bizaro86

I don't think profits are described as per unit of revenue, rather total profits. Obviously margins (and especially capital efficiency) matter for investors but I don't think you can generalize that this says anything about margins, except that when profits grow margin expansion is one of the more likely ways for that to happen. I also don't think (since its economy wide) it says anything about which businesses will earn those profits. As an example, the "investments" made by VC backed firms in the last few years would increase the amount of profits in the economy. However, those profits are probably not mostly earned by the VC owned startups, they were probably mostly earned by people selling fancy office furniture, Silicon Valley real estate, and (especially!) online advertising. Of course, in the long run misallocation of capital is a bad thing, mostly because it will tend to depress future investments once the misallocated capital is written off. Whereas successful investments into productive capital goods are likely to increase future investments. Anyway, like I said I appreciate you sharing this. The scientific part of my brain likes the "identity" part of it, and simplifying assumptions are OK with me - it's usually more important to understand the assumptions than the conclusion so you don't try and stretch something to where it doesn't apply.

These groups are not necessarily wiped out together. In fact I think governments backing the latter makes them more likely to throw the former under the bus earlier.

@Cigarbuttthanks for posting the Kalecki piece. That was very interesting. It isn't really intuitive but does math out when you think about it - which likely means I learned something!

True. He's also unlikely to be around making or keeping promises for many more decades. Nobody thinks it will be broken up in his lifetime. 10-15 years down the road after his A shares have been converted to Bs it's more possible.

I think it could be done with concentration, but you'd have to pick your spots and the patience required to stay in tbills or something when there weren't opportunities would be difficult. I've had 3 distressed credit ten baggers over a 15 year period, and none of them overlapped time wise. If I had concentrated more in those ideas I'd be considerably wealthier. The first one was a 5% position on a 30k portfolio when I first started investing, so made very little actual difference in terms of $$ - in retrospect that one should have been a 50% position, that would have made it like 1 year of savings if went to zero (which was possible) but would have been way more meaningful if it had hit. Of course, it's risky though, as I've had distressed credit positions go to zero as well, including one that was my largest position at one point.

I know this is a bit outdated, but I'd be a bit careful with that. Most Canadian mortgage bonds are guaranteed wholly (or in parts on the underlying) by CMHC, a crown corp. My understanding is that (unlike Fannie/Freddie) it has a full faith/credit guarantee from the government. So if the the entity that prints CAD guarantees a CAD obligation...

Potash has similar cartel characteristics imo.

Ah, gotcha, I would agree.

I think if you're not a w2 type employee you probably need a bigger cash buffer than w2 types. Contractors are often the first cuts in big organizations, and self employment is intrinsically more exposed to macro. Eg I own a travel business - March 2020 I had negative cash flow approx equal to 1 years income as things shut down. Obviously that's an extreme case, but even the "retired living off investments" types are at least as exposed to macro as the average w2. Isnt great to sell during a downturn, so makes sense to keep a cash buffer for living expenses.

I bought the Jan 2024s ($20 strike) when two cities made his original post. They've ~tripled. Luckily I sold >90% of the position for an average ~30% gain before the rip. Should help me stay humble in the future. Binary stuff like this I think it makes sense to go way out of the money because you get a better return if it really works and it's probably a zero otherwise anyway. And then the other big lesson is to let the winners run...

Congrats Gregmal! Hopefully 1000 of your new neighbours buy this year as well!

Also, it isn't obvious to me these will be qualified investments for a TFSA/RRSP. I've paid penalty tax on holding CVRs in my RRSP in the past. If they put it in your account as a security and it doesn't trade on an exchange, it isn't an allowable investment. If that happens, I recommend not ignoring the situation (which is what I did) and transferring the CVR to a non-reg account at some deemed value (which is what I did eventually).

I sold some naked calls on BBBY today. Nothing extreme size wise, and they're well OTM. I think this short squeeze gets capped off because they'll issue ATM shares into it as soon as they are able, which will keep boosting supply of shares. It's a bit of a hedge on my position in the unsecured (which is underwater). Ideally they take in enough cash on the ATM that they make the upcoming coupon payment without filing. Also @TwoCitiesCapitalthanks for the note on SI. I followed you into that one - so far so good, obviously.

Mortgages in Alberta are only non-recourse if they don't have mortgage insurance, which requires 20% down.

This is getting OT for this thread, but did you have to fill out the paperwork to register your shares/not object to the plan in order to receive those warrants, or did they just appear?

Indeed. I'm somewhat annoyed at myself for having missed it, as UNTC common was my largest position after the bankruptcy (and then by far my largest position as it outperformed). I knew those warrants were out there and checked for them occasionally - I should have been more systematic about monitoring for that.

Interactive Brokers has form you can fill out to sell them valueless securities for the same price as the commission. Not sure how long it takes though. I'm sure other brokers would have something similar.

Seems like plug in hybrids- which are generally battery EVs with a gasoline generator in them, would be ideal for this application.

Fair enough, but on the other hand I made a late payment on one of my utility bills this year. I was on vacation and forgot to pay it. The vacation cost like 5 years worth of my electricity bills, and I'm still not in any way in need of "ENERGY JUSTICE!!!!"

But if you hire the right consultants, they can help you select which fund-of-funds is likely to best meet your objectives!

As a similar aside, I'd love a pair of securities where 1 side went up by 100% and one side went down by 100% for tax efficiency reasons. Harvest a capital loss on the down side, and donate the appreciated side to charity in place or my normal giving (which doesn't attract cap gains tax in Canada).

I got a pretty grumpy letter from IBKR compliance when I traded between two accounts I control there. It wasn't anything nefarious for taxes or painting the tape - I needed to raise cash in my non-reg to withdraw but wanted to keep the position so I traded it over to my reg where I had excess cash. In retrospect I should have used something more liquid (this was low volume option position) where both trades would have been with another counterparty. If you want to pursue this, I'd use non-identical securities. Ie buy a $55 call in one account and sell a $57.50 call in the other or something like that. Or buy covered calls in one and sell naked puts in the other, equivalent but not identical.

LYLT -spinoff, most value is the Air Miles loyalty program in Canada. Launched around $30, down to $2.50 or so. Lost a big partner almost right away, had cost overruns, and their other business (grocery promotions in Eastern Europe/Middle East) got killed by inflation/war in Ukraine). P/S is a small fraction. Quite a bit of debt that the former parent put in a US holdco, which makes it non-deductible for Canadian taxes. They have $600MM in trust to cover future air miles redemptions and just renewed contracts with some of their largest partners (other than the big grocery chain who quit). Easily could be BK or 10x.

In fact, you can keep filling them to any pressure you want. Of course, eventually something would fracture under the stress... if that happens the storage would be wrecked forever. My engineer brain explodes when people use the safety factor on purpose for economic reasons.

Sorry, was overly brief. I just meant that with interest rates coming up massively and their very straightforward guidance you could calculate the amount net interest income was going to increase for the most recent quarter. It was quite meaningful, and the multiple on their non-zirp earnings was (imo) too low. The catalyst was them reporting those earnings so it starts to screen on them vs just being estimates. Part of it for me is just taking leverage off.