KochBank Weekend Reading

The accelerating erosion of business ethics in the US. From Buffet to Musk to Trump (see article below)."You can ignore reality, but you cannot ignore the consequences of ignoring reality." (Ayn Rand). You let crooks and liars run the show, expect bad outcomes. Every AfD voter in Germany should be aware.

When you need almost 5% GDP growth just for debt service. Nonetheless, they keep plundering the state ("Big Beautiful Bill" = unfunded tax cuts for the rich). Fiscal irresponsibility has its price: Gold to 20y Treasuries is going parabolic, CDS cost to insure US debt now matching Greece´s....

Chinese companies don´t focus on "maximizing owner returns" but "minimizing profits, so you can kill competition". This "race to the bottom" happens in many sectors (i.e. solar modules, retail, EVs, etc). Fabricated Knowledge illustrates how this process will impact the semiconductor industry. As a consequence, of "being involuted" (how the Chinese call the race to zero margin), new enterprise formation (start-ups) has almost stopped.

New Yorker: Three Faces of American Capitalism: Buffett, Musk, and Trump
Fabricated Knowledge: China´s Race to the Bottom: Margin Zero
The Timeless Investor: How the British Empire financialized the World

"The Empire upon the sun never set". Timeless Investor looks at the fall of the British Empire and the parallels to the US of today (see above)

Businessweek profiles Microsoft and its CEO in light of the AI transformation. Including the volatile relationship with Open AI (see below)

GOOG is statistically cheap. It´s trading at just 15x EBIT25e (10x EBIT29e, with BBerg cons. 8% p.a. growth). Great value or getting disrupted ?

Businessweek: Microsoft’s CEO on how AI will remake every company, including his
Rock & Turner: Google: Great Value or a Value Trap?
Best Anchor Stocks: Zoetis Deep Dive and Q1 review

Very Interesting

Over time very, very few stocks outperform the indices. Single stock risk increases with time. Competitive forces at work (source)

Founder Brian Chesky sees AirBnB in a "midlife crisis". He now wants to turn it into an "everything app" for booking all kind of services. The Down Round podcast asks whether AirBnB is having his "Wework moment" (see podcast below).

Insider trading nation

Podcasts & Videos

Down Round: AirBnB for Everything
Preferred Shares: The Sweet, Storied Success of Lindt & Sprüngli
RV Capital: Rob Vinall Postcard from China, Japan and the US

Is securitizing burritos a good business model ? A quarter of BNPL ("Buy Now, Pay Later") users are borrowing to pay for groceries, compared to just 14% a year ago, according to a recent LendingTree survey. The same survey found that 41% of BNPL borrowers struggle to repay loans on time, up from 34% last year. Klarna postponed a $15+ billion IPO it planned for earlier this year amid trade wars and the resulting economic uncertainty.

What it means to the fans when a 120 year-old club wins its first-ever major trophy (click)

Meanwhile, when a big club turns into laughing stock. Even Ryanair is mocking them. A fed-up ManU supporter escapes to Faroe Islands (click).

Enjoy the Weekend!