Well in 1945 there was a shortage of oil because of the War.

The government issued ration cards to individuals, specifying the amount of oil and gasoline they were allowed to purchase or consume.

global oil demand confirmed unchanged since 1945

Demand for newspapers has been falling, but their prices keep rising. I wonder why

because nobody reads newspapers anymore so they lost all ad revenue so they charge a premium to a few boomers seeking the comforting tradition of crisp newspaper on their fingertips in the morning, flapping giant sheets this way and that at the breakfast table, ingesting information like dinosaurs

no doubt oil is generally a good inflation hedge. "oil prices rise because of an expansion in the money supply" is overly simplistic when it's also subject to supply/demand shocks

If your thesis (extracted from your question) is correct, you have a very obvious long-term trade. Earnings and cash flow trump everything in the long run.

"Price change correlated with something it ought not be correlated with" is a definite opportunity.

With the Yen continuing to drop to 33yr lows I started a small position in the 'Buffett' trading stocks. I own very little overseas exposure other than LVMH and NVO so a little diversification is also nice.

+1 MAG7 / +2 SARK is a trade I like

Thoughts on potential EU decision?

https://www.reuters.com/markets/deal...il-2024-03-08/

Bear case on CPRI:

https://xiaocapital.substack.com/p/c...rse-merger-arb

Who knows what the FTC will do, that is the whole question, but the deal terms obligate TPR to fight them in court and the merger agreement was extended thru Feb 2025.

Europe: TPR/Kors have 6% market share outside the US/Asia. The LVMH/Tiffany's deal was cleared in 5 weeks and that involved, obviously, the largest player in the luxury market.

I don't think it's accurate that they would have 45% of the affordable luxury market in NA. Other reports have their share as low as 20-25%. Probably somewhere in the middle. And they are surrounded by competition, on all sides, from DKNY to Tory Burch to Dooney & Burke to Burberry and Marc Jacobs.

Market share is just a heuristic used anyway, but what really matters is market power which is based on elasticitity of price and substitution effects. A WallSt survey of their consumers revealed that 30% of CPRI/TPR buyers would switch if there was even a 10% increase in price. The same survey revealed that Kors, Spade, Coach handbags are only viewed as equal substitutes by 5-9% of consumers - the same range as a dozen other similar brands. If prices were hiked, a substantial portion of their consumers would either stop buying; or change to a cheaper [or pricier such as true luxury LVMH] brand[s].

Given that consumers can shop omni-channel and click through, literally, thousands of bags online should they desire, and can even check store prices instantly on their phone - a significant issue given the highly discretionary nature of the items, jacking up prices was always a non-starter from purely a sales POV.
Not to mention the importance of the wholesale channel who are generally able to set their own prices/discounts, the mall stores wouldn't have the same incentive to raise prices at retail even if wholesale cost bumps up 5-10%. JWN/Macys will take a smaller margin on these bags than risk no sale at all to a shopper actually in the store.

No deal it could certainly drop to the 32 range, but even the $28 posited by the bear is $12.5 down vs $16.5 up. No change in my opinion that the market has mispriced the risk of FTC fighting this to the death [where they'd likely lose, humiliatingly, again].

The good thing is with an all cash deal, if you're right you get paid out at that price, full-stop [as we saw with twitter] and no risk of ending up with NewCo stock that is in free-fall for any unknown reason. If it takes another ~10 months, that's another ~5% off the TVofM, but that's still 40% up from today.

The joy of binaries: I'll either be 100% right or wrong! That's why it's just one position in my portfolio.


N.b. not part of my thesis, but both Kering and Exor/Agnelli were also circling Kors which is why TPR made the all-cash bid in the first place.

I noticed the chart of handbag comps by the bear left out these brands: Dooney & Burke, Calvin Klein, Burberry and DKNY. Maybe that's how he got to his estimate of 45% market share...

Thanks naj, great read/info

Whether you're in the Stagflation camp or this is a new bull market camp, I think down from here in both scenarios is good.

I'm looking for a retest of the former high on the S and P 500, call it a minimum of a 10 percent draw down from here.

A very ugly couple of days, with all signs pointing to more to come.

I don't think this has anything to do with Israel and Iran, because the price of oil has been going down.

I think we're seeing some signs that liquidity is starting to dry up and the market may be trying to communicate to the Fed, that it's time to stop the Taper.

Now what?