scorpioncapital

If you don't put sufficient funds into your winners -i.e too diversified or unsure, then your result will be somewhat more muted. You need both to be right, a good idea and enough conviction to put a large amount into it - perhaps 30 to 40% of your net worth - but you better be right or else disaster!

So let's say interest rates are really low - and stock valuations are high because people pay a high multiple to earnings. Now, let's say growth rates vary by company - some can only do 5% per year others can do 15%. If inflation hits, some have said that value - or getting your profits out and in large amounts is key and that stock prices contract their multiples. So if I have even a high flying growth stock growing at 15% for 10 years and then the multipel shrinks from 40x to 20x, the result won't be too satisfactory. Likewise, if a cheap stock which only grows 5% has the same multiple, the result is perhaps a little better but not much. Since it isn't a fast grower, the multiple won't expand much. For example let's say IBM is trading at 12x FCF and grows 5%. The multiple may be the same and you get 5%. Or it might expand a little bit depending on what rates will be at the end of the 10 year period. I mean real growth rate here over inflation. Is this what they call the equity risk premium? I found this study - https://www.franklintempleton.lu/downloadsServlet?docid=hmbg58za But it only uses the average S&P P/E and doesn't have a formula for each individual stock and growth rate. It seems that whether there is inflation or not, growth is STILL the most important unknown variable - as well as the ultimate rate of interest (how can one invest not knowing this?). A company that is priced below its ultimate growth rate can expand the multiple and those - like many today, priced above their growth rate may contract the multiple. In other words, is it really true that value beats growth in inflationary periods or is it in fact garp - growth at a reasonable price that beats? On top of this, inflation tends to reduce the growth rate of some businesses versus others, so it's not an independent input. Does anyone know if there is a formula to determine how much contraction in multiple one should expect inputting these variables: ultimate interest rate, growth rate, current P/E ratio - or possibly expansion? For example if bonds are yielding now a p/e of 33 and they go to 20 (5% 10 year bond), what should one expect the p/e ratio contraction/expansion of a stock to be at various rates of growth in earnings?

This would make sense for very competitive industries but wide moat or oligopoly stocks should be fine?

I would look at IB family office account, or something similar.

There have been times when rates were so low that stocks had a 50x p/e...just saying things may be elevated but look at bitcoin as an example of how high a bubble can go.

I'm not sure citizenship matters, but residence. IB is organized with divisions usually by continent...so for example a resident in the Americas (north or south) would go with IB USA, one resident in Europe with IB UK and so forth...I see no reason why it can't be opened , just select your country of residence. Citizenship is just an identification formality usually.

people and institutions have to make up their vast losses in terms of time from the crashes and mistakes of the past. This force is very strong but also blinding to risks and impossibilities.

The joys of living in a country that taxes capital gains (some don't at all) :) I would not let tax considerations determine the optimal investment choice. But one should ask how sure one is of what one believes.

Value has become synonymous with cheap junk. Therefore I'd buy quality in any cycle, anytime because I prefer it even to cheap junk that bounces back.

There are two kinds of valuation - qualitative and quantitative. Too many people focus on the quantitative valuation and then wonder what happened when the perfectly beautiful numbers blindsighted them to competitive problems - or management problems.

Biggest gain was berkshire on 2x leverage. Don't expect a repeat :)

There's a company PCRX whose main product is a new opiod-free post-surgery painkiller.

You can read Buffett's article , something along the lines of 'how inflation swindles the equity investor'. His thesis is that securities are not a good haven for inflation in the general sense. Only a select sub-group of all securities offer decent protection and it is the job of the intelligent investor to study his/her portfolio and think about whether the securities held offer this protection or are going to be below average.

The only reason to own #1 - all net worth in small business is because you think you are going to earn 1000% or 10,000% on a small base over a medium period of time. Since that isn't possible with #2, the question really is do you have any capital to start with or you're looking to create capital out of thin air.

Let's think about this logically. Suddenly these companies have a lot more money, paying less tax. But this could have been done ages ago. Seems to me there is too much money swirling around chasing assets or returned to shareholders via dividends and buybacks. What's it called when too much money is chasing fewer assets or money is indirectly helicoptered to people who own stocks? :)

I think Buffett said this too - when rates are low you can afford to take your money out slowly. In the consumer realm, this means basically carry a debt forever until you die - almost a free lunch on the individual level. If rates are high or much higher, it means you need to get your money - return - out faster. On the personal level this means liquidation, bankruptcy for those who got in last or have income issues - in other words, you run out of time before the goal of dying with the largest debt. If you think about it, it's imminently rational - why would any consumer not stream out a huge debt over their entire lifetime and live off the banks and state and then die with a state old age pension? It's an upside down world :)

So let's call it $220/share - $240/share. And nothing says in a bull market you can't trade at 2x IV or $440 to $480 per share. Although that's not something you are counting on. But an overshoot is also possible.

meltup is value when inflation runs rampant. If it didn't , even a slow rise would actually be a big loss.

"the scrutiny of a central bank – the drug dealers, arms merchants, money launderers, dirty money, etc. And that money cannot get out of crypto – unless you or I buy crypto …. and pay in fiat." In other words the same politicians and the rich - have you seen Panama Papers and Paradise Papers? Even fiat has not stopped anyone. I don't blame them incidentally. Our social systems are so screwy I see more and more chipping away at trust in the system. Bitcoin has a large natural reason for being. I'd like to know if governments can shut it down. Probably there will be some tax haven nations that will benefit by allowing it for their currency or in case Western countries ban it for legal tender like paying salaries and expenses.

Trust me, the hypocrisy in America is nothing compared to countries were literally if you have any amount of capital you can avoid paying any tax altogether, and virtually no capital taxes. I'm surprised not everyone is piling into these nations - although they are to some degree.

definitely #4, especially if you are saying you need this money to pay the bill.

Why should money have a return in excess of maintaining a 0% real purchasing power? It's not like money produces anything, or is a business.

I guess his argument is there is no protection except in high quality businesses that can have a high chance of earning a good spread regardless of changes in rates. Reminds me a bit of the tide showing who will be naked. Now the tide is lifting everyone.

A very bizarre thing has happened with FWONA and FWONK. The k which has the lower voting rights has traded below the a since almost the beginning of the year. It's the reverse with DISCA/K right now. Is it perhaps that in a merger the Ks were given as a currency and then there were selling shareholders and just more holders of K vs A? Would the same thing happen after DISCK/A merger ?

I'm confused about the claim of inflation and real estate values. Some commentators say higher rates mean lower REIT prices, others say, higher inflation (higher rates?) means higher real estate prices that compensate for the higher rates so it's a wash.