thepupil

I don't really understand your point though because theoretically as one gets wealthier, the less and less one needs to risk as a % to make a "reasonable amount of money". Like let's say you find an options situation that's a 0x or a 10x. If you have $100K and are saving a good bit and you're young, maybe it's not crazy to risk 10% of your capital on that. Can make it back easily and in the upside case you double your capital base. If that person ahs $1mm, I don't think you risk $100K on it. I'd probably risk the same $10K. No right answer of course.

I keep money at Vanguard, Fidelity, Interactive Brokers, Treasury Direct, and Bank of America. I have a HELOC at Third Federal. I think each one is individually safe, but have selected those based on combo of convenience and perception of safety. an additional precaution worth taking is to not have a margin account if you don’t need one (I believe more clearly segregated). I assume at least once in my life, I won’t be able to access one or several of these. My biggest fear of this nature is a cyber attack (I’ve contemplated direct registration but have procrastinated and it’s not compatible with employer required reporting of all my holdings / trades). these types of risk are very low probability but extreme severity. I always want to be liquid and never want my liquidity to be dependent on one corporation.

i don't know man, i think he thinks he's the steward of the almighty dollar tasked with keeping our dollar hegemony intact ("price stability") which allows for our gloriously profligate standard of living....and also charged with wrecking the shit out of the speculative froth in all kinds of unproductive assets (including, probably, some i own). I kinda dig it. on the other hand, no idea how the whole government budget thing works at 5% rates and don't relaly think this last for a long time...but macro's obviously not my strong suit. and it's nice to have real return on savings. i sort of see it as a cleansing. cleansing of the most speculative behaviors (crypto, short term floating rate funded financial stuff (PE, RE flipping), and a check on non productive or marginal projects. we all got a little carried away. hell i put $100K in a groundup mixed use development in an opportunity zone that i won't see a dime for for like 10+ years if ever. we just had a crypto bank blow up. good to see some bodies start falling no?

well KHC and KO's margins are down (GP and EBITDA) from pre-covid, so maybe they have to reinvest all that into advertising. I don't really think it's important in the end or precisely understand your point. Everyone's complaining about egg prices. Cal Maine's margins are high, but they go thorugh boom/bust cycles all the time. nothing new. i just don't see any evidence of "price gouging" or whatever. if anything, inflation is wreaking havoc on profitability (as one would expect)

then you'd have a different view because no one is predicting that. I frankly don't find any validity to this "corporate greed" as cause of inflation reasoning. Like Kroger's margins are very barely up to flat from 2019. many companies' margins are declining and earnings power is declining in real terms. The simpler explanation is that inflation is has been real.

you can see PEP's wild and crazy (and by that, i mean completely non existent) margin expansion from all those price hikes here:

I'd agree here. Brent is $82 relative to $71 10 year average WTI is $77 relative to $65 10 year average Natty G is $2.60 relative to $3.40 10 year average Rotterdam Coal is $118 relative to $100 10 year average Dutch Natty is 44 relative to 34 10 year average All of these have declined substantially over the past year or so, are above pre-covid prices, but not crazily so, and not really at all in real USD terms. There's some strong dollar at work here though. For example, Brent is $78 euros, relative to $60 Euros 10 year average (so 30% above, whereas Brent is only 15% above 10 yr average.

Following a significant inflow (yay!!!) I bought 10% OTM calls on $ZROZ and $VT because I don’t have many high conviction ideas at this time and just want to cover myself in case of a big stock/duration rally. I am posting this in case anyone else is feeling dumb or out of ideas or timid. Maybe just park in t-bills like everyone and their brother is talking about, but also maybe consider that you may be wrong and consider capping your opportunity cost. This will obviously cost $.

My dad retired in 2007. He got "rich" (depending on your definition) through extreme concentration. He was an exec at a company that went public and put a lot in the stock at IPO. Company got LBO'd so he crystallized his gains, company later went bankrupt after he left. He stayed rich via bonds. Being 60% muni's w/ a typical Merrill lynch guy into the GFC saved my family's financial health as they weren't forced to make withdrawals at steeply discounted stock prices and didn't panic.. they owned a valuable unlevered home and by no means would have been destitute but a real life "sequence of returns risk" case study; if they went in 100% stocks, I'd imagine their standard of living would be lower than it is today. Now in 2013, I took over and it was stil like 50/50 and thought that was too conservative and switched things up to more like 70-80% stocks / 20-25% cash and it's the best and most impactful financial decision i've ever made (we're now more like 70/30 with the 30 being in bonds not cash built up the bond position over last year or so. Bonds are indeed a wealth preservation tool. and for many that's the goal.

An increasingly great time to be a saver. Starting to be able to lock in decent returns with duration. Short stuff 1 yr bill: 5.0% CLO AAA 6.3% Longer Stuff 10 yr: 4.07% 30 yr 4.01% MBS Index Yield to Worst: 4.8% 20 yr BBB Corps 6% TIPS 5 yr: 1.7% 10 yr: 1.6% 30 yr: 1.6%

I’m not saying bonds will beat Coke. Coke very likely wins vs 30 year 4% tsy. on the other hand this bond apologist thought Buffett’s comparison of KO vs the bond to be a bit lacking given that long term bonds actually did pretty damn well over that time frame and provided like 70% of the return and (1-2% less CAGR than KO). I didn’t run the analysis myself but the other dude on Twitter said constant maturity 30 years was beating KO for majority of time frame until big duration sell off last year. alas thought 30 yr tsy’s don’t yield >7% like they did then, then I’d own 50% instead of like 5

Most of you anti-bonders (asset classist or equity supremacists) will take heart in reading Buffett shilling Coca Cola vs a 30 year bond and what a resounding success his purchase of Coca Cola was vs a bond. You will sit back with your 100%+ equity allocation and smugly say “what kind of idiot would own bonds?” what you will not do is what two brave keyboard warriors of fintwit have already done, which is point out that since August 1994, KO has annualized at 8.5% per annum with divvies reinvested. A 30 year zero coupon bond returned 7.5% per annum. mr Buffett’s so called “trouncing” is more like a slight victory. #bondlivesmatter

since 2010, BNSF has paid out about $46 billion of dividends to Berkshire. total Liabilities grew from $33B to $45B, so about $11B. This was mostly increase of Debt from about $12B to $25B. The deferred tax liability was pretty constant at $14-$15B. Revenue went from $17B to $26B, EBITDA from ~$6B to $12B (so ND/EBITDA went from about 1.8x to 2.0x). Sales / Employee from $443K to $662K, Personnel Expenses from $4B to $5.2B, OM from 26% to 35%. BNSF's gross property wentr from $46B to $82B 2010- and equity from $35B to $46B. BNSF has certainly enjoyed very nice margin expansion, returned lots of capital to Berkshire and been a very successful investment.

selling INDT which at this point was only in non-taxable accounts to buy more more CLO AAA via JAAA. Index yields all in at about 6.03%, SOFR/LIBOR +150. Hiding spot while figure out the next move.

on both the way up, and the way down, I try to focus further out on the curve as very near term spot is so volatile. The whole curve is volatile of course, but for example NG12 is at $3.75 down from a high of $6 in Q32022. from 2018 to 2028 it bounced b/w $2.5-$3.0. NG1 on the other hand is at $2 down from $10. It's been as low as $1.50 in 2020 and got to $10 at peak "Europe will freeze" 2022. If you look at NG12 you see we're about 1/3 off the highs whereas NG1 80% so you'd draw different conclusions from those. despite having a fair bit of my net worth tied to the future price of natty, I don't really have any deep thoughts on the subject. I think natty is an essential resource and a tremendous advantage held but the US of A in terms of access/infrastructure/system which encourages (despite dems best efforts) our exploitation of said resource and as part of my long term plan to protect against inflation i own BSM/DMLP which allows me to participate in unlevered royalty form. I can't tell you if it will be $2,$4, or $6.

Like I said, I love a good MSCI Factsheet. For a quick snapshot of "what do all the world's stocks look like?" "What P/E multiple do high quality US companies trade for?" etc. and you just google "MSCI ____ Factsheet"...available to everyone. MSCI ACWI https://www.msci.com/documents/10199/a71b65b5-d0ea-4b5c-a709-24b1213bc3c5 MSCI ACWI Quality https://www.msci.com/documents/10199/9386d956-d8a5-4cf1-9eaa-fc597c10ad81 MSCI USA https://www.msci.com/documents/10199/67a768a1-71d0-4bd0-8d7e-f7b53e8d0d9f MSCI USA Quality https://www.msci.com/documents/10199/4af921f5-0bbc-470b-ad69-19a177fad9cf MSCI EAFE https://www.msci.com/www/fact-sheet/msci-eafe-index/05694439 MSCI EM https://www.msci.com/documents/10199/c0db0a48-01f2-4ba9-ad01-226fd5678111 MSCI US Real Estate https://www.msci.com/documents/10199/a3fb12a5-ada1-48e2-a5dc-df570d1c7137

You've asked this a few times. there is no one "market", but I'd say that generally when people discuss "the market", one is referring to a broad based cap weighted index such as the MSCI ACWI Index for global investors and/or a broad based US Index such as the Russell 3000, Vanguard Total Stock Market Index, or S&P 500 (just large cap of course, but like 70-80% of the others is this). If at any time you would like information re "the market" you can google things like MSCI USA, MSCI ACWI, MSCI World, MSCI ACWI Quality, MSCI Emerging Markets or look at vanguard's individual ETF / Mutual Fund websites. MSCI produces monthly factsheets that show the makeup of these indices, their constituents, performance, fundamental metrics like P/E, forward P/E, etc. Vanguard allows you to download excel sheets of all the holdings of their mutual funds. This is "the market". The market is not "what google/FAANG did" or what pupil says the market is or what gregmal thinks the market is. If one is a true tech bro, only investing in tech, I'll accept QQQ as "a market" but not "the market". I don't think that this is that difficult to process for a capable person such as yourself. Much of the investment community, individuals and institutions alike are judging their own performance against or are invested in "the market" which means "a broad based cap weighted index" as espoused by John Bogle, Warren B, etc. We can debate the merits of this approach or have little nitpick arguments about whole world vs just US all day long, but to agree on definitions is not that difficult.

unfair advantage on this one

also going back to TRC's 2003 10-K the company generated $18mm of revenue and $52K of operating cash flow...which is very similar to "$15mm of revenue and no reported cash flow" I think it is beyond a reasonable doubt TRC.

So running the below screen $200mm - $1B market cap, United States, Total Return since 1/1/2003 <4%/yr, Net Debt <$300mm, you get 100 companies. then sorting by investment in affiliates/JV's you get 11 companies, the 5th of which is my number one contender Tejon Ranch Company, which also fits the net cash criteria whereas most don't I can say with pretty high confidence that if it's in the United States, it's probably Tejon Ranch, but maybe that's confirmation bias since that's what I thought it was before running the screen. I also think Nitor likes difficult to value, long duration, unique assets often with irregular or unpredictable cash flows (JOE and TPL) and TRC is the very definition of all that stuff.

some more credit bear porn. Looks like about 30% of B- rates leveraged loan borrowers are at <1.1x and something like 10% at <0.5x reiterate that “the market” (broad cap weighted indices) has very high credit quality, low leverage, and is very well termed out and that 10+ years of regulations have pushed off this risk off bank b/s’s. Private equity/private credit is where the bodies are buried / will be.

Sounds kind of like Tejon Ranch. They have JV’s on their interstate land with industrial RE that generate cash flow similar to that, it’s a $520mm market cap, it’s a terrible long term performer. the numbers don’t match exactly, but given Nitor’s penchant for JOE and TPL, TRC may be a decent guess.

from my thinkng out loud on twitter / initial checks it seems that Norfolk isn't going to have to pay much for all this. Nevertheless, I still think it should be down over the las tmonth more than 3-5% relative to peers. For both my parents and my account, I shorted NSC in small size equal to 50% of estimated BNSF exposure for parents and 100% for me. We'll see how it works out. I doubt I'll make / lose very much. but downside probably like 15% (8% after tax) and upside is "more".

as someone who has/has had bloomberg for 12 years and is spoiled by it, there's probably nothing more frustrating to say to someone not on a corp's payroll than "if you had this $28K/year service" lol.

I'll put my bull hat on here. I don't think markets ever really fully priced in 2% rates / negative real rates, so It's not entirely surprising that they haven't come down more than an academic duration measure might suggest given the move in the 10-30 year treasuries. I'm guilty of this too, but a gentle reminder that the equity risk premium is Total Expected Return on Stock - Expected Return on Bond, though some folks (includng me) will define as earnings yield - bond yield. Both of these remain positive, but assuming LT growth in earnings, the one with total return is obviously much more positive (as there's little differential b/w earnings yields and bond yields at this time).