winjitsu

My feeling is a Buffett 2-5 years ago would have made comments (as he has in the past) on the GDP deficit, SPY P/E, potentially the political climate like he did around BHE last year. Perhaps a little more light on the Geico turn around (though who wants to talk about layoffs and raising prices). But get the feeling he doesn't want to stir the pot anymore. Don't blame him -- 94 is no spring chicken, and with the passing of Charlie, seems the feelings of passing the torch are accelerating. I just hope Greg is as good of a writer as Buffett. I've been a big fan of Bezos, also an excellent writer, and there was quite a big step-down in quality with Jassy.

Really not much to talk about from the letter. Get the feeling even more now that age is slowing down Buffett, especially with the comment about Greg writing the letters soon. Seems like there's alot less "life" in the words.

Via stock exchange from HK, not exactly "listed." I think it's for institutional and retail investors, not sure if the firm itself can use this mechanism for buyback. Atleast I haven't seen anything in english

Some math, and lets assume they are just forward contracts with the promise to deliver $100mm notional, and there are no forex moves. The expected delivery price is JPY(1+JPY Interest Rate) / AUD (1+AUD Interest Rate) based on interest rate parity. AUD is giving 4.5%, while Yen is giving 0.5%. Being short JPY/AUD futures means you should be making money over the life of the contract. Correct, you don't get the yen. The future's role here isn't to give you the cash, it's to hedge or swap risk from AUD to yen, so he can "borrow" at the yen rate while continuing to hold AUD. You are also correct that this is a currency short. In OP's case, he wants to be short $100mm yen on margin to utilize the low interest rates. His question was how could he express this short. So the following scenarios are similar (though not exactly the same), assuming you start with $100mm AUD and the margin requirement is 3% on contract: 1. $200mm AUD yielding 4.5%, -$100mm Yen cost 0.5% 2. Short Yen/Aud future covering $100mm yielding 4% (4.5% - 0.5% simplification), $3mm AUD in margin reserve yielding 4.5%, $97mm AUD, available and not margined, yielding 4.5%. Can we agree the EV from these two cases are the same? Now relax the no forex movments constraint, and you have some real risk. Both cases you will be hurting if the yen strengthens. But if the Yen slides from 120 to 160 like it has over the past few years, you have an incredibly profitable trade.

The carry trade is borrowing in a cheap yields, and investing in something higher yield. You can get very creative with it. Currency pairs, bond pairs, currency/stock etc. Back in the 2014 EU Crisis, you had short German Bonds, Long PIG bonds, and when those heavily in-debted PIGs had issues, you saw the unwind of the carry trade and a crisis. In the Asian Financial Crisis, you had many folks borrowing USD, investing in ASEAN currencies and bond that had higher rates and a unsustainable dollar peg, which also blew up. Carry trade can also help explain forex moves, for example the high rates on USD right now attract investors in low interest rate countries like JPY, CNY, CHF to sell their currencies and buy USD. In Japan you have Short Yen, Long Something Higher Yield. The carry trade in short yen is enormous right now given their decade of ZIRP, as shown by the slight move in exchange rates back in August leading to some catastrophic rolling margin liquidations. In our particular case, the futures contract is Short Yen / Long Aud. Then OP is using Aud to acquire Japanese Stocks, so the trade ends up Short Yen / Long Japanese Stocks. The future contracts being necessary here since he can't go short Yen in his IBKR Aus account directly. I think you have the margin backwards for future contracts. You only put up a small margin amount for the contract value. Initial margin on Yen/USD futures is 3k on 12mm Yen Contract (80k USD). Put in another way, you have 3k USD tied up to cover a 12mm yen position.

But it is the carry trade, since you're short the JPY, paying that 1.5% of interest, and your keeping your base currency as the margin reserve, AUD for OP in this case, earning 4% interest on it. And you to settle up whatever the currency appreciates/depreciates at the end. But yeah the margin requirement means you can't be 100% short JPY / long AUD like you can with the notional.

Someone else is in charge for all his other companies running day to day. I'm not sure it makes a difference if his title were ultimately changed to Chairman instead of CEO, people would still love or hate the stock by his ownership and association.

Enter the role of HKD and Hong Kong, basically the mechanism to acquire offshore dollars.

More like the latter, you put up a certain amount of margin based on the current price vs settlement, though it's not taken out of your account, just your available margin. And settlement is generally cashless, unless your are doing physical commodity futures (some funny stories about interns in investment banks accidentally taking delivery in CME). The amount of margin you put up depends on the contract, though it's generally low for these cashless ones so you can probably re-invest like 80-90%+.

Shorting futures, see:

In a slightly off topic pivot, I started using Eleven Reader app on my Ipad and Iphone by Eleven Labs to read audio books and other long articles. It's free and a total game changer -- audiobook level narration with interesting voices like Feynman, Burt Reynolds etc. I'm hoping they secured IP deals with estates but not sure... I found it a bit creepy at first, but love the improvement over robotic AI voices. The advancement in the tech is amazing. It seems their business model is to offer out these "voices" commercial, like a voice over in a commercial.

Purely out of completeness of data, here's Fund 4

He's under-performed outside of the first 5 years. https://x.com/eriksen_tim/status/1814015323752071364 The fact he has raised and managed billions while under performing says alot

Hard disagree with the tweet. What do we call all these tesla auto pilot deaths? Or the recent Cruise case where it killed and dragged a person for 30 feet. Or, all these new missile or drone equipped w/ image recognition and target locking so it's jam resistant being used in Ukraine, does that count as a AI death? Over regulation is bad. No regulation is bad. But many people have been killed by AI, and even more will be going forward.

Yeah I've come around to this same thought over past few hours. The fact its open source, and a few people have started to replicate results on a smaller scale means its legit advancement in the state of the art. Big win for the open source model and building together.

And this article is great too: https://www.interconnects.ai/p/deepseek-v3-and-the-actual-cost-of showing that they were training on-top of ChatGPT (and I suspect open-source Llamma like a few other Chinese firms) which used billions to setup. So I think there's alot more to this than $5mm. Likely a marketing stunt that I'm sure they'll want to use to raise billions off of. By of course happy to eat humble pie if I'm wrong

Gotham is Joel Greenblatt's fund, of You Can Be A Stock Market Genius fame. So the firm and principal are legit. But I vaguely followed their magic formula fund for a few years and I know it under-performed the S&P. Greenblatt has been on a few podcasts over the years talking about the quants they employee and the strategies they look at. A lot of historical back testing from what I recall.

Smoak is pretty famous https://www.smoakcapital.com/ Bradley Radoff is does long/activist and will pop up in many 8ks ($BOOM, $ENZ)

Did not know this and went down a rabbit hole. US investors can buy the OTC stock and tender the same on Fidelity and IBKR as I learned. For this particular one, Paid In Capital is $14.98 and tender price is $12.00 so it seems it should be safe from out-sized taxes (just 15% I think, versus if the PIC is lower than the tender price, the entire difference is treated as the dividend).

Any US-based odd-lot maximizers (multiple accounts) know the rules around these Canadian tenders? Would love to know if I can use the US OTC $feccf and experience using different brokers like Fidelity, Schwab, Etrade etc. Happy to share notes

They have not made an announcement and I haven't received a proxy statement from my broker yet

Yes, then you are now short yen and taking part in the “carry trade”. Im not an economist, but with japan raising and usa lowering rates, i think 160 is the highest well see and wont get back there

Bought heavily into $PCF today post rights-offering. "The Fund intends to hold a special meeting of shareholders of record as of Friday, August 23, 2024, to consider proposals to approve these changes. Shortly after the special meeting, the Board intends to authorize a tender offer by the Fund to purchase at least (a) 90% of the number of shares issued in the rights offering if the proposals are adopted, or (b) 60% of the number of shares issued in the rights offering if the proposals are not adopted, at a price of at least 98% of NAV." It's very likely the proposals will be adopted. NAV is around $7.17. Price is around $6.59.

Does Capital Accounts book exist anywhere to purchase? Read Capital Returns a few months ago and it was great. Mine: Greenblatt You Can Be a Stock Market Genius Greenwald Competitor Demystified Kahneman Thinking Fast and Thinking Slow

I'm sure we'll both make alot of money... just could have made a little more The volume increase this week and number of mentions on Twitter means this is no longer under the radar Just two weeks ago, I was convinced I was the only person looking at it. But it shows there are smarter people than me all around the world always looking