SharperDingaan

Specialists do amazing jobs, but there is also a need to give kids their space. One of our nephews used to get very frustrated as nobody would play monopoly with him (a favourite game), 'cause he was good at it, and way too competitive. It came to me to break dishes, swap the monopoly money out for Zimbabwe dollars, and play him for hours at a time, both of us picking up $200,000 at a time for passing Go . Sadly, he ultimately went into the computer industry .... c'est la vie! At boarding school, I wore orthopaedic boots as a kid, as I had extreme flat feet, and no arches; it doesn't go well when you're very junior, and now a target. However, you quickly learn to change the game, and there were no more objections after I dragged in a live mamba (poisonous snake) with one of its fangs buried in the heel of my boot. The boots were eventually replaced with oversized ankles and wide feet, that were great for water polo ... disabilities can also be opportunities. SD

These things are just a swap with no expiry date, and a more frequent settlement schedule. But the real market isn't predictions, it's the institutional ALM market. Create a 'unit' with a nominal face value of 1,000 and a nominal term of 1,000+ (proxy for infinity) .... and you have a zero coupon bond with a duration of 1,000+ . Duration x change in yield between MTM intervals = MTM settlement. A duration of 1,000+ ..... multiple times higher than today's typical leverage. Viscous little bastards ..... SD

Think in terms of a modified/re-named version of the Statement of Cash Flows. Reconciliation on the change in the years cash position, bucketed via 'cash flow from operations', 'cash flow from financing activity', and 'cash flow investing activity'. Cash flow from operations: dividends, interest, option premiums, realised gains, realised losses, etc. Cash flow from financing activity: monies to/from UK rental real estate, hotel partnerships (Paris), etc. Cash flow from investing activity: monies to/from partners, broken out by partner. The family funds buy 40% of a partners house, so that the partner may extinguish a mortgage, to free up cash for grand kids .... it will show up as an outflow from financing activity. A subsequent divorce and sale of the house, the 40% ownership shows up as a financing activity inflow. Mortgages on UK rental real estate adjusted up/down such that taxable net income on the property is zero. The change in mortgage balance, flowing in/out of cash flow from financing activity. One of the advantages of also being a CPA .... SD

As the managing partner of our family investment funds, part of our AGM has always been a letter/presentation outlining the thesis behind each of the concentrated positions that we hold; the initial premise, what has changed, expected future pro's/con's, how it has worked out, 6-yr to date CAGR (hold period), etc. Primarily as both a training tool, and as insurance against my having an incapacitating stroke tomorrow. It has worked out very well, and also become a great tool for look-back analytics. The letter/presentation similarly speaks to the overlays of dividends, swing/pair trading, and capital repatriation. Thesis, what has changed, actual vs expected results, reconciliation of inception to date capital repatriations by family member. Primarily for reporting, training, and insurance purposes. It has also worked out very well, keeps discussion future orientated, focused, and the family informed. The hope was that nephews would take over; they aren't going to, and the family is OK with that. Ultimately, the portfolio will hold just index funds, a laddered bond portfolio in run off, UK real estate, and repatriate a quarterly distribution; mechanics evolving as required. I post, as I hold each of a MBA/CPA/CFA, and run the partnership the same way that a CEO might run a private investment business. Expected to have transitioned out well before age 75, and not put my lay person partners at excessive risk. Different strokes. SD

We're still in the growth phase, so both CAGR and total return are monitored. CAGR over various time periods, and with breakouts for dividends, swing/pair trades, and capital repatriation. We need a 12% CAGR if we are to double every 6 years. It will change once we are in the draw phase. Cash yield above the RRIF minimum draw requirements + a ROE high enough to double capital every 10 years net of inflation. Tracking, merely to ensure that we are on track. SD

You might want to keep in mind that we're almost at the end of Q2, a quarter where the average crude price has been very elevated. For most, Q2 earnings will be released around mid August. Today, most companies are priced at what the average crude price was, when the war started. An opportunity SD

Ya come into my kitchen buddy, ya gotta take the heat The art of the haggle was well practiced, well before the art of the deal. Global Inventory will continue to drain, along with high US gas prices, all the way through the midterms. On his own admission, at about a US month of demand left in the US SPR, Orange Boy ain't got the cards. The haggle is just being friendly; recognise the entertainment value, and play the game. Play well ... and we can make you a deal between friends . SD

Agreed Trump wants to go home, just not so sure that Israel/Hezbolah feel the agreement also applies to them. Hard to imagine they aren't going to be tossing grenades. SD

We do a bit of pair trading as well, with each 'pair' being a different asset class (BTC/Oil), (CPG/Oil), etc. Sell the expensive and buy the cheap. Some of it is relative near term prospects, but it adds time frame to the risk; the expected 3-4 months often doubling to 8-9 months. Two sets of stars need to align .... if/when they do, you do very well. Key, is comfort with open exposure .... not for everyone. Some of it is seasonal. Sell the CAD drillers in May to buy CAD beer; reverse around Thanksgiving. Capture the busiest times of the year for each industry. Key is honest and accurate forecasting ... not the what you hope might happen. Not for everyone. Used to do pair trades within the different sectors of o/g itself, but it just wasn't worth tying up the portfolio. Were we to accept the restriction, we could do a lot better on the risk/return. Differeng strokes. SD

+ 1 But that big position had better be a life changer for the amount of risk you are taking .... and you need to be willing to add to it at a 50% decline. Gain in the multiple six digits or higher, and a 'win' that pays off the mortgage ... and then some. Make volatily your friend, and you will also make money your servant .... reducing the anxiety. The squeeze balls, not get squeezed SD

I go on vacation ... and the bottom falls out of the market . Enjoy .... but keep in mind that just as the market temporarily overshot upwards, it will also overshoot downward. WTI sub USD 80, is a trading opportunity, not an investment. The war isn't over yet, all goes as planned it is just on pause .... if Israel and Hezbollah actually stop fighting. Bibi is up for election and needs the fighting to continue. Hezbollah isn't about to stop until Israel pulls back. All benefit from higher oil prices if the rockets continue to fly. Enough randoms to reasonably ensure continued price spikes, and ongoing trade opportunities. Not quite the message being sold. SD

Not much point when the pipe itself, and oil storage facilities are all above ground. Pipe just changes the egress point; if that egress is subsequently blocked, the pipe becomes 'shut-in' and pretty useless. Also keep in mind that the much touted Iran/US MOU is not the end of the war either, it is just a temporary cease fire and rounds of nuclear negotiations at some targeted future date. Other than rotation, it is unlikely that most of the US task force and aircraft are returning home anytime soon. SD

It is quicker to loop around an existing line, pump at higher pressure, and use drag reducing agents; but it still takes months for the new components to be built, delivered, installed, and tested. In addition to which you need new storage at the terminals, to hold the additional flow until it can be loaded. Drag reducers and pressure tweaks on existing line may increase flow 15-20%, but after that .... Announce a big number, and a aggressive delivery date ..... but it's the date of first incremental flow .... not nameplate flow. All hat, no cattle. SD

It takes a lot longer than a year to build new pipe, and the terminal infrastructure required to accommodate it. Most would assume 24-30 months minimum, inclusive of upgrades, testing, and line fill. SD

Most would sidebar this large and restricted position into it's own portfolio; both for the tax possibilities, and to avoid distorting the 'core' portfolio. Thereafter, everything in the 'core' portfolio invested in anything but SaaS. What you do with that SaaS position, will very much depend on your expertise and experience in the sector. Long term sell or hold dependent on where you think the tech could go, a decision best made when you also have industry expertise. Risk tolerance thing. Good luck. SD