backtothebeach

Enjoyed the puns in the top posts of this thread: https://www.reddit.com/r/AskReddit/comments/1bc9vz8/what_is_badly_named_and_what_is_a_better_name_for/

Interview with Perplexity’s founder and CEO: https://podcasts.apple.com/us/podcast/invest-like-the-best-with-patrick-oshaughnessy/id1154105909

Bought SGOV for the first time today with some excess cash. With a buy limit at the Ask, I got filled at the mid-point. Nice surprise, I wonder if that is normal, since SGOV does not fluctuate at all during the day.

The Japanese trading house investment is truly a masterpiece. Purchasing high, durable dividend yields, with hedged currency, using almost free money. After a 30 year sideways market, right before take off. Stunning.

I think it depends on the exchange. On IB odd lot orders for FFH:CA don’t show up in the NBBO, and often get filled at favorable prices between the bid-ask (and I remember one time when a buy order was filled below the bid). With orders for FRFHF every single share is shown in the NBBO. I often use hidden orders on US exchanges, even though I’m not exactly sure how they work. Does Interactive Brokers match them internally, or do they catch other hidden/limit orders at the exchange? Not advertising your intention to buy/sell openly seems to be an advantage sometimes.

BOXX, SGOV and BIL have pretty much identical performance (dividend adjusted charts below). I'd be nervous about unexpected risks if I had a lot of money in BOXX. The tax aspect, if it holds, makes BOXX superior if you live in a tax advantaged jurisdiction. I wonder if, when buying SGOV on the first of the month and selling it on the last, the gains would be treated as capital gains or dividends with withholding tax.

This thread was started in August 2021 with the title “The TOP is coming”. In retrospect that was actually a great call, the market topped out in November 2021. Then, close to a market bottom, I think in May 2022, Parsad renamed it to “Is The Bottom Almost There?” The market bottomed in May, but made another even lower bottom in September 2022. Still, I think another good call. Not sure when exactly it was changed to the current title “ Have We Hit The Top? “, but it was way before a new all-time high, IIRC with the S&P around 4200, so in retrospect a very premature call. Just goes to show how difficult these calls are… and how difficult it is to be confidently bullish after a bear market, even when all the bullish trends are all in place. E.g. the index above it’s 200 DMA, etc.. I think after the GFC it was similar, it took a long time for people to regain confidence.

Thanks guys, will check them out!

Apple's podcast app is really starting to piss me off. Every couple of weeks it just reverts its settings to default. The skip back/foward time changes, and above all it reverts to continuous playback. Any recommendations for a better podcast app? What are you guys using?

A lot of excellent points above! To the original question, one aspect not mentioned yet, is that buying a large position in Berkshire for the long-term basically meant admitting that you are not that great, and that Warren Buffett has a better shot at compounding your money. Even though it is Warren Buffett ... there is some humility in this. --- Here is a neat tool for comparing Berkshire with SPY (dividend adjusted). You can drag the left edge of the slider that says '200 days' to the left to see any time period: https://stockcharts.com/freecharts/perf.php?SPY,BRK/B.

Sold excess FRFHF that I bought during the Muddy Waters dip.

Q: who are the investors that participated in perplexity ai's first funding round A: (by perplexity, removed footnotes) Perplexity AI's initial funding round included investors such as New Enterprise Associates (NEA), Databricks Ventures, Elad Gil, Nat Friedman, Pieter Abbeel (AIX Ventures), Yann LeCun (Meta), Andrej Karpathy (OpenAI), Ashish Vaswani (Transformer), Amjad Masad (Replit), Clem Delangue (HuggingFace), and Oriol Vinyals (DeepMind). These investors were involved during the seed stage and the Series A funding round before the company gained significant recognition and value.

In the last few days I have heard perplexity.ai being mentioned in various podcasts, and now here on the board in the Google thread. The name sucks IMO, but this could catch on. Maybe they find a catchy name for their engine that could become a verb... Private company for now. From Wikipedia: "Perplexity was founded in August 2022 by Aravind Srinivas, Denis Yarats, Johnny Ho, and Andy Konwinski.[7] Aravind Srinivas previously worked at OpenAI and now serves as Perplexity's CEO.[8] "Perplexity has raised $73.6 million in a Series B funding round, led by notable investors including Nvidia and Jeff Bezos. This investment, part of the total $100 million raised so far, has contributed to the company's current valuation of $520 million.[15][16][2][17][18] The investors so far include New Enterprise Associates, Nvidia, Databricks, Bessemer Venture Partners, Jeff Bezos, Susan Wojcicki, Jeff Dean, Yann LeCun, Andrej Karpathy and others.[19][20][8][21][18] Despite this high valuation, Perplexity has fewer than 40 employees.[19] It has garnered about 10 million monthly users.[22]

My guess is around $1B = 4-5%.

Audio quality is much better here, starting at 52:50 https://seekingalpha.com/article/4671013-fairfax-financial-holdings-frfhf-q4-2023-earnings-call-transcript

Post mortem on this trade: Selling the $40 three more times I ended losing $0.25. It wasn't as much fun as I thought, in fact a nuisance having to watch this p.o.s. stock every Friday in order to roll the short options. Waste of energy - lesson learned.

+1 Pretty much what I figured out about 5 years ago. Only two steps, with an optional third: 1. Buy Berkshire and/or other reliable compounders when they are relatively cheap. 2. (optional) when they are really really cheap add a little leverage, take off leverage when they seem slightly expensive 3. Do nothing Questions to figure out: Which companies are compounders? Which are reliable? What yardstick to use for "cheap". Not too hard for Berkshire. Or even the S+P500 if you happen to catch it in a bear market. Sadly that is boring AF, so I have not been able to stick to only these. Getting better at it though.

Year-end BV should be around $260 per B-share.

Ultimately the feeling that I was possibly cutting a long term compounder short without a really valid reason. Risking a huge opportunity cost long term versus risking a little more downside. A couple of posts on the Fairfax 2024 thread helped.

Bought it back 1% higher. Fuck. i suppose it was a good test to know if I would still buy my position today.

Very rational and makes a lot of sense. Especially the ”avoiding cash burning a hole in your pocket“ aspect.

What was your main takeaway? Are you indexing (part of) your portfolio?

There are many ways to employ leverage, each with its own nuances and execution quirks. They all involve interest as either a direct cost, indirect cost, or opportunity cost. Let’s say you have exactly the cash needed to buy 1000 shares of BRKB in your account: 1. You buy 1200 shares of BRKB, and end up with a negative cash balance on which you pay interest. 2. You buy 1000 shares and go short 2 ITM puts, for example strike price 5-10% above the current share price and expiring in three months. You end up with a positive cash balance on which you earn interest, but have limited your upside. If things were perfect, with a smooth uptrend, you could possibly roll this short ITM put up and out when it expires (higher strike and longer expiration), and basically have the leverage for free or even take in a little extra time value. Unfortunately, it rarely works out like that over longer periods, even BRKB is too volatile. This worked great when interest rates where close to zero, one could sell rather deep ITM puts. Nowadays these puts are assigned quicker once the time value has evaporated. If the puts get assigned, you end up with scenario (1.) 3. Similar to (2.), you buy 1000 shares and sell 2 ATM or OTM puts for some extra income and possibly getting your 20% leverage at a cheaper price if the stock drops below the strike price, in which case you end up with scenario (2.) or (1.) if assigned. 4. You buy 800 shares and go long 4 deep ITM calls (for example LEAPS) that use up the rest of your cash. The time value in the options is basically the interest paid on not having to pony up the entire stock price for 400 shares. Positive: there’s no risk of getting margin-called. 5. You borrow money somewhere else (mortgage etc.), put it into your account and buy 200 extra shares. This way you cannot get margin-called by your broker. 6. There used to be single stock futures, and now it appears there are CFDs (contracts for difference) available at IB with a financing rate similar to the margin interest. However I have no experience with the mechanics of CFDs. For example buying 1000 shares and buying exposure to 200 additional shares via CFDs may or may not have advantages over scenario (1.) above. Feel free to add to the list or correct any inaccuracies.

If your broker is going to margin call you at 150%, I think being 120-130% invested is too much. Portfolio margin at IB, allows you to go up to 500-600% in theory (depending on what you are holding) so your 120% would be much saver.

Undecided. Probably just leave it in cash for a while earning interest, as collateral for short puts that may be assigned. For example a while ago when I needed cash (to buy more FFH!) I switched STLC.TO stock to short ITM puts, which may be assigned at some point.