Post

How to get URL link on X (Twitter) App

On the Twitter thread, click on or icon on the bottom
Click again on or Share Via icon
Click on Copy Link to Tweet
Paste it above and click "Unroll Thread"!
More info at Twitter Help

Tiho Brkan

@TihoBrkan

Sep 15, 2020 • 12 tweets • 3 min read • Read on X

1/ One of the strangest things, at least for me, to read on FinTwit is the following statement:

“Even though stocks are expensive, bonds yield next to nothing, so there are is alternative.”

Umm 🤔... yes there is.

They are called alternative assets for a reason.

2/ • single family & multifamily RE
• self storage & multi-use property
• precious metals
• precious metal mining companies
• litigation financing
• invoice financing
• senior private credit
• private equity & venture capital
• art & collectables

3/ • construction senior debt
• construction mezzanine debt
• agricultural private equity
• farmland (grains & softs)
• joint ventures & partnerships
• long/short hedge funds
• volatility based hedge funds
• star manager hedge funds
• emerging market tourism RE

4/ • international cash deposits
• infrastructure private equity
• infrastructure private debt
• alternative energy investments
• crowdfunding & peer2peer
• small & medium sizes businesses
• e-commerce private business
• foreign exchange investments
• energy MLPs

5/ I’m sure I’ve missed a lot. Here are some background stories.

A German family I know invest into beef + avocado farms & soybean crops in Argentina.

Gentleman I talked with last week left AU to Silicon Valley with nothing, did a start up, made millions on a successful exit.

6/ My own family focuses on importing high end materials around the world & helping clients build/renovate luxury homes. We also do our own projects, too.

My best friend started a mining exploration company, later expanded it to mining traffic control company. Made millions.

7/ I rent my penthouse in Malta. My landlord owns the whole building, and several other buildings around the island. He made a fortune in multifamily real estate.

I was on a boat sailing local islands last week with a son of a family that made wealth in energy & oil business.

8/ Today I was a on telephone conversation with a gentleman from the States who is interested to diversify his portfolio into UK real estate debt.

My mentor made a fortune in Sydney (Aus) real estate & passed away at an old age with $150 million having never touched stocks.

9/ Ex-client from German made a fortune investing in renewable energy and wind farms. He did projects in Australia, South Africa and few other places.

My ex-girlfriend in HK is half Chinese half America. Her father moved from Boston to Shanghai in 1974, everyone said his crazy.

10/ He ended up making over 500 million and IPO his company on the exchange several years back. Was originally a lawyer, speaks perfect Mandarin & English, had a client called Proctor & Gamble (you might know them) and when he couldn’t find them a fragrance supplier...

11/ ...he ended up started his own company / manufacturing business in Tainjin and eventually grew it to a monster. Never invested in stocks.

What’s the point of the list I made and the stories I shared?

Firstly, wanted to share these stories as inspiration of what’s possible!

12/ Secondly, Wall Street is trying to convince you stocks are the only way to invest.

I have travelled half of the world!& met many successful people. Obviously, I’m still young but I’m yet to meet a person who got RICH of stocks.

No one used shares as a vehicle to success.

• • •

Missing some Tweet in this thread? You can try to force a refresh

This Thread may be Removed Anytime!

Twitter may remove this content at anytime! Save it as PDF for later use!

More from @TihoBrkan

Tiho Brkan

@TihoBrkan

Apr 4

I’ve made a career of buying pessimism and making contrarian bets. Naturally, I should be getting excited about the current sell off… but I’m not.

Panics like this can be purchased 8 times out of 10, and work during bull markets. When bulls are in charge, you’re bailed out even if you buy early. Eventually recovery saves and rewards you.

But 2 times out of 10 even the smartest investors buy way too early and early is synonymous with wrong in this business. That is how intelligent people blow up.

The errors often occur after a long bull market has conditioned people to buy the dip, after dip, after dip. This is known as Pavlovian conditioning.

Is the market panic overdone?

We don't think so. Go back almost 5 decades and you'll see the current sell-off is not that extreme.

Things can (but do not have to) get much worse.

Are credit spreads signaling a capiculation?

Not at all.

Spreads between junk bonds and similar maturities of government bonds are only at 4%.

The higher the spread for corporate vs. government bonds, the more risk is built into the markets.

There is no panic yet.

Read 5 tweets

Tiho Brkan

@TihoBrkan

Feb 18

1/ According to Bank of America's recent fund manager survey, global money managers are now holding one of the lowest cash positions... ever!

Fund managers can be considered dumb money and tend to be a fantastic contrarian indicator.

2/ US consumers are the most bullish on the market since the @Conferenceboard began tracking their sentiment.

The public is commonly considered as “dumb money” at extremes and a great contrary indicator.

3/ Corporate insiders' selling activity is now the most bearish ever. They are dumping their own holdings at a record pace.

Corporate insiders are considered smart money and have a fantastic track record of timing market extremes (especially bottoms).

Read 9 tweets

Tiho Brkan

@TihoBrkan

Sep 14, 2024

Unless there is a year-end rally, the Chinese stock market is on track for the fourth down year in a row. This is exceptionally rare for any global market.

Several key names — Alibaba, JD, Tencent, etc — show just how much corporate value creation fundamentals (FCF per share in blue) have completely disconnected from sentiment-driven, market expectations (share price in black).

In many cases, FCF per share is at or near record highs while the share price is near multi-year lows (in some cases decade lows).

See the $JD chart below.

Alibaba $BABA corporate value creation fundamentals (FCF per share in blue) have completely disconnected from sentiment-driven, market expectations (share price in black).

Tencent $TCEHY corporate value creation fundamentals (FCF per share in blue) have completely disconnected from sentiment-driven, market expectations (share price in black).

Read 4 tweets

Tiho Brkan

@TihoBrkan

Jul 20, 2023

Despite a very strong 10-month rally in stocks, most global fund managers are still overweight bonds (risk averse) and underweight stocks (risk seeking).

Some sentiment surveys do suggest bulls are back, but the lion's share of capital (managed by funds) is still defensive.

Asset allocation by an average retail investor (AAII) and an average fund manager (BofA).

The sentiment correlation is quite close over the last two decades, but it starts breaking down in 2016.

We think more & more passive LT indexers, hence retail is persistently bullish.

In February of this year 4 out of 5 fund managers expected China's GDP to outperform. We know quite a few investors who held this consensus view, as well.

The Chinese economic GDP has disappointed since. Today, only 1 out of 5 fund managers believe China's GDP will reaccelerate.

Read 5 tweets

Tiho Brkan

@TihoBrkan

Jul 2, 2023

1) Global economy has completely changed since the 1970s.

Today, intangible asssts (brands, patents, software, licenses, IP, etc) are twice as large as tangible assets (factories, plants, etc), which dominated the company investments 50 years ago.

This has many consequences.

2) Intangibles are expensed via the P&L statement, so they often don’t show up on the balance sheet the way tangible assets do (they are capitalised via cash flow statement).

Now, think how framing an investment as an “expense” will have a meaningful on financial metrics.

3) Intangible investments artificially suppress the net income (all of a sudden you have all these additional “expenses” which are really investments).

Therefore the P/E ratio is becoming obsolete and probably (almost) irrelevant.

Read 17 tweets

Tiho Brkan

@TihoBrkan

May 18, 2023

If ROC is higher than WACC, growing revenue adds shareholder value.

If ROC is lower than WACC, focusing on growth destroys shareholder value.

If a money losing business attempts to grow faster by cutting prices to gain even more market share, it leads to an adverse outcome.

How should management think about growth vs profitability?

If the business is generating excess ROC (above WACC) then focus on stable growth is intelligent.

However, if the business isn’t generating excess ROC, the focus should turn from growth to improvement in profitability.

The management teams should refocus on growth drivers only when the cash return on operating capital employed has increased in excess of weighted cost of capital and that is now validated & consistent pattern (not a multi year cyclical event, like with commodity businesses).

Read 5 tweets

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!

Ethereum

0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy

Bitcoin

3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Share this page!

Enter URL or ID to Unroll

Tiho Brkan

Try unrolling a thread yourself!

More from @TihoBrkan

Tiho Brkan

Tiho Brkan

Tiho Brkan

Tiho Brkan

Tiho Brkan

Tiho Brkan

Did Thread Reader help you today?

Don't want to be a Premium member but still want to support us?

Send Email!