glorysk87

Why do you think it turns into a recession? Leverage at the consumer level isn't particularly high. Corporate leverage remains relatively high, but there's no reason the credit market should close to them, and refinancing is a positive option at the level rates are at. Layer on fed rate cuts and an almost certainly fiscal stimulus globally...

You seem to be unable to distinguish between the gaming industry (which has never been better) and the equity prices (which are obviously doing poorly). Just because the stock prices are down doesn't mean the gaming industry is dying, as you heavily allude to. With that fundamental bias, there's no point in continuing this conversation further.

AFAIK there is no real spot market for lithium. the best you can do is try to keep updated on recent contract pricing by various companies.

interesting, thanks for the feedback all

I saw they're closing to new members Thursday. Does anyone have feedback as to how useful it is? Are the ideas unique and high-quality? If they're unoriginal and re-hashes of popular ideas then I'm not interested. Any feedback?

Man. I cannot for the life of me understand people who are loathe to take on any debt, especially over the past couple of years. As long as you have a sufficient equity cushion to protect against a downturn, responsible use of debt significantly extends your purchasing power and frees up cash to invest. My wife and I bought a car last year, a cheap Subaru, and I financed the entire thing at 0.55% for 5 years. I'll be paying a couple hundred bucks of interest over the entire life of the loan. That cash pile that I now have is being invested, and it's highly likely to exceed a 0.55% annualized return over the next 5 years. I'll take that deal any day of the week. I think as long as one stays away from maintaining revolving credit balances, keeps a decent cushion of cash in the bank, and makes debt decisions that won't permanently impair ones credit rating, debt is a great tool to be used.

I've already binged through every single available episode. This podcast is a MUST listen for anyone interested in business. Fascinating stories.

I don't think trade deficits are related to interest rates like budget deficits. It is a matter of consuming more than producing. Actually, it is not as simple because companies like Microsoft have few revenues from China. It is not like Microsoft does not produce, but they are not paid. The balance of trade is given here. Yes the longer we consume more than we produce, the more of our country foreigners own. Its being going on for a while and Buffett said it has to be fixed now in 2003! http://www.tradingeconomics.com/united-states/balance-of-trade Take this for what it is - an opinion. I won't say I'm right and you're wrong. So here are my thoughts: People commonly yell about the trade deficit being a terrible thing. They say foreigners will own our country, it's a sign of a weak GDP, the US loses influence, etc. But to me, it's like anything else. If you run a deficit at the appropriate times, it's simply smart investing. If the USD is strong, then our purchasing power globally is increased significantly. During those times, we should be buying more from foreign countries than we sell. We get more for each dollar spent. It's awesome. If/when the dollar weakens, we should increase output to export more than we spend so that we get those dollars back on the cheap. Aside from the theoretical scenario above, consider this. The balance of trade figure is inherently flawed, because it only shows the import/export of physical goods/merchandise. It doesn't give any perspective on value generated any other way. Consider another theoretical scenario: You're a 18 year old kid living out in Houston Texas. Since the US is able to put its strong USD to use importing oil, it means that you don't have to go work in the oil fields. This frees you up to go to college, go on to get a graduate degree, and then you move out to Silicon Valley and start the next Facebook. Now, through your life you've been an obvious net importer of goods, because you haven't really contributed to creating anything for export. But does that mean you didn't add value to the country? No way. Just another simplistic example, and by no means is it comprehensive - but I think it illustrates the fact that the balance of trade is just a number, and that number doesn't even come close to accurately representing the shifts of power between the US and foreign countries as you state.

We've run a trade deficit since the late 70s I believe.

Why would he criticize the trade deficit? Interest rates are at record lows and our currency is currently stronger than average. Our buying power is at a historic high while debt is the most inexpensive it's been in history. Running a trade deficit isn't only not a problem right now, it's likely the right thing to at this point in time. Now, if the deficit is perpetual and never shifts back the other way to neutral or a surplus over the years, then that begins to be an issue. But at the current time, I simply don't understand the criticism that's levied at the deficit.

Trump did well?? Holy. The number of things he said that were not just shocking but crossed the line into dangerous schools of thought were innumerable.

Pence. Pence? The guy who supports forced conversion therapy for LGBT children? Wait, not only did he support it, he wanted to divert funding from HIV prevention to conversion therapy. Jesus christ.

I would think there's a pretty obvious point missing from this thread. That point being that no matter how good predictions get, part of the determinant for pricing is what people are willing to pay. And seeing as how insurance has a pretty large psychological aspect (people fear being caught unprepared by the unknown - car crash, death, house fire, etc), there is a level of irrationality that causes people to pay up for insurance. So one would think that no matter how efficient the predictive models get, insurance companies should be able to build margin into their products. Unless you think that people will suddenly and uniformly become completely rational.

I've attached a collection of many of his letters. Makes for a pretty good read. Seth-Klarman-Baupost-Group-Letters.pdf

To be fair, and I'll admit I'm not very familiar with Chou, his letter doesn't inspire much confidence. The section on Valeant is almost cringeworthy reading. It reads like it was written by an 18-year-old college student who fancies themself an "investor"...

Wha? How do you figure that? Maybe if you distributed the demand across the entire day. But that's not an accurate way to look at it. Most people need transportation at roughly the same time as most other people. Commuting to work, commuting back from work are the two main times that come to mind. How are you supposed to spread your 3 cars across 30-40 people for a morning commute? Simply doesn't make sense. Also, you're assuming that once autonomous cars hit mainstream, everyone will want to car-share. Huge assumption that I simply don't think will be the case. I think plenty of people will still want to own their own car. I also think your longevity assumptions of 600k to 1mm miles are way out of whack. I think your assumptions and the conclusion you've drawn are absolutely insane.

Man. I think it's crazy not to be hedged in some capacity with vol this cheap...I know I certainly bought vol recently with the VIX around 12. I would have to imagine most decent funds out there are counterparties to the pensions selling puts. It's become a very cheap way to protect a portfolio.

Come on guys. Look at the data instead of just parroting headlines back and forth at each other. There is no subprime auto bubble. Subprime auto securitizations are performing better than they have historically. The information is all public. Looking at SC's newest ABS summary, cumulative loss rates for recent vintages are actually trending at some of the lowest rates vs historical vintages at comparable points in time. Consolidated credit performance is normal. Performing collateral appears normal as well.

Is there any way to track Acacia's holdings?

Titan - I posted how to fix your problem almost 2 weeks ago. Try it.

I'd argue they're not mutually exclusive.

Hate to break it to you buddy, but we've been in a bubble for the past few years...

This is true, if you're highly confident in the value of the stub. But it still requires all of the other parts of the trade to go your way in order for the timing to work out. This isn't like arbing a bond by selling strips and buying the bond. You need the market to act rationally to realize value in these types of investments. I've tried structuring these types of trades before and there are just a lot of things that have to happen, and you have to assume the market is rational, in order for the trade to work out. So personally, not a fan. If it's your thing, more power to you.

Thanks for the clarification. I trust you've done the analysis - though this idea isn't my type I appreciate you bringing it to the forum.

I did look at the 3 statement model. Not my intention to sound overly critical, but your model doesn't really analyze anything. It just summarizes the financials. For example, SPNS and MGIC have very similar margin profiles and while SPNS is growing slightly faster does that really warrant valuation premium of >100%?? I mean I obviously haven't done a ton of work on these names, but right off the bat that seems a little crazy. I just don't think your model is much of a model, if that makes sense.