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It should help the Greens, but may not

The DVDs-by-mail company conquered America’s video-streaming market. What next?

The government is taken by surprise at the implications of its strategy

Carlos Uraga, Pablo Fernández, Maurici Badía, Joan Álvarez y Juan Baena ponen freno a la alta contaminación de este material en el mar con soluciones tecnológicas para darle una segunda vida destinadas a la industria. Leer

La confianza de los consumidores españoles, repuntó un mes más hasta los 97,5 puntos en el mes de junio, repuntando desde los 89 del mes de mayo. Con ello se completa la recuperación de la confianza de los consumidores perdida durante la fase más aguda de los confinamientos por el avance del COVID, hasta niveles visto en el año 2019. 

El subíndice de situación actual creció hasta los 75,9 puntos y el índice de expectativas subió hasta un gran 119,1, la segunda lectura más alta de la serie histórica. 

Episode #330: Guillermo Cornejo, Riders Share, “Riders Share Is Like An AirBnB, But For Renting Motorcycles”               Guest: Guillermo Cornejo is the co-founder of Riders Share, the first & largest motorcycle peer-to-peer rentals platform in the United States. Date Recorded: 6/29/2021     |     Run-Time: 45:40 Summary: In today’s episode, we […]

The post Episode #330: Guillermo Cornejo, Riders Share, “Riders Share Is Like An AirBnB, But For Renting Motorcycles” appeared first on Meb Faber Research - Stock Market and Investing Blog.

Este fondo fomentará el desarrollo de proyectos digitales de alto impacto y la inversión en empresas en crecimiento mediante el refuerzo de instrumentos públicos de financiación, la atracción de fondos internacionales y la potenciación del capital riesgo. Leer

Además de ello, Enrique cuenta con experiencia previa en el ámbito de las agencias, formando parte de compañías como GroupM y Publicis Groupe, lo que le ha dotado de un enfoque técnico para la creación de estructuras de validación de audiencias, especializándose en publicidad, así como el expertise y liderazgo de la parte técnica y de etiquetado y la validación censal de métricas como viewability o Brand safety. Y, en definitiva, de un amplio y profundo conocimiento de la industria digital española.

De hecho, la implicación y compromiso de Enrique para con la industria han sido continuos, habiendo colaborado en iniciativas clave con distintos organismos e instituciones. Es miembro de la IAB Tech Lab para los grupos de trabajo DigiTrustID, que trabaja en la elaboración de una solución universal para un futuro cookieless; así como Taxonomy & Mapping Working Group, que desarrolla nomenclaturas de uso común, muy en particular, para los entornos programáticos. También ha colaborado con IAB Europe para la Comisión Europea en Online Disinformation and Fake News

En palabras de Enrique: “Después de haber trabajado durante más de diez años en la medición de audiencias para el mercado español, para mí es un placer tener la oportunidad de trabajar en GfK DAM. Con mi conocimiento técnico previo y en la gestión de proyectos de medición, vengo a apoyar desde la parte operacional a un equipo extraordinario de personas tanto local como global y una tecnología ya existente que garantiza la solidez y robustez del proyecto”. A ello, añade: “es emocionante poder vivir este cambio en un mundo digital cada vez más disruptivo, pero en el que me siento cómodo tomando los cambios como parte de una evolución constante y de trabajar en una solución de futuro, que estoy seguro, no promete solo cumplir con los requisitos pactados, sino emocionar de nuevo al mercado”.

Amazon.com (AMZN) saw substantial growth this past year, outperforming the S&P 500 and rising by approximately 93.4% compared to the S&P’s gain of about 35% and reaching record highs over the past couple of weeks. Despite hedge funds selling, the stock rose on the WhaleWisdom Heatmap to a ranking of twelve.

Amazon is a multinational technology company with a powerful presence in e-commerce and the cloud computing market. The company also offers digital streaming services and artificial intelligence solutions. Amazon Web Services includes machine learning services and supporting cloud infrastructure to aid its customers in increasing productivity and improving business outcomes. As a result of the coronavirus pandemic, more businesses sought to move away from internal management of technology infrastructure and moved to the cloud. Understandably, Amazon saw a boom in business during the coronavirus pandemic. Stay-at-home government orders led to increased online shopping, greater demand for streaming entertainment, and a push towards remote work.

Hedge Funds Adjust Portfolios

Amazon lost some traction in the first quarter of 2021, as hedge funds and institutions were decreasing shares in their portfolio. The aggregate 13F shares held by hedge funds decreased to about 56.4 million from 56.3 million. Of the hedge funds, 44 created new positions, 298 added to an existing holding, 62 exited, and 271 reduced their stakes. Overall, institutions were selling and decreased their aggregate holdings by about 0.8% to approximately 287.2 million from 290.0 million. The long-term 13F metrics between 2001 and 2021 demonstrate that Amazon’s investment potential maintains on an upward trend. The company saw a rise in ranking on the WhaleWisdom WhaleIndex to a rating of twelve from thirty-six.

(Whale Wisdom)

Encouraging Multi-year Estimates

Analysts expect to see earnings rise over the next two years, increasing from 2021 to 2022 from an estimated $55.13 to $72.60. Revenue estimates were also highly encouraging, with consensus forecasts reaching $489.6 billion by December 2021 and $576.5 billion by December 2022.

(Whale Wisdom)

Favorable Outlook from Analysts

Analysts appear to recognize Amazon’s strength in the e-commerce market, sharing optimistic price targets and opportunities for future growth. Tigress Financial Partners’ analyst, Ivan Feinseth, maintained a Buy rating on the stock and initiated a twelve-month target price of $4,370. Doug Anmuth of JP Morgan Chase & Co. views Amazon as a top pick, giving it a $4,600 target price and an Overweight rating. Anmuth believes that Amazon’s e-commerce penetration will continue to increase. However, despite optimistic stock values, Amazon must also work through leadership changes as its founder, Jeff Bezos, is replaced by Andy Jassy.

Optimism Beyond 2021

Amazon ushers in a new CEO in 2021, though the potential impact of leadership change has not stopped analysts from being optimistic for the future. Customer demand for Amazon’s products and services remains very strong, and the technology company continues to see upward growth. Multi-year earnings estimates should be strong enough to continue to attract long-term investors.

Thanks to JimHSoars, Gregory Gallant, Dan, Paul Hutchings, Stephen Ostdiek, and Maxi for becoming Knife Steel Nerds Patreon supporters!

YouTube

The following information is also available as a YouTube video for those that prefer watching to reading. The video might be more fun though there are more details and more discussion in the article.

Oil

One common rating method for quench oils is the quenchometer “nickel ball” test. A 12 mm nickel ball is heated to 1620°F and then quenched into 200 ml of oil. Nickel reaches the Curie point at 670°F at which point it is attracted to a magnet.

The nickel ball is held on a string and a magnet placed outside of the beaker so that when the nickel ball becomes magnetic it is attracted to the side of the beaker. At that point the test is stopped and the time taken. A general ranking of different quenchants is found below:

Parks 50 and AAA are quite commonly known oils among knifemakers. Parks 50 is a 7-9 second oil, clearly in the “fast oil” category. Parks AAA is a medium-fast oil, taking 9-11 seconds with the nickel ball test. I bought my oils from Maxim but since then DuBois has an easy online store available for these oils.

Quenchfast and Quenchall are offered by McMaster-Carr as “11 second” (Quenchfast) and “28 second” (Quenchall) oils. I asked McMaster-Carr for more information on the oils but the sheet they sent me (hosted here) doesn’t have any more specific information on the nickel ball test ranges. In fact, for some reason the datasheet calls Quenchall a 26 second oil instead. The buckets say Reladyne oil but contacting Reladyne led to nothing; the person I spoke to on the phone didn’t seem to have any information on the products whatsoever and kept asking me for an order number. Of course giving them the McMaster-Carr order number just gave an error in the system.

The Citgo Quenchol 521 came from Jantz. Jantz lists the oil as “14-16 seconds” on their sheet, but the datasheet from Citgo lists the oil as 16.1 seconds, which looks oddly specific when the other products have ranges.

So the ratings of the oils are not quite as simple as I might have liked. There are other products available, of course, notably Houghton makes a range of oils at different speeds. If you have a supplier that regularly sells 5 gallon containers of Houghton oils those are worth looking at as well.

Canola, Motor Oil, and the Inconel Probe Test

Knifemakers looking for oils to use that are cheaper than those available commercially most commonly use canola from the grocery store. However, some will also use motor oil. I found a study on 1045 steel where they found canola to quench more rapidly than motor oil so I am going to stick with canola as my “cheap” quenching option to test.

Data adapted from [1]

Despite quite a few studies that looked at canola oil I did not find any nickel ball measurements. This seems to be because the nickel ball test is outdated and has mostly been replaced by the inconel probe test.

The inconel probe test is similar but the probe can measure the temperature of itself during quenching to generate more information about the quenching process rather than just generating a time in seconds. So you get a curve such as below:

The blue line is the normal time vs temperature curve, and the orange line is the “instantaneous cooling rate” at each position. In other words, the slope of the time vs temperature curve at each position. You can see that the cooling rate is relatively slow at high temperature, then accelerates to a peak cooling rate around 1150°F and the slows down to about 600°F where it becomes more stable. Those three stages are the “vapor blanket,” “nucleate boiling,” and “convection” phases, which are also shown below. I have more information about these stages in this article about hardenability of steel.

Comparing Oils with the Inconel Probe Test

Below shows a range of different oil speeds from Houghton oils, as well as Canola:

Data adapted from Houghton International

The 7-9, 8-10, and 10-12 second oils look relatively similar but the peak cooling rates are slower as the nickel ball time goes up. The 15-22 second oil has a vapor blanket that lasts until a lower temperature, and then the peak cooling rate is significantly lower and at a lower temperature. Canola forms almost no vapor jacket at all and therefore reaches its peak cooling rate at a higher temperature. However, its cooling rate then decreases at higher temperatures, crossing over with the 15-22 second oil at about 1000°F.

However, if we look at water we see that it is much faster than any of the oils, coinciding with the nickel ball results I listed earlier. I have two temperature results listed because water is very sensitive to temperature. The closer the water is to boiling the more tenacious its vapor blanket is.

Water quenching chart from ASM Heat Treater’s Guide

However oil is much less sensitive to temperature. There are small changes in the cooling behavior with temperature but not nearly as extreme as water.

ASM Heat Treater’s Guide

Hardenability of Steel – Jominy

Hardenability of steel also has multiple measures. I first covered hardenability in this article which had an extensive discussion of different CCT curves (continuous cooling transformation) diagrams. Hardenability is how slow you can cool the steel from high temperature and still achieve full hardness. Hardenability is not a measure of how hard a steel can be after quenching, which is controlled by other factors, primarily how much carbon is “in solution” in the martensite. One relatively simple measure of hardenability is the Jominy test where a bar of steel is heated in a furnace and then is placed in a fixture with a water spray that is directed at one end of the bar. So that end is rapidly quenched and the cooling rate is progressively slower toward the other end, which is essentially being air cooled.

Comparing different steels you get a chart that looks something like this:

Adapted from ASM Heat Treater’s Guide

A2 is an air hardening steel so its line is flat; even with slow air cooling it fully hardens. 1095 is a water hardening steel so it only reaches maximum hardness at the position measured directly next to the water quench and the hardness drops rapidly. 5160 and O1 are oil hardening steels though the O1 is significantly more hardenable. 52100 is in between the water hardening and oil hardening steels, and different datasheets will recommend that either can be used depending on the cross section.

Continuous Cooling Transformation Curves

The CCT curves I mentioned above have more information about the behavior of the steel than the Jominy test. It is sort of like the difference between the nickel ball test (limited information) and the inconel probe test (more information). The CCT curve is generated by cooling the steel at different rates and measuring the phase transformations that occur during cooling. This shows the critical cooling rate required to avoid pearlite formation (makes the steel softer) and also the temperatures and times at which different phases will form. There are also certain features that can be different between steels such as some that will form some bainite (labeled B+K) if cooled at an appropriate rate, such as seen with O1 steel below:

Low hardenability steels see pearlite transformation at much shorter times such as can be seen with W2 below:

Different elements added to steel help to suppress the formation of pearlite. These elements are preferentially found in iron carbide so that when the steel tries to form the carbide phase of pearlite it is delayed by the diffusion of those elements. The most effective elements for hardenability are Mo, Mn, and Cr though Ni, Si, C, and V also affect hardenability. W2 has high carbon, low Mn/Si, and a V addition. The vanadium helps to refine the grain size which reduces hardenability (see my hardenability article). O1 has high Mn plus 0.5% Cr so it has relatively high hardenability.

Steels Used in This Study

I chose a range of low alloy steels to test the different oils that I bought. The primary tests I performed were with 1/4″ thick stock. 1/4″ is about as thick as most knives get so if it fully hardens at that cross-section then thinner knives will also work with that particular oil.

The steels above are ranked in order of increasing hardenability based on Jominy data, CCT curves, and otherwise estimated based on the composition using equations found in the hardenability article. W2 has very low Mn and Cr which means its hardenability is quite low. And as mentioned previously the vanadium addition refines the grain and further reduces its hardenability. 1095 has somewhat higher hardenability due to the increase in Mn. 26C3 has very high carbon which reduces hardenability, but the Cr addition helps to overcome that to have somewhat higher hardenability than 1095, at least according to the CCT curves. 26C3 has a similar high carbon+Mn+Cr composition to several steels like the Blue/Aogami series. 1084 is near-eutectoid and higher Mn than the previously mentioned steels which gives it increased hardenability. 80CrV2 has reduced Mn when compared with 1084 but with a significant Cr addition that makes up for it. 15N20 is an interesting case since it has a substantial Ni addition; nickel does not contribute that much to hardenability but 2% certainly has an effect. 52100 is a similar case with relatively low Mn but a substantial Cr addition for hardenability. CruForgeV and O1 combine significant Mn with a 0.5% Cr addition which is why they are the highest hardenability steels on the chart.

The W2, 1095, 1084, 80CrV2, 52100, and O1 were purchased from New Jersey Steel Baron. Most of the steels were produced by Buderus according to the composition sheets, and the O1 was produced by Latrobe. 26C3, 15N20, and CruForgeV came from Alpha Knife Supply. The 26C3 and 15N20 are produced by Uddeholm and CruForgeV is a Crucible product.

Experiment

I tested each of these as 1.5 x 2 inch rectangular specimens. The majority of the tests were with 1/4″ stock though some tests were done from 1/8″. The 1/4″ specimens were held at temperature for 18:30 minutes while the 1/8″ specimens were held for 10 minutes. Parks 50 and water were used at room temperature. The other oils were used at 120-150°F. I ground 1/32″ off the surface and tested the hardness, and then continued in 1/32″ increments checking the hardness each time until the center of the specimen.

1084 and Comparing Oils

It turns out that 1084 was in the sweet spot for comparing the different oils to each other; it shows the clearest differences. This was a little bit of a surprise because I expected 1084 and 80CrV2 to have more similar hardenability since Cr is less effective than Mn for hardenability, so 0.75 Mn should be similar to 0.4 Mn + 0.5 Cr. The results of the different quench media are shown below:

Water led to the highest hardness, as expected being the fastest quenchant. Parks 50 had a drop in hardness at the center of the 1084. Parks AAA had a maximum hardness of 62 Rc near the surface though it dropped to 60 Rc through the rest of the cross-section. Quenchfast (11 second oil) and Quenchol 521 (16 second) had somewhat odd behavior. The Quenchfast started out at higher hardness as expected but then the two oils crossed over at 3/32″ from the surface. I’m not sure what led to that result. The slow oil Quenchall led to low hardness. But the biggest surprise to me was that canola was by far the slowest oil. The overall time for cooling the steel in canola is very similar to the other oils, perhaps even faster. However, the slowing of cooling rate appears to be the deciding factor here. The “pearlite nose” on the CCT curve (the shortest time for transformation) occurs around 1050°F which is where the canola has already slowed down to the cooling rate of a slow oil.

O1 High Hardenability Steel

O1 with its very high hardenability there was no difference between Parks 50 and canola:

There is a small difference in hardness between the two oils shown above, however. This is likely due to “auto-tempering” which is a small amount of tempering that occurs by slow cooling through martensite formation. This explains why the two lines are parallel to each other rather than seeing a drop as would be expected from pearlite formation.

Water Hardening Steels – W2, 1095, and 26C3

I was also somewhat surprised that these water hardening grades did not fully harden in the Parks 50. Parks 50 is often promoted as “approaching the speed of water” but it turns out the word approaching is doing a lot of work in that sentence.

The other surprise here is that the steels are basically in reverse order of hardenability from what was expected on composition. I can’t think of many good reason why W2 with the lowest Mn is showing superior hardenability to the 1095, especially since both are made by the same manufacturer. I would expect the reason for reduced hardenability of 26C3 is because of differences in carbide structure from the manufacturer. Perhaps a follow-up study could be done where I dissolve the carbides and re-anneal them to all have a similar starting microstructure. When I quenched 1095 and W2 in water, however, they fully hardened. I didn’t have the 26C3 yet when I performed this experiment:

Effect of Cross Section with Low Hardenability Steels

Many knives are produced with thinner than 1/4″ stock so I was also interested in how much effect that would have. And some knives have bevels before hardening and so the edges may still harden even if the spine of the knife does not. Of course we expect a faster cooling rate with thinner steel and therefore better hardening.

Canola was unable to harden 26C3, 1095, W2, or 1084, though 1084 was by far the closest of those. I was surprised that canola could not fully harden 1/8″ 1084 since this is such a common oil used by beginning knifemakers. Parks AAA did harden the 1095 and W2 but not the 26C3, it needed Parks 50. Since the W2 and 1095 had higher hardenability than expected in my tests it is possible that other steel from another manufacturer, or the same steel hardened from the normalized condition may require faster than AAA. So for steels in the “water hardening” category I would recommend using water if thicker than 1/8″. Water can be a dangerous quenchant, it is important to avoid stress risers in the knife and keep the grain size small in the steel. Also “hard” water is a faster quenchant than distilled. If 1/8″ or thinner it appears that a very fast oil is effective in these low hardenability steels.

Intermediate Hardenability Steels

80CrV2 and 52100 had somewhat inconsistent hardening results. I believe this is also due to prior microstructure effects. Perhaps if the steel was processed for a finer microstructure in the annealed condition it would show more consistent hardness at the surface with fast oil. A finer microstructure would also reduce the hardenability of the steel so that could be an interesting follow-up as with the 1095/W2. With 80CrV2 the canola did not fully harden the 1/4″ steel and Quenchall was about 2 Rc lower than the other oils throughout. With 52100, canola and Quenchall dropped a couple Rc by the surface which makes it appear that the oils are not fast enough for that cross section. However, with the inconsistent hardening, Parks AAA and Quenchol 521 had somewhat lower hardness at the surface than the center. So it is hard to tell if the canola/Quenchall are insufficiently fast.

With 15N20 the Parks 50 (fast) and Quenchfast (medium) oils behaved similarly, while canola clearly led to softer steel. For CruForgeV all three oils showed similar results, so it seems to be hardenable enough that oil doesn’t matter too much with 1/4″ thickness.

Quenching Too Fast?

A frequent discussion I see on the forums and Facebook groups is whether to use Parks 50 or AAA for a particular steel. These oils are common with knifemakers so it is often a decision between one or the other. Some knifemakers will say that Parks 50 is “too fast” for some steels and you must switch to AAA to avoid reduced toughness. However, this is not as important a decision as is sometimes stated. One thing to remember is that Parks 50 and AAA are not that different from each other; this is not a decision between a very fast and very slow oil. AAA is straddling the line of the fast oil category.

One of the concerns is that the faster oil leads to microcracks and therefore reduced toughness. Microcracks are real but they occur due to plate martensite formation not from overly-fast quenching. Plate martensite comes from very high carbon austenite so this is controlled by austenitizing (how much carbon is in solution) not from quenching.

In a previous study we did on 8670 toughness we looked at toughness differences between Parks 50 and AAA. 8670 has hardenability similar to CruForgeV and is one of the steels that is sometimes said to be a no-no for Parks 50. However, the toughness was the same whether we used Parks 50 or AAA, in fact the Parks 50 was slightly higher but that is probably just due to experimental scatter.

Instead, the concerns with quenching more rapidly are warping and cracking. Cracks are not the same as microcracks. Microcracks are a microstructure-level feature that specific etching techniques are required to reveal. Cracking is on a macro level and are much more obvious. High hardenability steels can be quenched in slower oils to minimize the chances of warping and cracking. However, quenching high hardenability steels in a fast oil is still possible and it doesn’t mean reduced toughness.

Which Oil to Buy? 

Because warping/cracking can be reduced through a slower oil it makes sense to have multiple oils depending on the hardenability of the steel. However, if you buy only one oil it should be a fast oil like Parks 50 so that you can quench the low hardenability steels. If the funds are really so tight that you are considering buying canola I would recommend getting the relatively inexpensive AAA instead.

Which Steels Can be Quenched in Slower Oils?

To know which steels can be used with slower oil to minimize warping/cracking I have the following chart that is from my book Knife Engineering. It is an approximate ranking based on hardenability. The steels at the top are expected to have the lowest hardenability and the bottom has a few air hardening steels as examples.

Summary and Conslusions

The biggest takeaway for me is that canola is not a particularly great quenchant. I would highly recommend buying a commercial quenching oil instead. I was also a bit surprised just how sensitive the water hardening grades were to cross-section and oil. I thought at 1/8″ they would harden no problem. There was a pretty sharp transition where 1084 was a step up in hardenability from 1095/W2/26C3, and then every steel with higher hardenability than that was basically insensitive to oil choice. A few potential follow-up studies were mentioned in this article, such as processing the steels for different prior microstructures. We would expect normalized steel (pearlite) or fine carbide annealed structure to have reduced hardenability, which may be significant for forging bladesmiths. The austenitizing temperature can also affect hardenability, typically low temperatures lead to reduced hardenability. And of course we can look at other steels where we think it will be interesting.

[1] Pérez-Ruiz, Eduardo, Santiago Frye Rocha, and Jorge Freddy Llano Martínez. “Performance of Vegetable Oils on the Hardness and Microstructure of AISI 1045 Steel Quenched.” (2019).

The post Which Quenching Oil is Best for Knives? appeared first on Knife Steel Nerds.

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MastersInvest has spent a lot of time studying businesses and business leaders that have been successful, some remarkably so. Those companies that have forged not only stellar reputations in their fields, but also those who have succeeded in industries where success is not a common commodity. And whilst a solid working knowledge of these success stories is vital for any investor to know, its also incredibly valuable to look at the other side of the coin - those businesses that have failed.

Warren Buffett and Charlie Munger have long espoused the benefits of studying failure. Armed with the foresight of what not to do can help an investor avoid the key risk to any investment program - the permanent loss of capital. With this insight in mind, and having read a short synopsis in Bill Gates Summer Reading List, I looked forward to reading the book, ‘Lights Out - Pride, Delusion and the Fall of General Electric’ by Ted Mann and Thomas Gryta. An easy read, the book details the multitude of problems which beset GE coupled with a cornucopia of red flags to look out for in your own investments.

“I like to study failure… we want to see what has caused businesses to go bad." Warren Buffett

Once a storied industrial leader, the last few decades have been nothing short of brutal for GE. While a toxic culture of ‘making the numbers’ seemed ingrained at the time Jack Welch handed the reigns to Jeff Immelt, Immelt’s sixteen year term atop GE earned him a scathing review. Characterised with an incessant focus on the share price, always coveting Wall Street’s admiration, ignorant of tail risks, obstructive to feedback, turning a blind eye to questionable accounting and an absence of humility were the hallmarks of a failed leadership tenure. If the expression, ‘an institution is the lengthened shadow of one man’ rings true, this isn’t a book for Immelt’s trophy cabinet.

Gates Notes - ‘5 Ideas for Summer Reading’ 2021

Perhaps unsurprisingly, the company’s travails were strikingly at odds with the traits that have defined the great businesses we’ve reviewed in the past. Below I’ve called out some red flags and accompanying lessons from GE. Notwithstanding the accounting misconduct, most of the tell-tale signs of trouble are qualitative and behavioural in nature.

S&P500 [grey] vs General Electric [blue] Normalised - 2000 - 2021 [Source: Bloomberg]

Financials Above Purpose

In the superb book, ‘In Search of Excellence,’ Tom Peters noted, “We found that companies whose only articulated goals were financial did not do nearly as well financially as companies that had broader sets of values.”

“The Growth Playbook [was] a grueling annual examination of GE’s eight major business leaders. It was here that GE hammered out targets for sales and profits, setting the underlying assumptions for the financial estimates it would give investors. Under Immelt, the point of the exercise was determining how his executives would get to their financial targets - though not how they would determine what output the business would produce as a starting point. This practice had been ingrained at GE from the days of Welch.” Lights Out

“The problems stemmed not from any single action but from the practices of accountants on staff at the dozen or so plants in the division. They’d reported their numbers by working backward: starting with a profit target and then working out what their sales figures would have to show to get there, rather than simply running the business and reporting their results to headquarters every three months.” Lights Out

The best business leaders have long recognised a company’s share price is a function of long term business performance. Solve for the latter, and in time, the share price will look after itself. At GE the financials dictated strategy.

“Investors and executives need to realise that the creation of shareholder value is an outcome — not an objective.” Terry Smith

“Stock price is an outcome. You can’t manage the outcome. You manage the inputs.” James Gorman

“We want corporate management to solve for value creation, not security price.” Dan Loeb

“Companies that focus on their stock price will eventually lose their customers. Companies that focus on their customers will eventually boost their stock price. This is simple, but forgotten by countless managers.” Morgan Housel

“When it comes to discussing a company’s strategy, it is alarming how frequently one finds confusion about what a strategy actually is. Often a CEO mistakes a short-term target, say an earnings per share target or a return on capital threshold, with a strategy.” Marathon Asset Management

“Some would claim that maximising profits is a business’s ultimate purpose. Yet it is often when companies become exclusively profit orientated – and explicitly define this as their objective - that things go wrong. The end result of what investors seek, good shareholder returns, is invariably better achieved obliquely.” Nick Train

“An annual report with a numbers obsession speaks volumes about what’s important.” Marianne Jennings

Jeff Immelt’s strategy was directed with reference to the share price; providing guidance, smoothing earnings, setting optimistic long term EPS targets, undertaking acquisitions and divestments to appease Wall Street, appealing to big investors and ‘making the numbers’ regardless of cost. All are misguided short cuts.

Focus on Share Price

Of all the books on great businesses I’ve read, I can’t recall one where a company’s share price featured so prominently. Great businesses are all about empowering people, innovating, delighting customers, tolerating mistakes, focusing on the long term, upholding values, embracing change and remaining humble, to name but a few - none of which rated barely a mention.

“The stock market didn’t appreciate what GE was really worth. And it was driving Jeff Immelt crazy. His handlers claimed that he didn’t watch the daily movement in the shares, but his actions betrayed him. The stock market was the ultimate scoreboard tracking his performance.” Lights Out

“‘The stock is currently trading at one of the lowest earnings multiples in a decade,’ Immelt wrote in his annual letter to investors in early 2006. ‘Investors decide the stock price, but we love the way GE is positioned. We know it is time to go big!’ he wrote.” Lights Out

“Always aware of the stock’s reflection on his leadership, Immelt was trapped in a waking nightmare.” Lights Out

“GE’s stock price and its miserable performance were a constant cloud over Immelt’s head.” Lights Out

A management’s obsession with their share price is often a tell for investors; as recognised by some of the world’s best.

“Today, it seems to be regarded as the duty of CEOs to make the stock go up. This leads to all sorts of foolish behaviour.” Charlie Munger

“[The managers we have owned] don’t have a screen in their office showing them the price of their stock. And lots of them do. Sometimes you find it in the lobby of a company and sometimes you find it on the CEO’s desk. That doesn’t interest us. Their focus is on the wrong thing, in our judgement.” Chuck Akre

“We’ve been suspicious of companies that place a whole lot of emphasis on the price of their stock. When we see the price of a stock posted in the lobby of the headquarters or something, things like that make us nervous.” Warren Buffett

“A worrying sign is a CEO with a subscription to Bloomberg as this may indicate an unhealthy interest in stock prices and short-term news flow to the detriment of long-term thinking.” Marathon Asset Management

Quarterly Earnings

The best investors have a long-term orientation, focused on where a business might be in three to five years or more, rather than next quarter’s result. GE spent their time trying to please short-term investors.

“We do not worry about the stock price in the short run, and we do not worry about quarterly earnings. Our mindset is that we consistently build the company — if you do the right things, the stock price will take care of itself.” Jamie Dimon

“The investor wanting maximum results should favour companies with a truly long-range outlook concerning profits.” Phil Fisher

“We really think that an undue focus on quarterly earnings, not only is probably a bad idea for investors, but we think it’s a terrible idea for managers. If I had told our managers that we would earn three dollars and 17 1/2 cents for the quarter, you know, they might do a little fudging in order to make sure that we actually came out at that number.” Warren Buffett

Business Results Aren’t Linear

Smart investors recognise the business environment and economy are not conducive to a perfect earnings trajectory. GE failed to understand this, deploying unethical and in some case illegal short cuts to deliver.

“GE executives have acknowledged that they worked to make sure earnings were growing in a nice smooth trajectory.” Lights Out

“When Fortune’s Carol Loomis once told Welch that the smoothing practice was terrible, he vehemently disagreed with her. ‘What investor would want to buy a conglomerate like GE unless its earnings were predictable?” Lights Out

“The concept of managing earnings, another wonderful numbers term that infiltrates the numbers-pressure culture that leads to ethical collapse. It’s not cooking the books, it is managing earnings. A numbers obsession finds employees and officers not managing strategically but manipulating numbers for results.” Marianne Jennings

“Be suspicious of companies that trumpet earnings projections and growth expectations. Businesses seldom operate in a tranquil, no surprise environment, and earnings simply don't advance smoothly. Charlie and I not only don't know today what our businesses will earn next year we don't even know what they will earn next quarter. We are suspicious of those CEOs who regularly claim they do know the future and we become downright incredulous if they consistently reach their declared targets, Managers that always promise to ‘make the numbers’ will at some point be tempted to make up the numbers.” Warren Buffett

“Businesses do not meet expectations quarter after quarter and year after year. It just isn’t in the nature of running businesses. And, in our view, people that predict precisely what the future will be are either kidding investors, or they’re kidding themselves, or they’re kidding both.” Warren Buffett

Promoting the Stock

“In the [2015] annual letter, Immelt wrapped up his lecture on the limitless superlatives of GE with an awkward plea to major institutional investors.. ‘We have delivered for you in the last five years. But we are still under-owned by big investors. In this time of uncertainty, why not GE?’ he wrote, like a heartbroken lover begging for reconciliation. ‘We have a ton of cash that can protect you,’ he added.” Lights Out

“[At the annual Electrical Products Group conference for industrial investors and executives] Immelt, as he had done before, argued that investors had GE all wrong and were mispricing a stock that should have been above $30 a share.” Lights Out

“We suspect that business leaders who are busy promoting themselves or their stock are not properly focused on running their companies. We go out of our way to look for management that cares about shareholder value but doesn't hype its stock.” Marathon Asset Management

“People who have a proclivity for announcing how valuable their stock is, are I think, people who you ought to be very cautious of.” Warren Buffett

Fancy Predictions

“As the [2016] year came to an end, Immelt planted a flag that would define the rest of his career: he declared that GE would produce at least $2 of profit per share in 2018. It was an unusually long-term projection, and its meaning was undeniable to Immelt.” Lights Out

“It was wishful thinking at best that GE could deliver the $2 of earnings Immelt had promised.” Lights Out

“Charlie and I tend to be leery of companies run by CEOs who woo investors with fancy predictions. A few of these managers will prove prophetic – but others will turn out to be congenital optimists, or even charlatans. Unfortunately, it’s not easy for investors to know in advance which species they are dealing with.” Warren Buffett

Candor and Bad News

“Faced with the prospect of telling their tempestuous CEO that the new product was a disaster, the managers chose another route. They massaged the numbers.” Lights Out

“There was no market for hard truths or bad news. Not as far as the guy at the top was concerned.” Lights Out

“It was better to figure out a better way to deliver the bad news, or make it go away somehow, than to present it to Immelt straight.” Lights Out

Great businesses are tolerant of mistakes. Great Leadership recognises businesses grow through trial and error. When problems aren’t addressed they fester and the eventual impact on a business can be disastrous.

“Almost every business has problems, and we’d just as soon the manager would tell us about them. We would like that in the businesses we run. In fact, one of the things, we give very little advice to our managers, but one thing we always do say is to tell us the bad news immediately. And I don’t see why that isn’t good advice for the manager of a public company. Over time, you know, I’m positive it’s the best policy.” Warren Buffett

“Bad news concealed over time doesn’t get any better. See those studies again: companies with the most candid disclosures in their financial statements perform better over the long term and have higher share prices.Companies that put their current positions and performance right out there for investors and analysts to study are the companies to put your money in.” Marianne Jennings

A Culture of Making the Numbers

“The pressure to perform inside GE is omnipresent, and missed goals can be fatal, a tradition true at all levels of the company.” Lights Out

“Management expectation about the sales growth and profit they should be able to hit didn’t reflect the dim reality of the market, team members told Steve Bolze [CEO GE Power] and Paul McElhinney, the head of the unit that administers the service contracts. Vocal complaints about management’s view diverging from the reality of the market, or from basic math, were common among lower level Power executives. When the concerns were raised to leaders like McElhinney, they were stopped cold... ‘Get on board,’ McElhinney said. ‘We have to make the numbers.’” Lights Out

“When Immelt took over the Plastics operation, the previous management hadn’t been playing it straight. Under pressure from Welch, the division had stretched to make the numbers, including misreporting inventory figures to reduce the cost of goods sold.” Lights Out

“Welch would argue that he pushed his underlings to produce results, not fraud. But even if the CEO didn’t bend the rules himself, Welch cultivated an environment of pressure that incentivised people to do just that.” Lights Out

“If you couldn’t do the job and hit your targets, they all knew, Jack Welch would get someone else who could.” Lights Out

“Jeff Immelt’s assignment was clear: keep the earnings machine of GE humming steadily along, as it had under Welch.” Lights Out

“GE regularly leaned on [GE Capital] to make sure that profits stayed steady.” Lights Out

“Few fates were worse than missing your numbers at GE. Executives assigned targets to underlings, rather than lower-rung workers passing information up the ladder, so projections were based on market realities.” Lights Out

“Salespeople relied on financing provided by the stub of GE capital to prop up customer demand.” Lights Out

Marianne Jennings wonderful book, ‘The Seven Signs of Ethical Collapse - How to Spot Moral Meltdowns in Companies... Before It's Too Late’ cites ‘Pressure to Maintain Those Numbers’ as the number one sign of ethical collapse; “All companies experience pressure to maintain solid performance. The tension between ethics and the bottom line will al-ways be present. Indeed, such pressure motivates us and keeps us working and striving. But in this first sign of a culture at risk for ethical collapse, there is not just a focus on numbers and results but an unreasonable and unrealistic obsession with meeting quantitative goals. ‘Meet those numbers!’ is the mantra.”

“Charlie and I have been around the culture, sometimes on the board, where the ego of the CEO became very involved in meeting predictions which were impossible and everybody in the organisation knew, because they were very public about it, what these predictions were and they knew that their CEO was going to look bad if they weren’t met. And that can lead to a lot of bad things. You get enough bad things, anyway, but setting up a system that either exerts financial or psychological pressure on the people around you to do things that they probably really don’t even want to do, in order to avoid disappointing you, that’s a terrible mistake. And, you know, we’ll try to avoid it.” Warren Buffett

“We really believe in the power of incentives. And there’s these hidden incentives that we try to avoid. One we have seen more than once, is when really decent people misbehave because they felt that there was a loyalty to their CEO to present certain numbers, to deliver certain numbers, because the CEO went out and made a lot of forecasts about what the company would earn. I’ve seen a lot of misbehaviour that actually doesn’t profit anybody financially, but it’s been done merely because they don’t want to make the CEO look bad, in terms of his forecast.” Warren Buffett

“You really have to be very careful in the messages you send as a CEO. If you tell your managers you never want to disappoint Wall Street, and you want to report X per share, you may find that they start fudging figures to protect your predictions. And we try to avoid all that kind of behaviour at Berkshire. We’ve just seen too much trouble with it.” Warren Buffett

If a culture is broken and toxic the best advice is to steer clear. It’s almost impossible to turn around a poor culture.

“You can’t buy a company that’s got a dishonest culture and turn it into an honest culture." Bradley Jacobs

Cost Cutting

“The Corporate cost cutting program [was'] called ‘Simplification.’ That program had zeroed in on worker pensions and retiree health insurance as a good place to tighten the company belt.” Lights Out

'Whenever I read about some company undertaking a cost-cutting program, I know it's not a company that really knows what costs are all about. Spurts don't work in this area. The really good manager does not wake up in the morning and say, 'This is the day I'm going to cut costs,' any more than he wakes up and decides to practice breathing.'' Warren Buffett 

“You can’t cut a company to greatness.” Charles Schwab

“Almost every firm engages in bouts of cost cutting. Exceptional firms, however are involved in a permanent revolution against unnecessary expenses.” Marathon Asset Management

Losing Your Competitive Position

“If a management makes bad decisions in order to hit short-term earnings targets, and consequently gets behind the eight-ball in terms of costs, customer satisfaction or brand strength, no amount of subsequent brilliance will overcome the damage that has been inflicted. Take a look at the dilemmas of managers in the auto and airline industries today as they struggle with the huge problems handed them by their predecessors. Charlie is fond of quoting Ben Franklin’s ‘An ounce of prevention is worth a pound of cure.’ But sometimes no amount of cure will overcome the mistakes of the past.” Warren Buffett

“Companies which underinvest in their franchise in order to meet short term targets are not good candidates for compounding wealth.” Terry Smith

Accounting Irregularities

Pressure from the top to hit numbers coupled with an unwarranted focus on the share price, can tempt employees to fudge the numbers. Once again, Marianne Jennings observed, ‘A declining stock price can cause bizarre accounting behaviour. The drive for numbers, number, numbers can take us right to the slippery slope and into ethical collapse.”

“GE Power had sold service guarantees to many of its customers that extended out for decades. By tweaking its estimate of the future cost of fulfilling those contracts, it could boost its profits as needed.” Lights Out

“These reviews [of GE’s service contracts] produced profits that GE could use to hit targets for Wall Street, but they were really future profits, produced by accounting adjustments alone. There was no actual cash coming in… [They] can be red flags to investors… To pad the hole, GE now began selling its receivables - bills its customers owed over time - to GE Capital in order to generate short-term cashflow, making it appear that those newfound profits were matched by cash flowing in the door.” Lights Out

“The SEC concluded its investigations into GE accounting practices, having found multiple instances of misbehaviour in the pursuit of financial targets. The company had overstated its earnings by hundreds of millions of dollars and stretched the accounting rules to their breaking point.” Lights Out

“The SEC described [GE as] a company that lied to investors in its regulatory filings and in its public statements, that ignored growing risks, and that worked to keep those risks hidden.” Lights Out

“Over the years, Charlie and I have seen all sorts of bad corporate behaviour, both accounting and operational, induced by the desire of management to meet Wall Street expectations.” Warren Buffett

Hitting Guidance

“What starts as an ‘innocent’ fudge in order to not disappoint “the Street” – say, trade-loading at quarter-end, turning a blind eye to rising insurance losses, or drawing down a “cookie-jar” reserve – can become the first step toward full-fledged fraud. Playing with the numbers ‘just this once’ may well be the CEO’s intent; it’s seldom the end result. And if it’s okay for the boss to cheat a little, it’s easy for subordinates to rationalise similar behaviour.” Warren Buffett

Acquisitions & Divestments

Immelt wanted to appease Wall Street and convince them to place a higher multiple on the stock. Historically GE had enjoyed a premium valuation providing the currency for accretive acquisitions. As GE Capital grew, a complex finance business within an industrial company, Wall Street applied a lower multiple. Immelt believed shrinking GE Capital would fix the problem.

“GE could use its unusually high price-to-earnings ratio for an industrial company as high-value currency to pay for deals. By acquiring companies with a lower price-to-earnings ratio, GE was getting an automatic earnings boost.” Lights Out

“Immelt needed to make moves that would finally impress upon Wall Street that he had found a way to lead the old GE into a new economic paradigm.” Lights Out

Capital Management

“GE had been sending cash out the door to repurchase its stock but wasn’t bringing in enough cash from its regular operations to cover its dividend.” Lights Out

“Buybacks were a regular fixture under Immelt, who spent more than $108 billion on them after 2004. At the end of 2018, GE’s entire market value was $67 billion.” Lights Out

Group Think

“The oversight role of the board was minimal.” Lights Out

“The board, made up of current and retired business executives and academics, as a group, liked Immelt and didn’t want to challenge him.” Lights Out

“Top GE executives, including Immelt, would say that they never heard any serious dissent about the Alstom deal.” Lights Out

“The absence of robust opposition [to the Alstom deal] also pointed to the broader problem, long cultivated and growing into a quiet crisis within the company of real candor and self-awareness. When it had come time for lower levels of management to stand up to the ultimate boss and tell him that his legacy play wasn’t going to work - and in fact, had been a clumsy mistake all along - no-one was willing to do so.” Lights Out

“Vice Chair John Krenecki, insiders said, had been forced out by Immelt, in part because he had already seemed a little too prone to disagreeing with the CEO or telling him no.” Lights Out

“GE’s board of directors was unquestionably weakened from having the CEO as the chairman of the Board.” Lights Out

“While Immelt said he encouraged debate, [Board] meetings often lacked critical questioning.” Lights Out

“The seventeen independent directors got a mix of cash, stock, and other perks worth more than $300,000 a year.” Lights Out

“[Board] directors rarely challenged Immelt.” Lights Out

“The [Board] directors had amassed impressive titles in their own career and in many cases undeniable achievement. They had resumes a yard long, most of them had personal fortunes, and they were presumed in all company to have unusually astute minds for business - not least because each one was a highly compensated director of GE. And yet, on their fiduciary watch, with whatever caveats about individual misjudgement and macroeconomic trends, they had done nothing to stop one of the world’s most solid industrial companies from lunging off a commercial cliff.” Lights Out

“Sycophants are the enablers of ethical collapse. Fear and silence are the enemies of an ethical culture.” Marianne Jennings

“If you arrange your organisation so that you basically have a bunch of sycophants who are cloaked in titles, you are going to leave your prior conclusions intact, and you’re going to get whatever you go in with your biases wanting. And the board is not going to be much of a check on that. I’ve seen very, very few boards that can stand up to the CEO on something that’s important to the CEO and just say, you know, ‘You’re not going to get it.’” Warren Buffett

Complexity

“Inside GE’s legendary management machine was a complex mechanism that used [GE Capital’s] deals to help the company meet its profit goals.” Lights Out

“GE Capital was always a problem. It was utterly complex and filled with risk, and its tentacles reached everywhere in the company.” Lights Out

“[The financial services] balance sheets were treacherously complex, and deep risks lurked there and were not always easily spotted in the quarterly profits and losses.” Lights Out

“[GE Capital was] essentially operating a high-powered hedge fund.” Lights Out

“Where you have complexity, by nature you can have fraud and mistakes.. This will always be true of financial companies. If you want accurate numbers from financial companies, you’re in the wrong world.” Charlie Munger

Cyclical Industries

GE ventured into the highly cyclical oil business with optimistic forecasts, little experience and no margin of safety.

“GE was going big into the oil business.” Lights Out

“Now GE became, in a series of high-dollar acquisitions, a player in the oil and gas equipment market virtually overnight.” Lights Out

“While Immelt heard, and was annoyed by, the chirping of some analysts who felt he’d paid a premium to leap into the oil and gas industry several years after his competitors, the company’s leadership was sure that the ensuing years would show the bet payoff.” Lights Out

“GE’s ‘base case’ assumption for all of the rosy pictures it was painting about its oil unit was $100 for a barrel of oil. Brent crude had closed out the previous month at more than $105 a barrel, only a little off its summer peak.” Lights Out

“Afloat on fracking profits during an oil boom, Lufkin had caught GE’s eye and been swallowed up at an expensive price, only to become a casualty when the conglomerate couldn’t abide the hit to earnings that a prolonged dip in the price of oil represented.” Lights Out

Insurance Tail Risks

“Everyone - reporters, analysts, investors - thought that the company had sold the insurance business long ago, significantly de-risking GE Capital. In often highlighting this point, Immelt and his top executives hadn’t minced words: GE was out of insurance.” Lights Out

“The core problem was that GE had made some bad decisions in reinsuring the long-term care policies.” Lights Out

“GE needed $15 billion to cover its liability.” Lights Out

"Virtually all surprises in insurance are unpleasant ones." Warren Buffett

“You can make big mistakes in insurance… You can make mistakes in something like insurance reserving, big time.” Warren Buffett

Bigger than Life CEO

Jeff Immelt almost personified the ‘bigger-than-life’ CEO. It’s a characterisation Marianne Jennings identified as another red flag for investors.

“Immelt knew the power of his influence, and he wasn’t above calling these subordinates [below the divisional heads] to make sure they knew the stakes and urge them to hit their targets.” Lights Out

“The structural component that fuels fear and silence and numbers pressure is the presence of an iconic CEO who is adored by the community, media, and just about anyone at a distance.” Marianne Jennings

Humility & Tone from the Top

“Immelt was required by the board to use only the company’s planes and was barred from flying commercial.” Lights Out

“Immelt, his good cheer notwithstanding, was not interested in hearing his judgement questioned. ‘My job is to make the company perform,’ Immelt told a newspaper reporter, ‘and my job is to make sure that nobody defines this company other than me.” Lights Out

“[Owning GE Capital meant] Immelt enjoyed having the accompanying seat at the table with Wall Street power players.” Lights Out

“Owning NBC gave Immelt and Welch access to red carpets.” Lights Out

“It had taken two corporate jets to take Jeff Immelt around the world. For much of his career [Immelt] often had an empty jet follow his GE-owned Bombardier or Gulfstream to far-flung destinations, just in case there was a mechanical issue that could lead to delays.” Lights Out

“No effort was spared by the staff to ensure that meeting venues were cooled to meat-locker temperatures to accommodate Immelt’s preference, irrespective of whether anyone had ever heard him make such a demand out loud.” Lights Out

“Was a CEO supposed to object that the temperature was not to his liking, or demand that elevators were always open and waiting for him? Or that the cold diet sodas he liked were always present on a sideboard when he entered a room, no matter how far-flung the visit or conference room he walked into?” Lights Out

“But GE has stood for well-bred hubris as well. Under Immelt, the company believed that the will to hit a target could supersede the math, even when hundred of thousands of livelihoods - those of investors, customers, and suppliers, to say nothing of workers, retirees, and their families - hung in the balance." Lights Out

Smart Investors

The emergence of a smart investor on the register is no panacea for investment success. Activist investor Nelson Peltz’s fund emerged with a $2.5 billion stake in 2015. Even the great investors make mistakes.

“Trian’s endorsement was the stamp of approval that Immelt thought would help others realise the full legitimacy of GE’s expected turnaround.” Lights Out

“In every great stock market disaster or fraud, there is always one or two great investors invested in the thing all the way down. Enron, dot-com, banks, always ‘smart guys’ involved all the way down.” Jim Chanos

Summary

The ‘pressure to maintain those numbers’, a culture of ‘fear and silence’, a bigger-than-life CEO, and a weak board conspired against the investors of General Electric; red flags that stand firmly in the qualitative camp, not to be found in a spreadsheet.

These misdeeds aren’t unique or new to investing. After more than two decades of research and observation, Marianne Jennings identified each of them in her book, ‘The Seven Signs of Ethical Collapse.’ They didn’t go amiss at Berkshire either, given Munger and Buffett’s astute understanding of human behaviour.

History is littered with similar corporate disasters to GE. They serve as a warning for analysts, investors, portfolio managers, boards and CEO’s alike; Forewarned is forearmed. Understanding those qualitative tools that may suggest not all’s right with a company might help you ‘keep the lights on,’ when the next GE turns up.

“I think that many CEOs get carried away into folly. They haven’t studied the past models of disaster enough and they’re not risk-averse enough.” Charlie Munger

Source:
“Lights Out - Pride, Delusion and the Fall of General Electric,” by Ted Mann and Thomas Gryta, Mariner Books, 2020.

Further Suggested Reading:
“The Ten Commandments of Business Failure,” Investment Masters Class, 2016.
“The Seven Signs of Ethical Collapse - How to Spot Moral Meltdowns in Companies... Before It's Too Late,” Marianne Jennings, MacMillan, 2006.
“Avoiding Group Think,” Investment Masters Class, 2016.

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Hace ya bastante tiempo que no escribía nada y me apetece contaros las experiencias que estoy viviendo.

Por diversas causas, en las que no pienso entrar, el balance entre ingresos y gastos en Madrid no salía. Hemos decidido mudarnos a nuestra casa IF. Imaginaros lo que supone, mudanzas, trastero, explicaciones, etc…

Bueno pues nos hemos venido a la casa IF, pero me está costando adaptarme. Primero pues lo de siempre, el sistema te educa para trabajar y ser útil para la sociedad y eso genera en muchas ocasiones ansiedad. Eso lo tengo asumido. Pero tengo la gran suerte de tener una familia muy buena que le gusta esta casa. Aquí no pagamos nada, pero, estamos teniendo muchas dificultades:

1. A ver, como mejoras pues he puesto todo el sistema de aspersión para tener 9 aspersores a pleno rendimiento. Pero la excesiva carga de ganado que hay aquí, y el calor que está haciendo está siendo muy duro. Esto hace me que no me permita ponerlos, por lo que parece un secarral. Además, conseguir césped a éstas alturas es tarea imposible:

1. Al seat león que tengo para viajar, le falla el inyector del cilindro 2 intermitentemente. Por otro lado pierde agua el coche. Avería. Ya tiemblo con el palo. Menos mal que le meto mano yo y que sea lo que Dios quiera. Creo que puede ser la bomba de agua, pero no lo sé hasta que no le abra el cubrecárter. Claro, y os preguntáis por qué no lo he hecho ya, pues mirar el siguiente punto.
2. Esta mañana al arrancar el indestructible Mitsubshi se ha roto el eje de la bomba del agua, por lo que el desastre es importante. Le hago la distribución entera ya que estamos:

Yo monto un circo y me crecen los enanos. Ahí véis el eje de la bomba del agua partido y nada, ya he empezado a desmontar ventilador, aspas, viscoso, correas… ala distribución entera.

3. Aún no hemos montado la instalación solar porque la persona que me tiene que traer el material, por A o por B, no me lo trae. Tiramos de una nevera de 45W con una instalación que ni los gitanos. Así no podemos seguir.

En fin, que estoy hasta las narices de averías y problemas. Tiro de grupo electrógeno 3 o 4 horas al día. Gracias a Dios mi primo que es un crack, se dio cuenta que el grupo estaba demasiado revolucionado. Le puso un condensador mayor y trabaja a la mitad de revoluciones, gasta y suena menos. Pero así no podemos seguir. Necesito el material ya.

En resumen, que mal. Se me hace un monstruo tirar con esto. No busco compasión ni nada por el estilo, quiero que sepáis que no todo es tan bonito. Todo cuesta un montón. Como cosas buenas, la familia y amigos, que hacen que sea más llevadero. Algo, poco, he hecho bien, he pintado la cochera y limpiado la chimenea. De la chimenea han salido 6 carretillas de obra de ceniza y la he reforzado con 20 Kg de cemento refractario. La monja ha lijado y barnizado como todos los años las ruedas de la entrada y le han quedado muy bien. Es de lo poco que hemos hecho bien. La mesa del porche la ha lijado y barnizado, eso muy bien:

Y bueno, a veces me dan ataques de pánico, pero bueno, respiro hondo y ya. Porque si sólo es para mí, me vale con poco, pero ya no soy yo sólo. Trago saliva, pero a veces la cabeza se me va.

En cuanto a bolsa:

1. Me he quedado todos los derechos de ACS y he reinvertido en ella todos los dividendos de España en ella.
2. Me he quedado todos los dividendos de Iberdrola redondeando al alza.
3. Guardo el dividendo de IMB de UK.

En cuanto a compras, como ya sabéis 500 euros al etf de SP500 al precio que esté y fuera.

Y si os digo la verdad, no tengo tiempo de mirar la bolsa, es que la vida no me da. Yo pensaba que la ciudad te quitaba tiempo pero aquí son averías por todos lados. O empiezo a tomarme esto de otra manera o me da algo.

Por último decir que un amigo ha sido ingresado con 56 años con cáncer terminal. Esto es un aviso a navegantes adictos al trabajo o a lo que sea que le quita el tiempo para lo que realmente le gusta hacer. El pobre se va y le quiero con locura, pero se va.

Poco más os puedo contar, en cuanto haya alguna novedad os digo, pero estamos en la casa IF hasta que cambie la cosa, pero va para largo. Alquileres muy caros, ERTE´s, trabajos temporales….no sé, no cuadra. No lo veo. No sé qué pensais vosotros.

Saludos.

En este episodio de Value Investing FM, Adrián y Paco tenemos el placer de entrevistar a Santiago Domingo, analista en Magallanes Value Investors.

La entrada Entrevista a Santiago Domingo de Magallanes aparece primero en Academia de Inversión - Aprende value investing desde cero.

Terminó la semana en positivo el Perpe Global Portfolio mientras el MSCI AC World EUR bajó ligeramente igual que la semana anterior. Considero que las caídas importantes llegarán en próximas semanas, de manera que la parte en efectivo seguirá siendo relativamente elevada en un 45%.

En cualquier caso, aprovechando las fuertes caídas en las tres semanas anteriores de la bolsa española, inicio puntualmente posición en el IBEX 35 con un 10%.

También aumento ligeramente la posición en MSCI Frontier Markets, que ha aguantado relativamente bien las bajadas recientes.