Dec 8, 2022Liked by Callum Thomas

Sentiment definitely got too bearish on Europe in early October, but I also think the sabotage on Nordstream and the German's unwillingness to significantly extend the operating lives of the nuclear reactors will be problematic. Germany has a lot of shale but is unwilling to allow fracking and even Obama said they needed to accept the political costs of fracking after Putin invaded Crimea. Instead, they doubled down on Russian gas.

I've hedged my stake in Vermillion (VET), the largest energy producer in France, Germany and Ireland by shorting EWG since it has more industrial companies than the Euro Stoxx 50. German industry will be hit by more cost inflation from labor and energy than the US, and the ECB doesn't even have a dual mandate to support full employment. A lot has changed since they raised rates in summer 2008.

Some European companies with less industrial exposure will outperform but overall I agree with the adage that Europe is a better place to visit than invest.

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Dec 8, 2022·edited Dec 8, 2022Liked by Callum Thomas

1) Great Off-Topic ChartStorm session, nice as it comes with an element of surprise :), thank you!

2) Ref Europe, looks bad but in general when it looks bad, one buys cheap naturally, just need to cherry pick some more probably. On that, I did a stock screener in September in the context of the energy crisis & the geopolitical situation. Maybe interesting & complementary: https://maverickequityresearch.substack.com/p/stock-screening-for-value-in-europe

3) I will make an update on it in Q1 2023 and also other stock screeners in specific pockets of the market (both Europe & US).

Have a great day!

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