SharperDingaan

It is also one of the more entertaining portions of an accounting lecture ..... lot of rogues and manipulation in here! Depreciation. Tax depreciation > book depreciation = deferred tax liability = zero interest loan = lower WACC = higher valuation. Depreciation: Managing expectations High rates over high income periods to lower income & fund the jar, reverse during low income periods. Write down more aggressively than needed (bath tub), write up as you need an income boost. The controller maintains a pre-close spreadsheet for a reason .... There is a reason why everybody looks at the Statement of Cash Flow ... it's not JUST to see where the cash is coming from, and going to SD

You might want to rethink. An accountant put together the financial statements, he/she had all the relevant facts, it is to a specific accounting standard, and the process is audited once/yr. Similar thing for Life Insurance actuary reports, and o/g Reserve Reports. But ...... the statement is only a snap-shot as at a point of time, and by itself - of limited use. Zero context. Investors compare over multiple quarters for a reason, it's straightforward to move revenue and expenses between quarters, harder to do it between years, and over multiple years; 'patterns' become visible. Hard to bullshit, when the audience is looking at the most recent 20 consecutive quarters of cash flow statements, and related ratios. Investors also look at cash 'cause it erases arbitrage between accounting standards (USGAAP vs IFRS) - cash pays bills, not accrual driven income. The marketing folks look everywhere BUT cash - if you don't talk about it, it doesn't exist. Life Insurance financials are driven from the Actuarial Report which sets the liabilities; assets and equity build around it, with cash as the plug. The changing cash flow statements hint at the evolving liability risk. Context. Oil and Gas financials are driven from the Reserve Report, which typically sets the company growth rate. A mining or o/g gas company is in perpetual blow-down unless it can replace its assets. The Reserve Report typically determines the debt ceiling, and the remaining 12-month capital available for asset replacement - by either exploration, drilling, or acquisition. Context. Reserve based lending (RBL) is the cheapest form of debt financing there is. Point? There isn't much to understand about about a Statement of Cash Flow, it's all about the flow of cash, NOT cash as at a single point in time. Sure, the marketing folks will hate you - but notice how many of them are poor. If they were as smart as claimed, shouldn't they mostly be rich? Context . SD

The share exchange ratio is typically problematic. It has to be set the night before the announcement, and cannot reflect any of the 'drama' post announcement. The acquirer will pay a higher premium, the seller will claim they are worth more, key shareholders may not want to sell, and the consideration is paper - not cash (all primarily agency driven). In the short-term, a debt-financed acquisition boosts financial leverage on the same share count. As long as incremental cashflow can cover incremental interest cash outflow, synergies and cost capitalization will raise EPS and share price. A year later, synergies fail to deliver, and the write-offs arrive - lowering share price. Agency incentive to finance with the cheapest debt possible, extract whatever fees you can, and sell into the higher share price - if/when the share price fails, it is someone else's problem. A WEB typically has too much cash. Incremental cash flow only has to exceed the interest lost on the cash used, and EPS rises sooner. Relative agency risk declines as well, as there is less involvement and greater competition for the business. As with the share exchange route, market float can be bought in at any time. SD

The man was just thinking ahead ! https://www.theartnewspaper.com/2020/10/13/steal-and-repeat-why-art-gets-stolen-time-and-again Frans Hals’s Two Laughing Boys with a Mug of Beer (around 1626) was recently stolen for the third time in as many decades, making it the latest high-profile work to become a repeat victim of seemingly targeted thefts. But, when it is notoriously difficult to sell on well-known works even on the black market, who would risk repeatedly targeting such paintings and why? In other examples, it appears that anticipating the authorities catching up with them is exactly the reason why such prime works are appealing to criminals. “One thing I’m seeing more of is the use of such stolen works as a bargaining chip for [reducing] sentences,” says Robert Read, the head of art and private clients at Hiscox. “This trend was noted about a decade ago, but as sentencing gets more creative in the courtroom, it would appear that criminals are viewing it as more of an opportunity—in this case the more publicity and better known a work, the better.” Seems to me that the real value of these paintings, is who else nicked them before you did! If if happened to be a Frank Costello, or a Carlo Gambino ... well it's really a family heirloom, and priceless SD

Acting like a day-trader! We suck at short-term trading, and it just isn't our thing. Most times we will emerge with a gain, but it will typically be a lot smaller than we would otherwise have made - had we simply never entered into the trade. Picking up dimes at the expense of dollars is just a dumb way of doing things! The only time it has really worked for us is when vega trading a covered call; the call will either expire worthless, or a negative press article will appear that allows us to buy back assigned shares at a lower price. We will routinely round-trip, but we don't day-trade. Entirely different risk dynamics! SD

It currently takes about 2 years for a new book to get into publication ... this information is as at 2016. The foundiing Bitcoin Paper was released late 2008, 8 years prior. As at YE 2021, Bitcoin is 13 years old, and this book is 5 years out of date - only about 38% (5/13 yrs) !! The most effective way to get up to speed on Blockchain, is to simply take a university course. This early in the technology's life, curation matters; which is the value-add of taking a course. Drink from the fire-hose via Google, once you have a framework down and know where you would like to expand your knowledge. Not all courses are the same, and not all are on-line, so look around. Faculty will also often give alumni an exemption, to take a course that would otherwise be 'closed'. The other advantage of going the course route; is connection to the university's ongoing research, incubator, and internship programs. If your company needs to do research into a potential application, the bulk of it can often be done via a university monitored, student internship, part-funded via a government grant. Some university's better than others Happy hunting! SD

The issue is the growing possibility of an unexpected loss too large to recover from. Risk multiplied by continuous interest rate decline, and over-reliance on markets always recovering to higher prices (ongoing fed intervention). Were rates to appreciably normalise (rates, LP, etc), or mild 'moral suasion' applied, the market would drop like a brick. Against which the game can go on almost indefinately - as long as nobody screws up! One approach is to hold cash, and pray for failure T-Bills, BTC, etc as a bar-bell strategy. Bleed a little every day but one day, and that day may never come, you will make the trades of the centrury! Of course ... should the 'rules' change on you ... you're f****d !! Another approach is to simply buy blue-chip dividends. Div yields > bond yields, over the mid-long term - divs & share price rise as the economy recovers. Over the near term changing price doesn't really matter - no intent to sell, and you have a cash flow to live on. For many ... 'I've no effing idea!' - this is what advisors are for. You pay them to worry for you, while you get on with your life. For those too cheap to pay - simply average in/out of index funds, look them over once every 6 months or so, and get on with your life. You're going to pay a fee no matter what - get over it! No one today, knows where things will end up 5-10 years from now - best one can do is 'forecast', and periodically update as time goes by. There are no guarantees, however, some things ARE 90% certain; both WEB and Charlie will be dead < 10 years! Get used to dealing with risk, or give your money to someone else to manage. Life is too short. SD

Nah, it was just that anarchist aren't very good at the collaboration thing! SD

The bitcoin paper owes its origins to the cypher-punk movement, and the ethos expressed in the cyberpunk manifesto. Very smart people, all adept at getting around 'the state', and most all with experience of collapsing states and the dark-side of central banking. Rebels with both brains and technical skills, who set out to change the world, and did. Resistance to 'establishment' (currency change) simply fuelled the fire, as did growing evidence of success. Anonymous and its legions of helpful hacks didn't just appear out of nowhere. SD

Useful bit of math to keep in mind, re the BTC 21M hard cap. Once all BTC have been issued, network POS activity results in NEW demand on the SAME total supply of satoshi. The MORE network transactional volume, the more demand - and the more BTC smartcontract functionality, the more network trabsactional volume. At 100M satoshi/BTC and BTC at USD 60K, a satoshi costs 6/100 of a cent (60K/100M) - no one is going to be concerned about transaction cost. Every Euro 1/2c rise in the price of a Satoshi ... raises the price of a BTC by 500,000 Euro (100M x 0.005), or USD 565K at the current 1.13/1:00 FX rate. Producing a cost of 5 Euro/transaction, split between buyer and seller, were the miner to charge 1,000 satoshi per update. About the current cost of a credit card transaction, ie: affordable. Simply buy/hold a BTC ETF, and you're pretty close to the deal of the century ....... SD

"St Peter's in Rome...the shear opulence of that building and the surroundings, gold leaf everywhere etc " Years ago I had a discussion with Italian friends, and asked 'Why didn't everyone just ransack the buildings, and steal both the artwork and gold?. Some of the statue work would look great in my bathroom!" Following a extended silence, much twinkling in the eyes, and a tap alongside the nose - I was told "2%". Another extended silence ... and Cin Cin, Alla Nostra Salute! SD

All of 'us' in the 'we' do an update every 3 years - what's changed, what we can do, how, why, etc. Any of us can do more than we've agreed, but its on his/her own dime. We take the view that charity starts at home, the first $$$ go to mortgage/debt retirement, thereafter local projects where we have involvement. Ideally personal involvement, alongside a modest financial donation to make the project 'happen'. Projects have ranged from 'Secret Santa', to helping family vendors stock specialty product at xmas/easter, to various business limited partneships, to converting a gravel pit into a paying public garden. Almost always a business approach, capital compounds and pays forward. A great many local projects are part fundable via government grant, whereby patrons put up 1/3 and the government puts up 2/3. Being a local patron, and tripling the projects money, has a certain appleal to the 'value' minded investor! The 'legacy' thing is still there, but we have zero interest in feeding the masses today. We would far rather spend the money on teaching fewer, in our own backyard, how to fish - with ideally an overwighting of 'boiler makers' in the pile. If only to ensure that future generations of family will always remain grounded! The female side of the family includes two UK magistrates, and a council women that date back to the very early 1900's - before women were allowed the vote. Apparently the ladies justice were quite ruthless, and thoroughly enjoyed themselves! Different POV. SD

Vitalic (ETH) is just being smart - do the same as you were using our token, and save 30%. Sure I could save you 80% but why be an idiot and give the 50% away? More people using ETH the richer Vitalic gets, same as the old-fashioned robber barron. BITGOLD, SALT, and a great many others don't have a problem. If you choose to do it via private ledger, you don't even need ETH. Common practice in growing parts of the Caymans, Bahamas, Gibralta, and Maltese communities - with staff typically on a 4-6 week rotation. Spend what it takes, buy the best tech/people/etc, create the structure, get out of the way. Nice gig if you can get it! SD

It is a very simple thing to make a ETH based stable coin pay out a formula driven monthly distribution -you get the equivalent of a fully automated securitization. Make the stable coin the securitization trust, make each token a proprtionate interest in the trust, make a smart contract pay the distribution, set up a private market 'exchange' to facilitate token liquidity, and locate the whole thing offshore. Contract out the bulk of asset purchase/disposition, populate the trust via direct feeds. minimize the human touch. A great many people currently working in securitization permanently dissapear. The CFA/CPA/MBA's discover that the road to wealth is via building real businesses, NOT by trading bits of paper. The various robber barons of old were all scum, outright bastards, and masters at manipulation - but almost every one of them also ran real busuness, and used them to create monopolies wherever they could. Wealth made by building real businesses, making competitors offers they cannot refuse, and greasing the odd wheel here and there - that also built the wealth of the community around them. Customers had to be able to afford your goods/services! Interesting times coming up! SD

In the manufacturing sector, 'Just-In-Time' introduced lean manufacturing; driving productivity through the roof by cutting inventory. obsolence/wastage. and labour reliability/usage via robotics. As long as you had repetitive unchanging tasks, and volume - automation was an obvious choice. In the service sector, blockchain/smart contracts do the same thing. In the banking sector, defi apps do almost everything a branch does - cheaper, faster, with broader reach and more consistent service. At most, we need maybe 1 in 7 seven existing branches, that exist just for the big items; processing centers where you sign your mortgage, etc - one cental location, costs split between 2-3 banks. Today's 'old folks' insisting upon using branches, using nursing homes in < 10 years. Branches as melting ice cubes. Lean manufacturing works best if you have free trade, and secure robust supply chains. It's a great solution 80% of the time, and much of the displaced workforce went to services. We've since discovered that its not so hot the remaining 20% of the time ..... and it remains a mystery as to what we do with the resultant millions of displaced service workers. Guaranteed minimum income is raised for a reason, as everyone starting their own little businesses - is cummulatively just not the same thing. Tech is starting to bite, and employers just have no idea. Opportunites SD

It's an undesirable branch land job, a less desirable employer, and poorly paid - the labour pool is just voting with its feet ... Most people still need to work, benefits have/are running out, yet the best they could do is 2 applicants in 2 months? It must be offering a truly sh1te comp package! Inflation is here, it's aggressive, and the dinosours are in denial. Relative to most other employers, bank benefits are already very good, so .... if Wells actually wants to hire staff, it's going to have to offer a lot higher pay. Inflation. SD

The drug dealer just collects payments in paper bills, money launders, then simply uses the banking system - same as everyone else. Pays around 3-5% commission to money launder, 20-25% for security (people, busts, bribes, infrastructure, etc). Cost wise, moving money around via BTC is a dirt cheap alternative, and simply smart business. Bribes are paid in USD, Euro, Pounds, etc for a reason! everyone wants the money, and it thins down the accumulating bales of paper bills Buy a BTC ETF, or a CME crtpto derivative, and you are not generally subject to the enhanced KYC rules - exempting much of the retail demand for BTC. If you want to transact in BTC directly you're usually a dealer, and the primary regulatory concern is money-laundering. Ongoing decision as to cost vs benefit. Political risk no different to what it has always been, just more diluted over more players. No change in the well-worn solutions either (bribes, extortion, coercion, etc.) SD

Value investors are just frustrated, because BTC is like no other asset. No CF to discount, therefore no value. No comparables, therefore no value. Unquantifiable demand vs a fixed supply, therefore no predictability. The nearest 'understandable' high-level comp? it's a tulip! its a ponzi scheme!, its a fools purchase!! Chuckle, chuckle, and move on! The reality is that a good chunk of the BTC demand is simply a version of crowd funding - putting money up simply 'cause its a good idea, goddam socialists!. Break a BTC into enough units (Satoshi) and each Satoshi becomes the equivalent of a dirt cheap Green Bay Packers Certificate. $5 for 5 certificates to put on my wall, prices each at $1 - not a big stretch for anyone. Price a Satoshi at 10 for 1c, the same way a Green Bay Packers Certificate is priced, and a BTC is worth 100K. Network effect. SD

The real problem is that WTI has been unsustainably manipulated downward via the existing SPR release, which is coming to an end. Over the last few weeks, the mild inventory builds have largely been attributable to the average weekly 2M/bbl week SPR release, and incremental demand is now rapidly drawing that down. OPEC has been releasing an incremental 400K/bbl per day per month, from Sep-Dec. Thereafter, incremental releases stop, as both OPEC/Russia believe the market will be close to oversupply (resumption of covid lockdowns in Europe). The current 2M/bbl week SPR release (20M/10wk total), is 285K bbl/day. Prices will continue rising, and the administration needs someone to blame. The only folks currently benefitting are o/g bankers getting their loans repaid, and o/g shareholders. Not enough votes. SD

Just to throw in some reality .... It is highly likely that the BC (& elsewhere) flooding is going to generate all kinds of big claims, that will burn through the vaious reinsurance tranches. Additionally, most would expect that as a Cdn Reinsurer, Odyssey very likely has disproportionatly more exposure to Cdn risk, and the BC claims. If you expect both the Odyssey Q42021 to suck (BC claims), and the whole 2021 to suck (BC fires AND floods), the issuer bid looks very good. FFH gets the shares ..... Q4 is the make/break quarter for the years performance. Given the fire/flood, most would expect FFH to show an UW loss for 2021, and that UW losses offset a good chunk of investment gains. Just burnt 10B to increase exposure to future UW losses! what is it wiith these people! Just can't win with FFH! Market sentiment unlikely to support an ongoing higher share price in the short-term voting machinery. It's mid November .... Now an enterprizing lad ........ might take the opportunity to do a round trip wash sale - buying back over the festive season, at low prices, in a nice thin market Harvest a tax loss? book a round trip gain? and set-up for the once/yr dividend paid in January? Pretty hard to see how one walks away with < 10-15%. SD

Technically, one can't reliably short BTC without using CME futures. Why the CME? Collection on your expected obscene MTM gain is guaranteed, whereas on a backstreet 'exchange' ... not so much! SD

You're simply showing your age! Obviously ... the BTC is the more valuable - 'cause I can short the hell out of the sucker!! The Green Bay certificates is just a direct crowd-fund. Same result, but a lot more efficient than selling branded merch at inflated prices to pocket the gains. Network monetization that 'old school' capitalist just do not get SD

The quote is specific to BTC, and the fixed 21M supply of BTC. Nothing to do with the hyper-ledger. Crypto is a network business. The hyperledger is a monopoly single network, spanning the entire world, collectively built and maintained (regulated?) by the worlds major nations. And .... if you have the biggest, and the most effective network, you set the market minimum price and conditions of use. Of course, nobody is forced to use the hyperledger. If one goes elsewhere, one just pays a higher transaction price for the same or similar utility - hence a entity using ETH has a commercial incentive to move to the hyperledger. However everything on the hyperledger is trackable; if one wishes to transact without a track, one needs alternatives - but they cost. Each with its own pro's/con's depending on the requirement The Hawala & Chiti systems aren't going away anytime soon. SD

Ultimately, the hyperledger/IoT, will displace much of the functionality of ETH. The hyperledger infrastructure progressively cascading down to lower and lower level applications as scaling increases and unit costs drop. Payment processes, smart contracts, blockchain delivery - all as fully integrated components of the hyperledger infrastructure backbone. Not that dissimilar to todays ubiquitous suite of Microsoft product. The hyperleger is still very esoteric today, and very expensive - but it is rapidly changing. Blockchain and smart-contracts are fully integral components, payment is a work in progess. roll-outs progessively release via the cloud. While ETH is todays low cost solution, its eventual commercial obsolecence is enevitable. A good 10 years to run - how much longer depends on ETH's ongoing development between now and then. So what? We are looking at tech solutions with a very limited life; at best they eat the smaller fish, and sell out to a bigger one. Resulting in the most cost effective horse & buggy manufacturer the world has ever seen - but just before the advent of the motor car. Then there is BTC ..... everyone insistimg they must be able to pay for things with BTC (medium of exchange) ... and totally missing that its real value is unit of account, and store of value. SD

The fed is mamipulating the yield curve by artificallly altering the supply/demand of money at all points along the curve. Mechanically, it means cut the supply of money by enough to raise bond prices at that maturity, and lower the YTM. The reduction in YTM offsetting the increase in CPI, to produce no net change. Our earlier mechanics were described incorrectly, but we are saying the same thing. Some argue that demand for money is similar to the C +I + G +(X-M) of total demand. When the yield curve isn't changing, the total demand for money must equal the total supply, and net growth over the four components must equal zero. When the condition is present, one can test each component against independent observation, and draw conclusions. We know that growth in C + G has been high, therefore it must be low in I + (X-M), We know supply chain issues have worsened, and that current US activity is nearing pre-covid levels - so (X-M) must already be quite negative, and about to get worse as imports rise. The mystery is I Just a different assessment and POV. SD