ValueArb

France's population in 2014 was slightly smaller than Ukraines in 2022. In the first month of battle (August 6 - September 5) they took about 330,000 casualties in the Battle of the Frontiers. Then they took another 250,000 casualties in the 7 day battle of the Marne (September 5 - 12). They ended up with about 300,000 dead in the first 5 months of the war, and 650,000 dead in first year and a half, so maybe 2M casualties? It just shows how much a people will sacrifice to defend their country when they are truly motivated.

Who said the spring offensive would destroy Russia? I always thought the western military leadership has been pretty conservative on setting expectations.

I read his bio to my kids yesterday, quite an inspirational guy who shows you can accomplish great things if you put your mind to it, and not to let wealth become chains.

I would argue Burry didn’t get even one macro call correct. His bet was based on analyzing the credit quality of borrowers in mortgage trusts, observing riding default rates and make a reasonable inference about what would happen when their ARMs reset. AFAIK he didn’t place any bets against thy banks, or for a recession, etc.

Come on, Wikipedia isn’t an authority on anything, it’s a crowd sourced compendium of claims from investigators who refuse to reveal their findings and methods. I already posted a link to a description of how the explosions could have been caused by methane hydrate blocks at high speed triggered by attempting to clear the pipelines from a single end, just as Gazprom would hace done to prep them for possible use. Even the investigators say things that unwittingly support this possibility. “Two Danish engineers with expertise in pipeline construction argued that the highly pressurised gas released by the explosion could have both bent the severed pipeline ends and formed the crater in the seabed”

I don’t know what his investors expected him to do or whether the big short was outside the parameters of what he was allowed to do.

I think there is a great detail of doubt. Accidental explosions produce similar damage as intentional explosions. No one has any credible motivation to sabotage the pipelines, Gazprom has a long history of similar accidental pipeline explosions due to its incompetence, there is little incentive for investigators to say it wasn’t sabotage, and I haven’t seen any evidence they investigated the possibility of an accident or even had the proper industry tech experts involved.

If you are considering an investment that almost certainly requires you predict future interest ratesm or oil prices or any similar macro price movement, I have six words for you. Index funds and dollar cost averaging.

Can you be more specific about what who refuses to answer? Because for one big problem, its unclear whether anyone bombed the Nordstream pipelines. https://thelawdogfiles.com/2022/10/nordstream-ii-electric-instapundit.html

If he's not a hero then no fund manager is. He beat the market by 28% a year for six years before he even found the Big Short. Combined it makes him a top tier all time great investor. His record since is unknown since he disavowed running outside money after the Big Short experience.

It was. Top Speeds (according to Wikipedia): F-35: Mach 1.6 F-104: Mach 2 F-22: Mach 2.2 MIG-25: Mach 2.83 The F-104 was a little hot rod that could climb like a scalded cat. It was also very dangerous to its pilot. First version had a downward firing ejection seat because they didn't have one that could clear the tail, but also had problems with compressor stalls on takeoffs on hot days, so that was pretty much an end of life accident. It also didn't have very much range, and needed its afterburner to go Mach 2 which drained the tank real quick. The F-22 isn't just faster than the F-104, it can fly supersonic without an afterburner giving it a far greater range while supersonic. And it's stealth, but costly, expensive to maintain, and loses like 3 weeks every 2-3 months to required refurbishment of its skin. The MIG-25 was a huge sled that was super fast, but not maneuverable or stealthy and had a short range. It was built to intercept B-70 Valkyrie Mach 3 bombers, but they were canceled years before it was finished. It did have a huge and powerful radar, and was replaced by the very similar MIG-31, a two seater with more advanced radar that they are still using today to launch Kinzal missiles at Ukraine. Ukraine can't shoot it down because it flies so high and fast. Finally the F-35 is very stealthy, has a good range, is cheaper to build and maintain than the F-22, and has a both a carrier version and a vertical takeoff/landing version for the Marines. It can't supercruise and is nowhere near as fast as the F-22 but we can afford to fly more of them and they should have a high readiness percentage.

One of my favorite free markets vs. communism stories is that of the Russian communist party. Tsar Aleksander had freed the serfs, to an extent, giving them their own small land tracts and allowing them to leave their lords domains if they wanted to for the first time. Russian agriculture output gradually improved (still far from a pure free market, serfs were required to make payments to buy their freedom/land, the plots were too small to be efficient and many were still collectively farmed). But in 1918 the Russian communists had control of much of what was left of Russia (after ceding mass amounts of land to Germany for peace) and were locked in a brutal civil war with the Whites to keep that control. Food was expensive and scarce for the army and the urban proletariat that made up the communists main political support. So they mandated that all excess production from the serfs be handed over to feed the proletariat and army. They sent armed bands led by Commisars through out the farms to seize any excess grain and other foodstuffs. And they arrested anyone they arbitrarily decided was hoarding, shot anyone who resisted, sometimes with their families, and of course occasionally raping peasant women because they could. Sometimes when they found a farmer with just barely enough food to feed your family, sometimes they would still call you a hoarder and take it all as "excess". And you might ask, well how did the Whites lose the civil war when the communists turned the entire rural population against them? The Whites were WORSE, they conducted pretty much the same type of raiding, theft, murder and rape, and also confiscated the farmers lands as the Whites were led mostly by clueless Tsarist elitists and former royalty who were trying to restore their lands and properties without a care for anyone "beneath" them in social status. So after the communists won, a couple years of bad weather created massive food shortages and famine that killed millions. They finally realized that the farm production was fraction of what it was under the Tsars because farmers had been beaten down to learn to only produce the minimum to feed their own family and not to stockpile production against bad years because any excess would only get stolen. So they switched back to a free market and allowing farmers to sell excess, and voila, production recovered. Then when things were getting much better, it became a bit embarrassing that the "communist" party was allowing so much capitalism to exist. The smartest and hardest working farmers were becoming wealthy, as well as traders, transporters and others involved in the entire system of selling farm production to the urban centers. They grew afraid that they were creating another elite class that would subvert their grip on power and lead to their replacement by a more mainstream political group. And despite the increasing production the Russian and Ukrainian farmers were far less productive than western farmers for two reasons. One was there were a lot of small farms that emerged from the serf system, and also they trailed substantially in mechanization. This isn't surprising, these people had just emerged from a system that kept them uneducated, many couldn't even read, and their initial plots were tiny. It takes time for plots to be sold and combined into larger farms, and for farmers to produce enough to save enough to reinvest in mechanical harvesting equipment. So one approach would be to encourage capital formation and farm sales/combinations so the market would improve naturally, potentially even rapidly, over time. But spoiler alert, Stalin didn't do that. He thought he could kill three birds with one stone, forcibly collectivize the farms to grow them to larger and more productive sizes, while wiping out the new bourgeoisie (which he called "kulaks") and the political threat they might present. And guess what, it didn't work. Instead it lead to another plunge in farm output, and an even greater famine which the Ukrainians remember as Holodomor and many regard as a genocide being that it killed 3M to 5M peasants. Stalin regarded it as a solution to a problem, since he hated and distrusted peasants. So the communists in Russia learned the costs of socializing agriculture twice within a decade, and still ignored the lesson because real world results that conflict with strongly held political beliefs are commonly rejected by humans throughout history.

So the guy responsible for the Nasca, Peru alien mummy hoax had the balls to try to run another one? https://www.snopes.com/fact-check/alien-mummy-peru/ I've also read that some of the team associated with this new hoax were involved in the Alien Autopsy hoax. https://time.com/4376871/alien-autopsy-hoax-history/

Wow, this thread is a blast from the past for me. At the same time it started on Amazon I self published a short story written by my youngest daughter, with illustrations by her older sister. It was a great experience for her, and got rave reviews (from all her relatives;). Highly recommend it as a way to memorialize something your kids created that you are especially proud of. https://www.amazon.com/Sleeping-Fish-Haven-Hill/dp/1546690360

Fastest? I think you mean best, though the F-22 might be better in some roles.

I didn't truly understand value investing until I was 37 years old, and barely invested in anything before then (other than sweat equity in startups). Since then what has changed is mostly different ways of finding good ideas and a better understanding of market mechanics (options, warrants etc) and an increasing circle of competence in understanding how different types of businesses earn their profits. For one embarrassingly dumb example, I didn't really understand until my 40s the obvious fact that current earnings were almost immaterial to the value of resource based companies like miners and oil companies, what really counted is how much they have left in the ground, what it would cost to get it out, how long it would take, and what it would sell for when they did.

ARM went out today and is trading at $60, 100 times earnings and 24 times sales for a shrinking business. The bull market is still strong!

Same place as always, microcaps and nanocaps.

Thank you, it is very gracious of you to share your work.

https://www.wsj.com/business/energy-oil/americas-wind-farm-revolution-is-broken-fa82d64e?mod=business_feat5_energy-oil_pos1 "Even with generous green subsidies, offshore wind projects are being called off as developers struggle to make a profit"

Not a huge sample size.

Excel. I input my estimated intrinsic value along side the price, and it auto-calculates the discount to IV for me. Every morning i sort based on discount level to see what are most attractive to purchase or sell. This is also important because its linked to my individual spreadsheets for each idea and when I occasionally update my IV estimates I don't need to also remember to update a static range in my watchlist sheet. And I'll keep track of share counts for anything I own and calculate percentage of portfolio as well, etc, etc.

My Forex Funds Two stylized facts about the foreign exchange markets are: It is very hard for retail traders to reliably make money trading currencies, and They keep trying? From first principles, it seems like a good idea to be on the other side of their trades. If retail traders want to buy pounds, sell them pounds. If they want to sell yen, buy yen from them. Etc. If you do this as a full-time business, you will want to make some refinements. Here are the three main refinements: It can’t really be the case that retail investors lose money because they consistently bet the wrong way on currency movements. (That would take skill!) They lose money because (1) they make essentially random-chance bets on currency movements, with zero expected value, and (2) they lose a bit of money on each trade from commissions and spreads. So, if you are in the business of trading with retail traders, make sure to charge them lots of commissions and spreads. Meanwhile you don’t want to incur the costs of going out and buying yen, pounds, etc., each time your retail customers do a trade. Ideally you will “bucket” their trades: A customer comes to you and says “I want to buy $1,000 worth of yen,” they give you $1,000, and you say “okay great you have 14,400 yen in your account.”1 You don’t actually go and buy them any yen (you just make a note in your books saying that you owe them 14,400 yen), and they don’t actually want yen (they just want to bet on the price). They will eventually close out the bet by selling you the 14,400 yen back for dollars, and when they do you will cheerfully deliver them, like, $970. You keep their $30 loss as your profit. No yen are ever involved. You will want them to make leveraged bets: Instead of giving you $1,000 to buy $1,000 worth of yen, they give you, like, $100 to buy $10,000 worth of yen. Then if the yen moves against them by 1%, they have lost all their money. If the yen moves in their favor by 1% they have doubled their money, but the odds are in your favor. The straightforward way to combine Refinements 2 and 3 is to trade FX futures, where the customers put down a small amount of collateral to enter into a contract with you that pays out based on the price movements of some currency pair, so (1) the trade is leveraged and (2) you never have to go out and actually buy any foreign currencies. FX futures are a very standard way to trade currencies, so customers will be happy to trade them with you. It should go without saying that none of these refinements are legal advice.2 You can make further, shadier refinements. For instance, if your customers are only trading with you — if you never go out and buy any actual currencies or do futures trades with outside dealers — you might think, well, it is not strictly necessary that the prices I charge customers reflect actual market prices. They could just be different prices. If yen futures currently trade at 147.4 and a customer comes to you looking to buy yen, you sell them yen at 146.9 to the dollar. Why not, who cares, it’s all just happening on your own computer systems. You have to be careful with this: You probably have to show your customers some screen of bid and ask prices before they trade, and if you show them that yen are 147.5 bid / 147.4 offered and they hit “buy,” they might be puzzled to get only 146.9 yen for their dollar.3 But (1) they might not be (not everyone pays attention) and (2) you can explain it away. “Ah, price impact, market slippage, the market was at 147.4 but then your big buy order moved it,” you can say. Another important set of refinements is: Some customers might actually be good at trading foreign exchange, and will cost you money; what do you do about them? Your answer might be some combination of: Shut down their accounts. Jack up the commissions, spreads, fake prices, etc., that you charge them, so that they start losing money. Stop bucketing their orders, route them to real markets, and let them trade with their own money with someone else; you charge commissions but no longer take the other side of their bets. The last important refinement, of course, is that you probably want to lie about all of this? “We charge zero commissions and all of our customers make money!” might be a lie, but it is a better pitch than, like, “we have found a maximally efficient way to fleece rubes like you.” Everything else I said above can get you in trouble — none of it is legal advice! — but the lying is its own separate way to get in trouble. On Friday the US Commodity Futures Trading Commission brought a fun enforcement action against Traders Global Group Inc., which runs an online FX trading platform called “My Forex Funds” that “offers retail customers the opportunity to become ‘professional traders,’ using Traders Global’s money to trade against third-party ‘liquidity providers’ and sharing in any trading profits”: But Traders Global is allegedly on the other side of all the trades: The CFTC’s complaint hits all the highlights. There are commissions of course: And customers make leveraged futures trades, maximizing their likelihood of losing all their money and having to put in more: There is, uh, slippage: And there is the handling of profitable traders, which involves dialing up the slippage: And then, if that doesn’t work, routing them to other counterparties so they are no longer Traders Global’s problem: All the good stuff. I guess one question is how much of this is illegal. The bones of it — “we will trade futures clients with our customers, charge them commissions, close their contracts when their equity gets too low, and route orders we don’t want to other deals” — seems kind of fine? As long as you don’t lie about it?4 But the combination, plus the alleged lying, is quite lucrative:

From a week or so ago, thought it was interesting in how ARM's price has been "set". Arm Schematically a very good trade is: Buy 10% of a private company at a $1 billion valuation, paying $100 million. Buy another 5% at a $2 billion valuation, paying another $100 million. Now you own 15% of a company worth $2 billion. Your stake is worth $300 million, but you paid only $200 million for it. You have a profit of $100 million. The problem is that, while on a mark-to-market basis you have a $100 million profit, on a cash-flow basis you have paid $200 million and not gotten any cash back. If you sell your 15% stake for $300 million then, great, $100 million profit, but if you were the only buyer at the $2 billion valuation (or at the $1 billion one!) then you might end up with a loss. On the other hand, markets do tend to anchor on the last trade. If the last trade was you buying at a $2 billion valuation, then the best guess is that the next trade will also be at around a $2 billion valuation. If that’s you selling, then, good. I think of this trade — buy a stake in a private company, then buy some more at a higher valuation — as being a specialty of SoftBank Group Corp., mostly because SoftBank did this in a very prominent way with WeWork Inc. It did not work: SoftBank invested in WeWork at a $20 billion valuation, and then a few months later it invested again at a $47 billion valuation, and then a few months later it utterly failed to sell WeWork to the public market at a $96 billion, or any, valuation. (And now WeWork has a public market capitalization of less than $300 million.) Still. In 2016, SoftBank took chip design company Arm Holdings Ltd. private at a $32 billion valuation. Then it sold about a quarter of the company to the Vision Fund, an investment fund managed by SoftBank, at that valuation. And then this month it bought that stake back from the Vision Fund for $16.1 billion, a $64 billion valuation. The Vision Fund doubled its money (in cash), while SoftBank doubled the valuation of its stake (on paper). Yesterday Arm filed to go public again. There are skeptics; the Financial Times’s Lex column writes: To be fair, Arm says that itself; a risk factor in the prospectus warns: On the other hand, if you don’t think that the stake is worth at least $16 billion, it's a bit odd to pay $16 billion for it? Apparently the “prior contractual arrangement” was a cap on the Vision Fund’s return at two times its money; paying out the maximum return just before the initial public offering is a pretty bold bet that the IPO will go even better.

I'd like to see a federal national natural disaster fund to stop politicians from using these disasters as political opportunities to spend our "unlimited" national funds to improve their political standing. A national disaster shouldn't require a special action from the president or congress, we should have a framework in place with defined benefits and include resources like FEMA. They'd send in immediate help, and also be responsible for paying to rebuild. Specifically, the fund would cover all the standard disasters, wildfires, earthquakes, tornadoes, hurricanes, etc. It would charge each state based on their relative size and risk. To ensure the rates weren't manipulated, 20% of the coverage would have to be purchased from private insurers which would set the rates for the entire pool. Have a board of directors elected by the states, who'd be responsible for hiring and overseeing the manager of the fund. No president, no congress, no politics, if any states had complaints they could address them through their board members.