SharperDingaan

He will be investigated but set free - 'cause he did nothing wrong. A post on a social media site is simply 'entertainment'. An 'investment recommendation', is also NOT subject to censure, as long as it is NOT made by a designated investment professional (CFA, FCSI, etc.). DFV was just good at 'promotion', and acted on his opinions, which is not illegal. Similarly, much of the daily media 'news' is entertainment, and not subject to censure, if a professional broadcaster was not involved in its production. It really just highlights how out of date the current Investment Act is. No change for a very long time, until one day the dam breaks - and its a six-sigma event. SD

FFH is just temporary parking for cash that is going to be repatriated this year, and we're private money. For the next month or so, we just think that FFH will offer a better return than CVE will. If we screw up, we'd also prefer to be holding FFH vs CVE. SD

There's lots of speculation, and 'lobbying/consultation', but we just do not know. Directionally, few expect a continuation of 'business as usual'. SD

We sold our CVE today, and are back in FFH. A round trip was not the intent, but at current price levels it is worth the adverse earnings risk. We have a both a low re-entry point, and enough of a gain on this second round trip, to allow us to sleep very well :) SD

A few research pointers, that will help towards a better decision. Research what happens when fracks are done too near the surface. Gas and chemicals migrating into town aquifers, seeping out of the land, earthquake triggers, etc. Note the locations, local farming/ranching practice, frequency and type of damage, PTD drilling in the area, well abandonment history, and how the damage is being brought to light. This is the environmental issue triggering the response. Some reservoirs stand out. The sparsely populated rural land that is marginally productive at best, the tap water that can frequently be lit, and cattle that routinely die from contaminated water. Fracks that were too close together, or where there were too many for the reservoir, they were poorly done, and wells routinely abandoned. Companies containing the damage by compensating ranchers for their dead cattle, and denigrating the odd images of flaming taps and cattle poisonings. Bully the yokels to keep it quiet, and protect the high paying o/g jobs for the rest. Every reservoir has its own hairball, some worse than others. Fracking is just another tool. As experience has accumulated, it is being better applied, and is 'safer' as a result - lot of improvement between today and even just 5 yrs ago. It is also better to frack where there is stronger regulation/environmental protection (Canada) as it minimizes the worst of the abuses. However, for legacy wells, it's too late. Most would expect much tougher US regulation, and probably reservoir specific. Most would also expect reservoir ownership to consolidate under the majors, in return for legacy cleanups and better environmental management. Less drilling for a time, less US (light oil) production, and less associated importation of Cdn heavy crude for refining. Higher heavy oil inventory at Cushing, as a production buffer. US o/g will scream, but the reality is that the industry is done with the 'shale cowboy' disruption. Not a bad thing, and well overdue. SD

Going by last year, 2019 YE results were announced Feb-13. Most would expect an update either in the MD&A, or in a related press update as soon as they exit the lock-up period. Our own thoughts are that BB tech is the preferred choice for security sensitive auto applications, and the choice of Tesla and the other high-end car makers. Sold as the standard in luxury brands, where price is not an issue. Purely speculation, but if it is correct - it is worth a great deal. SD

It will become much more fun when a sizeable hedge fund is targeted for extinction. All it needs is a quiet leak as to what the bulk of the targets long-short combo's are ;) and a competitor bites the dust by the end of the week. After all why share the market take with many? when there's an opportunity to remove a few. SD

My apologies if I don't find $500k sufficient... But IBKR has an obligation to protect their shareholders and clients. They don't exist to entertain YOLO gamblers. Robinhood is the "broker" that: - stored trading passwords in plaintext - allows self-described degenerates to trade options despite KYC regulations - allowed WSB to get "infinite leverage" using a bug - caused the death of a young trader - settled for $65M with SEC for deceptive practices - became the preferred platform for YOLO short squeeze plays Robinhood admitted that they need to block CASH PURCHASES of certain stocks because the capital requirements for their very concentrated positions was more than they could afford. They drew down their credit lines. Allowing more risk to build in the system (at hedge funds, WSB, RH, Clearing house, etc), is absolutely insane. And AOC and Ted Cruz cheering on a bubble is doubly insane. Disclosure: Long IBKR (so I am biased against RH) Sure RH is no saint, but they exist because the regulatory framework let them. Tech bros built a network driven start up for capital markets, expecting to put the compliance 'stuff' in 'later' - and the framework let them. Ali Baba (China) also tried something similar, and it didn't work out so well. Network businesses run on viral swarming. Create a buzz, others pile on, and magnify it at a compounding rate; if the buzz makes individual network members money, transmission accelerates. The more 'buzz', and the more 'central' the network, the more value to the network, and everyone in it. Direct the swarm at a narrow group of targets, and members WILL make a LOT of money - both on the way up AND the way down. Until now the dominant network had been restricted to just the hedge fund community, and a few participants with a lot of money each. Now its a zero trust, public democratized network swarm, of many participants, each with a small amount of money. The very ethos of bitcoin protocol, and nicely in time for the kids of the founders! and their very deep and broad 'support' bench!! Individual RH accounts are for the most part < 500K each. The most they will lose is their account contribution, the same as if they had simply bought an option on XYZ coy. If they luck out and win, most gains will be <500K and they are protected by SIPC. Free pass. What it really shows is just how obsolete the current 'plumbing' is. It's going to get replaced ;) SD

Shorting is typically not a problem for a company until it is abused, and posters have referenced very good examples. The issue to date has been that for those abusing; they have long had the pretty much exclusive ability to gang up on a target, and slip a few banana peels under it. Now, the abusers can be suffocated via a short squeeze, that can be maintained for longer than the abuser can survive. Hence the abuser with large short losses, that cannot roll their short-term notes as they come due, will collapse almost immediately. All that the abuser can do, is try to take down as many others with it that it can. Contagion. Problem is that the social media swarm needs heads, and the sooner they get them, the better for everyone else. Interesting times. SD

IBKR chairman on CNBC today: https://www.cnbc.com/2021/01/28/interactive-brokers-restricted-gamestop-trading-to-protect-the-market-says-chairman-peterffy.html He is very worried about a broker or clearinghouse failure. He doesn't mention which counter-party he is worried about, but RH says they are restricting long stock purchases due to CAPITAL requirements. This suggests RH is thinly capitalized. I know RH investors aren't sophisticated enough to understand this, but if I was sitting on $20M paper gains at RH, I'd be very worried about the viability of my broker. Disclosure: long IBKR Edit to add: When you say that IBKR should permit bear call spreads, you are saying that IBKR should accept the counter-party risk on both legs of that trade. The trade might be low-risk for you, but very high risk for IBKR. Robin Hood accounts are protected by The Securities Investor Protection Corporation, up to 500K/account; worst that happens is that it takes account holders a few months to get their money out. IBKR is just pissed that they would be assessed a portion of the restitution, and that Robin Hood would just be the first domino of many that collapse. There is also the problem that if there is a significant 'plumbing' failure, the obvious systemic replacement is a blockchain based solution; that will drastically reduce the role of intermediaries (ie: brokerages). Especially when that solution already exists. https://www.brokerage-review.com/investing-firm/bankrupt/what-happens-if-fidelity-vanguard-etrade-goes-bankrupt.aspx#:~:text=Besides%20bankruptcy%20laws%2C%20the%20collapse%20of%20a%20broker,accounts%20would%20be%20protected%20up%20to%20certain%20limits. SD

This is very funny. Hedge fund bros bitching because retail found a way to beat them at their own game, and they don't appreciate the competition! Welcome to 21st century disruption. Social media platforms are SCALABLE network businesses, hedge funds are not. It used to be that as a big fund taking a specific position, you could be pretty sure that other funds would pile on; collectively driving the target share price down, & validating your thesis. Now you have to compete with a scaling network swarm that didn't get the memo, and which see you as scum. WTF ;D SD

We had hoped that the bros would be too busy making money in BTC to read. One asset class - but now two assets. https://www.cmegroup.com/media-room/press-releases/2020/12/16/cme_group_to_launchetherfuturesonfebruary82021.html SD

We sold some of our FFH today, and moved the proceeds into CVE. 10%+ on the round trip. Agreed that FFH should do very well in 2021, but a little hesitant around Q4 2020. The last quarter of an insurers fiscal year is typically when the year's true-up's occur; hence a wise man should hedge his bets a little. We still have a position, just not as much. May we all continue to do very well :) SD

During the .com era, a very good friend of ours steadily filled up his pension accounts with company stock, then had a panic attack. He couldn't buy puts on his own company, but was allowed to do so on direct rivals in the same business, and used his bonuses to pay for the puts. We'd had a discussion, re the relevant risks involved, and he slept very well. The boom started busting, and the puts began generating significant MTM settlements. As the money was corrupting, he got rid of it safely by flippantly asking his wife to buy an average 2 1oz gold wafers every week, and put them in their safety deposit box. After successive rounds of layoffs and extended misery, he finally managed to get packaged out with a good parachute, and a company pension that was essentially worth nothing. As he had kept all the funny money on the way down via the MTM settlements, he knew he was OK, the package was just an added bonus. However, he had not thought too much about the wafers. When he went to look, he found that there were so many that his wife had got them a 2nd, and much bigger safety deposit box, that was near full. At a time when gold was now in the USD 3,000+/oz range. He found it incredibly debilitating, and had to seek help for a time. Every day, colleagues he had known for much of his working life were losing their homes, marriages, and lives to the company's demise; yet he had managed to keep the money, multiply it again many times over, and get paid a very nice severance (in cash) as well. Utterly obscene. We had another discussion, and a great many others benefited from free counselling and scholarships, anonymously paid for. From time to time he provides anonymous advice to our very small and private blockchain start-up ;) Point? Pay attention to what the outcome is if you end up doing everything right (by plan, or luck) - and have a plan. Enjoy the game, but recognize that survivor guilt is not fun. SD

Just to throw a related POV out. Almost every treasurer, the world over, will tell you that money is ridiculously cheap - and will continue to be for quite some time. If you did NOTHING MORE than simply roll notes as they came due, most would save millions/yr in interest. Savings that could be used to 1) greatly lengthen maturity terms on the replacement notes, 2) pay the interest on a NEW (and large) note issue, or 3) simply be allowed to flow to the bottom line. At a time of significant technological change, newly constructed long term assets are subject to heightened obsolesce risk. It is far smarter to use the capital in industry consolidation, to extract greater production efficiencies and economies of scale - closing old plant along the way, by assigning work to your now most efficient plants, operating at a now higher capacity. But not good for employment. But if you consolidated in the minerals sectors (o/g, metals, etc.), the outcome is very different. Obsolesce risk is minimal, opex savings from scale are immediate, and write downs on stranded assets ensure little/no tax for some time. Better still, as cheaper mineral deposits exhaust (& technologies improve) over time, the stranded asset becomes viable again, and the write downs reverse. Point? Once Covid settles down, there will be a growing and enormous wall of money going into industry consolidation, And it will go to the minerals sectors first, where job-loss is more uncertain. Skate to where the puck is going .. not where it is right now. SD

Tesla, Facebook, BTC, Tencent, and Alibaba all trade within a market cap of 0.6-0.8T. Much of the bitch is because at these market caps, they are more valuable than BRK, TSMC, Samsung, Visa & Walmart - old timer favorites. Hence, these upstarts must all have BS valuations, how do I exploit that? Yes, the valuations are high, but so are the valuations of the favorites. The rising tide of unlimited QE and stimulus lifts ALL boats, not just the Teslas, Facebooks, etc. The problem is the relative ranking, and that is very much BOTH an industrial revolution, AND a demographics thing. Back in the day steam replaced sail. The 'go-go' stocks of the time were the railway, steamship, and arms companies, plus anyone supplying materials to those rapidly growing industries. The dogs were the those supplying material to the displacing industries. Same thing is happening today - yes the darlings are overvalued, but fundamentally? by not as much as many think. Yes, yes, it's different this time, I've heard that before! Bitch less, and actually look around you. THE major oil companies ALL getting out of oil and into green energy, THE major auto manufacturers ALL switching from IC line-ups to electric, THE major IT companies (& their big clients) ALL switching to blockchain based solutions. It IS different this time around, and the pace of change is accelerating - yet old timers think this should not affect relative market caps? Irrationality is not just in the market, it is widespread. Sure the inexperienced will make mistakes; when you were just starting out you knew squat as well. But back then, other people were the fat cats and you didn't know they even existed - today .... you're the fat cat!. Lots of ways to feast, but you have to be able to live with yourself afterwards. For most people, it will just mean giving the gains away to worthy endeavors. 'Go Fund Me' campaigns raise the amounts they do, for a reason. Not what most want to hear. SD

Now this, is my kind of people! SD

A common strategy in the options world is the 'long straddle'. A long call, and a long put at the same strike; profit on both the downside and the upside - as long as there is significant disruption. A strategy that would have paid off on almost every market top in the last 25+ years. Buy the things that will do well in a collapse, buy the things that will do better if the madness continues, and keep some powder available for opportunities as they present. Lemmings will do what they do, no matter what they are told; we don't know when the madness ends - but Lenny .. when it does, we get very, very rich 8) SD

The Tethers of the world exist because their client base 1) cannot stand the scrutiny of regulation, and 2) much of the client base is investment ignorant. When the client base prefers to NOT comply with standard KYC restrictions, it's not a good sign. At some point the Tethers will implode, probably with a little 'help' from the light side. Similarly much of the stable coin market will as well, when sponsors can no longer meet their margin calls - and their sh1te coin collateral is sold off en-mass. When? is anybody's guess, but it is a reasonable expectation. Why stable coin? the mechanics are very similar to a CDO^2. Last time around, a number of prominent I-Banks found out that liquidity is a bitch - when it suddenly evaporates :) It does not mean that BTC collapses, but it does mean that the derivative players make a great deal of money on the way down, and proven global establishment of 'crypto' as an investment 'asset class'. The wheel rolls, the 'dark side' gets shaken out, and BTC remains alive and well. SD

Muscleman, Source, please. https://fortune.com/2021/01/11/china-covid-hebei-beijing-political-moat/ China has placed the capital of Hebei province—Shijiazhuang, a city of 11 million—under lockdown as the city enters “wartime mode” to combat a fresh outbreak of COVID-19 that has infected over 300 people. 22M according to the NYT, as of 4 days ago. https://www.nytimes.com/2021/01/13/world/asia/china-covid-lockdown.html SD

I guess this is as good as any place to state survivorship bias, right? Not disputing just easy to envision potential owner operators that fail once sold. Uh, for my sake, I hope not too true. As with everything, it's a judgement thing. With the very good businesses it's often invitation only, between two salt-of-the-earths, that know of each other. Survivorship isn't just at the business level, its also at the acquirer level. The bigger issue is settling on the 'when it's time to go' - strokes, deaths, inability to change, etc. all on the table. Tone and strain of the upfront conversation, typically determining outcome. Like it or not when you are an owner/operator, you are in the people business. You only have two hands, so many hours in a day, and a family deserving of some of your time. You have to be comfortable with building things, by working through others, versus just trading bits of paper. Not for everybody. SD

For a lot of people it is much more basic; family either doesn't want to take-over the business, or just isn't up to it. The founder sells to monetize their life's work, and continues to run the business for both health (mental/motivation/physical) reasons, and something to do. Done well, it's a second wind that works well for everyone, and which can take many well into their 90's. Often great businesses to work for, as they have both industry brains, a deep bench, and the capital to do meaningful and successful innovation. Also a lot safer, as they've been through the business building process, survived it, and fully understand the inherent business risks in their industry. The buyer just needs to make capital available as needed, and stay out of their way. All about emotional intelligence. SD

Just to throw some things out: We all know that what goes up also goes down ...... but almost always it's with a dead cat bounce. Ideal for a liquid swing trade. Example: Of late BTC has been trading between 34-40K/token; it is a lot easier to get in/out of BTC token, than it is a BTC put ;) The issue with euro puts (BTC) is the timing - you have to call the price at end of day, on day X. Almost always you will lose ... unless you start from a strike that is very high, do it in a mania, use a short term, and don't put it on until you see signs of discourse - lot of ways to screw up and lose your premium. Shorting makes a lot more sense, but it comes with the possibility of uncertain loss. Options, or shorts, your capital is at material risk - swing trade and there is much less risk. To swing trade: either sell something that you are long in, or defer the purchase of something you want to buy - that simple. If you can't do that, walk away, as you don't have the temperament for this. Most would argue that the 1.9T US stimulus package will be a positive. Probably one of many, in short succession, as how do US muni's otherwise balance their books WITHOUT raising property taxes? - and collapsing the pump prime. Most would expect coordinated and similar stimulus in many other western nations as well. Do you really want to short against a GLOBAL rising tide? Mania, and bubbles are quite different. You're looking for bubbles largely confined to a narrow group of names (nifty 50), and ideally a demographic. Most think Tesla a short candidate, but the market caps of both BTC and FB are higher. Demographics. If any of this was news to you, this isn't your game. Step away from the table. SD

At this point, it's really more an alternative comparative vs the amazon/spotify deals for streaming. Use it to monetize, control distribution, and complement the video on her own website. Market to prove concept, then talk to the bigger players & get a better deal. This will become the music machinery of her generation, and the more experienced she becomes at it .... the better the end result will be. Artist as both creative and manager of her IP. SD

It's really not about the curriculum, it's about the inability to apply. Example: Engineers are forced to take electives utterly unconnected to engineering, to 'round them off'. So when the engineer shows up in a music appreciation course, looking for an easy grade, and the professor asks what 'music' is, it often doesn't go well. Citing music as just a bunch of EM waves at different amplitudes and frequencies ....... is not the desired 'answer' SD