SharperDingaan
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Everything posted by SharperDingaan
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The 'tops' thing ..... It's a casino folks. The house is ultimately going to win so long as you keep the accumulating pile of increasingly valuable chips on the table; you need to do systematic material withdrawals, and put the proceeds somewhere. London/Paris/New-York/Milan Grade-A real-estate! No different to commodities; get your original investment back as soon you can, play with just the house money, and always keep the withdrawals in something useful/safe. The cycle reverses .... you still live. SD
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I'm informed .... that the legacy's are daughters, family, and land; quiet, mostly unobtrusive... and nobody can do anything without them. Additionally, the odd masterpiece for the walk-in closet, and surprisingly ... coloured man made diamonds at 5-10 carats+ per stone before faceting. Hard-ass grandma has some of her ashes turned into pink diamonds, cut and set into favourite heirlooms, that will in-turn show up at many of life's on-going big occasions ..... Gotta hand it to her .... there's a certain amount of appeal to this , and it's a lot prettier than a gravestone! SD
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-Your best investments for 2024 and beyond-
SharperDingaan replied to Luke's topic in General Discussion
Just a bump and update ..... 7:1 consolidation over the year, re-branded as ACX.TO, and trading today at CAD 6.32, up 28% YTD ... strong metrics and only 34.9 M shares outstanding. Quietly moved all of our ESI.TO into this over the year, for 2.5x more torque on US/CAD drilling for the same CAD investment. All goes well, 2026/2027 could be a very good year! SD -
Same as every other native coin, ETH has two values; utility, and investment. For utility purposes it does many things well (token wraps), but competition has been steadily eroding its utility value. For investment purposes it was the primary diversification purchase in a crypto portfolio, but its weight in a portfolio has steadily declined as other options have progressively become available. The other choices were NFT, bitcoin farms, etc. ETH did well in an X/15/85-X portfolio; so long as the 85% in BTC rose in price, and the X% declined as the alternatives lost popularity. The presence of the CME options and futures markets in ETH ensured a high minimum weighting; and if those options were sold for premium, created a crypto convertible. While investment value was always greatly exceeding utility value, ETH just needed to continue being used within the development community. Fast forward; today BTC is also a diversifying asset within the cash allocation of a portfolio, and the crypto portfolio is more of a X/50/50-X allocation. Lot less benefit from BTC, and the alternatives are a lot better than they were. All else equal; with less rocket fuel available, ETH is unlikely to comparably perform as it has in the past. With a lot of implications around portfolio optimisation and mostly negative; going forward, most would argue that the existing $ in ETH is better spent as a new $ in BTC. The obvious overlay is a longer term ETH/BTC pair trade done via the derivative markets, with periodic settlements against existing holdings. Just a different POV. SD
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Lets leave it as an object lesson on the immutability of blockchain .... make a mistake, you can't erase it! The real value to this technology is blockchain; BTC is just the payment app that demonstrates the use of blocks on a chain, and bitcoin protocol/smart contracts to chain them. Granted, it's a pretty damn good application! but its only a small part of the whole enchilada. It's new technology, there's nothing else remotely like it, and most all recognise that it is an industrial revolution. Just as cars replaced horse/buggy, and steel/steam replaced wood/sail/water, it's a leap of faith; but if you don't familiarise yourself with it, and it comes about ..... you could get badly burnt in the coming change. Lot of posters on this board were sceptics at first; today BTC is now a material portion of their portfolio, with much of it from rising asset valuation. What could have gone wrong ??? they hadn't learnt further, and remained poor. An added benefit is that some of the posters on this board, go back to near the beginning of BTC in 2008. Step away, put in your hours, then come back. SD
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It's just not a DCF valuation; same as every other methodology, you end up with a number in a given time frame that you have to ascribe confidence to. As usual, one could be bang on with the value .... but way-off on the timing. Sadly, sh1te is still going to happen! SD
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Incomplete phrasing; I would patent the cure and licence it out to one/two pharma's for royalties + stock. The cure becomes available to those who can pay, and I hopefully end up having to file a report anytime I trade the pharma's stock Decades later (after the patent expires) I work with the UN, a low cost knock-off is made available to the 3rd world, and my name goes up on the side of some building. Just a different PoV. SD
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There are other methods ... they are just proprietorial and not public. When you have the cure for cancer ... only an idiot would make it public SD
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You are a portfolio analyst. You would like BTC to be one of the assets in your portfolio. Bonus depends upon it. To optimise the portfolio you use the asset correlation coefficients and Black-Litterman. Easily computed using the last 60 months of data. The optimal portfolio weighting is 22% to BTC, and executed. BTC falls 25%, the portfolio is underwater and under review. Correlations are recalculated, the optimal BTC weighting is found to be 12%; you're fired. Why? You hadn't realised that with BTC in the universe, the correlations weren't stable enough; the BTC should have been ejected. The PM keeps his/her job, and simply hires another portfolio analyst. Sentiment changes; 6 months later BTC is added to the portfolio again. Did it work out as as an investment? ask the portfolio analyst who got fired. SD
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Just to demonstrate a potential 'valuation' .... Assume the halving is every 4 years, and it doubles the price of BTC. The 4-year CAGR is 19%. Assume the money press prints 9% more over the next year (conservative?). Therefore, anytime that BTC rises by more than 28% (19%+9%) within the next 12 months, you're up. Compute the BTC rolling annualised X-week return for Y weeks/months, and assess; thereafter, it's just straight forward technical analysis. All judgement; zero DCF valuation. SD
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One random post ..... ! Folks just can't get past that the price of BTC cannot be supported by DCF valuation; the reality is that it doesn't exist yet, 'cause it's just too early. Not much different to trying to value a relationship ... as many have pointed out. We look primarily to where the puck is going, and try to position ourselves accordingly. Cut losses early; sell when the hot and heavy breathing is just about in our ear; quietly buy back in the aftermath of the big event ... little more than a different application of Agile Project Management. Same as every other hard asset, BTC rises by at least the year-on-year increase in money print. But it rises by even more if/when level II/III use can displace some of the 2nd/3rd world use of USD bills (fiat cash), and/or some of the former monetary gold-standard is replaced with a monetary BTC standard. Each is a fundamental game changer, but it's not possible to accurately value either of them until it's commonplace. C'est la vie. We hold our BTC via a BTC-ETF, and we hold in quantity. Similar to an emerging market fund; when we see extreme liquidity we try to exit, and in quantity .... buying back slowly at some future date, at lower prices and a deep liquidity discount. Low key version of market making, and price has little to do with it. Not for everyone, but it has worked out well for us. SD
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BTC, concentration and the money press thing ...... To get ahead is to not just buy and hold something that will outperform the money press, it is ALSO to trade the price volatility of that thing. Then you need to recognise that the return from trading the volatilty will be multiple times that of holding the asset itself. There is a reason why so many of those who have done well at this, have ALSO seen so many market/business cycles; it's a progression. If you had loaded up when BTC was 57K and sold at 75K (+32%), you have done very well for a few weeks exposure. But for the SAME next few weeks of additional exposure are you likely to do as well by simply continuing to hold BTC, or by swing trading it? Most would say swing trading it. To do well at the swing trade, one has to 1) recognise when it's currently the better of the two options, and 2) have the expertise and risk tolerance to execute. The more cycles you have experienced, the better you should be at this. SD
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US shale production is a function of price, current break-even is around USD 65/bbl. While most would expect Trump to allow fracking, cut regulation/royalty costs on new drilling, and that new drilling to be primarily 'manufacturing' by the majors; it's mostly a wash net of ongoing depletion. All else equal, similar ongoing production, but at a steadily lowering break-even. Not bad. Near/medium term growth largely depends on a new and reliable supply of heavy oil for blending, and Trump allowing the industry to 'flare' surplus gas without penalty. The obvious solutions are 1) Trump reopening the CAD/US Keystone pipeline project, building the remaining relatively short connection piece, and importing tariff free CDN heavy 2) importing tariff free Mexican heavy, and 3) importing sanctioned heavy. Expect a lot of 'real politic'. The 1st mystery is tariffs; if they apply to oil imports, oil for domestic consumption will sell for more, raising domestic production. The 2nd mystery is Russia; Russia/Ukraine war ends, sanctions removed and importation of heavy Russian crude begun, new drilling with western technology permitted. Sanctions on Iranian exports tightened, Iranian production/facilities sabotaged, everyone else takes up their lost production. Price averages out at about the same, even if Iran attacks the facilities of others. Lot of favours need to be repaid; but over the near term, US shale isn't likely to change much. SD
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The real threat is a 'supra' CBDC using a version of BTC protocol, that displaces USD as the global reserve currency. USD devalues rapidly, trade partners competitively devalue; no real short-term change, but the price of BTC (in local fiat) rises as the currencies devalue. Inflation ticks up for everyone, raising hard asset values (real-estate), and market yields (real + inflation). Fed Reserve offers a BTC backed (inflation immune) USD trade currency as the global reserve currency ... that is also protected by the 'might' of the US/NATO. Awesome! Or .... most of the worlds trade blocks, supported by their CB's, collectively agree to denominate and settle their trade in 'supra' CBDC. Also inflation resistant, but reliant on collective management, vs that of a single entity (US) to manage it. Also awesome! ... but not so much for the US. SD
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It's the same thesis, it's just integration into main stream finance that's evolving. MSTR as guarantor (central bank) of direct BTC loans (borrow and repay in BTC), lending at maybe 20:1 ... looking like a CB but not actually being one. Over time; MSTR either loses the niche to industry as BTC becomes just another kind of loan, or is replaced by the US Fed Reserve under updated legislation (populating the vault with the silk road seizure &/or acquisition). Fed Reserve USD devaluation, offset against the BTC vault revaluation in USD. New type of US T-Bills secured against the BTC loan book, and BTC options and derivatives more securely tied into the Fed Reserve via the CME. Elegant. SD
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Ethics thing. The ethics of the identical situation are different everywhere in the world. You don't rip your client off 'cause it's bad for business, the ethics restriction is just byproduct. Curriculum. There are many ways to doing investment, value is just one. It behooves one to be aware of the other approaches and how they work, agreement is not a requirement. Employer. It's up or out, and no different to accounting, cpg, legal, academia, etc. Cheap bunnies drinking cool aid goes a long way to keeping costs down, and when you're king ... you're the beneficiary. Play the game or walk away, your choice. Everyone makes poor choices, but life moves on, and you either reinvent yourself or live miserably for the rest of your life. Most CFA's and MBA's work in the corporate or public sector, not IB. As it's just not worth the drama. SD
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It's a union card, the same as an MBA. Different markets will value the letters differently, but if you don't have them .... don't bother applying. When the employer pays the dues, you don't much care. To the employer it's a marketing and insurance cost, get caught doing something unethical; it minimizes the severance cost. Value is different for everyone. If you know little about investment it's worth considering. If you're doing an MBA later, you will just be swapping your finance course for an elective. The CFA Way is just the starting point; you're expected to evolve your approach as you build your experience. It's also an ego thing. In the early years, gross pay divided by work plus study time is often less than minimum wage. That freshly minted CFA also has the identical skill set, and is now available at cents on the dollar when the holders live in different countries. The supposedly smartest guy in the room ... that is dumb as a brick in a globalized world. Been there, done that, long since moved on. Just a different POV. SD
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Very good! SD
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A Bitcoin Bank would exist 'cause the founders need to money launder; and they cannot put up the CME margin to hold BTC options or futures directly. Deposit your BTC with us for interest! (chequing account), so that we can margin against it and use the bank to either buy more BTC, &/or drive up the price ( another Tether) !!! Thing is ... a tamer operating version of Bitcoin Bank already exists; and it's called MSTR ... damn! The 2nd/3rd level BTC payment markets need to focus on the 2nd/3rd world, vs the tech community. In these worlds, USD is used for payment 'cause it retains its value against local inflation, and bills are accepted by all (black market) as cash is untraceable. The thing is that at scale, one needs bales of USD bills .. along with the associated organisation and security. 2nd/3rd level BTC payment markets become useful when they can displace USD bill use in these markets... and in part, is why there are all kinds of dire CB warnings around the pending collapse of USD. SD
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Hate to tell you this but the inventors were bang on; this is the BTC-ETF (dividend paying) in today's market. Retail: Same as the T-Bill, and held alongside the T-Bill as an interest bearing store of value; cash it in for whichever fiat you want, whenever you wish to buy something. The T-Bill giving liquidity at the expense of inflation exposure, the BTC-ETF giving inflation protection at the expense of diminished liquidity. Institutional: Hold the BTC directly, and trade the derivatives on the CME. 6 weeks ago you could buy BTC in volume at around USD 57.5K, today it's around USD 72.5K (+26%) with a week to go until the US election. If you believe the warnings on out of control US spending, the USD devalues and the BTC USD price rises even further. SD
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Re the Middle East. One might want to keep in mind that it is primarily Russia and Iran/Iraq that supplies (sanctions discounted) crude to China and India. Price has fallen as demand from China's slowdown has more than offset India's growth. Russia/Iran can either cut back supply to help raise/maintain price, or flood the market and rely on volume to swamp the price effect. Back in the day, both players had the excess capacity; not so much anymore. Iran has the ability to 'co-mingle' Iraqi production to 'boost' production, Russia doesn't. It's better for everyone in OPEC+ were these two to cut back supply .... in an enforceable way. Lots of ways to keep the 'risk-on' premium up, and lots of room for ongoing Russian/Iranian/Iraqi 'accidents'. Can't supply what you cant produce, deliver, load, or repair .... and refineries, pipelines, pumping stations, etc. are inherently 'hazardous' infrastructure. It is also hard to get replacement parts for old equipment ... petroleum related, or otherwise. The oil facilities are now targets, and it's in all the producers interests to keep it that way. SD
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B2 bombings, leaked docs, anticipatory repositioning of assets (all sides), etc, etc. Whatever the eventual outcome, we clearly aren't in Kansas anymore. The reality is that 'spheres of influence' are temporary, and expensive to maintain. Proxies are a cheap means by which to maintain presence, they are either 'created' or are the strong men in the region, and per maintenance purposes ... have to be periodically terminated. Let the proxy's get out of hand and you get the Taliban/Isis, Iraq, Iran, etc. Supplying weapons to both sides works for a while, but there's always another armourer ... and more influence for more weapons. Maintenance that could have been done quietly, now becomes regional wars; while there are preemptive remedies, they rapidly get harder to execute, and errors a lot less forgiving. Ideally everything goes as planned. SD
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No dog in this, but quite a few things are coming together here. Gulf airspace restrictions. The only way to/from Iran from Israel is either via Syria/Turkey, or the Red Sea/Arabian Sea/Gulf of Oman/Persian Gulf. Might be OK for the stealth birds, but not possible without protected multiple air-air refuelling top-ups along the way; however, a lot more practical were there protected refuels/rearms on either the African coast or in Pakistan/India. Needs a lot of help. 30 days until the US weapons flow drys up, 6-13 days left to act - if it has to be done at least 1-2 weeks before the US election. Supposedly target types have been agreed; have to think the types of assistance and ordinances have been agreed as well, along with contingency 'aftermath'. Takes time. This is what the professionals do, they do it very well, and obviously we hope it goes as planned. Just keep in mind that one day, in the none to distant future, we're very likely all going to wake up to a major market volatility spike. SD
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These things are very specific to the state/province/country they are in; hence, it really comes down to what you would like to achieve, and how. Part of it is also the 'bang for the buck', and ability to do things 'quietly'. There is a great deal of positive to be said for contributing to hiking/walking trails. Quiet, and non controversial. Most often its either capital purchases to help secure the land the trail crosses, or a few operational bucks to buy materials (wood, gravel, nails/screws, equipment rental, etc.) that volunteers will use to maintain the trail. There are many such trails around the world, and the by-product is often a boost to rural/local tourism. The Bruce Trail Conservancy is just one such example https://brucetrail.org/ There is also a lot of positive around botanical gardens; similar to the trails there are both capital and operational opportunities. Again, quiet and non controversial; but the payoff is typically more paid employment at a bit better than minimum wage, and for many who wouldn't otherwise find work. The Burlington Royal Botanical Gardens are just one such example https://www.rbg.ca/ No bullets or drama to these picks; simply young kids through to the aged, building memories and doing their thing outdoors, to the best of their abilities. All cultures, and all year round. Enjoy! SD
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Tighter regulation is 'cause shale gas has seeped into both the water table and the subsoil (cattle refuse to graze the land). In some places at night, you can literately see flame come out of the water and ground were you to light it off. Total costs rise (re tighter regulation); per well costs decline as production swings over to 'manufacturing' and there are now multiple bores in the same pay zone. Biases toward field consolidation, and bigger vs smaller producers. Some argue that 'manufacturing' also mitigates the problem, as there are now many more and closer bores in the zone; reducing pressure, and giving the gas an easier way out than surface migration. While today's production suffers a higher gas cut, tomorrows's well also becomes a stand-alone viable gas producer (assuming multiple bores tied into the same well head); and it is also relatively straight forward to convert existing oil collection infrastructure to gas once the reservoir becomes primarily a gas producer. Changes the cash flow profile, and resultant valuation. SD