maplevalue

Bridgewater warns US inflation fight is far from over: https://www.ft.com/content/3489c43d-83ff-413b-9477-dd6c042211f2 I enjoy listening to Bridgewater's macro takes as they seem to take a much bigger picture view as opposed to the sell side economists which seem largely concerned with what the next CPI/employment print is going to be. Will be particularly interesting if late 2023/2024 is finally the year of the 'China reopening' and global economy hot because of it

Truly hard to tell what will happen since the effect of higher rates has not really been felt yet. Gut tells me all levels of government will do whatever it takes for housing to not fall, so could have a period of time where prices flattish, but the cost of a mortgage is crazy high as rates stay elevated. Widely followed analyst Ben Rabidoux noted in a tweet sometime in the past year that he received a tip from someone in cabinet that propping up the real estate market was behind some of the recent immigration changes (cannot recall which one).

I enjoy the 20 minute strength workouts available through the Peloton app. Helps with motivation when you can just follow along to an instructor.

https://www.bridgewater.com/research-and-insights/most-global-economies-remain-in-disequilibrium-requiring-policy-action Interesting article from Bridgewater; reiterating that China stands out as having capacity to ease policy (i.e. increase asset prices).

Am I thinking about the implications of this right, two possible scenarios? 1. coup -> regime change somewhat quickly -> Ukraine war ends soon -> supply chains normalize, energy prices come down? 2. coup attempt -> things can get messy -> heightened uncertainty -> even more disrupted supply chains?

Interesting article: https://www.wsj.com/articles/chinas-ev-juggernaut-is-a-warning-for-the-west-1389f718?mod=Searchresults_pos6&page=1 "How is China in contention to lead the world’s most lucrative and prestigious consumer goods market, one long dominated by American, European, Japanese and South Korean nameplates? The answer is a unique combination of industrial policy, protectionism and homegrown competitive dynamism. Western policy makers and business leaders are better prepared for the first two than the third. " "When Western auto executives flew in for April’s Shanghai auto show, “they saw a sea of green plates, a sea of Chinese brands,” said Le, referring to the green license plates assigned to clean-energy vehicles in China. “They hear the sounds of the door closing, sit inside and look at the quality of the materials, the fabric or the plastic on the console, that’s the other holy s— moment—they’ve caught up to us.” "Still, the threat to Western auto market share posed by Chinese EVs is one for which Western policy makers have no obvious answer. “You can shut off your own market and to a certain extent that will shield production for your domestic needs,” said Sebastian. “The question really is, what are you going to do for the global south, countries that are still very happily trading with China?”

IMO the most likely scenario is when they close out the TRS they end up buying back the stock (i.e. there will be no 'cashing in of the TRS gains'). I think of it as FFH owns that amount of stock represented by the TRS, but it just sits on the balance sheet of a bank for now.

Congrats to all, thanks to @Viking for showing us the way

This is how I think about NTDOY. With the additional point being that one day I wouldn't be surprised if Apple tries to buy NTDOY.

Candidate who is likely to become Mayor of Toronto announces an extra 1% land transfer tax on homes over $3mm (https://www.oliviachow.ca/more_support_for_people_who_need_it_most).

Thanks for sharing this with us. I put this in the pile of financial imbalances that built up over a time period of very low interest rates. Rates have not even gone up that much and some big cracks starting to appear!

Probably look at something in small caps where the opportunity is too small for the big quant funds (ie where most of the quant talent is) to bother taking advantage of.

Slightly different topic, but one of the things I have found interesting lately is we have seen more op-eds from some of the leading newspapers in Canada questioning the wisdom of the government's immigration policy. This would have been unheard of a few years ago. What really caught my eye was this column from the left-leaning Toronto Star. Dear immigrants: Coming to Canada? Here’s what you’re really in for https://archive.ph/vsON2

From the just released 2023 Canada budget.

In my experience doing proprietary trading on the sell side, any given year the vast majority of my P&L was driven by a very small amount of trades (usually 3-5) which were either sized relatively large, or I was able to let run through my initial target. Finding the trades you could size up was key, and in order to do this you need a good understanding of the downside. All this is to say I would be more comfortable with a concentrated portfolio. One technique I have seen is people look at their concentration based on the book value of their positions. I think this makes a lot of sense.

https://www.reuters.com/markets/europe/greece-months-away-investment-grade-rating-says-cbank-chief-ft-2023-03-07/ How times change. Maybe this leads investing in Greece back into the mainstream ” March 7 (Reuters) - Greece is close to regaining its investment-grade credit rating in 2023, after 12 years of relegation to junk status, the Financial Times reported on Tuesday. "We think that 2023 is the year will get the investment grade," Greek central bank chief Yannis Stournaras said in an interview with the paper, urging the country's next government to maintain fiscal prudence. Stournaras told FT he was "confident" that credit rating agencies would upgrade Greek bonds within months should lawmakers signal their intent to maintain reforms and take advantage of a "window of opportunity" to significantly lower the country's debt burden.”

https://www.bnnbloomberg.ca/canada-s-largest-apartment-landlord-reports-record-rent-turnover-in-q4-1.1887499

Eurodollar futures if you can access them will let get this type of exposure.

On the point of it "likely take years to fully play out", you are very right on that from a Canadian perspective since 75% of variable rate homeowners payments are fixed (i.e. payment same, interest/principal split changes, or amortization extended; https://www.bankofcanada.ca/2022/11/staff-analytical-notes-2022-19/). It just delays the pain, but one day these borrowers will have to pay!

Today is a day where one would really think your trade should be working (strong economic data -> high rates -> bad for long duration ARKK stuff) but price action is doing the opposite of what we would expect based on this. May be indicating the tech stuff just got too oversold. (I recently bought SMT which very similar to ARKK...trying to bottom feed).

Took me awhile because had to import things to Quicken across many accounts (which is a bit of a pain). 2022: -12.8% IRR Roughly in line with S&P which looking back was quite a remarkable feat given coming into the year was 1/3 growthy EM stocks which got marked down by 1/3 during the year. Thank you Fairfax Financial (a position which I very fortunately added to in early November). I continue to tilt very heavily non US (relative to the index which is ~60% US) for the diversification.

Watched Tokyo Vice. Great show with some great acting although I didn’t care much for the final episode.

Is it not interesting how the "high inflation is now a secular phenomena" theme emerged precisely after a bout of inflation which was quite clearly caused by shutting down most of the economy while sending out cheques to people to not work. I feel like it's very easy for economists to construct a narrative around high inflation when they can point to the current YoY rate and shout "deglobalization" "demographics" "a new commodity supercycle"...much harder for them to go out and understand the tremendous, and in my opinion underappreciated, efficiency gains from technology happening (for goodness sake Moderna had designed the COVID vaccine by March 2020!). Inflation is a very very very very difficult thing to understand/forecast. Which is why I am coloured skeptical of the new consensus that has emerged around it.

Yes

Two adds to existing positions recently: Morguard NA Residential REIT - one of cheapest REITs out there who are buying back shares for first time since 2016 Scottish Mortgage Trust - a small 'we are past peak inflation' position