SharperDingaan

The problem with monopoly money is that you can sell your house at an inflated price, but then you've got to buy another one to live in at an inflated price. The only beneficiaries are the intermediaries charging a % fee. Toronto's new condo market has long been driven by FR interest +ppty tax +locker fee +condo fee < rent. New condos sold well because the condo fee wasn't funding the reserve fund, and the owners expected to be long gone before the repair assessments arrived. Footage shrank to reduce the down payment, but interest savings were often offset by locker fees. Then, as now, you bought a new place because it was both available, and a lot better than the alternative run-down dive at the same rent - but lose your job, stay too long, or interest rates rise, and you lose your home. It is highly likely that a number of very high quality Alberta o/g firms will be partially restoring their dividends over 2021. At current prices, and a 75% restoration, most will have a cash yield of 7% ++. Even if you added 50% to the current 1.75% yield (1.5-2.0% avg) to get a yield of 2.625%, the value of these firms rise 2.67x plus. Point? In some sectors even if you see a 3.0-3.5x rise in price, the sector will still NOT be expensive! How do you get OUT of the nuthouse? Quietly move a % of gains into BTC and precious metals. There is a reason why BTC has become a lot more 'mainstream' :) SD

Given the ongoing Covid disruption in both the EU and the UK, most would expect no sudden widespread change until there is some stability again. Continuation of ongoing evolutionary changes at the margin, and a slow thickening of the border. What most miss are the growing smuggling and duty-free zone opportunities ;) An enterprising lad could do a great deal with a duty-free 'zone' on a UK island and ship-to-ship transfer in international waters. All perfectly legal as well, but sadly a time limited engagement. SD

It seems pretty obvious that when forecasting in terms of YEARS, 2021 is an up year, 2022 a transition. and 2023 anyone's guess. Most of the variance is in the up/down magnitude, not the 'timing'. Looks a little different though when forecasting the 2021 QUARTERS - there is a lot to suggest a rocky Q1, before all the positives start dominating the headlines. 9-months of Covid and the current vaccine roll-outs, has elevated hope to high levels, which has spilled into the markets. Understandable. But by end-of-January, the deaths from the Thanksgiving and Christmas gatherings, will have hit a lot of families. That will be when it suddenly gets very 'real', and in the short-term - it is unlikely to go well. When nations initially go to war, both sides are confident they are going to win, and in short order. Then the bombs drop, and the bubble bursts as the bodies start piling up at the morgues/hospitals. The initial shock (negative) quickly turns into a resolve (positive) to get the job done. Process that seems familiar? Point? Enjoy the well-earned Christmas, but keep both your family and your portfolio safe. A little precaution, could go a very long way. SD

We're sitting on the largest cash position we've ever had. It would seem that most see 2021 as a very good year (as we do), but not necessarily the timing within the year. There are a number of very solid o/g entities in the Alberta oil patch, where an opportune purchase could easily boost the otherwise 2021 return by a good 30%+. All high producers, with excess FCF in the hundreds of millions (CAD), at todays price deck ;) SD

We know that it takes roughly 4 weeks from contracting Covid, through to hospital ventilator (2-week incubation, 2-week home>hospital transition). However, the good news is that of every 100 people infected, only a small portion end up on a ventilator. How many, largely depends on the demographics and socio-economic classes of the population infected. We know that a vaccine takes between 3-4 weeks to do its thing (3 weeks between shots, 1 additional week for reaction). How long depends on the vaccine, but most would expect a minimum 2 weeks. Meaningful vaccination does not start until early January 2021. Meaningful benefits will not start to show until early February. We know that self-isolation isn’t very practical over a festive season, and that Covid infection WILL swamp much of the hospital sector through January/February. Hence hospital staff vaccinated now, to ensure their availability. Augmented with widespread repeat lockdowns from mid December to mid January in many places. US stimulus is not really practical until late January, it will take a few weeks to show its benefits, and Winter is traditionally a slower economic time in North America. Slower still when in lockdown, and with less activity – less demand for anything related to it. Most would also expect the UK to be leaving the EU without a deal, and heightened related uncertainty. We find it hard to see how WTI stays at USD 49/bbl., and would expect a temporary decline of at least 15-20%. Hard to see the major F/X rates maintaining their current trends as well. Obviously, if it comes to pass, we will do very well – if it does not, our consolation prize is still pretty good! What are your thoughts? As we would seem to be coming up on another once-in-a-lifetime opportunity (hopefully!), about on-par with the daily 1700-2000-point changes in the DJIA that we saw earlier this year. SD

When folks think of Gold and BTC being functional equivalents, the implied assumption is that 1oz Gold = 1 BTC. The reality of course is that the Gold/BTC 'exchange rate' is NOT 1.0000, and NOT stable. Plot the exchange rate over time, and you get a nice 'options like' curve. Point? Gold/BTC are just different asset classes in the same 'demand' space - and NOT equivalents. Price has nothing to do with production cost, it is simply current demand divided by (new supply + change in float). Float simply being the quantity of gold/BTC available for trading, versus the total quantity of gold/BTC ever mined since day-1. In the BTC world every time a whale sells, the float dramatically increases, and price drops like a brick. Most folks don't recognize that the 'market' is BOTH the physical (physical, mutual funds, etf's) AND the paper market (derivatives). Obvious, to those with experience from the commodities markets; not so much to most other people in this space. And material, because many of these forms include different degrees of leverage. Not for everyone, so pick your spots accordingly. SD

Lot more than 7% ;) Most recognize that the global QE (current & future) is devaluing currencies. So long as the horses ahead/behind you on the carousel devalue at the same rate that you do, nothing changes - but to those NOT on the carousel (BTC, Gold, etc.) the devaluation is obvious. Institutional/fund money is flowing in as a hedge against devaluation, and precious metal prices are not really changing as almost all the incremental flow is going into BTC. SD

Ripple is a tech community darling but just one of many 'wannabe' payments token. IBM backs Stella token, Facebook backs Libra token, launching in January. Of all the non CBDC out there, Libra is both 'good enough', and offers the most opportunity; simply because of both the size of the Facebook P2P network, and the size of the global migrant workforce. Everyone is familiar with Facebook, most have an account, and with Libra - a migrant can now easily send money home at a fraction of the 7%+ that a WFC typically might charge. A built-in, and sizeable user base. The break-up pressure on Facebook is temporary - until CBDC is introduced. Sooner versus later, as Libra is both not under any sovereigns regulation, its P2P network is bigger than all major banks, and the Facebook 'experiment' can easily be repeated at a Google, Ali Baba, Ant Financial, etc. To do better - the payment token has to be backed by better than just the 'full faith and credit' of Facebook. It has to backed by the 'dark side' - (one or more) major central banks. Developers need to continually raise $ to fund their projects, hence the hype and 'mystique'. Simply, because if you look like the smartest guys in the room, you must be! Of course, if you're Taleb, these folks who looks and talk like doctors are the LAST people you want to talk to ;) SD

Retail might measure in Satoshi - but options/futures are based on whole lots (BTC); and institutions buy in whole lots (BTC), not partials (Satoshi). Capital Markets used to insist that it was not possible for a MM fund to 'break a buck', then found out that it can indeed happen. The tech community will similarly discover that the 21M limit can and will change. BRK was split 10:1 to create cheaper shares that were more accessible to a wider range of buyers. The resultant incremental demand on the same total supply, pushing the price up. No INCREMENTAL split, no price increase. Dividing existing demand into smaller pieces (Satoshi) does nothing. The 21M limit assumed 21M token in circulation, but if token is inactive - it is not in circulation. Could be because wallet holders lost their private key (frozen token), or people are just not trading their token today. Point? the 21M limit is an 'interpretation', not what everyone thinks it is, and money trumps tech. SD

BTC is just an app evidencing a use of blockchain. Sure, BTC can be used as ‘money' - but it is really an ‘asset class’; that can be hedged via options, futures, and OTC derivatives. Just as you don’t pay for coffee with fractions of a house, most don’t pay for coffee with fractions of a BTC either. Even though you can. BTC trading is an evolving market. Version 1; all trading limited to back street exchanges only. Version 2; institutional trading permitted, but confined to enhanced KYC accounts and limited to BTC, and CME options/futures. Version 3; institutional trading expanded to include margined long only, via ISDA compliant derivatives from a CB approved oligarch? Anonymous ownership preserved, beneficial ownership … not so much. No going to a Coinsquare for 100,000 BTC. Most would expect the price of BTC to rise, as incremental capital inflow from institutions and momentum trading, drive up demand on the same limited base. Those from capital markets, would expect a future increase in the 21M limit, and long only BTC trading (similar to the ADR market), to further promote liquidity. Version 4. (Even the great BRK did a 10:1 split at around the 235K/share mark) The attraction with BTC, is that value change can be efficiently extracted as cash, via option/futures settlement guaranteed by the CME (backstopped by the Fed?). Investors have incentive to trade for serious money, on the regulated exchanges vs the Coinsquares of the world. The Coinsquares will still exist, but as secondary markets trading non fungible token (crypto kitties) and stable-coin. Point? This is not your grandpa’s, or your dad’s market. You can do very well, but only if you can apply what you know and not have to rely on a crutch. SD Disclosure: We’re back into BTC; but only via the derivative markets, and only for training purposes. Gains/losses are held in BTC, and updated every MTM settlement. So far it has been going well ;)

You might want to refresh yourself on the current state of database technology, and Quickbase. Effectively Database 4.0. Unlike ancient times, the data referenced is now a unique registry token and its related blockchain. The database is essentially a library of registry token, where each token represents a 'thing', inclusive of its immutable golden record. ie: each token representing a specific customer of the firm, and an audited record of every transaction between that customer and your firm - with querying driven from specific nodes on the Merkle tree. Simple thing from that to feeding an AI logo, to put the right custom marketing in front of the right customer at the right time. Incremental sales for little more than the cost of electricity and depreciation on the algo. https://www.quickbase.com/articles/timeline-of-database-history. Were you only to do business against a fully funded escrow, secured against a customer deposit, or a letter of credit - you would also almost instantly eliminate the vast bulk of billing, A/R, A/P, collections, and bad debt expense from most companies. The OH saving, and competitive advantage is both stunning - and where the real money is ;) SD

Just to throw some numbers out ... 5.7B USD/17,500 USD (assumed price.BTC) = 325,000 BTC. And this is just one of a few of these 'elephant' transactions It is highly unlikely that any one/few parties has this many BTC, unless they were around BEFORE the famous Bitcoin Pizza purchase (10,000 BTC for 2 large pizza). That transaction was May 2010, and we know that Hanyecz accumulated at least 50,000 BTC+ over a lifetime of mining. If the 325,000 BTC is one of a few transactions from a small group (>50% p(x)), this group was mining in 2009 and prior. The Satoshi Nakamoto ;) paper was published in 2008 .... https://www.cryptoiqtrading.com/the-bitcoin-pizza-guy-actually-spent-50000-bitcoins-on-pizza-over-the-course-of-his-life/ https://www.newsbtc.com/news/bitcoin/bitcoin-pizza-day-anniversary/ https://news.bitcoin.com/satoshi-nakamotos-bitcoin-white-paper-a-12-year-old-summary-of-robust-unstructured-simplicity/ Bitcoin may be anonymous - but it's only if you are doing small transactions. Good luck to them! SD

Just to throw it out ... There are a great many towns in the Toronto Golden Horseshoe where developers are offering the penthouse floors of new built/to-be-built condos at very attractive incentives. 35-40%+ discounts, taken as either free upgrades or extended periods of reduced condo fees. If the intent going into retirement; is to either flip the SFH (now too big), or the newly acquired condo; it can be very attractive ;) Think outside the box a bit. SD

He's twisting interpretation to justify his BTC investment, and make it NOT look like the punt it is. One can be pretty sure that he got the long BTC at a deep discount (25-35%), and used some of the 'saving' to hedge it with with put options and futures. As long as the asset (BTC) is volatile, and MTM settlement is guaranteed, he does well. The why he's in BTC. The inflation rant is an exaggeration. CPI is the best measure we have, and it is easy to adjust - the rich man's basket of goods is also very different to the poor man's. If you day-trade all day, including changes in the value of your assets AND your liabilities is valid, but you aren't main street. CPI is a measure of MAIN STREET inflation, not rich man inflation. At 4B invested, the 30% liquidity discount is roughly 1.7B. Deduct 100M to set up option/futures hedges, and even a monkey should well. Smart investment; but it really says that a big player in the BTC space is trying to get out, and is trying to create liquidity events to do it. BTC didn't just run up to 19K/BTC by itself! 30%? Typical collateralization requirements on stable-coin are 130-150%. More collateral for a larger exchange, stop-loss starts at a higher collateralization rate. MORE volatility. Good for everyone ;D SD

China is communist. State-owned enterprises exist to further the state interest, not the investors. An investor buys a lottery ticket to benefit from expansions, and shorts the market to benefit from contractions. Gross market gains > write-offs/dilutions, generating a nice ROI. Nothing wrong in that, but a different approach. SD

Late at night, she just doesn't want to tip her hand that she's from across the tunnel or the bridge ;D Free drinks, and saves on the hotel room - smart women! SD

The issue with this is expectations - and their management. Simply because each friend is at a different level, with a different risk tolerance, and a different degree of financial discipline. Ultimately, how many different people are you trying to be?, and what is the 'exit' plan? - if there even is one. 'Cause todays financial advice often turns into holding limited P/A's, partnerships, etc. as time moves on. Most just need financial counselling, not an investment vehicle (stock/bond). If you have 10K in credit card debt, WTF are you doing investing? versus just paying it off immediately. The friends really need a course in basic financial management, and a MENTOR; not investment tips. Your involvement? $100 fee + lunch/coffee to review their finances once every two years, and write them a plan. Once you can run there are other possibilities - but learn how to walk first. Good luck! SD

Just for a twist ..... There is little difference between an ideology and a computer algorithm - the algorithm just codes it as a set of instructions, and executes it faster, consistently, and more reliably. In the crypto world the ideologue is a Decentralized Autonomous Organization (DAO), or basically a robot! https://www.investopedia.com/tech/what-dao/ Love algo's ;) they go reliably batshit when you 'gas' them with tainted data. Same thing happens with the people version - a little wind up, and watch them go! SD

Living in NYC is no different to living in a London, Paris, Milan, Sydney, Barcelona, etc. If you are a young person and shopping for a mate, this is where you want to be .... but it's a limited term engagement (6-7 yrs at most). You are also a big chunk of the annual churn - once you've decided to settle down you're renting in the burbs, 'cause kids are expensive! If most WFH and zoom all day - both the opportunities and the pool of potential mates in NYC just crashed. F*** It!, live in the burbs, travel to NYC on the weekend, and just rent a room in the DT on saturday night. Hotels are hurting, deals are abundant, and you look 'smart'. Not paying inflated rents, no car to maintain, discretionary cashflow, yada, yada. Common practice. 6-7 years? Graduate at 24/25 with a masters/designation, if the family hasn't started by 30/31 it isn't going to. Better get to it - 'cause the clock is ticking! Does it come back? Sure, but anyone's guess as to when Is it cheap? Compared to what, and is the comparative relevant SD

Just to throw something different out. You know squat about this, there's no real upside, and it is unlikely to end well. Of course there are exceptions, but the manager almost always has deep experience/expertise in it. Far smarter to look at the fintech platforms, find something that makes sense to all of you, and put your money there. It's modern, will give all of you very good experience, and if the investment blows up - your friends will not be blaming you. Different strokes. SD

You might want to look at the leasing business models. Typically 70%+ of a lessor is 1-2 big clients paying the bills, with the rest being small clients generating the profit. Profit from small clients subsidizing the net loss on the big ones. Remaining profit going to the investors. Your model only applies to the big SaaS players, and only when in stable state. Smaller players merge/consolidate, fire the big client, and use the lease buyout proceeds to finance the acquisition (&/or go private) ;D . The resultant entity typically ending up as a smaller but materially more profitable company, and a lot easier to manage. Ultimately, the big player then makes the smaller player an offer that it cannot refuse - paying in equity to avoid the tax bite. No change in share count if the big player is also in the market buying shares for cancelation ;) Industries moving into fintech, is not stable state. Look at the better players in the fintech space SD

There is nothing wrong with wealth/income inequality, the problem is the often sh1ty social behaviour of the wealthy. There is a reason for the division between 'old' and 'new' money - 'old' money has hung onto it; in large part 'cause they've learned how to behave. Wealth inequality is the NORM, not the exception. India's 'caste' system, Europe's various 'class' systems, similar things in most of Asia, South America, and Africa. Birds in gilded cages as an inspiration to all, but they ALL have to live/eat/shit somewhere, and when they 'forget' who they are ..... Mansions right next to slums is commonplace, the walls are just gated and guarded. We also call these places compounds, or ghettos. Routinely hire from the community ('cause you DO need the labour), and you make it extended family - everybody lives peacefully. Choose to be dysfunctional, and risk losing your privilege. 'Friends' advise that in many places K&R is the traditional cure to rich arsehole behaviour. If the family pays - the arsehole is returned; if not - well .... 'the tribe' has spoken. I understand that returns are often a 're-education' event, occasionally underlined with the odd missing body part. Essentially the private sector version of the state 're-education' camps (China, Russia). The message? Behave, and you will enjoy a nice life. SD

It's really the difference in net tax (after every possible deduction) that matters, and the remaining # of years over which you expect to pay. To get the lower rates you have to jump a lot of hoops, and both the annual and cumulative difference has to be enough to make it worthwhile. Assume a choice between the US (assume 35% tax) and BVI (25% duties). https://www.investopedia.com/ask/answers/100215/why-cayman-islands-considered-tax-haven.asp 10% on 1M is 100K saved, against which there are the incremental costs of living in BVI vs the US (assume 35K/yr). Are you really going to move to BVI to just save 65K/yr (6.5% on the 1M) in taxes? Probably not, 'cause frankly - you just don't earn enough! But what if you earn 10M/yr, and spend an incremental 100K/yr vs 35K? Moving to BVI now saves you 900K/yr (9% on the 10M) in taxes, and you will live a very nice life. Easy for companies to move (primary capital), not so much for people (secondary capital). Hence there can be some 'lag' in making tax rate adjustments. SD

But then why doesn’t everyone just do this with Switzerland. A country with zero capital gains tax ? Lots of places with zero capital gains tax, but most require you to either be a citizen or resident there. Ultimately You will pay, but it'll just be in other ways. EVERYBODY pays, even the Swiss. SD

The Cdn investment is put up as collateral against a loan, with loan proceeds invested in the US. No sales, no tax triggers, no issues. Blows up if there is a sudden drop in the value of the collateral, so most would over collateralize. SD