Spekulatius

This is infrastructure too: Hopefully there is some money left.

https://www.journalofaccountancy.com/issues/2000/apr/thedosanddontsofirainvesting.html

^ The usability of Koyfin has gone downhill since the last major upgrade unfortunately. I believe the best way the get these charts is to create a template with the metrics as below: What I really like about Koyfin is the “today’s market” tab- itgives a great overview how various markets / segments are performing. I check it every morning. Overall, I prefer Tikr.com because it is easier to use and has some functions that Koyfin doesn’t have. The charting is nicer in Koyfin though.

The dot coms itself we’re not the real problem when you were a mutual fund or ETF Investor back in 2000. Those stocks mattered , but the real issue were the enormous amount of bubble tech stocks like SUN, Cisco,Microsoft, The ancillary telecom bubble stocks like JDS Uniphase, Nortel, Global Crossing (most of them become zeros or pretty close) as well as pretty much any semiconductor stock and the list goes on and on. Then there was TER Independent power Producer bubble with the most famous example being Enron, but there also was Mirant, Calpine,Montana Power (bankruptcy ), El Paso Energy (survived but was a shadow of it former self). While there were plenty of cheap stocks so many high flyer stock were in the broad index fund that those absolutely got destroyed in addition to a lot of bankruptcy that caused irreversible damage to portfolios. I do think we could have a similar meltdown when SPACS, high flying tech with no earnings as well as low quality secular challenged business get simultaneously rerated.

Prosus traded yesterday ( and it traded significant down) in Amsterdam when the US markets were closed. So today’s move in the US followed Amsterdam’s move yesterday.

Added to my tracker of Prosus $PROHY today and added to $VNT.

Real estate yolo: https://twitter.com/jmf_5/status/1412402644090507275?s=20

If you only need to do one trade, are real time quotes really that important. I typically just put a limit order in and let the chips fall into place. With IB, one workaround is to buy just 100 shares and then you know the price based on the market value of your holding. The market value updates in real time faster than the quotes. I hve done this in the past with a paper account in IB as well. you don’t get bid ask spread, just the current value based on the last trade. But in any case, I don’t really bother any more and just put in a GTC order and sometimes wait a bit , if it is really illiquid. This works in other markets as well when you don’t have real time quotes.

@LearningMachine question regarding the China stock market performance is a legit one, and I don’t have an answer, but a few hunches. Checking out the index here and taking FXI as a proxy m the index is chuck full with Chinese tech , probably a 40% allocation ( Alibaba, Meituan, Tencent, JD etc). Then there is a healthy allocation to financials ( Ping An banks etc) https://www.ishares.com/us/products/239536/ishares-china-largecap-etf – the lack of tech allocation is not explaining the Chinese stock market underperformance - multiples for Chinese stocks have not expanded (PE is around ~15x and have been for while ), for US stocks they have. If you consider that the Chinese stock market has become more tech heavy, then it seems that Chinese stocks have seen multiple compression. Fin aiv also for example have become very cheap ( single digit PE’s). One aspect that is interesting and may explain some differences is that China has not lowered their interest rates to the same extend than the US. China’s interest rate is 3.85% and US is effectively at zero. This is quite a large gap since the Chinese yuan is pegged to the USD effectively. I believe this explains some differences, but there are likely other factors. https://countryeconomy.com/key-rates/china It seems kind of interesting to invest in the FXI after I read thinking though this. Or even better put some allocation into Tencent via Prosus and hope that it works out. Ping An (insurance and generally considered the blue chip in their business also seems interesting , as they benefit from higher interest rates and in fact show higher ROE than most comparable US insurance cos. They also pay a rising dividend. Edit, I went through many other Asian large cap index ETF (Malaysia, Thailand, Indonesia, Korea ) and they all have vastly underperformed the US markets and even Europe, despite higher GDP growth. China is no exception here, it more seems like the US and to a lesser extend Europe is the exception.

I am not sure why the Chinese stock market performed so badly, it China had a severe stock a market crash in late 2015, which occured at the same when we had an industrial recession, as a consequence of the oil price meltdown. https://en.wikipedia.org/wiki/2015–2016_Chinese_stock_market_turbulence The largest bubble was in 2007 however and the Chinese stock market never really recovered from this. Starting points really matter. Generally speaking, the correlation between GDP growth and stock market performance is fairly weak. What matter much more are ROIC. D how shareholders are treated.

Interesting the treasury's cash balance has been going up (mostly due to taxes received and treasury's issued) not down as contemplated. it doesn't seem like they want to draw this down. Now at $852B.

Maybe we can fold the 2001 tech stock crash and the 2007 housing crash all in one. That could be a lot of fun!

The answer to the bubble question depends on 1) will interest rates remains low 2) will cooperate to rates remain low 3) will cooperate profit margins remain at current levels or even go higher. If the answer to all those questions remains yes, then we are not in a bubble. If one or more of these factors (which so far have been tailwinds) become a headwind, then valuations are most likely adjust accordingly.

There is always not her court case, but we are now 9 years past the NWS, so I think the chances of any dramatic reversal through courts are very very small. Not worth betting on, imo. I think the remaining bet is mainly a political one on the chance is that the landscape changes with the next administration will do things differently as far as GSE’s are concerned. Again, we had a couple of administrations - the GSE were quasi nationalized under Bush, NWS under Obama, pretty much nothing under Trump and now a few changes with Biden. I think the chances of anything happening with the next administration are slim, but not non-existent. The LT call option value is there, it’s just not worth much because the odds of it happening are pretty small, imo.

I agree on this. Especially if reading about these things likely just increases an inherent bias that exists to begin with and sucks people even more into this bet. I hate binary bets like this and I followed several other ones like BMYRT. In the end, they all seem to be crapshots and it turns out the “experts” didn’t really have an advantage over the average Joe. If you treat it like crapshoot and put in your bets and accept the outcome, it’s probably OK to bet on this within risk limits. Beyond that, it is just poor investing and no better than those folks gambling on weekly options on WSB.

3rd Avenue RE fund also got into Fannie/Freddie late last year: https://thirdave.com/wp-content/uploads/shareholder-letters/Archive/TAREX/2020-Q4-TAREX-Shareholder-Letter.pdf Seems off mandate to me and I am sure they are going to get heat now that this bet didn't work out.

Cheers:

Sorry for the losses to everyone who invested here. I know I was only an casual here and had a diverging opinion, mostly because of my instinct to avoid any investment that looks like a binary event. I have played a few and watched many more and they never seem to work out as expected. I hope everyone is OK and can move past this.

The government can take banks into receivership of they fail. It has happened many times and it is nothing new. Same for insurance companies although that it more regulated at the state level and much rarer.

I believe it is settled that these are basically government institutions now. One thing that is remarkable is that the Common is actually down less than the preferred. Who would have thought?

No expert on legal docs, but it sounds to me like we are done here.

Interesting enough, I have the opposite experience with as regards to OTC stocks with IB. Fidelity shows the correct Bid/ask even for stocks you can’t buy any more (dark stocks). With IB, I have gotten executions outside the bid/ ask spread shown both above and below. My casual observation regarding Fidelity and IB execution is when I sold relatively low priced and lower volume stocks on both my IB and Fidelity Accounts at the same time. Then Fidelity seems to score well, and with the price improvement, the average price I got is above my limit with sells, vs at limit for IB. I think Fidelity is one of the few brokers that don’t get paid for order flow, also that payment for order flow isn’t a totally black and white statement either: https://www.spglobal.com/marketintelligence/en/news-insights/trending/IiJL9zOpAk76f_BrDunluA2

Smallish starts in CNNE, PROSY (Holding cos) and a small add to BAYRY.

Since BTC is now legal tender supposedly in El Salvador, anybody has to accept it. it will be interesting to see how street vendors in El Salvador and the many small business deal with BTC payments and the volatility. I suspect there are going to be a lot of exceptions - otherwise I think we will see a lot of chaos and bankruptcies occurring from folks that find themselves on the wrong side of the volatility or that possibly get scammed.