SharperDingaan

You aren't going to correctly predict the market. If you could, you wouldn't be poor - and posting on this board! For the next few months, the 4th wave will very likely keep a lid on economic growth. As the vaxxed remain asymptomatic and approach 3 of every 4 people in the G7, the shrinking pool of unvaxxed are contracting in increasing numbers. Vaxxing continues to be resisted, and it's unlikely to change anytime soon. Most would expect rapidly rising covid numbers to remain a real drag on economic activity for quite some time. However markets are where they are today, because THIS time around the G7 economies are NOT locking down in response to Covid. Growth largely depends upon how rapidly the unvaxxed either vax, contract the Delta variant, or croak; same dynamic whether in a G7, or some other country - difference is the number of dead. People gotta live, and they gotta work to do it; so buy the consumables History suggests we can be pretty sure we're entering a period of unprecedented, unpredictable change. It also suggests that the popular (market) views of the time are primarily denial, and that the winners were those who thought for themselves. The same thing repeated itself in the US, with the collapse of the housing market and the start of the Great Financial Crises. An immensely profitable period for some of us This thread evidences the market fear ... tell me what I should do! Clearly, the game beaters have been doing their jobs well! Now it's just a matter of driving critters through the traps; most would prefer not to be the critter. Opportunity is knocking. SD

"Nwoodman's graphs upthread show FFH trading at or above BV for most of the time since 2013. Nothing to do with a trading move. " Yes .... but were they trading at/better than the MULTIPLE of B/V that their peers were trading at, at the time? Sadly, not so much. SD

Granted, even a broken clock will be right twice a day; but it doesn't mean keeping time by it. At times the market price may reach/exceed fair value, but it's more via the market trading a momo trend versus a fundamental valuation approach. Agreed they have many investments, but it's largely the same story with all of them. The company either thinks they are worth a lot more than the market does (time difference), therefore no value add. The market expects a transaction in XYZ, and values in anticipation of a transaction that the company ultimately never does (execution difference); Blackberry and Resolute are just more recent examples. To benefit, you really have to round trip and not buy and hold - new names, same as the old names, but the game pretty much remains the same. Just a different way of looking at it. Every time the market goes manic on one of their investments, it's another round trip opportunity SD

The reality is that FFH is NOT bought to get rich - it is bought to STAY rich. An investor simply hopes to make more than the index, and choses FFH as a diversifier to the Sched-A banks, BAM, SU, etc. - wealth made slowly via compounding. Nothing wrong in this, but recognize that it is what you are buying. FFH is never going to get 'full market value'. It is just too complex for most to process, there are too many dung heaps, and the industry is too esoteric. It is just 'the nature of the business', but every quarter there will be some negative to latch onto and sell down on. Like it or not, Mr Market is a short term manic, not a long term builder. However, the industry seasonality and dung heaps DO create periodic opportunities. You get rich by trading around them, and taking your gains off the table. At $CAD 525 a +/- sentiment driven round trip of 5% will produce roughly CAD 5.25K/100 shares, and take 4-8 weeks. An average two trips/yr will buy you a nice vacation after tax. Investors are not employees, you do not make your wealth by working a lifetime for the company. The reality is that an ivestors holding period is a lot shorter than a working lifetime, hence the need for a different approach. Different strokes. SD

You might want to be out of stablecoin until the discussion paper is released https://www.reuters.com/article/us-usa-fed-brainard-digital/feds-brainard-cant-wrap-head-around-not-having-u-s-central-bank-digital-currency-idUSKBN2F1038 SD

It's more like Etherium creates a new standard that works with CBDC. Stablecoin itself is just another currency pegged to something (USD). However, national currencies have a CB defending the peg, whereas a stablecoin just has a pile of collateral valued according to the buoyancy of the crypto market. A great deal of money can be made if you can break a CB's currency peg (Ie: Soros, BoE). Breaking a stable coin peg is a lot easier, and only a little less profitable SD

Shiller has some very big holes in it .... For Shiller to work, the vast majority of new share issuances has to be via the market (therefore at market price). Utter crap!. Employee stock options do NOT settle at the market price on the day the option is excercized, they settle at strike prices settled YEARS earlier, and there are a LOT of these spread over a LOT of different companies in the index. Oops! A great many acquistions are paid for via equity issuances that by-pass the market entirely (o/g). Immediatley income accretive, assets increase, equity increases, almost all ratios improve, yet the market recognizes none of of it at the time. Often worsened when the positive changes are so extreme that analysts dont trust their models, and therefore don't update untill quarterlies have been released. Oops! Sure, when Shiller first published, the index may have been relevant - but that is getting on 20 YEARS ago. Today it is a completely different world. SD

'Every dog has its day. What are you investing in today, so as to be where you would like to be in 3-4 years?' Tombstone marker. It is periodically usefull to side-pocket 'vintages'. Simply because current/near term investments in portfolio A, and the 3-4 year stuff in portfolio B; require very different approaches and controls. Most people will also perform far better if their original capital is kept within some range - typically the cummulative initial contribution to portfolio B. Total cost of portfolio B, MINUS round trip gains invested in additional shares, about equal to the optimal capital limit. Thereafter, dividends/sale proceeds pulled out and either reinvested in FI, repatriated, or fed into the next 'vintage' Repatriation to repay debt, simply being FI investment done a dfferent way. Different approach. SD

Just to add some take-aways. Concentration. 20% on purchase (day-1) is the size of the pile of sh1te you bought. 20%, 9-months out, means your pile has grown at the same rate as the rest of the portfolio (ie: you've failed). You took on risk, the pile has to grow FASTER than the portfolio; all else equal - 9-months out, it should be MORE than 20% of the porfolio. Day-1 weights understate. Most times you are going to have to average down, materially raise the concentration, and pay for it with margin. After which you will sell enough at your now lower cost-base to repay the margin; many months from now. Typically NOT a topic in any 'diversification' discussion! Round trips. A trading position allows you to round trip, and the gains can be taken out in EITHER cash, or a HIGHER share count. The same investment divided over more shares, lowers the cost base. Withdrawing cash lowers exposure to the name, and enables deployment into the 'next' idea. Every dog has its day. What are you investing in today, so as to be where you would like to be in 3-4 years? Ideally tommorrows stars are todays dogs, and cheap! Hence your 'new' 20% positions should really be in these, they should be paid for out of recycled risk capital, and existing positions funded from house money. Obviously, some trick! Good luck. SD

The NA and Asian FANGs are just pushing the CBs to 'get off the pot'. Either issue CBDC soon, or we allow payment in BTC and enable a bypass of your currency controls. If Amazon can accept BTC, and Asian counterparts are not allowed to - Asias economies will go into recession as business moves to Amazon. The obvious target is China, and acceleration of the CBDC solution to keeping the Yuan and Renminbi seperate. Work with the rest of the world or do yout own thing; your choice, but the clock is ticking. A little anarchy is not a bad thing! SD

The more concentrated you are, the less 'buy and hold' you are - as every concentration is a core position, PLUS a trading position. Margin used to work down average costs, and paid down from trading gains. Very few people are immune to the excitement when their 'conviction' is playing out. You have the trading position for a reason. And while the ideas are rare ..... they are a lot more frequent than one might think. SD

And it all ASSUMES the securities will NOT be frozen, should there be an 'event'. Any kind of 'liquidity' restriction (frozen account) and they break-the-buck. Do exactly what the US Fed tells you to, when they tell you, or they break you? Not quite the investment that you thought you had?? SD

A stable coin blow up is pretty much the definition of a grey swan event https://www.investopedia.com/terms/g/grey-swan.asp 'In other words, it is a risk with a potentially large impact but a low perceived likelihood of happening. Because there is a slight chance the event will occur it should be anticipated, particularly as it could shake up the world' The pin prick could be anything. Tether is just one of many possible events, any kind of failure that 'breaks the buck' ANYWHERE will do it as well. SD

Agreed, should ANY stablecoin tied to either BTC and/or USD experience an 'issue' - it will immediately affect ALL stable coin and crypto. Hence, it is not unreasonable to think of it a grey swan event; the question is what is the probability? and is it rising? Our own view is that in the ongoing climate, crypto exposure is not warranted - and we now hold T-Bills. We're still fans of crypto as an asset class, but just think we can better double our exposure by staying out. Different POV. SD

Solar is just getting to its next stage, that's all. The clean energy just goes into breaking down waste water and distilling it to extract the H. H that is stored as gas and pumped into EV hydride batteries. SD

If you have a ‘clean’ security, margining it for cash is a straight-forward transaction. If you are margining for stable coin to re-margin/resell for cash, you are trying to money launder. If you are putting up BTC as stable coin collateral, vs just selling for cash - it is because the BTC wallet is ‘impaired’ in some way. One must wonder why? It appears that Bifinance is failing, and that founders have turned to the illegal market. It would also seem that regulators have become concerned enough to begin ‘ring fencing’ potential contagion. Should there be a temporary ‘market discontinuity’ in the crypto market, it could really make your day … God bless the CME SD

The cost of trying to make a Roth airtight just isn't worth the benefit. The reality is that there will always be a few very big winners, but as long as they are discreet about it, it really shouldn't stop the broader public from benefiting via the program. The winners are eventualy going to end up donating much of their win, to the benefit of a great many - in the meantime, they are really just 'care taking' the money. One individual in Canada used to have a TFSA so large, that it eventually funded the business school of one of Torontos universities. SD

This is why you have to do the transfer via a sale into the market, and a buy out of the market. The transfer was 'at market', and every independent in the market at the time of the trade had the opportunity to take the bid. You simply made a competitive, and therefore independent trade, proving market fact. Whether or not there actually were independents in the market at the time of the trade is not your problem - they just have to have had the oportunity to hit the bid. Of ciurse, the IRS may have a different opinion - but facts trump it. In Canada we have the TFSA account, intended for tax free savings. Taxpayers can contribute to it every year up to the current life-time maximum of $75,500. Imagine an investment of 50K invested in 250,000 shares of an o/g stock at $0.20/share. The shares subsequently go to $10.00/share, the TFSA has $2.5M of value in it, and the entire gain is tax-free. The same trade in a taxable account at a 50% tax rate, would have generated a 612.5K tax bill (2.45Mx50%x50%). With 2.5M of capital, If all future trades are done in the TFSA, you will NEVER pay tax. https://www.wealthsimple.com/en-ca/learn/tfsa-limit?gclid=EAIaIQobChMI6Imw4Ofd8QIVlh-tBh1RhAf2EAAYBCAAEgJkRPD_BwE Many would say this is abusive, whereas the facts evidence that it is far from it. You played within the rules, took the risk, and it worked out - it could also have failed. Retroactive penalizing simply because it worked out 'too well' is the abuse, not the trade itself. SD

In Canada, you used to be able to exchange shares between a tax-deferred, and a non tax-deferred account, at 'value'. The securities could transfer at any price between the high and low of the day. If there had been no trades that day, the high and low of the most reeent trade could be used. If there had been no trades for a month, you could transfer at a nominal value of your choice, arguing the shares had no value as there was no market for them. Consequently, a very large number of shares could be contributed at a value of 1c each (PayPal). If/when the shares start trading again at a healthy price, good on you. Sadly, today you have to sell the shares into the market instead. To get the same result, the account you want to transfer into just makes a market bid, at the nominal price you want to transfer at. To some people this is abuse, to others it is simply explicit recognition that nothing prevents the buyer and seller from being the same person - exactly as occurrs every time there is an internal transfer between accounts. Theil had a smart accountant; others are just pissed, 'cause they didn't think of it as well. You cannot penalize people for just being good at what they do. SD

You got that big number because you repeatedly took on risk, and won. And the bigger the number became, the less incremental risk you had to take. You cannot penalize people for simply being good at what they do. SD

Many years ago, friends in low places reminded me that one can always hire an expert, but ability to think 'around a problem' was rare. Sadly the man passed many years ago, 'cause he was a master oil smuggler in his time. Oil is a manipulated product, little different to hard drugs. Everybody wins as long as the price remains high, families will have their dramas, but there is collective 'enforcement'. There are bills to pay, and minimum revenue requirements - interfere with that at your cost. Hence, focus on what is required, and who requires it. The 'container ship' fire and explosion in the UAE's main oil loading port, very likely wasn't an accident. Were the container ship moored at DP Terminal 3, and a real attempt made, all tanker ingress/engress within this port could have been sttopped. https://www.aljazeera.com/news/2021/7/7/fire-erupts-on-ship-dubai-port-explosion-rocks-city SD

WTI is not going to go over USD 100/bbl for any sustained period, although a spike is always possible. Producers are holding back millions bbl/day and are largely using recovery driven demand to draw down the excessive inventory. Most Opec+ nations rely on oil funded budgets, and most need an average price in the USD 80-90/bbl range. As the shift to EV accelerates, NA shale producers have incentive to raise the gas cut, by accelerating the oil draw down. Over the near to medium term, much of the E for that incremental EV, will very likely have to come from new gas powered power stations. The sun don't always shine, and the wind don't always blow. The industry is also asset stripping. So NO new elephants, NO cowboys, and consolidation wherever practical to extract scale advantages. Baring the odd break-out, discipline is highly likely to stay in place. Not a lot to fear. SD.

As this is a 'material' transaction IFRS basicaly allows 2 choices. 1) Report the higher value ($47) on the face of the financials, along with a dislosure note relating to the following $14 regulatory aspect, or 2) no change on the face of the financials, and a disclosure note outlining the entire $63 'market' revaluation. Go with 1) and you also improve the financial ratios. In an efficient market, the choice of disclosure shouldn't matter. However, we all know markets are NOT as efficient as claimed ..... SD

Digit was 'booked' yesterday when the announcement was made. Results will show up in Q3. SD

To be in the market - does NOT always mean active management. Most people use a COMBINATION of active, ETFs, and fixed income, with the portfolio weighting to each approach changing over time - as both lifestage and market condition change. We invest in o/g because we are not constrained by investment policy statements, and have deep expertise in the industry, risk management, and investment finance. We have a material, sustained, competitive advantage relative to most industry analysts AS LONG AS WE STAY within the o/g sector. We are active investors, BECAUSE o/g is cyclical - a buy/hold strategy applied to a cyclical doesn't work; ie: expertise drives approach. Outside of o/g we're very conservative; excluding rollovers, we might trade FI instruments once every 2-3 years, as opportunity presents. We actively manage so that we can use the collaterall, otherwise we would use a bond ETF. Example: Margin a bond to repay a mortgage, to capture both the interest difference and the tax advantage. We are the exception, for most people an ETF will be the better way to go. We earn a larger return because we bring more to the table. SD