ValueArb

I bought the puts, but the only quotes I've seen where it traded below 70 was during hours today, shouldn't they have been closed out friday? This must be the first time I've ever made made money on puts since I never remember this happening before.

If there was any technique to predicting short term stock price moves with even 52% accuracy, it's adherents would have returns far in excess of Buffett, and be much richer than him. But somehow I've never seen a technical analysis billionaire. ARKK is $65.54 as I write this. A year ago it closed at $146.67. Good thing it's a diversified ETF.

I apparently bought 500 shares of ARKK at $68.22. By that I mean my $100 ARKK Puts were supposed to have expired Friday, and I thought they'd be cash settled at $71 or where ARKK closed on Friday, but instead this happened? I've never seen this before, what the heck happened?

Is the KB Homes CEO a net buyer or seller of KB Homes stock?

You make good points, thanks Greg.

When was the last time a large retail broker failed? Lehman Brothers? I think the risk is very small, for any established broker I would not give it much thought. If I was at Robinhood, well, I would give it quite some thought.

Do you recheck your thesis if someone is willing to sell shares to you? It's a similar thing. I don't put much weight into academic studies but there have been a few that says high short interest isn't a meaningful indicator. I think it's like anything, there is always someone with an opposing opinion to yours, that's what makes markets.

Thanks, I have to admit that you blew my mind with that fact that gold has a $10 trillion dollar market cap. If I had known this when I last owned BTC, I probably would have kept it and bought more at $400. I remember trying to justify that it would be worth more but at the time $8B seemed like a huge amount.

Imagine there were only two types of investments available, and you have to pick one at the beginning of each year and hold it for a year before switching. The "safe" types usually pay 10% a year, but they go to zero 1% of time. The "yolo" types return 100% but go to zero 50% of the time. Now you analyze expected value, and see that the safe type is by far the most profitable over time. The safe expectation is 9% a year, while the yolo expectation is to break even. Being a smart, conservative investor, you only pick safe investments. So every year your portfolio increases 10% a year and after 4 years your up almost 50%. But meanwhile, many people (who are evidently less smart than you) pick yolo investments, and some of them have won every year and are up 800%. You decide you want more income, but don't want to take more risk. So you decide to start a podcast to talk about how to steadily generate solid returns. But few listen because they all subscribe to YOLO podcasts by investors up 800% named Chamath. And worse, the 1 in 25 "value" investors who chose your same approach but were unlucky enough to go broke keep calling into your podcast and berating you for saying safe investments are safe, and calling you a charlatan. Thats when you realize you should have been a YOLO investor.

A 60x BTC return in the next 10 years would give it a market cap of roughly $50 trillion dollars. In todays real terms, that would be about double the US GDP, and half of World GDP. Even 20x would put it close to US GDP.

ARKK is a pretty good proxy for the frothiest part of the tech bubble and it's at $86 right now, down about 45% from a $160+ peak in first half last year. SPCE is at $11.92 down from the 60s, PTR down to $16.90, WKHS, $4.12, etc. It's a bloodbath out there.

Even if I put 3% in crypto, what difference would it make? I'm expecting to generate high returns from my portfolio because I've consistently been able to do so. Crypto returns would have to be insane to make any significant results in my results. If it doubled my stock returns that's only adding another 3% a year. I doubt I'd lose sleep over it. If you really believe in Crypto outperforming your other investment by multiples, you should have a lot more than 3% in it. I simply don't have that faith, especially as stimulus slowly winds down and deflates the balloon. And while the concept of business transactions on the block chain and smart contracts are really cool intellectual concepts, i can't put money into them until I see people actually using them for real products and services, instead of just more ways to grift off speculators.

Wild card is BABA's collapsing margins.

37% with money under management for an average of 9 months. The one account I controlled for full 12 months returned 49%.

https://focusedcompounding.com 's podcast with Andrew Kuhn and Geoff Gannon. Latest covers Amazon & Alibaba, found it insightful. https://podcasts.apple.com/us/podcast/focused-compounding/id1352422076?i=1000546996236

This.

BABA?

If you can finance real estate with a 3.5% mortgage for 30 years, 4% is probably an ok cap rate. But I can't finance my stock purchases with 30 year no-recourse loans. Would be awesome if one could. In the mean-time I need to ride out bad markets.

Sold, establishing large position in PLTR tomorrow. More seriously, every time I run into someone who owns Palantir I ask that same question and I've never gotten a convincing response that they know what PLTR does.

One of the things I've heard recently that zero growth stocks trading at 10-15 PE actually should have a fair value of around a 25 PE. Maybe that's a product of a near zero risk free rate, but if that's similar to what the 50% of value managers are saying I just think low interest rates have made them delusional.

What does Palantir do?

The obvious candidate is Elon Musk. He clearly is a visionary, and clearly created massive value at SpaceX and Tesla. The question is whether he continues to add value. At Tesla it's mostly a production problem now. Musk's overpromises don't appear to be doing anything other than pumping the stock price, Semi, Cybertruck, FSD, etc are all years away. And he's creating regulatory risk, from SEC violations ($420 assured, Hertz contract, fake FSD video) to safety issues with full self driving beta with random customers on public streets. Tesla's struggling to reach it's production goals, factories are delayed, etc and it's EV market share continues to fall (below 14% now). It's only moat is the Supercharger network. At SpaceX his recent contributions appear to be far more valuable, but he's also leading them down super risky paths. Starlink is going to require a huge amount of capital to build and operate, and a large customer base to reach positive free cash flow. Starship was already designed to be the largest launch system in history and he just made it significantly larger in the last week. It makes sense given the efficiencies gained with larger mass launchers, but what's the market for a 150 tons to orbit system, even if it's priced at under $50M a launch? Starship has to solve some tough problems including re-entry, in-orbit refueling for deep space missions, and it's got to be cheaply refurbishable between missions. If they have to inspect and replace tiles like the Shuttle did, it's not going to be cheap. So maybe the go for broke risk taking that made Musk the wealthiest man on earth might not be the type of leadership these companies need now they've achieved critical mass.

I don't do DCFs on potential investments. I've done DCFs to get a feel for how various growth rates work out into long term valuations, but there are so many moving parts that I wouldn't rely on them. i've heard Damodaran does a great job at DCFs, and have been meaning to watch one of his youtube videos to get a better understanding of modern DCF thought process.

I read it but thought it pretty meh. Too much detail, got mind numbing after a while. Barbarians at the Gate had far more interesting characters, or at least went into better detail on the participants so you knew and cared about them more.

It's been said that a business model shift is sometimes a great opportunity. But I can't imagine how this will be a good example.