Locked = Twitter break
Joined February 2024
- Tweets 2,055
- Following 475
- Followers 183
- Likes 4,207
107 Photos and videos
Jun 9
This is part of the reason why I got out of oil when it went over $100. Oil is too important of a commodity for people to let moon. They’re going to find ways to solve shortages.
Oil may even be a short here. Too hard for me tho.
Anyway…back to Twitter break.
Jun 8
The global oil system has offset almost 90% of Hormuz barrels
17.5 mmb/d has been offset with bypass pipelines, reduced Chinese imports, increased US export, SPR releases & demand destruction
#Oil #Hormuz #EnergyMarkets #CrudeOil #DemandDestruction #EnergySecurity #Commodities
97
Jun 9
Being bullish oil here is a bad bet.
If the straight opens, oil goes down.
If the straight stayed closed, the price is capped due to demand destruction.
Anyone paying close attention has already seen some demand destruction.
Complacency isn’t the issue.
Jun 8
WHY OIL ISN'T $200 (YET) DESPITE 1 BILLION BARRELS LOST:
- massive refinery run cuts (9Mboed)
-drawdowns: refined product storage crude (SPRs)
-demand destruction of refined products
-"comatose" complacency among buyers
-China not buying
-hedge fund longs exhausted
1/3
78
Jun 2
Both Berkshire and $GOOG have made a lot of mistakes in capital allocation over the years. People don’t remember because the underlying businesses are so strong.
You could have made the same argument about the Metaverse critics a few years ago. The critics were right, however.
Jun 2
Unsurprising at this point:
But my X feed is once again full of retail investors who are absolutely convinced they understand capital allocation far better than the execs at Google and Berkshire
Personally I do not claim to be so wise
I am long $GOOG 🤣
1
1
2,562
Jun 2
Nearly every company from the early days of the internet doesn’t exist anymore. Who says current incumbents will be the winners here? It’s not hard to believe that someone could create a competitor at a much lower cost due to constraints that don’t exist for the majors.
Was early in investing career during dot com. Front row seat to telecom blowup. Worked as utility analyst during utility trading blowups. Was trading CDS during GFC. Ran short focused fund during energy blowup. Watched liquidity driven 2021 meme and sw bubble.
This is nothing like any of those.
You had legit big frauds ie Enron and worldcom during utes/telecom. Ratings triggers that wrecked companies that no longer exist. Dot com was speculative frenzy. No substance behind many companies. We were still on dial up internet for years after. The internet couldn’t scale nearly as fast as expectations. GFC was leverage across system and the assumption house prices couldn’t go down. Energy crisis was oil plummeting combined with massive high yield issuance.
The hyperscalers are quasi monopolies. Barely any leverage. Tons of OCF to fund build out. Existential for each to compete.
Too far too fast. Sure. Bubble. I don’t see it.
1
44
Jun 2
It’s hard to know when to cash out of the market, but the Mag7 dumping infinite amounts of cash into the market is making me more nervous than anything. What happens when they slow down? I mean…this level of spending can’t be sustained indefinitely.
Do note that Alphabet expects $30B, or 37.5% of its proposed $80B raise, to go toward employee equity-award tax obligations not funding AI infrastructure.
37
Jun 2
Berkshire used to do countercyclical deals. The deals they’ve announced in the last few days are procyclical. It’s indicating the potential to make a lot of deals now. How many deals can an entity as big as Berkshire make and still find hidden value or distress? Probably not many
Jun 1
Wow, Berkshire Hathaway investing $10 billion into $GOOGL in a private placement as part of a broader $80 billion equity capital raise by the company to expand its AI infrastructure
1
49
May 26
Not really. I wish oil would go to like 70 while the situation continues. I’d go full port into oil and the green on my screen would look something like this almost immediately.
93
May 26
I’ve been seeing an increasing number of articles along these lines. Maybe we’re nearing the end of the AI trade?
Target pushes deeper AI adoption, reviews usage‑based pricing, India head says reut.rs/4wLahUt reut.rs/4wLahUt
46
May 25
I believe that Burry will be right on a lot of his picks. People tell me that AI is going to revolutionize everything. Maybe it will, but I don’t know a single person whose job has been impacted by AI in anything other than a minor way. Yet, so much money has been spent.
May 24
Unfortunately this is my biggest bear thesis on $MELI today
1
45
May 25
People really should go back to read “The Big Short”. His investors tried to pull their money from the CDS trade. It’s hard going against the grain.
20
PureUtility retweeted
3
3
47
36,143
May 21
People say the same thing about oil every time the price gets high. Within a few years, however, everyone wishes they put hedges in place when oil was high. High commodity prices almost never last long. Compute is a commodity.
83
May 20
It’s only a matter of time before we see a disgruntled employee load something illegal into Google Cloud to intentionally to get their account shutdown. Without a secondary backup on another service, I wouldn’t be surprised if the whole company goes down due to that action.
May 20
This wild.
Two years ago, Google deleted a large customer’s account: Unisuper, an Australian retirement savings fund.
It seems they now blocked an even larger customer, cloud provider Railway.
This kind of story you never hear with AWS, Azure, or even Oracle. GCP 👎
60
May 20
I’m increasingly thinking that this might have more significance to clearing bottlenecks than I thought. This combined with the H200 pricing is very interesting.
We’ve agreed to a partnership with @SpaceX that will substantially increase our compute capacity.
This, along with our other recent compute deals, means that we’ve been able to increase our usage limits for Claude Code and the Claude API.
29
May 20
Oil can go a lot higher from here, but the problem will be solved in one way or another. There are just too many interests working against it. Oil is a self-defeating trade above certain levels. I really hope oil crosses $150, however. I’ll make a lot of money on the other side.
BREAKING: After 7 failed attempts, the US Senate has advanced a measure that would require congressional approval for continued military strikes on Iran.
In a 50-47 vote, the Senate has now officially advanced the Iran War Powers Resolution.
72
May 20
I’ve been putting software trades on recently. If AI finally shows some cracks, we’ll see a rebound in those stocks. It might be worth buying some selective puts, but I’d rather be long software since the trade is easier and more tax efficient.
31
May 20
I’m impressed by some of the things that AI can do, but I hate weak benchmarks.
3 hours to pull 5 years of financials plus YTD and email it? I can do that in less than 10 minutes even with some putzing time built into the budget.
May 19
Semianalysis published a table last night that does more for the demand side narrative than 6 months of analyst commentary lol.
Token cost vs human labor cost on 9 real internal workflows. and EVERY SINGLE ONE had ROI over 10x (most landed between 60 and 90x)
The workflow that stuck was an initiation note on $HPE, covering roadmap, balance sheet, and capex sustainability. The cost in tokens was 21,33$.
The cost in analyst time, at 20 hours and 50 dollars an hour, was 2k dollars (so ROI of 93x)
You can argue about how generalizable a single workflow is but it's hard to argue with the moment the analyst sees the receipt. The workflow does not go back. The senior analyst will not return to a process that costs 90 times more, and the junior will not be allowed to.
The reason this is not cyclical demand is the reason the cotton gin did not roll back. Once the labor cost of a task drops by 90 plus percent, the unit of work changes.
The old workflow is not slow, its gone.
The buyers of intelligence at every desk in finance, law, consulting, and biotech are about to spend the next 2 years rediscovering that they have been paying 100x more than the new floor for the same answer.
The other line in the SemiAnalysis post that stuck out was that banks are not using this yet. Most enterprises are not. The token bill of the next 24 months is going to be funded by people who saw a 21 dollar receipt and could not unsee it.
The demand curve does not bend until the supply curve does
28