green-...nergy-transition-11621656039?mod=hp_lead_pos7
https://www.wsj.com/articles/americ...-paves-the-way-11615311932?mod=article_inline

This looks like a very significant trend for the next 10 years. I already have a piece of that through my Uranium trade but there might be other ideas out there. Potentially Lithium miners but its difficult because energy is not my forte. On Nuclear, there is no choice but to use Uranium, with EV batteries and Lithium, I wonder if there aren't alternatives. Apparently there are plenty of non-Lithium batteries technologies. They are just not economical now, but if Lithium prices were to rise a lot, wouldn't they become economical then? I dont know so I'm just watching this. But I definetly think there are some opportunities in this space, just perhaps not right now
If the WSJ, and the economist are all excited about this, it means right now its not a good entry price. But perhaps in the coming months there will be something here
More...
This estimate seems really out there but it would have huge consequences if turns out to be correct
"Electric vehicles are expected to account for about 50% of all vehicles produced in the world by 2030, according to UBS Global Research, up from about 3% to 4% today."
 
https://yetanothervalueblog.substack.com/p/breaking-down-the-ridiculously-complex

"But the real opportunity here might be in PSTH remainco and PSTH SPARC. Remember, Ackman has an absolutely incredible track record of deploying cash in times of a crisis, and both remainco (which seems to have no end / liquidation date) and SPARC (a five year SPARC with the potential for extensions) give him a bunch of permanent cash to deploy into a crisis. "

I agree with this. I'm not super interested in Ackman's UMG deal as I am in this remainco cashshell and his SPARC tradable rights. I'm looking to buy these when people dump them in droves in the coming months
 
Random thoughts about reserve currencies:

1595341928985


Gold's share of central bank reserves is down substantially since Bretton Woods broke down. Meanwhile the USD and European currencies (now the EUR) picked most of that share. This enabled the EU and the US to borrow at low interest rates, finance fiscal stimulus after fiscal stimulus, to bail everyone out, to keep running current account deficits and to keep expanding their monetary base as much as they wanted to (which is connected to financial repression). This is all fine and dandy until you factor that the only reason this has not lead to a inflation crisis is because the velocity of money has collapsed. In fact, lots of the increase in base money was necessary in order to offset the drop in velocity. But that isn't risk free, it leads to exit risk.

If velocity were to pick up again, will the central banks act? will they act fast enough? Also, exit risk means these 2 central banks are always 1 appointment away from an inflation crisis (like it happened in the US in the 60's and 70's, it seems that Arthur Burns was a big part of that crisis). These appointments happen every few years. So its like an inflation russian roulette.

Exit risk is still going up everyday as QE is still going on in major central banks. The question that I dont have clarity one is: Is the baseline scenario one of discontrolled inflation (ala 70's)? I don't think that is the case because central banks learned the playbook to solve that problem from Volcker and I think Raoul Pal is wrong when he says interest rates can't go up, yes they can go up if NGDP is growing at 7-10% a clip because rising incomes are supportive to service debt. So its not a matter of rising rates, its a matter of why are they rising.

So I think they can dodge the 70's bullet but at the same time, I dont think they can too aggressive because there is an assymetry there, a depression is much worse than an temporary inflation crisis. This titls them to screw the savers and help debtors more than the other way around. And rising total debt to GDP ratios just makes this assymetry more necessary. So while an big inflation crisis can be avoided, investing wise, the implications are similar. One still needs inflation protection because cash will be devalued, it just wont be massively devalued but financial repression is not going anywhere and as a non-baseline risk, you got the inflation russian roulette coming every few years (the Arthur Burns risk)
 
Daal said:
https://yetanothervalueblog.substack.com/p/breaking-down-the-ridiculously-complex

"But the real opportunity here might be in PSTH remainco and PSTH SPARC. Remember, Ackman has an absolutely incredible track record of deploying cash in times of a crisis, and both remainco (which seems to have no end / liquidation date) and SPARC (a five year SPARC with the potential for extensions) give him a bunch of permanent cash to deploy into a crisis. "

I agree with this. I'm not super interested in Ackman's UMG deal as I am in this remainco cashshell and his SPARC tradable rights. I'm looking to buy these when people dump them in droves in the coming months
More...
I changed my mind on PSTH, I longed some. I think this is a resonable bet looking 2-3 years out

https://yetanothervalueblog.substack.com/p/some-final-pre-deal-psth-umg-thoughts
 
You must log in or register to reply here.
Back
Top