backtothebeach

Well apparently only market makers are allowed to fuck around with the bid-ask spread... Got a message from IB about a regulation UMIR 2.2 – Manipulative and Deceptive Activities, asking me to refrain from such. I had bid up FIH.U a few cents, and the new bid was promptly matched with more volume, I suppose by the market maker. Then I canceled my bid and hit the increased bid with a hidden sell order. Don't the HTFs do this all day long?? Maybe not in Canada.

Probably not. But I had good profits on an average cost of around $12, and I still have exposure through FFH. Wouldn’t be opposed to buying it back around $16, if it keeps bouncing around like it has in the last years.

Sold FIH.U. Damn this is illiquid, took all day.

Snapshot:

To be fair, this thread was renamed twice. First it was a cautionary "The Top is coming", which was in retrospect not a bad call in August 2021, when the ultimate bull market top came only 3.5 months later. Then at some stage during the subsequent bear market Parsad posted and renamed the thread to "Is the bottom almost there", also a good call. But yeah, the last rename, don't remember when, to "Have we hit the top" is quite a long time and quite a few % ago.

2x?? Lol. I can manage 1.25x. The second half of the 1994 afternoon session is excellent: “…the economic value of any asset essentially is the present value, the appropriate interest rate, of all the future streams of cash going in or out of the business. And there are all kinds of businesses that Charlie and I don't think we have the faintest idea what that future stream will look like. And if we don't have the faintest idea what the future stream is going to look like, we don't have the faintest idea what it's worth now. So if you think you know what the price of a stock should be today, but you don't think you have any idea what the stream of cash will be over the next 20 years, you've got cognitive dissonance, I guess is what they call it. So we are looking for things where we feel fairly high degree of probability that we can come within a range of looking at those numbers out over a period of time, and then we discount them back. And we are more concerned with the certainty of those numbers than we are with getting the one that looks absolutely the cheapest, but based upon numbers that we don't have great confidence in. And that's basically what economic value is all about. The numbers in any accounting report mean nothing per se as to economic value. They are guidelines to tell you something about how to get at economic value, but they don't tell you anything. There are no answers in the financial statements. There are guidelines to enable you to figure out the answer. And to figure out that answer, you have to understand something about business. You don't have to understand a lot about mathematics. I mean, the math is not complicated. But you do have to understand something about the business.”

Excellent, thank you for posting. I’ve started with listening from 1994. Great for a long flight! “I know, Mr. Buffett, that you've said that you don't read what other people say about the market or the economy. But do either you or Charlie have an opinion about how you think things are going to go? Are you bullish or bearish? You may have trouble believing this, but I, Charlie and I never have an opinion about the market because it wouldn't be any good and it might interfere with the opinions we have that are good. If we're right about a business, if we think a business is attractive, it would be very foolish for us to not take action on that because we thought something about what the market was going to do or anything of that sort because we just don't know. And to give up something that you do know and that is profitable for something that you don't know and won't know because of that, it doesn't make any sense to us and it doesn't really make any difference to us.”

I agree with the discussion, but get your facts straight, almost 4 out of 5 Syrian refugees did not end up in Europe. Turkey took a huge influx. (Source Perplexity) In 2024, the top 10 countries hosting the most Syrian refugees and their numbers are: Turkey: 3,112,683 .Lebanon: 774,697 (up to 1.5 million including unregistered) .Germany: 716,728 .Iraq: 286,099 .Egypt: 156,465 .Austria: 97,939 .Sweden: 86,956 .Netherlands: 65,622 .Greece: 50,759 .Sudan: Hosts an unspecified number of Syrians among its refugee population

Yeah, sorry, shouldn’t have mentioned this. Best to do this stuff in non taxable accounts or jurisdictions.

Cofounders trying to take MAPS private at $1.70, now trading at $1.49. No idea if it is an arb opportunity, just came across it by chance.

Same, I just look at account value, calculating unlevered return would be very difficult.

Example: You are long 100 shares trading at $90, zero cash. You sell the shares and sell a 3 month out $110 strike put at $20.50. You now have zero shares, $11050 in interest bearing cash. You still have exposure to the stock trading up or down, but have limited your upside to $110.50, so it is not an entirely free lunch. Using that cash for withdrawals or buying other stocks with it turns it into leverage. It's the same risk profile as a covered call basically, but different nuances. With interest rates at 4-5% the put is likely to get assigned once the time value is gone, often after a few bad days in the market when the option has gone further in-the-money. The market won't give you the free interest on the cash for long once it seems the put is certain to end up in-the-money. In a tax free acount or jurisdiction there should be no problem, as I understand in the U.S. it is a grey area* if selling a stock at a loss and then selling an ITM put can be interpreted as a wash sale, depending on how deep ITM, how likely to be assigned. *not tax advice.

These annual withdrawal rates are only 0.125-0.2’% per month. Between selling puts or covered calls and trading around I always had this kind of cash laying around. Not many dividends. Also, since IB pays such good interest on portfolio cash, I sometimes converted long stock into short deep in the money puts and had lots of cash for weeks or months until those puts got assigned. 0.125% monthly withdrawal is so little that it doesn’t really move the needle.

year return years CAGR 2014 9.7% 1 9.7% 2015 -10.1% 2 -0.7% 2016 23.5% 3 6.8% 2017 -6.5% 4 3.3% 2018 -25.6% 5 -3.2% 2019 47.3% 6 3.8% 2020 40.8% 7 8.4% 2021 81.9% 8 15.7% 2022 10.4% 9 15.1% 2023 74.4% 10 19.9% 2024 55.9% 11 22.8% It's been 11 years since I decided to put all my funds in the same IB account and try to compound it. Taking more leverage risk than most (like being 200% long Berkshire), also selling puts like crazy. The first 5 years were negative 3.2% CAGR, due to rather stupid mistakes that ate up all the Berkshire profits. (Pro tip: Don't sell large amount of SPY calls thinking there is no way SPY will not drop below a certain level again, then refuse to admit the mistake and stay net short in a bull market, lol). Late 2018 I finally wisened up and did what I knew to be correct all along: Buy compounders when they are cheap, then do nothing. I still had a lot of leverage, and kept selling puts, but generally on more solid firms like Berkshire, MKL, BAM. Also got better at getting out of dubious firms at the first or second sign of trouble, having been burned by CBI/MDR in previous years. The last 6 years have been crazy. I would not believe those numbers if someone told me it was their performance, but it is true. Being leveraged made me super sensitive to risk and I went to "only" 90% long (10% cash) in February 2020, when Covid started to spill over to Italy. I did not know what was going to happen, but I knew there was too much risk on the horizon. Last year my returns were dominated by Fairfax' crazy performance, my port was 75-80% in Fairfax throughout the year. Halfway through the year I started to hedge with trading and ultimately staying short more and more December SPY $550 calls. That cost me 3-4% performance in the end, but lessened volatility. It is unlikely I will ever have a run like the last 6 years again, and I repositioned my port two weeks ago, removing leverage, and to "not risk what I have to make more money I don't need". The end goal is to make the port boring AF so I don't have to watch it all the time. At the start of 2024 I began withdrawing monthly for living expenses, the equivalent of a 2.5% annual withdrawal rate. After last year's return withdrawing the same amount is only a 1.5% withdrawal rate. My plan is to take a page from @Gregmal and @dealraker and become a more "passive" investor, focusing on quality of life rather than being obsessed with stocks and the markets all the time. Let the compounding do its magic. It's going to be difficult because what's more entertaining than flicking back and forth between watchlists and watching realtime quotes, trying to find the right moment to roll short puts, and seeing your port fluctuating for hours on end lol.

Even better adjusted for the dividend. Return in 2024: +53% in USD +66% in CAD Congrats to all! A huge shoutout and thank you to @Viking, @SafetyinNumbers, and all others who so generously share and discuss Fairfax here. And to @Parsad especially for making it all possible.