Long-term thinking. Markets, strategies, and capital allocation.
Got myself into a mess in the Turkish market
Got myself into a mess with the Turkish KUYAS stock. Haven’t been able to sell it for weeks now. There’s just no liquidity in the market – that’s it, taban. It looked like a good stock, been going up for years, everything seemed to be okay. So I added it to the portfolio. It went up for me for a while too, then suddenly dropped like a rock. I’m down about 70% on the position now, and probably around 14% on the whole portfolio. ...
Bought it. Now what?
So someone gets into the stock market. Opens the brokerage app, and there they are… “ideas.” Subscribes to a Telegram channel – more “ideas.” Goes to read some research – yep, “ideas.” “Top 10 stocks to buy,” “5 high-yield bonds,” “30% upside,” “idea of the year.” Wow! Okay, fine. Buys one at 5% of the portfolio. The next day – another. Skips the third idea, buys something else on day four. Then another one. Puts 5–10% of the portfolio into each. ...
The Russian stock market: tears, tears, tears
The Russian stock market’s been hard to look at without tears in recent years. Entirely in line with the broader situation in the country and reflects the public mood. What should you do in a situation like this – in Russia or anywhere else? Depends on your investment horizon. If it is long – say, 10, 15, 20 years or more – you can essentially do nothing at all. Just keep investing in stocks, understanding that price fluctuations, stagnation, and drawdowns are a normal part of the process – the price you pay for the potentially higher long-term returns of equities as an asset class. Perhaps the only thing worth striving for is to select good stocks and improve portfolio efficiency when possible. ...
“Fair value” is just an opinion
“A stock is undervalued” sometimes means nothing more than: “I spent a long time building a careful model and, in the process, convinced myself that I was right. I checked all the numbers, factored in growth, discounted the cash flows, calculated fair value – surely I didn’t spend all that time for nothing! Now all that remains is to wait until the market finally agrees with me.” Been there. For example, I held Alibaba stock for almost two years, roughly from 2021 to 2023. The price kept falling, yet according to analysts, the stock was still “undervalued.” Say, it was $100 with a $140 target, then gradually turned $50 with a $70 target. In both cases, +40% upside. Except I had already lost 50%. And even if the new target ($70) were eventually reached, I would still be down 30% from my purchase price. It helps to remember: “fair value” is just our opinion (or the average opinion of a small group of analysts), while the market price reflects the decisions of a vast number of participants, a good many of whom do not build any models at all. ...
Will AI replace financial advisors?
Financial advisors have plenty of competition. For Russian clients, the main alternative is a bank deposit: why invest in anything if you can put your money in a bank and simply collect interest? Real estate takes the second place: you can see and touch an apartment, rent it out, or pass it on to your children. Quite unlike those exchage traded “candy wrappers.” Now a third rival has joined them – artificial intelligence. A client can quite reasonably ask: “Why should I pay an advisor if I can open ChatGPT or Claude, tell it about my money, and have it sort everything out?” ...
Sanil Electric / A062040 – BUYING
Sanil Electric has grown on the back of a shortage of transformer capacity and an investment boom in data centers, renewable energy, and storage systems. Revenue and earnings continue to grow at double-digit rates, and production is running at full capacity. The business, however, depends heavily on a few large customers and on how long the current industry cycle lasts. Let’s take a look at what is driving the company’s results, where its strengths lie, and which risks could change the picture. ...
Progressive / PGR – BUYING
Progressive has effectively caught up with State Farm in US auto insurance market share and, according to S&P Global estimates, has even moved into first place on a trailing 12-month basis. The company continues to grow both premiums and its customer base. At the same time, growth is slowing, and the company’s current financial performance depends to a significant extent on favorable conditions in the insurance market. In this article, I look at what allows Progressive to maintain its strong position, how its economics work, which risks could quickly change the picture if they materialize, and what should be monitored after the position is opened. ...
Bond ETFs: how to build a conservative portfolio in dollars
Money held in a strong currency should not simply sit idle in a bank or brokerage account. The global bond ETF market makes it possible to build a portfolio for almost any conservative objective. There is no need to select bonds individually, monitor dozens of issuers, or regularly reinvest coupons: a single fund may hold hundreds or even thousands of issues. Let us look at how this market works, which funds fit which goals, and why a portfolio of ETFs is often more rational than idle dollars or a small collection of individual bonds. ...
Can an investment advisor compete with a large bank?
Mark Develman, host of the “10k” podcast, spent two hours trying to understand why someone without a specialized degree or experience inside a financial institution believes he is qualified to advise people on their capital. The conversation was hardly flattering: Mark repeatedly played down my Bank of Russia license, media publications, years of experience, and investment results, while I never quite learned to defend myself with bold promises. No hard feelings – that is what interviews are for. Someone has to ask the “uncomfortable questions”; otherwise, they are simply boring to watch. Here is an abridged transcript. ...
Leading brands momentum: how the strategy works
A good investment strategy does not begin with a list of issuers, but with clear decision-making rules. The selection criteria, number of securities in the portfolio, expected holding period, conditions for selling, performance benchmarks, and acceptable drawdown should all be defined in advance. Without these rules, a portfolio becomes a collection of random ideas: one company looks appealing today, another tomorrow. A new report comes out; analysts raise their target price. As a result, the portfolio’s composition and, just as importantly, its risk-control logic often remain unclear even to the person who assembled it. ...