RichardGibbons

Putting aside the entertainment from mining and the (non-mining) utility of a good graphics card, this still isn't the sort of reasoning I use because it's difficult to predict what will happen with security prices in the short term. For instance, based on this reasoning, it doesn't make any sense to have bought Bitcoin in September because you could have just bought Ripple in September at $0.171, and it's currently at $1.185. So, for every $300 of bitcoin you've held since then, you've lost $1,228. And you'd have done even better if you'd just bet it all on black 11 on the roulette wheel just before it came up. Deciding whether a short-term bet on volatile securities was a good decision based on the outcome is usually a mistake, I think. Particularly if you allow the outcome to influence your emotions or future decision-making. (Like, what are you going to do today with the information that Ripple greatly outperformed Bitcoin over the last 3 months? Based on your "you shouldn't have bought a card, you should have bought bitcoin" reasoning, you're probably now required to sell all your bitcoins to buy ripple. :) )

Yeah, this is a good warning, SD. In my case, I bought a PC in September because my old one was 7 years old, slow, and getting BSOD every few days. I got a better graphics card than I would have otherwise--maybe an incremental cost of $300--so I could mine effectively. Normally my computer is on whenever I'm awake, so the incremental cost of electricity is low. I don't know if it was a good decision, but seemed like a reasonable gamble in that $300 isn't that much money to me and I've enjoyed doing it. Economically, it has paid off, returning about $600 so far. Of course, that's just an outcome that says little about whether the decision to buy the better card had a positive expected return. Even if one happens to win at roulette, it doesn't imply it was a smart decision to play.

You think that head to head hit was a deliberate attempt to injure? It was certainly a penalty, but it looks to me like a random mistake in a fast-moving game, akin to the safety's mistake against Minnesota last week. (That said, this was a bigger mistake. That one cost one football game. This sort of mistake can cost careers.)

Interesting. Based on your thoughts, I may give it a shot too.

FWIW, I am mining zcash with a 1070, and recently I've been making in the region of $3-5 per day. At this instant, it's $3.54 per day. Your son's 1070 TI should be slightly better than that. It's not going to make anyone wealthy, but it's pretty fun.

Thanks Cigar. The Fortin-Paradis paper is interesting. I don't actually buy their conclusions because most of their conclusions are derived from a survey of people who are extremely biased to present a particular view, plus they seem to hand-wave away social costs. (Like, if you think immigration is a key component of the Vancouver bubble, what is the cost of locals not actually being able to afford accommodation in the city? What's the cost of businesses not actually being able to hire employees because it isn't economically feasible to work here when housing prices are so high?) The other interesting part was the quantification of the value of the 5-year loans the investors provide the government. If the authors believe these loans were so valuable, I wonder if they'd support the government simply borrowing money on the open market (saving most of the administrative costs of the program, while paying interest), and investing themselves without bothering with the "immigrant investor" part. It's hard to know from the numbers they provide if this is economical, but I suspect that their number support this sort of centralized economy. Nevertheless, despite the flaws, it is interesting seeing someone attempt to quantify the value. I find the tax numbers a far more compelling argument, but I think all those tax numbers came out after this study, so the authors can't be criticized for missing those. Richard

I'd be interested in the stats that you have that show it's a good one. From what I have seen, it looks like win/lose. After five years, people coming in through IIP declare less income than refugees. One could make the the argument that they're "investing" in houses, but I don't think this is a good thing when most IIPs are settling in two overcrowded cities, helping to push housing prices far out of reach of the median household. Thus, to me, it seems like investor immigrants are a big net negative. On the other hand, it seems like refugees and immigrants--who will build a life here, work hard, and contribute to the country--add far more value. Richard

I agree that there's a change in tone. I think it's largely the result of different people posting, as opposed to people who were bearish becoming bullish.

Yes, it is. There have been hundreds of different coins created, none of which even comes within two orders of magnitude of 100K tx/s. It's certainly a big technical problem, even if it's a problem for which people have proposed solutions. Richard

Bitcoin can't even process 10 transactions per second. (In contrast, Visa has processed 47,000 transactions per second.) To actually do a transaction, it costs $6-20. If the network can't handle people purchasing stuff with bitcoin, and people get charged huge amounts to actually make a purchase, it seems unlikely to ever be a currency.

As far as I can see, foreign exchange gains and losses are taxable. Like, if you were trading regular currencies, you'd have to pay tax, right? Is there something I'm missing? I'm also confused by your reasoning on #2. Don't the people who own the crypto have a domicile, so therefore they have to pay taxes? I'm not sure why crypto existing only in cyberspace matters. I hope I'm wrong about this--I was planning to pay tax on my crypto gains. So, if you're right about those answers, I'm really interested. Or is your argument more like, "the IRS has no way of knowing, therefore you don't have to pay tax"?

No. Resilience means "recover quickly from difficulties". Anti-fragile means "become stronger as a result of difficulties".

It's pretty amazing actually. Even on the simplest, non-controversial thread, Cardboard feels the need to start attacking people personally. I'm guessing that it might be because, when he feels unsure of his knowledge or position, he goes ad hominem to make himself feel less uncertain. Or maybe it's more of a vendetta thing, where Cardboard has classifies some posters as "enemies", and therefore needs to attack whenever he sees them, akin to a dog barking at the postman. Or something else?

For me, it was somewhere around 1987 when I was 15. I started with TA, quickly abandoned that, and went toward mining stocks (basically buying when no news was coming out, and selling just before drilling results were released) and options investing. In grad school in 1996, I abandoned mining stocks to gravitate toward value investing. In the mid-2005, I began to focus less on cigar-butts and more on competitive advantages. In the last 4-5 years, I've been much more about growth with competitive advantages.

You know, Cardboard really seems to love turning investment threads into political threads. I've been respecting Sanjeev's decision to restrict the political discussion to the political boards, but if the group believes that these threads should be politicized, I'll start throwing my hat in. After all, embarrassing, foaming-at-the-mouth right-wing rants like Cardboard's previous post really do encourage responses. Or at least some mockery.

Suppose that he bought WFC in his personal account rather than JPM. And then, suppose after a couple of years, he decided that, amid WFC's recent scandals, the bank had lost a significant part of its competitive advantage and it was time to sell. He knows that Berkshire selling would likely have a negative effect on price, which would hurt the position in his personal account. So, what does he sell first, Berkshire's stake in WFC or his own? Since his personal account potentially benefits from front-running Berkshire, that's a conflict of interest. By ensuring his personal stockholdings don't intersect with Berkshire's he can avoid this issue.

Good point. Sorry for misunderstanding your post, indirect. That is pretty interesting, and is some huge volatility skew. It would be interesting knowing how often the market's gone up more than 5% in 3 months and what the average gain has been vs. how often it's gone down 5% in 3 months, and the typical loss. (Not to say that the market today is like the average day in the past 100 years, but rather it would be interesting just knowing that as a starting point for thought.) One other method of exploiting this might be by taking some of that short put money and hedging with some VXX calls (because the trade is probably only a disaster if the S&P 500 crashes, and VXX calls would do well in a crash.) Or changing the short put to a bullish put credit spread to reduce the downside. Maybe I'm just getting more complex than necessary, but I just hate getting into positions with potentially huge losses (e.g. a 25% crash like 1987 would cost almost 50 points).

I'm not quite sure where you're getting your data, but I think the source is incorrect. Put/Call parity means that, in a liquid, shortable security, puts and calls are typically close to optimally priced relative to each other. (By put/call parity, I mean a call is equivalent to long shares plus a long put, and a put is just short shares plus a long call.)

To me, the negative opinions on Fairfax are far too extreme because, based on the outcome of a single event, people seem to have concluded that Fairfax can't do macro. But suppose that, at the time the last macro bet were made, there was a 50% chance that the bet was right. If that were the case, Fairfax was betting on a coin flip, where, if it came up tails, they'd lose $X, and if it came up heads, they'd make, say, $6X. Well, it turns out the coin came up tails, so they lost $X. But now to claim because of that single bet that Fairfax's are likely to be low in the future--particularly when that single bet may have been a good bet to take--simply because the bet had a bad outcome seems illogical. It kind of smells like outcome-oriented thinking unless you believed strongly seven years ago that the bet was a bad one. And to my (faulty) memory, I don't remember many people making strong claims back then that the macro bets were a bad idea. (In fact, if it were the case that the odds were like the coin-flip described above, I'd be delighted if Prem et al make those macro bets again and again. The more the better.)

One alternative that gets you American exercise is to go with SVXY or UVXY options, but that's at the cost of value decay from contango in the underlying while volatility is low (reversing to backwardization when volatility is high). I agree with you that there doesn't seem to be a good alternative for volatility options with long duration that doesn't suffer from either European exercise or decay due to contango.

One subtlety to these that is worthwhile noting for those who might be considering a similar trade is that VIX options are European exercise--they can only be exercised on their expiration date. What this means in practical terms is that, if the VIX hits 50 in October as a result of a crash, these options will be worth much less than $35 then. With deep-in-the-money European exercise options, the time value works against you.

Yeah, I think you're right about the headwinds versus the tailwinds. I think you can get pretty far simply by reducing the headwinds dramatically with better education. http://www.huffingtonpost.ca/entry/social-immobility-climbin_n_501788 The other concept that's useful, and I think Scalzi has written about, is financial resilience to handle random bad events. e.g. If you're middle class, and your car breaks down, you get it fixed, and maybe take temporary hit to your credit card, but nothing insurmountable. If you're poor, and your car breaks down, you might not be able to get it fixed, and so you might not be able to get to your job, so you might lose your job. Essentially, parental wealth (middle class+) gives you a greater buffer against random bad luck.

Fair point. I thought when you said "banking system", you mean the entire system (i.e. including the CMHC, the Bank of Canada, and the governments). If you mean just the banks, then I think you're more right than wrong--there's a lot of truth in Chuck Prince's comment that "you dance when the music is playing".

To me, this is a very odd thing to say when we're in the middle of a massive housing bubble, when--in a world where houses are considered affordable at three times income and grossly unaffordable at five--houses in Vancouver are going for eleven or twelve.

Package sorting and warehousing management.