scorpioncapital

We seem to live in a world of more volatile currencies. This leads many companies I see today to report on 'net basis' and 'constant currency' basis. I read the wikipedia, etc..but am confused. Is this the next shoe to drop like SBC not being an expense? If a company translates net profit using non-market foreign exchange rate is it real? It seems similar to accumulated comprehensive income. Insurance companies dump unrealized gains/losses here. Now with companies if they operate in foreign currency, is that currency sitting in that foreign currency and so will reverse if the base currency (say USD) goes back down? Until that time - IF that ever happens (might take years or decades right?) should we assume the net real reported growth rate? In other words, currency impacts, unhedged, should be part of the business management's performance right? If they had hedged their exposure they'd report better results. Strangely I have seen some US companies report higher reported growth than constant currency growth and vice versa. It seems some companies benefit from a weaker US dollar and others from a stronger one. So if a company has say 5% growth rate in real time terms and 10% in Constant currency, what is the true picture of the growth rate? How would you value the company growth rates given currency issues? Ignore it or assume it is a real hit for valuation growth rate for a sequence of years in your DCF calculations?

and you can add on the extra 6500 or whatever will be next year's additional room.

Love the point about the lesson. Some are slower or faster to learn it, but when you learn it on your own skin, it is there for good. But even in a failure we have to ask what made us do it or stay with it. Usually the reason is not half bad, but there is probably a better way to fulfill that need. Cheers!

people are like this is all over. i don't think so . can anyone say why the stock market won't be at this level in 2030, even after many up and down distractions? Traders market it seems.

Wonder why he is slowing down the buying even though it is within his juicy target range. Does it imply not 100% confidence in a full buyout? Another reason? No rush because range-bound? No desire to go above 20% ever?

"The couple has high expenses including eating out, transportation and music festivals, but, according to the host, there is no way they will change those things" I think there is something strucurally wrong with the society if you can't do these lifestyle things and still have a home.

I think there are some strange issues with how each country can set their rates. Look at the margin rates at ibkr - https://www.interactivebrokers.com/en/trading/margin-rates.php Notice the cad rate is 0.5% higher than the US rate. After a 100 bps hike. And US will hike 0.75 to 1% next week. There seems to be some mechanism issues in the actual market rate vs what the central banks are targeting? I wonder if this may be the focal point of the next crisis where some bank sets a rate of x but they can't get it within some % of x?

You have added alot just by suggesting a basket approach. This is key if you want to do it safely since there is an expected positive payoff. I am not sure if you can have a case of this time is different where the traditional majority of deals closing suddenly break not according to statistical history. I believe even the pandemic did not lead to such a result. Another way to think about it is to position size quite small if your goal is simply to say preserve your cash. At the current time this would require around a 5-10% annual return from this operation. So you can work backwards from that goal to find out what position sizes and spreads you'd need to top up your cash. I am not sure if this entire operation is better or worse than holding a TIP etf however.

I sort of agree. By making unemployment go up a bunch, productivity down and gdp growth stagnate the CB would be sending a political message that the government needs to wise up. However, the backlash (since the people and government control the government presumably) tends to create populism. I am not sure a cb can be independent in a democracy if things get bad enough, they'll just vote themselves into a banana republic!

"Lots of people are in shock right now. Most felt that with all the debt being carried by consumers in Canada there was no way the Bank of Canada would be able to increase interest rates like they have been doing" Unlike the USA, BofC has a sole, not dual mandate. I interpret this to mean, we have no problem to run our population into the ground in a massive recession as inflation is the only mandate. The States has to balance unemployment with inflation to some degree. Of course the mandate may change and/or the inflation target may be moved up. Read an interesting opinion in WSJ that to avoid a recession the US (and probably Canada) would need to raise the inflation target to 4%. Of course that also means your money is wasting away faster.

From a theoretical angle, is it better to invest in commodities or value-added companies that sit slightly above the commodity layer? Or even higher? Is it better to own an oil stock, a semiconductor stock, a cloud infrastructure stock, or an app on that infrastructure? Is abstraction more profitable? Or perhaps the division should be recurring revenue versus capital goods one time sales?

20x in like 150 years seems rather slowish. I mean its all great from a detached pov but if you somehow live or seek to live off wealth it has to happen faster I think. More like Microsoft from mid 80s to today. That's why growth is always prized. I never believed in value stocks even under high inflation, of course a high growing value stock is the gold mine if it can be found.

Why not? Since inception around 2014, Woods has outperformed Burry, even with this year's steep loss.

Personally I don't think he's very wise. 200m may seem alot, but Cathie Wood is running 23 billion.

If raising 2-4% causes recession 35% of the time, and we have raised now 1.75% total (from 0%), and we are in recession (seems likely 2 negative GDP quarters or close) then we can conclude we are in that 35% of the time. Even more scary it is below the 2-4% raise traditional range - probably due to massive global debt. This suggests to me we will get less and less raises, and catastrophic financial disasters at lower and lower rates. negative rates seem they are coming with cbdc? )

such small positions. a few million here and there. he's not very rich is he? )

They should tell everyone when the market goes up - exact date and time, and when it goes down, timestamp too. Rate changes and amount. That way we can all have our guarantees ) But seriously, hyperinflation and inflation only works if covert. It must be definition be deceitful.

is the thesis here that low inflation suddenly makes all stocks more valuable again (or, to be less politically correct, overvalued again)? If inflation averages 4% instead of 2% for years and years, I would imagine p/e multiples will not get so out of hand, and may even be subdued, putting a ceiling on prices that have been very high for the last 20 years

You know I used to look at stock charts from a few decades back and I saw periods where the stocks literally flatlined...for years if not decades. It was uncanny. I wonder if something like this can happen again. If you look at these charts its like flat for 20 years and then everything shoots up.

if so smacks of desperation.

Viktor Shvets at Macquire thinks not just payments will be disrupted but the entire concept of banks. He thinks banks will have no reason to exist for the allocation of capital into the economy when there is CBDC. I see scary disruption in every direction. Heck, I even see disruption in fields that haven't even started yet really! like gene sequencing. i see a gaggle of competitors on the heels of every industry, new or old. This is scary times for moat investors because if the value of moats all flatten to a pancake then perhaps management efficiency becomes the superior variable. This would seem to argue for lower interest rates across the board though. It seems that the entry of competitors may be somewhat sensitive to economic variables therefore the more recession/inflation /etc..there is, the harder it may be for new things to get entrenched, favouring the moaty stocks like visa/mc.

seems like everything is getting cancelled. cancel culture has come to stocks!

could it have something to do with ability of people to live in other places or even outside the country?

"$15,000 - Pre-Tax Investment look through" Look through earnings would seem to be represented by the change in unrealized/realized capital gain/loss declared each year. Otherwise, how do you access these funds , as they are internal to the company. Even if they do buybacks, it still shows up in carrying value.

So bills did yield 7% in the 70s? I am not sure if holding cash in a money market won't eventually get to be a return (almost) the same as a i-bond or any shorter term bond. But the escalating phase takes some time so maybe that is why people buy a TIP or 2-5 year bond, trying to time the rate of acceleration of rates.