⁠Librarian Capital
Japan Tobacco shares currently down ~17% as part of Tokyo market rout (Nikkei down ~12%) https://t.co/eGs3Sb2d78
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⁠Hidden Value Gems
My last macro point for today.

“Announced layoffs fell sharply in July to 25,900. During employment-led recessions, this series spikes up, not down.”

h/t @yardeni

Otherwise, it does feel that a lot of technical / forced selling is happening. Going back to bottom up research… https://t.co/hrsG44NP1N

I haven’t heard about the SAHM rule until last week. Here is how it works and further thoughts on whether it is causing a market meltdown.

1️⃣ The SAHM rule calculates the difference between the current 3-month average unemployment rate and its lowest value over the previous 12 months.

2️⃣ If this difference exceeds 0.5 pp, the rule suggests that the economy is likely entering a recession.

3️⃣ The idea behind the SAHM rule is that a significant and sustained increase in the unemployment rate is a reliable early signal of economic downturns.

4️⃣ The rule might not work, according to the author, Claudia Sahm:

✅ “I am not concerned that, at this moment, we are in a recession,”

✅ “no one should be in panic mode today”

✅ There are key measures of the economy that “still look really good.”

✅ “[The Sahm Rule] may not tell us what it's told us in the past, because of these swings from labor shortages, with people dropping out of the labor force, to now having immigrants coming lately. That all can show up in changes in the unemployment rate, which is the core of the Sahm Rule.”

cc @Claudia_Sahm - Hidden Value Gems
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⁠Librarian Capital
L'Oréal buys 10% stake in Galderma for partnership

"To work towards a strategic scientific partnership"
"Will not seek to be represented at Galderma’s Board"

"Off-market block trade with the EQT-led consortium"
Price "non-disclosed", funded by existing cash/credit

$OR $GALD https://t.co/7Mjei0d7hQ
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⁠Hidden Value Gems
The Mag7 stocks are down 15% in a month, still up 31% year-to-date. https://t.co/lkAxIRlQrm
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⁠Hidden Value Gems
$OCI.AS seems to be on track with its break-up plan. A good deal selling a ‘blue’ ammonia plant in Texas to Woodside for $2.35B. This is 44% of OCI mkt cap.

“Sawiris has already struck deals to sell other parts of OCI. Last December, the group agreed to offload two fertiliser holdings for about $3.6bn apiece, to Adnoc and Koch Industries.”

“In its end-of-year earnings for 2023, OCI said it would distribute at least $3bn to shareholders this year.”

via @FT

Never looked at $OCI in detail. Looks like an activist shareholder and the controlling family are aligned to unlock the value through asset sales and potential dividends?

A story in the @FT https://t.co/l3hNKyrYwI - Hidden Value Gems
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⁠Invest In Assets 📈
RT @InvestInAssets: Terry Smith is considered the Warren Buffett of Britain.

In 2010 Terry founded "Fundsmith" which has beaten the index by a substantial amount with a CAGR of 15.6%

Studying his investing strategy is more valuable than a degree in Finance

Let's break it down: https://t.co/s6w42nkpP5
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⁠Hidden Value Gems
RT @HiddenValueGems: $BRK.A Q2 highlights:

✅ Buffett sells half of $AAPL stake, worth c $88B. Probably expects less upside in Apple and higher taxes in the future. Not sure a big strategic acquisition is on the cards…

✅ Cash pile at $277B, almost 30% of the Mkt Cap. A great position if we enter tough times.

✅ Insurance float at $169B.

✅ After-tax operating profit rose 15% to $11.6B, driven by higher insurance underwriting profits and increased income on the company’s large cash holdings.

✅ Bought back just $345M of stock in the period, one of the lowest quarterly totals in several years. That compares with $2.6B in Q1 2024 and $2.2B in Q4 2023.

✅ Book value per share rose to a record $419,000 per class A share from $398,000 on March 31, 2024. The gain in book value was driven by operating profits and the rise in value of Berkshire’s equity portfolio, which totaled $285B. Berkshire’s stock now trades for about 1.5x the book value.

✅ Geico’s combined ratio was 83% in the second quarter, down from 95% a year earlier.

✅ Profit at Burlington Northern Santa Fe, the railroad business, was down slightly to $1.2B after taxes in the second quarter from $1.3B a year earlier, and profit at Berkshire’s utility operations (Berkshire Hathaway Energy) declined to $655M from $785M a year earlier.

$BRK.A $BRK.B #BRK
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