February 2022 'The purpose of knowledge is action, not knowledge' - Aristotle
Tuesday 1st February 2022
The RBA kept rates on hold today, no surprise considering there’s a federal election in a few months time. They did announce an ending to the bond-buying program kicked off in April 2020.
Friday 4th February 2022
Overnight Meta (Facebook) dropped 26% based on their 4th quarter report. It’s the first time FB user numbers have not grown. Plus they are burning millions of dollars on their meta-verse play.
Australian company Boral dropped 42% today, after returning $3 billions dollars to shareholders in dividends. This is a great example of the irrelevance of dividends. Had Boral retained the cash, their share prices would have not dropped 42% in a day.
Monday 7th February 2022
The censorship battle continues. Someone coincidently (how’s the timing…) created a collage of Joe Rogan being inappropriate and Spotify have removed over 70 episodes of his podcasts so far. Joe again handled it fantastically in another direct video posted on his Instagram. Some how, I don’t think this is over…
ARG reported today, their half yearly dividend up 14.3% on last years to 16 cents fully franked. This is another example of time frames mattering though. As they’d previously cut their interim dividend due to the covid correction.
Thursday 10th February 2022
Flew down to Victoria’s surf coast to say bye to one of my Uncles. He’s dealing with end stage lung cancer. It was wonderful to see a stack of my family and get some time with him while we all can. He’s lived a wonderful life and even now is happy, positive, upbeat and excited to do things he loves that he can still do. Saying it was difficult to say goodbye is an understatement…
It was also great checking out Bells Beach with my brother (see picture) and cruising along part of the Great Ocean Road down to Lorne for breakfast, at my uncles favourite breakfast spot with my Dad and brother.
CBA announced an interim dividend increase (to $1.75 from $1.50 last year) in addition to a further $2 billion dollar share buyback, on top of the previously announced $6 billion dollar buy back.
Friday 11th February 2022
US Inflation hit 7.5% over night. In my view, inflation is a wealth tax (these days) and should be treated that way. I’ve written about inflation previously if you want to search more on this topic using the search function on the website.
Saturday 12th February 2022
US market over night had another red session. The threat of war will do that.
Friday 18th February 2022
More red overnight in the USA and on the ASX this morning. Ben Carlson tweeted:
“NASDAQ composite stocks from 52 week highs:
Half of the stocks in the index are down 30% or worse
40% of stocks are down 40% or worse
35% of stocks are down 50% or worse
28% of stocks are down 60% or worse”.
And in another post:
“Current drawdowns:
S&P 500: -9%
Shopify: -61%
Facebook: -46%
Tesla: -29%
Square: -63%
Paypal: -66%”
There’s a bit of ‘conviction’ being tested at the moment and on the flip side there’s probably a lot of long-term opportunity on the table now for quality businesses.
Thursday 24th February 2022
It was reported; war between Russia and the Ukraine broke out today. Tension has been high for weeks and the markets (overnight in the US and today in Australia) had a solid decline.
I understand shares return so well over the long term because of the risk of investing in the unknown future (equity premium risk). We have high inflation, interest rates soon to rise, a federal election in May here in Australia and now a war.
Personally, none of this fazes me. My horizon is long term and execution of my strategy remains the same. Selfishly, I hope asset prices continue to fall. Nothing like buying great businesses on sale!
BTC price is where it was around a year ago. I’m not sure why it’s coming under so much pressure, but it’s not uncommon for other asset values to not move much for a year or two. I don’t see the problem with BTC doing something similar.
Closer to home construction company Probuild has collapsed, leaving $5 billion dollars of projects unfinished. I was surfing in Byron Bay today with some friends and noticed tens of millions of dollars of property renovations happening around Watego’s beach.
It looks like there’s heaps of demand for building renovations in the private sector, but the problem is pricing jobs as the inflation on materials at the moment is insane. It’s why building companies are under some pressure at the moment.
Saturday 26th February 2022
Censorship just increased and free speech just decreased a little more in Australia. The TGA (Therapeutic Good Administration) announced its now illegal for health companies to engage people in paid advertising. Detail can be found here: https://www.tga.gov.au/tga-social-media-advertising-guide
Their apparent goal is to minimise ‘influencers’, people with a large following but little education promoting health products. While I agree there’s no shortage of misinformation online, muting it all is not the solution. Because who’s watching the watchers?
The solution is more conversation and letting the market decide what’s accurate and what’s not. We cannot protect from themselves entirely. ‘Life is not fair’ according to Bill Gates. ‘Life is a daring adventure’ according the Helen Keller.
Their will always be people getting ripped off and making what turns out to be poor decisions. If we take things a step further, I’m not at all confident the medical establishment/big pharma has you best interests in mind when it comes to health. Look at how the whole covid situation was messaged and handled… No mention or mandates for regular exercise, healthy eating, avoiding alcohol, sunlight and vitamins such as C, D and zinc at minimum, boosting our health, wellbeing and immune system. Instead it was a blanket mandate, plain and simple.
Still don’t believe me? Riddle me this.
If you’re alive and healthy the medical industry/big pharma makes no money from you.
If you’re dead the medical industry/big pharma makes no money from you.
If you’re alive and sick the medical industry/big pharma makes money from you. They’ve got a customer for life.
Please don't misinterpret me. The advances in emergency medicine and surgical procedures is fantastic. We are lucky to live in the times we do and able to access if we need it.
Bottom line is we’ve all got to pay. We either pay now, looking after our health and wellbeing or pay later attempting to repair it.
We all know the saying ‘an ounce of prevention outweighs a ton of cure’.
Sunday 27th February 2022
Warren Buffett just released his 2021 annual letter to shareholders. Always worth reading https://berkshirehathaway.com/letters/2021ltr.pdf
Monday 28th February 2022
Southeast Queensland and the Northern Rivers of New South Wales are dealing with severe flooding. We’ve had heavy rain for a few days now, I had to postpone a camping trip at the end of last week due to heavy rain and now people are cut off, roads are closed and we’ve sadly lost lives.
Schools, businesses and services impacted are all closed today.
It’s fantastic to see the community come together and help each other out as these floods are nuts. People have lost everything, homes completely under water, families stranded in cars on high land with no food, water or anywhere to sleep.
The power of the power is strong though. Boats and Jet Ski’s are out in force rescuing people and shipping supplies. Some great Go Fund Me pages have been set up for emergency supplies and food preparation for everyone in need. One of the accounts was going for $5000 and last time I looked was at $28,000!
After the past two years of fear and segregation unnecessarily promoted around the world, it’s fantastic to see communities coming together to help each other out.
In other news, Ben Carlson Tweeted the S&P500 is down 10.4% and the NASDAQ down 15.7% from their ATH’s. While many individual companies have gotten hammered down 50%, 60% and 70% recently, the indexes have barely skipped a beat, it’s business as usual.
Morgan Housel is one of my favourite financial writers. His book 'The Psychology of Money' is a must read in my opinion. If you've not read his book, this interview he did with Tim Ferris is time invested. https://open.spotify.com/episode/7FggPSDSlfv4tLcRBZsQLy?si=zJfSosDqQPa1oLj-xElBVw