The Gaza War didn't hurt us much

 

After the terrible shock of the massacre of Re'em Festival, Israel declared war on HAMAS and expected a concerted attack by its enemies. Some 400,00 reserves were mobilized and re-trained during a month while Gaza was being destroyed from the air. Foreign countries sent emergency rescue planes to evacuate their citizens from Israel. Even Argentina sent a Boeing. People, alarmed, bought dollars and its price jumped to 4 sheqel per US dollar. 

Almost two months later, we are negotiating with HAMAS, the expected surprise attack by Iran did not happen (thanks to America that sent one of its battle groups to the area), Western governments strongly supported Israel in its hour of need, the economy is recovering fast and the dollar (see graph) is below its pre-war level. Muslim protests all over the world frightened European people,strenghtening the Right. The "extreme" right won the elections in Holland. 

Maybe the war did not damage us too much.

Civilization's Disease

 South Korea's fertility rate has dropped to a record-low 0.70 in the second quarter of 2023, according to the latest government report, in yet another stark indicator of the deepening demographic crisis in a nation already grappling with the world's lowest birth rate.According to the monthly demographic and census report released on Wednesday by Statistics Korea, the country's statistics body, there were 56,087 newborn babies in the second quarter, a 6.8 percent drop from the same period last year. The count represents the lowest since 2009 and marks 91 months of consecutive decline in births.The country's population has been decreasing for 43 consecutive months, according to the report. In June alone, the number of newborns totaled 18,615, while recorded deaths stood higher at 26,820.

Ultimatum from America's Best & Brightest

         From the WSJ:   As Israel began exchanging Palestinian prisoners for Israeli moms and children, Harvard was dealing with its own ultimatum.

A week ago pro-Palestinian students gave university President Claudine Gay until Monday to respond to three demands. They were: that Harvard divest from any investments in “illegal settlements in Palestine”; that the university reinstate a proctor suspended for taking part in a mob that surrounded and harassed a Jewish student; and—of course—a promise from Harvard that “pro-Palestinian students and workers engaging in non-violent protest” would face no disciplinary action.

There you have it. The ethos of our modern best and brightest in a nutshell: We are taking a brave stand—but we demand that we pay no price for it.

Why I am losing on Potash?

 Why? I cannot think a reason. Brasilian farmers were not long ago paying 1200 dollar per ton, but the israeli potash company ICL is getting paid 250 by the Indians. Brazil imports 98% of its potash. The use has increased from 10 kg/ha. to over 100 kg/ha. with the accompanying increase in agricultural yields per hectare. Canada is investing billions in the development of its Jensen mine, the Australians are not much behind. The demand is begging for fertilizer because of the Ucraine war. 

 And now we have the Teimanim menacing our maritime  traffic on the Red Sea from Eilat to Mombay. The shares of ICL have sunk into Earth's mantle, devoured by its boiling iron/nickel inner core.

Major players in the Potash market include The Mosaic Company, Potash Corporation of Saskatchewan, K+S AG, Israel Chemicals, and Uralkali. The global potash market will grow from $22.04 billion in 2022 to $23.03 billion in 2023 at a compound annual growth rate (CAGR) of 4.5%. The Russia-Ukraine war disrupted the chances of global economic recovery from the COVID-19 pandemic, at least in the short term. The war between these two countries has led to economic sanctions on multiple countries, a surge in commodity prices, and supply chain disruptions, causing inflation across goods and services and affecting many markets across the globe. The potash market is expected to grow from $30.61 billion in 2027 at a CAGR of 7.4%.

On another note, ICL broke ground yesterday on their $400mm LFP (Lithium Iron Phosphate) plant in St Louis. When both phases are operational by 2025 they will produce 30,000 metric tons of LFP annually. Current China price for a metric ton of LFP is 83,000 yuan, or $11,500/mt.

Why I am losing on Potash?

We are too soft

 The HAMAS criminals have kidnapped two hundred Israelis and are demanding trade in for HAMAS prisioners and to stop the war. We are negotiating and apparently we are going to give them a respite and free a lot of terrorists. I think we are making a big mistake, that we are too soft and they are playing on our sentimental weak points. To eliminate the HAMAS once for all we have to play hardball: for example, to put 400 prisioners and others in front of a "paredon" and start counting down. Every hour one would be executed till they called Uncle. We should never negotiate with criminals. 

There was a story in Argentina. A criminal gang kidnapped a rich man's mother in law and demanded a million dollars. The man did not answer. After some time, the gand sent a note that they felt  sorry for his suffering and would let go the dear old woman for only 500,000 dollars. He did not answer. The next note said that they this lovely old woman told them how much close they were and convinced them to accept a symbolic amount of only ten thousand. Silence. Nothing. No answer. The last note: "Please, have pity on us, come and take back this insufferable old hag! Take her and 10,000 dollars!" 

Bayer falling 30%

Bayer said it is halting a trial for asundexian, an experimental cardiovascular drug. Bayer’s Frankfurt-listed shares (XE:BAYN) fell about 30%. Bayer is a hundred and fifty years old German giant pharma company, tremendously stable, conservatively managed and reliable. Losing a third of its worth in a day or two is most amazing. It means that one third of its worth was the hope for the success of an experfimental drug. I have blind faith in German quality. Just bought German car. 

Rich Man's Portfolio

Warren Buffett’s portfolio:

Apple: $156.8b (50%)

Bank of America: $28.3b (9%)

American Express: $22.6b (7.2%)

Coca-Cola: $22.4b (7.1%) Chevron: $18.6b (5.9%) Occidental: $14.5b (4.6%) Kraft Heinz: $11b (3.5%) Moody’s: $7.8b (2.5%) Others: $31b (10%)