bizaro86

Nice. I think Hong Kong is very cheap. Will have to find some stuff for my TFSA.

I would like to sign up for your newsletter.

One of the many reasons I own IBKR.

With the spreads they charge on currency exchange it might still be cheaper to buy pink sheets if there's any volume at all.

JOE

SOBO.to Not selling fully, just taking a bit off the table after the post-spin run-up. I still like the assets (and given the level of leverage this isn't that big a change in EV/EBITDA which is the correct way to value this imo).

Sounds great, will PM

Matt Levine wrote about this in money stuff. Relevant Excerpt: Arbitrage I wrote yesterday about an apparent arbitrage in US presidential election prediction markets: Donald Trump contracts on Polymarket trade at about a 53% chance of him winning the election, while they trade on other prediction markets at more like a 49% chance.[2] If you can buy Trump at 49 elsewhere and sell him at 53 on Polymarket, you can make a quick 4-point profit. I did not take this too seriously, and you shouldn’t either. I assumed that it probably wasn’t a feasible arbitrage: “I am sure there are some fees that I am not accounting for,” I wrote, “and I don’t know how good liquidity is on any of these places.” Also Polymarket is in theory off-limits to US investors. Those sorts of things — trading costs, liquidity, capital constraints, etc. — are the normal explanations for differences in prices in different locations, “limits to arbitrage” that prevent people from selling the expensive contract on Polymarket and buying the cheap one on Kalshi or wherever. But the other natural reaction you might have to seeing the same contract trade at different prices in different locations would be: Well, are they the same contract? What if “Donald Trump will win the election” is worth more — that is, has a higher probability — on Polymarket than it does elsewhere? That seems implausible: There is only one presidential election, and Trump will either win it or he won’t. But that might not be exactly right. There is some history of epistemic uncertainty when Donald Trump loses elections. Different prediction markets might resolve that uncertainty in different ways. Here is Kalshi’s 2024 Donald Trump election contract, whose rules specify that “If Donald Trump or another representative of the Republican party is inaugurated as President for the term beginning January 20, 2025, then the market resolves to Yes.” Here is Polymarket’s equivalent (but higher-priced) contract, which sounds fairly similar: The resolution source for this market is the Associated Press, Fox News, and NBC. This market will resolve once all three sources call the race for the same candidate. If all three sources haven’t called the race for the same candidate by the inauguration date (January 20, 2025) this market will resolve based on who is inaugurated. But then Polymarket has a link to a resolution contract, and a button labeled “propose resolution.” Because Polymarket, unlike Kalshi, is not exactly a corporation with a representative who will consult some authoritative source and declare the winner — for contract purposes — of the election. Polymarket is a decentralized platform, and its method for resolving contracts is crypto-y. Here’s a sample from Polymarket’s documentation on how contracts are resolved: All market resolution is completely decentralized. A majority of markets on Polymarket are resolved via UMA's optimistic oracle, the rest (some price markets) are resolved via Pyth. Polymarket leverages UMA's Optimistic Oracle (OO) to resolve arbitrary questions, permissionlessly. From UMA's docs: "UMA's Optimistic Oracle allows contracts to quickly request and receive data information. The Optimistic Oracle acts as a generalized escalation game between contracts that initiate a price request and UMA's dispute resolution system known as the Data Verification Mechanism (DVM). Prices proposed by the Optimistic Oracle will not be sent to the DVM unless it is disputed. If a dispute is raised, a request is sent to the DVM. All contracts built on UMA use the DVM as a backstop to resolve disputes. Disputes sent to the DVM will be resolved within a few days - after UMA tokenholders vote on what the correct outcome should have been." So there’s a “generalized escalation game” and a possible tokenholder vote. A couple of readers emailed me along the lines of “I thought about doing this arbitrage, then I read that documentation and got confused and decided not to.” I wrote once about Polymarket’s contracts: Because it is crypto, in fact “all market resolution is completely decentralized” and there is a complex system of bonds and rewards to resolve questions, but it is a convenient shorthand to say “the result of the 49ers/Jets contract is determined by the official final score of the 49ers/Jets game in real life.” That is approximately correct, in the way that it is approximately correct to say “credit default swaps pay out when a company defaults, and make bondholders whole for their losses on their bonds.” That is: Most of the time, you can just think of the thing as reflecting the underlying economic intuition (“CDS is insurance for bonds,” “this contract pays out if Trump wins”). But some unknowable percentage of the time, weird stuff might happen with the payout mechanism. So you can play the game at the basic level, buying the contract to bet on Trump winning (or the bonds defaulting), and that will mostly work most of the time. But there’s always a chance that somebody else is playing the game at a different level, buying the contract to bet on the resolution mechanics. One reader emailed: I'm pretty confident that if Trump "wins" (in the way the mainstream media and most normal people would use the term) Kalshi will resolve the contracts so that my Trump Yes’s pay out, and Polymarket so the Trump No’s do not. ... If, however, Trump “loses,” then I am again pretty confident in what Kalshi will do, but I have no idea how to estimate the risk that some major stakeholders or Trumpy-crypto-types could affect the resolution of the Polymarket contracts, which is where all of my money would be coming from. So the persistence of the arb could just be the market pricing in a roughly 3% risk of an outcome dispute that breaks the Polymarket/Kalshi symmetry on these events, which in the current climate feels not crazy? I truly have no idea if that is right. Presumably the crypto consensus mechanism was built by smart people who want it to reliably get to the right answer. But if you think it has, like, a 5% chance of getting the weird answer, you’d pay more for the Trump contract on Polymarket than elsewhere, because that contract is worth more.

Levelled was poor word choice, I knew it was just flooded and was being dramatic. I think your estimate is approximately correct, and given they lost about $230MM in market cap I think the market roughly agrees with you. I thought it was fairly undervalued before and I think the flood is "efficient-markets'd in" now (or at least close) so I'm keeping it. I think there's a decent chance they get some government money as an offset somewhere along the line. Total inventory was $483MM at quarter end, but some of that would have been OK, and probably a lot of stuff got sold directly before the storm as people stocked up to prepare. I think the big potential upside here is if management finishes the cleanup and says "screw it" and decides to sell.

I had the excellent timing to buy IMKTA about a week before Helene. Grocer in the Carolinas, owns tons of real estate, cheap but maybe a bit of a value trap (majority owned, no indication of monetizing RE). Then Helene leveled their owned (and by rumor uninsured) distribution center...

One small suggestion - I think you'd have more success getting people to join you if you made a case for how undervalued the assets are as a result of current management. I think many aren't interested in getting involved to fix a wrong in the system, but would be more interested if they thought there was a big payoff to fixing this. Just my two cents and I wish you well!

Thanks!

Anyone have the full list of 30 or know where I can see it? I have an rbc brokerage account as well

I didn't own TC pre-spin. I don't like the long-haul gas assets at all. I think it's possible they end up stranded as gas goes to the west coast and low prices suppress production.

For sure. Top 10% or 1% or 0.1% doesn't really matter.

I bought some after the spin. I think the dividend is too high and would prefer they lower it for some debt reduction. But there are 3 pipelines with scale out of western Canada, and they own 1. My macro forecast is that (1) there will never be another one built and (2) oil sands production will keep growing even if slowly, and will not decline for decades. (1) and (2) imply strong demand for a finite resource (egress capacity). TMX coming online was a downside for these assets, but its not going to get repeated and the industry is growing into the new capacity.

I personally find reports like these useful for framing my personal situation (even though I'm sure their accuracy is low). Basically, as a reminder to live with gratitude for the circumstances and advantages that have allowed me to end up where I am. The exact details of whether I have more money than 98%, 99% or 99.5% of the other people on earth doesn't seem hugely important. But remembering that just about everyone else has it harder than me is a good reminder if I'm ever feeling down.

The other long term solution is to put the water back where you found it - ie, into the same formation. That's what most conventional fields do, because there is generally a big benefit to using the water to waterflood. Now, extremely tight formations make that more difficult, but I have a feeling it gets figured out before exporting brackish water to other states.

The type of person who would pull 30mm to the side would never have yolo'd from 80k to 300mm in the first place. Because it was also insane not to dial back the risk everywhere along the way, including at the 80k level.

I think the optimal play there (if it had been publicly owned) would have been SEC whistleblower. Pays out a portion of fines.

If the person had a process I could understand I'd do so with at least a segregated portion of my funds. I'd definitely be very interested in seeing the picks for further research. If it's someone posting publicly I echo the requests for a link (posted or by PM!)

I think you'd be more likely to see a big buyback than a spin. The next time there's a big market crash maybe just buy $100B of BRK...

I think it's at least as likely that Brookfield took advantage of Cockwell here. While the $17 he paid was market price, I think it was quite overvalued at the time. It was propped up by an unsustainable dividend in a market with low interest rates. Cockwell was buying it for his son, a professional forester, so may have been less price sensitive. Five years later they still trade at $17, after a structural change in New Brunswick timber pricing structure and the carbon credit announcement. I think the intrinsic value has gone up quite a bit since then, but the stock price hasn't moved, partially because it was overvalued at the beginning. This was getting propped up by its unsustainable dividend and Brookfield sold it to an insider who wanted (imo partially for non-economic reasons). I don't think the Cockwells are saints by any means, but I don't think their ownership is disqualifying. Especially in a thread about yield vehicles - I think they're probably par for the course among self interested real estate managers. They're not the Bakers from FRPH but they aren't an RMR entity either.

The Cockwells paid fair-ish value for the stake - it was publicly traded at the time and they didn't get a discount or anything like that. I'm not qualified to judge how the negotiations between the Cockwells and Brookfield went down, and to be honest I don't really care.

I mean, that's why I said "Brookfield adjacent". He's owned the stake for 5 years and capital allocation has been fine. I probably would have cut the dividend and started repurchasing shares instead but that's not a big issue. Wouldn't be my first choice for major owner but I think it's probably fine.