Saluki

This is interesting because if you look at the payoff for something using the Kelly criterion, something below a full kelly bet isn't as profitable. But once you go beyond a full kelly bet, your returns start to decline. But with a half Kelly bet, your return is less, but you won't be wiped out. When you over bet, not only is your return lower than a right sized bet, but your odds of being wiped out go up a lot. Rather than realize that he got lucky winning the lottery and taking some chips off the table, he just kept doubling down until math caught up with him. https://youtu.be/qfX35o7v6XY?si=mgYxVPIngvqD2MY-

I've been buying a little every day of some of my very small positions to get them to 1%. I don't want to take big bites until I sell off a couple of things that I went overweight on (I overbought OXY and hope to sell the higher cost shares in a month and get the tax loss and still maintain the position. I also overbought GOOG on the selloff and plan to trim it whenever it gets over 20% of my portfolio, which I should've done before the big drop). Very small positions: CROX, NEP, EPD, VET, PM, and lately RTO and VRRM.

Well if by "30%", you mean that if the index averages 10%, then you get 13%, that's plausible. But if you mean the nominal percentage plus a nominal 30% (40% yoy), then I call BS. Also, unless you can have them trade for you, you won't get there by copying. 13fs come out every quarter, and some investors like Burry churn a lot so you won't get much info from their reports. Some people like Jim Simons at Renaissance or other algorithmic traders may be making hundreds of trades a second, so it's not something you can do without millions in equipment and an army of quants. Second if your personality doesn't match the strategy, you won't be able to do it. Buffett can hold a stock for decades. If you can't, then you will lose patience and sell or "tweak" it a little to improve it and it will destroy the results. Third, in huge disruptions where a lot of money is made or lost you will get killed because you can clone their strategy, but you can't clone their conviction and if you don't understand why they bought, then you won't know if you should sell. Seeing what others that you respect are buying or selling is a good filter if you want to do look further into something. But would you let your doctor operate on you without asking what you have, where they are cutting you open, and why they are doing surgery? Isn't that what completely copying someone is?

If you look at the BABA post you can see that I sold out right before it popped. Ditto for TV. The ancient curse on my portfolio strikes again. Luckily, it's magic works powerfully only in the short term but fades away in the long term. When I bought Coupang it went down 50% before the curse wore off. Scorpio Tankers was down 80% at one point.

Been trimming some STNG.

This is what bothered me about him even before he imploded. People like this usually end up really rich or in jail, with not a lot of them in the middle. I think he's one of the few who ended up in both ends of the tail distribution, so kudos to him for that. Russian roulette has a positive expected value too, but that doesn't mean it's a good idea to play it, no matter the expected value is. And it's morally repugnant to get other people to play it on your behalf while you profit off the results without suffering any of the harm that you are causing others to endure.

This is a scenario that I did not foresee. It's pretty common for clean tankers to switch to dirty at the end of their useful life, but it's usually one way because the costs to switch back to clean are so high. https://gcaptain.com/trafigura-to-convert-more-supertankers-if-oil-market-woes-linger/ It appears that only trading houses, like Trafigura, that own their own fleets are willing to accept the costs to switch because of down time, prep costs and risk of contamination. But if you can switch from carrying people in a taxi to a school bus, that will drive down the costs that taxis can charge. https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/shipping/071224-dirty-to-clean-switch-caps-high-lr2-tanker-freight-rates-as-supply-widens#:~:text=Moving clean products on VLCCs,helps minimize the cleanup costs.

He certainly has a gift for self-promotion. I met him in Omaha at one of the side events during the Berkshire AGM. Surprisingly, I met some people there who cam for Whitney's get together and didn't know about the larger Berkshire stuff going on He did not seem like a bad person, but rather than talk up his own ideas, he always invokes Buffett, Munger and his classmate Ackman as cover, or the old "appeal to authority" logical fallacy. I really don't want to slam him, because I don't think he's a bad person and I think on some level he believes the ideas that he's peddling, and that's why other people believe him too. It just all seems to me like the old "cargo cult" groups in the south pacific. Isolated tribes in the south pacific would see planes come from the sky and drop gifts. Their own gods didn't help them like this so they would build fake runways, make helmets out of coconuts and flashlights out of bamboo and stand there waving their arms like the GIs do and they would wait for the stuff to drop from the sky. Tot hem it looked convincing, but it displays only a surface level understanding of what is going on.

https://seekingalpha.com/article/4719982-international-seaways-tanker-market-updates-seasonal-upside-ahead-podcast-transcript Interview with CEO and CFO of International Seaways. Not one that I own. They have both Crude Tankers and Product Tankers. Thesis is unchanged: Very low order book, which is not enough to replace ships as they are retired. New output from OPEC countries is killing oil prices, but should be good for crude and product tankers because they have to get it to market somehow and these tankers are already in a tight market.

Yes, I forgot about that. Thanks.

It's already a big position for me, but i picked up a few shares in my retirement around US$1000 when it dipped briefly a few months ago and sold it for a quick hit. I think we may get another opportunity here and there, particularly next quarter. OXY is FFH's biggest equity investment, and the new accounting rules which make you take mark-to-market losses and gains and treat them as earnings, not just adjustments to book value. This will surely make FFH's GAAP earnings look terrible this quarter, no matter how good the other stuff is doing. If that happens, I wouldn't mind adding more again in my retirement account and selling when it bounces back, since those moves aren't taxable.

I'm sure that some molecules are very easy to make, which is why counterfeit Fentanyl/Oxycontin is smuggled in from Mexico. I don't know a lot about chemistry, but I'm fairly certain that a lot of things will require precise equipment, temperature and other controls that are beyond most people's abilities, even if they had the right equipment. For example, my understanding is that some compounds are produced and the molecules are mirror images of each other, but the left hand molecule has different properties than the right hand molecule, so figuring out how to get the one you want and not the other is a challenge. Or what about things like mono clonal antibodies? So I can see people meth at home, but I don't things like insulin. There's a book called Future Crimes, by a guy who worked at the FBI. It has some elements of this kind of thinking. Since gene splicing is viable now, and you can implant genes in plants from other plants to produce what you want, why not have a plant on your window sill that has been altered to make cocaine at home? They can't stop it at the border if you can download the directions from the internet. People are already making illegal things like ghost guns with 3d printers, so I'm sure that this will become an issue as tech gets cheaper and AI is there to help you work through the roadblocks that you encounter. "Hey Siri, this recipe for [drug] isn't working. Based on this lab test that yielded these results, what part of the manufacture am I doing wrong, and how do I correct it?"

I think you'd want to have enough that with your strategy it would increase without adding to it, even as you withdraw for your living expenses. Do you know anyone who has a heart attack or stroke and survived? In the US, even with health insurance, your last year of care if you suffer a major medical event will likely cost you more than all your previous medical expenses during your lifetime. You don't want to be confined to a bed and worried about that last $80k running out, or becoming a burden on your kids to pay just to keep you alive, or out of a state funded nursing home.

I don't think that's such a good idea. I know people who love working out or martial arts and end up opening a gym and are miserable. I met a couple who moved to Costa Rica, opened up a surf school and got divorced. Ironically, the cash cow was the shady online credit repair business that they owned before they moved down there, which nobody enjoyed but provided lots of cash and no headaches (the surf school did the opposite).

Here is a guy talking up RedCat. This came out after my post. The thesis is that RedCat is one of the finalists for a military contract. If it's a binary outcome like that, options would probably be a better idea, but this is not a big company, so it will tough to play it. And since it's up 3-4X in less than a year, good luck finding someone to sell you one that isn't outrageously priced based on the volatility. Also, if they don't get the military contract, you are stuck owning a company that you overpaid for because it was pumped on Twitter, and they are late filing their 10-K, so it's questionable if you can trust them. Moreover, even if they get a military contract, the thesis is built on profitability if they can use that contract to borrow money to build a new factory, which will help them produce a larger quantity of drones and lower costs through economies of scale. If that contract doesn't come through, or if does and the new massive capex doesn't solve all their problems, then you're only catalyst is to hope that you get acquired by a larger defense contractor. Too hard pile.

I think it depends on the person and your temperament. If you have a full time job (or are managing money for others) then you have have money coming in which not only keeps you from having to sell in bad times to pay your living expenses, but gives you a psychological buffer. Lets say that you keep your day job and you can find 1 stock this year that will 10X in 10 years. Your returns will be be great, but it will probably be very volatile. Let's say that you quit your job and with all your new free time, you can find 10 stocks that will 10X in 10 years, and you spread your bets around. The return will be the same, but less volatile, and less of an emotional roller coaster. You get that same smoothing of temperament by having a weekly paycheck. So maybe, as someone suggested, keep your job but go part time. Also, consider if your strategy would shift, knowingly or unknowingly, if your job situation changed. Nassim Taleb had an interesting idea, that if you are in a very low volatility job like a government employee, you should be investing in risky assets so you have a barbell like portfolio with the risky assets counterbalancing your safe job. And if you are a musician or an actor, you should buy bonds because Hollywood is fickle so you want a safe investment to balance out your risky career. Knowing what you know about yourself, besides more time to find new stocks, would your method and risk profile be the same if the cash was now what you were living off of?

Yes, I misunderstood. I agree, for people in the middle it makes no sense, but might be worth it for the people on the low end, as you mentioned, or even the high end. One of the Facebook co-founders, Eduardo Saverin, renounced his citizenship because it was a one time hit and he knew his future earnings would dwarf that hit. Also, baby boomers are now dying off and leaving large inheritances to their heirs. If you renounce before your parent dies, those assets are not included in your net worth because your entitlement to them doesn't vest until the parent dies, since they can change their minds and disinherit you. An irrevocable trust is a different story though.

Apropos of this post. The slowest person should go in front, not behind, so that you all travel together. Don't split up. If you don't know where you are, don't keep going. It's harder to find a lost person when they keep moving around. Have a lighter or something to start a fire, to stay warm and also to make it easier for rescuers to find you. Also, I think this guy has a legitimate HR complaint about hostile work environment. "Micro aggressions? No. Macro aggressions. They took me to the wild and left me to die by myself."

The US is one of the only countries in the world that taxes people on worldwide income. That's why a lot of wealthy Chinese chose Canada instead of the US. Let's say that you are a dual citizen of the UK and US and you live in the UK and earn US$500k a year. You are taxed at both the UK and US, but the UK rate is higher and you get to deduct those UK taxes from your US taxes, so you pay nothing in the US. What if you are offered a job at a bank in Dubai for $500k. If you were only a UK citizen, that would all be tax free money because Dubai doesn't have an income tax and you aren't taxed while living abroad. The US would tax you though. In the US you wouldn't pay tax on the first $120k, but the rest is all taxed as US income tax even though you don't live there. If you got to live in Portugal and eventually got citizenship, an EU passport is probably as good as a US one, and better if you want to live in another european country.

While Waymo is still by far the leader in total miles driven, it looks like Zook, by Amazon, is leading in "miles per disengagement." That's the number of miles that you drive before a human has to touch the wheel. https://thelastdriverlicenseholder.com/2024/02/03/2023-disengagement-reports-from-california/ Is anyone familiar with Zook? Are they testing on the highways (easier than a city like San Francisco) or are they racking up miles in a place like Arizona? It seems odd that one company would be able to perform so much better than the others if it was working with a lot fewer cars, and thus fewer data points.

I wonder how much Waymo could be worth in 10 Years. Even if all new cars sold were self driving starting tomorrow, there are still legacy cars that will stay on the road for another decade. As fewer legacy cars are driving each year, the benefits of self-driving get stronger. However, If there were only one self driving company, it would be better than several, because they cars could talk to each other and avoid accidents, instead of trying to predict what the other driver, or AI is going to do next. So if that is the case, and GOOG wins that fight, then auto makers would have to license it from them. Car insurance would get cheaper if you used the car AI that is the most popular because it could avoid the most accidents since accidents wouldn't occur when it encounters another car using it's same AI, but might with other systems that fewer users. Unless different self driving systems could commute with each other. The self driving eco system could become a self-reinforcing loop that broadens the moat. Besides fewer accidents if all cars used the same self driving, the self driving could reduce the level of accidents so low that you wouldn't need such heavy cars or expensive features like airbags. How much would that be worth to automakers? Wouldn't that help with global warming? Lighter cars take less gas and require less dirty coal to make the steel for the car. Traffic jams would be a thing of the past because self driving cars wouldn't crash on the highway, and computers talking to each other are very good at minimizing the space between things moving in the same direction. Walmart and Amazon do this in their warehouses with boxes, why not with cars? Apple watches can monitor your vital signs. Wouldn't it be great if your car could sense that you were having a heart attack and drive you to the hospital while it called them and told them that you are on the way? Google charges me for cloud storage and I'm sure I'll be paying it for the rest of life, now that I've started. Will self driving cars be a SaaS model too? Will people need to have their own cars if you can call a Taxi with Waymo and it would be a lot cheaper than Uber, since there is no driver to pay, and the cars will be used 24hours a day? My brother has a Ford Mustang from the year that he was born, that he restored. He says he'll never get a self-driving car. I'm sure there are people who loved to ride horses who said the same thing. But eventually the costs of upkeep for the hobby outweighed the benefits and everyone got a car.

I think it's oversold, but I'm not sure of the market cap in a few years because of the uncertainty about the fears of a breakup. IF the judge says that GOOG can no longer pay Apple to be the default browser on iPhones. It's possible that most people would still use Google, and that $20bln a year that GOOG would save, at a 20x P/E is another $400Bln market cap. However, if Apple wants to capture some of that, maybe they will come out with their own (crappier) search and make it the default on iPhones. Then how much of that $20bln stays with GOOG, who knows? Google cloud is 3rd behind AWS and MSFT, but it's still growing at +20% a year. How much is a fast growing sticky SaaS business worth in 5 years? I don't know, but it's probably a lot. It wasn't until recently that I started to see a lot of ads in Waze. That brings in ~$500m a year and the moat gets bigger every year as more people use it. What's that worth in 5 years? The Other Bets segment currently brings about $400mm a year if i remember correctly. There are a lot of other bets in there and one of them is Waymo. People love fawning on Elon Musk, but the last time I looked at the two most important metrics, Waymo is way ahead. Those are: total miles driven, and miles driven before human intervention needed. I don't know how much it's worth, but in 5 years I bet it will be a lot more. The prior big selloff was when ChatGPT came out and people thought it would kill Google search. It hasn't. And Google has a very impressive AI of it's own. It's still early for AI, so I don't know what the final contribution will be, but among the most advanced in this space are Google and Meta, along with MSFT. And generative AI and Machine Learning work better with more data. Google has the search by a mile and they also have YouTube for video and sound. That's gotta be worth something to the AI moat. If the court doesn't split them up, but instead makes them make some data about search and advertising auctions available to it's competitors for a fee, maybe that hurts them, but maybe it brings in more revenue. Still in the early innings. I thought about trimming when it got to be my largest position and didn't. Now that it's come down, I think maybe I can overweight it, and if it grows, then keep trimming whenever it grows beyond a certain percent (15%? 20%?) that I am comfortable holding for a long time.

Sold a few META and FFH shares in my retirement account that I bought recently for a quick hit and bought more OXY. Unintentionally sold more TAYD when a resting sell order hit it's price target.

Feels like a broken record, but I picked up more GOOGL and OXY. With pocket change I picked up a few shares of ENVX and CPNG.

I've always liked Peter Lynch's quote about the stomach being a more important organ for investing than the head. Along those lines, here's a related thought by Seth Godin. "If money is an emotional issue for you, you’ve just put your finger on a big part of the problem. No one who is good at building houses has an emotional problem with hammers. Place your emotional problems where they belong, and focus on seeing money as a tool."