RichardGibbons

Well, kind of everyone defines it that way, economists, accountants, pretty well everyone. If you google "income" you'll find the term is pretty standard.

Income does not imply in any way a working relationship. It just implies money coming in. e.g. gambling profits, capital gains, insurance payouts, and gifts are all income.

Hmm, I think this violates Hanlon's razor (never attribute to malice that which is adequately explained by stupidity).

Yeah, this theory makes sense to me. At this point in North America, people are either: vaccinated, so they don't really need to worry much about major problems so can revert to normal behavior non-vaccinated, but are unvaccinated because they have little fear of COVID, so can continue to behave normally There will be deaths among the non-vaccinated, but most will be akin to someone dying as a result of not wearing a seatbelt--unfortunate, but a natural consequence of a decision that that person was entitled to make.

It was a chart created by someone on reddit, but it looked reasonable based on my in-my-head estimates. I imagine they got the data here.

I'm no expert on pandemics, but if the description of ADE is correct, then I struggle to see how it's consistent with this data from Ontario. Of people 12 and older, Ontario has 73% fully vaccinated and 82% with at least one vaccine dose, and Delta is the most common variant.

Thanks, everyone, for your kind comments. It's worth noting that for me, it's not yet worth a victory lap because it's still speculative and could still turn into a mediocre trade. I took out about a 100% profit when I rolled the options the first time, but nothing the second time. If the stock reverses, there's a chance that the entire position ends up worthless and I'd be left with the 100% gain. (And that might look like a nice win, but I think it's not worth buying out-of-the-money options if your goal is only a 100% gain. It's way too hard to win over 50% of the time with long OOTM options.)

TL;DR: A mental model I picked up 30 years ago allowed me to recognize an opportunity based on other peoples' analysis, and I used options to reduce risk. Luck also helped. Back in 1992, when I was trying to learn investing, I read a book about why gold stocks are the best investments. Even then, I figured out that what they were saying wasn't that smart, that generally commodity stocks suck. But the one thing that stuck in my head was the idea of operational leverage in commodity companies. Basically, it's the idea that if you're looking at a commodity business, when the cycle turns up, if the costs of production don't increase, basically 100% of the revenue falls to the bottom line. And in that scenario, you actually don't want to own the lowest-cost business. You want to own the highest cost business, the one that was staring at bankruptcy, because at the bottom, that business will be priced on its tiny or non-existent earnings. So, while the low-cost producer might see its profits double or triple in the upswing, the high-cost producer could see its profits go up 20 times. So the high-cost producer's shares should do much better. I've been sitting on that model for close to 30 years, never having used it (generally buying stocks on the basis of value, growth, or quality). But then in reading message boards, I heard about UAN, and read a bunch of people's analysis about the business. I tried to kill the idea because it seemed so ridiculously undervalued after the operational leverage kicked it, but I couldn't kill it. The options seemed like the way to go because generally I don't want to own commodity businesses long term, and if the thesis was correct, it ought to move fairly quickly. Plus, that operational leverage cuts both ways--if fertilizer plummets (like lumber) UAN should get killed. So, I saw long options as a way of reducing risk on my speculation (with the downside being options are bad with companies that make large, unpredictable distributions.) That said, it's worth noting that almost everything has gone right, which obviously is not normal. UAN's fertilizer is mainly used for corn. Brazil's corn crop has been demolished, USA has had droughts, China also had a bad harvest and has been buying corn (and hoarding its own fertilizer), so corn is high. That increases demand for fertilizer. And there have been various production problems, and yesterday a fertilizer producer just asked for fertilizer anti-dumping measures to be instituted against Russia. As a result, while fertilizer always peaks in the spring and resets to low prices in the summer, this year summer pricing has been higher than spring. So there's been a fair amount of luck (though it's insensitive to phrase it that way. My "luck" likely means some food-insecure people somewhere in the world will be suffering.)

Yeah, I didn't mean within broad society. I meant within the community to whom he is personally attached. Like, "I'm happy to help out my friends."

In an attempt to prove that pigs get slaughtered, I rolled most of the UAN Aug $50 calls into November $60/$65 calls. However, I increased the number of calls by a third, and did it by legging several times so that there was no additional cash outlay (though some additional short-term risk). This is about a 1,650% return since my first UAN options post here, but I think it's still a decent speculation. If fertilizer prices hold at current levels, which seems possible, then the MLP could distribute $25+ of cash flow in a year. Under that scenario, it's hard to see the units remaining in the $60 range.

One can gain social standing by acting magnanimous, and it's possible that, once one reaches a certain level of wealth, the value of the social standing gained can exceed a relatively tiny economic loss. (I have no idea if this applies to Prem because I don't know the guy, but it's possible. It's also possible that he just screwed up.)

I created an auto-trader using the IB API, but it was with C#. It worked as promised.

I think it's primarily the combination of zoning, bureaucracy, ideology, and immigration. Essentially, a huge percentage of the major cities are zoned to single-family homes. And, it's hard to change that. If you want to build anything else, you have to change the zoning. That means fighting in front of city council with residents who are worried about the neighborhood character changing. And to even get that day in court, would typically take a couple years, and it might not be successful. And if you are successful, it would typically require paying the city hundreds of thousands or millions for neighborhood amenities. Essentially, the city believes that if, as a result of rezoning, the value of the property increases, then the city deserves to take the money created, rather than the owners of the property. So, there's substantial risk and unusually high expenses associated with any development that increases density. More broadly speaking, municipal politicians are fairly ideologically-driven, typically not believing in market-based solutions. Though they're very concerned about affordable housing, if they could get affordable housing, but in doing so, some property developers would become wealthy, they wouldn't view that as an acceptable solution. One councilor in Vancouver, Jean Swanson, sees affordability as a crisis and cares a lot about the underprivileged, but for two and a half years has voted against almost every proposal for adding more supply (because the poorest wouldn't be able to afford that supply. She doesn't see it as a good thing that middle class will move into the new supply, freeing up less-expensive space for the poor, but rather a bad thing because average rental prices will increase.) Finally, on top of these supply restrictions, Canada has relatively high immigration. But much of the country is a frozen wasteland, so about two-thirds of immigrants end up in Vancouver and Toronto, and 80% in Vancouver/Toronto/Montreal. So, you have constantly increasing demand and artificially restricted supply, leading to high prices.

Greg, to not clutter up the thread with political discussions, I've responded to the political aspects through email. On the non-political stuff... I think it's pretty reasonable to write off things as "conspiracy theory", "far right/far left nut jobs", etc. because that's how one functions in the world. One only has so much time to make decisions in the world, so we mostly navigate the world through heuristics. If someone says something clearly false for ideological reasons fives times in a row, then the sixth time I'm going to spend basically no time evaluating their statement before dismissing it. Applying the critical thinking well takes effort and time, and we need to prioritize our resources. The cost of the critical thinking is high, the probability of the heuristic being wrong is low, and the cost when the heuristic is wrong is also low. So, as someone who owned a Portnoy REIT 20 years ago, I'm fine with writing off any Portnoy REIT off immediately. I have enough historical evidence that management is unlikely to be acting on behalf of shareholders, and I have more confidence in Portnoy's ability to screw shareholders than I do in my ability to identify a Portnoy REIT that won't end up screwing shareholders. Plus, there's thousands of non-Portnoy investments I could investigate instead. So, it doesn't make sense to me to spend any time whatsoever on a Portnoy REIT when I could instead spend that time on another investment.

Yeah, that's exactly what I mean. Thanks, Cubsfan!

I think it's kind of worked, actually. What effectively happened is that people with right-wing views keep talking politics, and people with centrist views have shut up. So, effectively, the "arguments" are much shorter and usually end with something like, "I said something political, and you communist bozos aren't even responding because you've been proven wrong." And the centrists think, "OK, that's not at all what happened, but whatever. I'm fine with sticking to the rules and just talking about investments."

This is pretty interesting, because according to this, so far in Q2 they've made over $12M. It's not clear to me that one can just annualize that 12M, because I don't understand that well how they make their money, so it could've been an aberration. I've been mining for a few years, and, for part of the last few months (when the transaction fees for ETH were high) I was making $16-18/day (using a 3070), while more typically--and for the last few weeks--it's been in the $4-5 range. But, if you could annualize the $12M to $72M, then Yearn's P/S (which is pretty close to its PE, since it doesn't have many expenses), is in the low 20s, which seems stupidly low. It makes me wonder if I'm misunderstanding something since I've only stared at this for an hour or so. They plan to use the profits to buy back tokens and potentially ETH for the treasury (though apparently not for cancellation.)

Yeah, it wasn't actually UBI, but it was approaching it more than other natural experiments I've seen. I think the two big questions about UBI are: Can we afford it? Will it affect work incentives in really negative ways? On question 2, the historical evidence (e.g. the Dauphin experiment, the experiment Nixon did) suggested the answer was, "No". The people getting UBI who decided not to work as a result of UBI tended to not work because they were either raising a family or getting advanced education. I perceive those as "good" reasons not to work. Raising a family helps to ensure social cohesion and prosperity for the next generation. Advanced education improves long-term productivity. With these checks, I think we're observing that many people in lower-paying jobs aren't going back to work. Though the unemployment rate is 6% (i.e. not super low) anecdotally, it seems like employers are struggling to find labor. And, to me, it doesn't look like it's because people are going to school or raising families. It looks like it's because they don't want to work. That's not to say that UBI is dead in my eyes. Rather, it's that some (sparse) historical evidence made UBI seem like an obvious win if we could afford the cost. This is the first clear evidence I've seen that the changing incentives with UBI might disrupt the labor market. (Which may be an obvious logical conclusion, but to me, it matters that there's now some evidence to support that logical conclusion.) And maybe those disruptions are fine--the effect might be that the price paid for labor increases until the middle management level and corporate margins fall, which might be a good thing for society, reducing income inequality. But it could also have a bad outcome--many small businesses going bust, a massive spike in unemployment, a reduction in the tax base that would pay for UBI, and even more power consolidated in the biggest companies, exacerbating income inequality. So, that's why I've changed a bit. The little evidence we had seemed to indicate no negative effects on the labor market, and now the little additional evidence provided by stimulus suggests there could be massive, potentially dangerous effects on the labor market.

Further to the options strategy, I'm not sure about regulatory limits on Fairfax, but one thing they might want to consider is converting their long position into synthetic calls. (i.e. buy some puts). Edit: Actually, no. Now that I think about it, they have such a big position, they probably couldn't put on such a massive hedge without demolishing the stock price (as the option writer would likely hedge their short puts by shorting shares.)

Well, there was a conversation about it a couple months ago, but the consensus seemed to be that Fairfax would be insane if it doesn't dump the entire position at $12. It's also noteworthy that pulp has started increasing as well, though not to the degree lumber has. I've had some Resolute calls since $11, because this situation seems like what options were designed for: It's unlikely to be a position that I'd want to hold for a decade. If lumber stays up for a while, the stock should increase and the options' leverage makes me lots of money. If lumber plummets, I lose much less money than I would if I had a comparable position in shares.

One of the nice things to come out of this is that it's provided some evidence in the case for a universal basic income (UBI). Of course, giving people money during a pandemic isn't the same as giving them money during normal times. But even that limitation, it's changed my point of view. A year ago, I thought we needed to run some experiments on this because the small amount of evidence we had seemed to indicate that would work. Today, I think the evidence is starting to indicate that UBI is unlikely to be a sustainable solution.

Yep, as you say, they were treated fairly. There's a lot of value in society shunning those who perpetuate paranoid conspiracy theories without any evidence whatsoever.

I'm not that libertarian relative to others on the board, but I'm still not a fan of the argument that crypto should be banned because it makes illegal things easier. I can see why a state would say that, but as an individual, I think there's value in currencies not controlled by the state. Because even if you think that the state is completely trustworthy, you could be wrong. And, if there is a way for individuals to remove their assets from state control, then the state is less likely to try to implement an oppressive system knowing that the people have an alternative. Plus, just because something is the law doesn't make it right. For instance, the Nazis passed a bunch of laws expropriating Jewish wealth. Even if a Jew could flee Germany, they wouldn't be able to take their money with them. If cryptocurrencies existed then, the Nazis might still have tried the same thing, but wouldn't have been nearly as successful. And maybe you don't think that can happen here, but we already have laws like civil forfeiture. The government can and does seize assets based on suspicion of criminal activity (and for assets like cash, its simple existence seems to often be considered sufficient "evidence" that the asset was acquired through criminal activity.) Effectively, civil forfeiture laws allow the police to steal any large sums of cash that that they happen to stumble upon. So we're part way there. So, I understand why the government would want to eliminate a currency that limits its ability to oppress people. But as an individual, it seems like a good thing that a currency exists that limits the extremes of states' control.

And now sold YALA a week later after fraud allegations arose. Regardless of valuation, I have no tolerance for fraud allegations, particularly when those allegations are hard for me to disprove.

Hmm. My best guess is that some multi-billionaires don't form relationships with women based solely on looks.