Spekulatius

In my opinion, if crypto becomes large, it will be regulated by governments, it‘s that simple. As long as crypto stayed small in terms of total transaction value or total market cap relative to the government sponsernd currency, it can stay under the radar. Now, that the cumulative market cap has cracked 1T in USD value however, it has become a factor and attracts attention because they basically become a competing currencies. No government in the world gives up control over their currency without a fight. The reasons are many - if crypto becomes more valuable and Acts/Substituts currency, it is like printing native currency and causing inflation without the government benefiting from it. The government also will lose control over payment flows with the obvious effect of benefiting the underground economy and tax evasion and organized crime. For those reasons, government have an incentive to keep crypto small. Governments cannot really eliminate crypto, but they can probably limit the total size (in terms of market cap) by discouraging institutions from using and owning them by various means. Institutional assets are where the real money is and if you prevent adoption by various means, the size of crypto should remain small compared to the flow of government government sponsernd currency and the total market value of printed USD. Of course I don’t really now what will happen, but I do think any government will absolutely prevent a competing currency from becoming a large factor, if they can. Crypto is just that, a competing currency, printed by private parties often located outside the country borders.

Weekends in crypto are always like Wild West, I am guessing this is because institutional players are not participating and all you have got is a bunch of gunslingers that are buying and selling on their mobile phones while gulping white claws or harder stuff. BTC down ~11% as I write this while drinking Cabernet like a boomer. If you are trader, this is probably more a feature than a bug.

Reduced BABA on Thursday at a loss (few %). The main reasoning was that I did not like the last earnings report, not matter how you slice it. The reduction in core market profitability is the most bothersome to me. I expected a blowout quarter due to economic recovery and similar to what we saw with GOOG, FB and AMZN and this was nothing like this. I know, I know, paper hands. @LearningMachine also asked some good questions regarding GMV and there aren’t really good answers. One can question how much it matters, but it‘s just another incremental negative. BABA’s accounting always was murky (which deterred me in the first place ) and I would never make this a huge position, not matter what. Now it‘s a smallish starter position which I intend to keep.

FYI:

For me, the main benefit of this forum is not to present a full fledged research report, it is crowdsource research. I post what (little) I know and hope that other posters add to it and fill in some blanks or prove me wrong. I found this to be a hugely beneficial. I welcome full fledged research, but don't expect it here and think this is generally found behind some sort of paywall that supresses the crowdsourcing aspect that I think is more valuable. That said, there is nothing wrong with a tip jar, some authors that publish research have those and I occasionally tipped.

I think the variance is sharecount is somewhat normal with the potential for earnout shares, warrant's and sometimes redemptions, but in this case, the range is large. Kyle somewhat explains why in his AMA.

Yes, i am going through the same process right now and told my insurance broker to shop us around. FWIW, we have homeowners, 2 cars and umbrella all with the same company and I would jump ship with all of them. @rkbabang gave me a good triangulation point (he lives almost in the same area) that tells me I can do better. Also, related, I tried $LMND a few days ago, because it is supposed to be so easy. Went through a bunch of questions with them, which took a while, but in the end their AI decided our house is no bid, because the fire department is not up to their standards. I did get a quote from Liberty Mutual after going through their online questionnaire, that was cheaper, but those are nonbinding estimates (teaser) and the real quote is almost always more expensive when you follow through with it. I will now wait what my broker comes up with. If they cant come up with something better, I try another broker. Now, I have totally derailed @DooDiligence thread.

10k is the reporting threshold for any cash transaction in the US, it makes sense to extend this to crypto.

KNBE - recent IPO that I learned about in the MF Industryfocus podcast. Cybersecurity play that focuses on Training. Seemed like a timely pick after thr Colonial pipeline disaster that sure must have raised the visibility about fishing attack risks. The stock tanked after earnings and I am not quite sure why. Earnings and CC seemed fine to me.

This is an open forum and should stay that way Imo. If you want to get paid for your research just start your own substack and see how it goes. I have quite a bit value from this forum, both in terms of new ideas as well as feedback on my own ideas.

Thanks. I am with an insurance broker who gave me a good enough quote a few years ago, but then rates started to creep up. I suspect then they just auto renew and don’t really look at the price until you ask them too (which I just did).

@DooDiligence what percentage of your home or structure value is your current premium? I am surprised it is possible for them to cancel the insurance before the contract is up. Generally, I would recommend to go with a good insurance broker and get a couple of options. FWIW, when i lived in CA, my homeowners insurance for my crappy ~350k value house was only $500 (no earthquake insurance and this way before the wildfires). Currently, I pay ~1.7k for my house that is worth a bit north of ~600k (in MA). Feels a bit high and I want to investigate options upon renewal. Again I never had claim in 20 years of owning homes. We certainly have a hard market, insurance rates have been creeping up.

What a time to be alive - AMA session with Kyle Cerminara regarding the FGNA- OppFi SPAC. So far, he has dodged my question ( or wabuffos ) why they switched to fair value accounting on their receivables.

Business breakdowns by itself is a great podcast series, but I found the Episode about the Ethereum blockchain particular great and I am generally indifferent to crypto. What I like about this podcast is that it describes actually what can be done with the Ethereum blockchain and why it was the designed the way it is and differences to Bitcoin. https://podcasts.apple.com/us/podcast/ethereum-into-the-ether-business-breakdowns-ep-09/id1559120677?i=1000522314009

You can’t shut down Bitcoin or other cryptocurrencies, but you could deter institutions or even citizens from owning and using it, via taxes, money laundering laws etc. If you can’t use it, any crypto currency is pretty worthless, imo. It is also true that the marginal cost (which consist of energy and depreciation for crypto mining equipment) is set by the price of the cryptocurrency , so the more valuable crypto becomes, the higher the consumption of resources. I think we would have a similar problem if we were on gold standard without inflation. We would have to dig for more and more gold if the economy expands to create enough currency to facilitate trade and have a enough gold as A store value (outside of the productive economy). From a macro economic perspective, it is quite interesting to see how this is going to play out. Maybe there is a play here in Iceland real estate or some utilities in countries with an abundance of cheap energy, besides the obvious AMD and NVDA.

I would buy BAH before I would buy TYL. BAH is more federal government consulting , I think @Inofeisone gave some interesting insight that they can leverage this to get more business from states and cities. BAH is a consulting business model that in some way looks similar like my cherished defense contractor stocks, but perhaps with better organic growth prospects. BAH stock has seen some multiple expansion but it is not close to being valued like TYL (for good reasons) but if they can compete against them in the future, this could become a different story. It is a great business as the business relationships last often many decades. That reminds me to do more work on BAH (I put it in the maybe pile a while ago.)

There is also a sweet and short one with CNBC: I always enjoy his commentary. He doesn’t have a fixed view and keeps an open mind.

Ok, yes, this makes sense.

How does someone who has been actively on this site for a while get value from a Phil Town course? That stuff seems pretty basic, at least based on my first look.

^ I assumed the lower provisioning was caused by a better than expected loan losses due to stimulus checks. I don’t know if they arbitrarily juiced their results. Frankly, I don’t care, if what they are doing is good for society or of it is fintech or a grubby payday lender. If they can lend at ~100% APR (which is what their income statement and balance sheet suggests) and lever it just 2:1 and keep loan losses to a manageable 30-50% () this business prints money like no other. I do think that there is absolutely no reason to sell a business it’s economics like this, so I assume some sort of regression is going to happen and the folks selling the business know this. I think I just keep watching this post deal and see how the business goes. Perhaps I take a flyer on the warrants if they are cheap enough.

Doge is a hustle and Elon is a hustler.

It is easier to create new cryptos than it is to create new elements. If you are a celebrity (Kardishan) or an organization (think NFL) or a company (Tesla) to name some examples, is there really a downside to create to create your own crypto currency and promote the hell out of it? The technical barriers to entry are nil. Dodge coin has proven to get to $100B in market value. That’s larger than the entire US airline industry in terms of market cap.

This is a pretty good Twitter thread on the “True Lending rule” from the Trump administration that made life easier for subprime lenders that operate across many states: Repealing this rule could impose some additional regularity cost for lenders like OppFi, but it is not clear how much that would affect the bottom line. OppFi tried to sell itself as Fintech, but it really is a deep subprime lender. The profitability and growth has been mind boggling - they basically 10x their size and equity (equity growth from $9M to $99M) just through retained profits. I don’t care how you call this, if it is that profitable, it is probably the best business I have seen ever. Of course there is the catch, if something is too good to be true, then it typically is. I suspect as this grows in size, someone takes a close look at it and then the problems start. It was mentioned in the podcasts is that their Glassdoor reviews (4.4*) and BBB rating are pretty good. The Glassdoor reviews look a bit generic and it is clear that management or HR is looking very closely at them. The high number of reviews in Glassdoor (~190 reviews for ~500 employees) suggests that management is managing Glassdoor postings too. I searched in the Apple App Store and didn’t find and App for AppFi or Apploans. Strange. Fascinating to see how this plays out.

So, I listened to Bill Brewster’s business brew podcast and he has an episode where he interviews Jared Kaplan from OppFi. OppFi is going public via a merger with the FGNA SPAC this year. Bill and Jared talks a lot of about OppFi business, which caters to subprime customers and why it is a good value proposition for them. Anyhow, I looked at OppFi’s pre IPO numbers and almost can’t believe how profitable it is, to the point where the numbers are absurd: https://www.sec.gov/Archives/edgar/data/0001818502/000119312521135035/d135342dprer14a.htm#tx135342_22 The numbers are almost absurd. Their revenue is about equal to the size of their balance sheet, which means APR is around 100%. ROE is about 200%. they bumped up their equity from $37M to almost $100M through earnings last year. last year was probably a best better than average due to stimulus preventing defaults on their extremely low credit worthy customers but even befor thwt, the numbers look quite Impressive. Quite frankly, what I don’t understand is why they are going public at all (you don’t really need to raise external capital with this profitability) and Joe the customers don’t default en masse with the type of loans. This is not really addressed in the podcast, but the filing shows the profitability so unless this is all fake or not repeatable, it is one of the best business I have ever seen. The FGNA SPAC is launched by Kyle Cerminara and Larry Swets (which I understand some have mixed feelings about), but are well known in fintwit for their BTN involvement #lumbergang. (No position yet).

John Hampton posted something interesting on Twitter. Type in the Google window: “ How to buy “ and see what comes up. Here is mine: