SharperDingaan

Highly amusing thread so far .... Pick ANY crypto-currency that is NOT Bitcoin, or a CBDC (E-Krone). Apparently it's way BETTER than holding USD, Euro's etc ? - and at paying for transactions than either a debit/credit card? Cause that smart money guy says so (insert talking head). He did ....'XYZ' IPO, made repeated killings, & therefore must know his stuff. Indeed he does! ... how to get idiots to take the junk off his hands at higher prices. It's quite the skill ;D Most of this crypto is SOLELY backed by the full faith and credit of the issuer. US Fed if you're using USD ... then down from there. The credit 'backing' your shiny new crypto is JUNIOR to an unsecured debenture issued by a CCC credit. Yet even that unsecured debenture has an indenture agreement, and a stated interest coupon. The crypto? .... incurs MORE risk .... has no agreement ... and the holder doesn't even get an interest payment for it. No wonder the smart money IPO guy has a jump in his/her step! Why not Bitcoin? Because you can short Bitcoin on the Comex via futures and options. Profit today, not years from today. Oops, doesn't your shiny new crypto have that? ..... End of public service announcement! SD

YTD the 2019 low was in early Feb around $3390 You might want to consider that the 2018 value of $3200, is actually a hodler who bought at 19K+ ... and ain't never giving it up, if it means selling at a loss! Nothing to do with any kind of increase in inherent value. SD

The reality is that looking at financials is only going to catch the bad or incompetent, the visible part of the iceberg. Think about how business is actually done in most places in the world; where's the line on the P&L entitled 'bribes'? And have you ever seen an account entitled 'bribes', in a general ledger? We simply call bribes something else - making 'covering up' an every-day part of business. The deciding factor is a judgement call, subject to incentivization. SD

Almost always these things are the result of an ill-conceived change in an accounting standard; in this case, the standards around securitization. At the time the entire profit on a 20 year securitization deal, could be booked as profit on day-1; today you can only book profit as you earn it. Of course an accountant has to find the anomoly, an analyst has to call it, and it is in neither parties interest; until there is more to be made on the way down, versus the way up. Hence it is a rigged game; and it is to you (the investor) to both realize that, and realize that it cannot be pumped without promotion. These companies are 'market darlings' for a reason. Point is, that unless you are a forensic accountant, you are not going to detect them. SD

Two "jammed" owners of comparable property should buy each other's property (swap) at a low (or at least realistic) valuation. Or would that be unlawful? I was thinking the same exact thing. I would highly doubt there would be a loophole that obvious. Couldn't you also just sell it to a friend for a low price and then buy it back for the same low price? There will not be a problem if it is a sale and lease-back; even if there is a conditional option to repurchase > N years, or a specific event. The substance is a 3rd party market transaction, and the seller is not obliged to repuchase. SD

Takes me back to my light post and tear gas riot days! https://www.cbc.ca/news/canada/toronto-raptors-fans-thousands-1.5175150 SD

Just to add to this ... Almost all retirees will tell you that retirement is 3 stages; 'go-go' years, 'go-slow' years, and 'no-go' (god's waiting room) years. Look up an actuarial table, determine when you're supposed to 'croak', and work back to today. 90 - maybe 3-5 'no-go' - maybe 5-8 'go-slow' - 65 (age at retirement); suggests 12-17 years of 'go go' retirement at best - that's it. Your real investment 'capital' is that time, and it's to you to get the most out of it. Lots of ways you can do this, but it really helps to have a 'plan' first. SD

Might not be what you want to hear, but it might well save you a small fortune .... At 59, you're too old. It will take at least 3-5 years of intense reading, the cost of at least a university/college course or two, and tuition (losses while learning); you will be approaching 64 by the time you know anything. Assuming no major 'senior moments' until 75-80; there will be maybe 10-15 years of runway at best. Is picking stocks really what you want to be doing in retirement? Index funds, not individual stocks/bonds Tuition/learning time is a lot shorter, and your decisions are limited to just recognizing when to enter/exit specific sectors. As every boat rises/falls with the tide; all you need do is be able to recognize when the tide is going in/out, and know what a sturdy boat looks like. Look at starting/buying into a business, not investing. For most retirees the issue is what are going to do with your time. For business people it is often better to buy a minority stake in an existing business, and treat it as a 'working hobby'. Typical businesses are breweries, patisseries, inn keeping, etc.; the skill-sets, work load and financial risk is spread over multiple partners, and you're in the business primarily for 'fun' versus profit maximization. The long-term pay-off is increased longevity, better health, and better quality of life - by keeping both mind/body active. Good luck! SD

The folks who cannot get the names right are not the ones implementing block chain; they just wished they understood it :D Like it or not, Bitcoin and Bitcoin protocol is here to stay, but its value really depends upon both your purpose and where you live. Central Bank Digital Currency (CBDC) is a much more practical payment system, and already exists (eKrone). It'll probably be a very interesting conversation, not that dissimilar to what it might have been like talking to a Steve Jobs at the dawn of Apple. Back when people thought a 'mouse' was a rodent! SD

Capital used to concentrate in the nifty 50; if you were a 'name' you got a higher multiple than the other guy - simply for being in the index. Then, as now, shorting those likely to drop out and buying those likely to replace; was a profitable trade. But even during crashes, the multiples in the nifty 50 remained higher than for the other guy. Everyones share price declined, but the deeper the markets liquidity pool, the better the share price held up. Todays index fund is essentially yesterdays nifty 50. Dogma preaches that a MMFund can never ' break a buck'; and that an index run can never happen. Experience shows that periodically 'dogma' is wrong, and that markets react violently when it occurrs. Derivatives have given us the tools to exploit it. So what? At some point there will be a breakdown, and for most it will be debilitating. But the bigger players will not really be affected; because the scenario is part of the annual stress test. Just a different POV. SD

Not a problem for those companies not in the index, other than undervaluation for long periods...I'm buying those like hamburgers at half price. It will be a problem for the broad market included in the indices at some point, and could create a panic. Cheers! I must be missing something, but I don’t see a lot of stock being 50% off, just because they are not in an index. Besides, isn’t almost any stock in some kind of passive index, like the various Russel indexes? The only inefficiency I can see is that with the float being weighed rather than market cap, owner operators are systematically underrepresented. In todays world we have derivatives, and 'aligned' incentives Much of the loss on the underlying shares in the index would be offset by index gains on leveraged index puts. There might be a modest index net loss, but there isn't going to be anything major. 'Cause if a material portion of your firms revenue is from index investors ... you will see to it that they do not experience any major loss. SD

30% off would not tempt me if Corbyn looked likely to take power. Doesn't do much for us either. But if the utility currently paying a 9.75% cash yield, suffered a 35% price decline - we would suddenly be earning 15%; for life. And reducing the amount of capital we need to fund a UK retirement by 35%. If the pound also devalued, we'd have some other opportunities as well. It's essentially a long straddle on Brexit uncertainty. Crash out of the EU and we win, per the above. Stay in the EU and we also win, albeit not as much. Do nothing, and we eat non-cash opportunity cost. SD

You might want to include leverage in your asset mix ;) (T-Bills, Margin, etc) If your retirement draw-down is 4%/year, and the market has just tanked 35%, are you really going to continue seling down your equity at those depressed prices? Or is the plan to temporarily fund that 4% draw-down from your cash position + dividend/interest inflow? or margin borrowing + dividend/interest inflow? Ultimately, it's a calculation ..... SD

We've just let our Gilts mature, and let the money sit in an ordinary savings account. The biggest hassle is putting up with the bank calling every 2-weeks, with offers to help us 'invest' it. Hard to see how the UK economy does not take at least a few very hard hits around this fiasco, We expect that as the tide goes out, there will be some spectacular failures; significantly depressing multiples accross the board. Once there is a hard outcome, it'll be shopping time. Whatever the new regime; people still have to eat/drink, and use utilities (electric, gas, water, sewage, etc) If you can ultimately buy at 25-35% off, it's pretty low risk. In the meantime, tune out the drama. SD

Always keep in the back of your head, that you're dealing with the tongs/triads. You might be able to do a short, but you're not getting your profit out. SD

I don't understand these drivers complaining about money. I mean, I have never seen Uber advertised as a full-time job. Commercials always show it as additional income when you have a few hours to spare. I drove for them while in college and some nights when my wife worked 3rd shift as a nurse. I was quite happy to have some "beer" money in college. If anything these people should be thankful Uber exists. It facilitates everything for them and gives them a platform to make some extra income. Nobody is forcing them to drive for Uber and they could go out and start their own private taxi service if they really wanted (my neighbor used to do with for a local Judge...made out pretty good). Society needs to stop trying to push these supplemental income jobs as careers. Bagging groceries, flipping burgers and driving for Uber isn't a career. We need to hold firm to this conviction, because out of necessity comes change. People will learn this and adapt if needed. Fun fact: also paid for the entirety of my honeymoon by donating plasma in college. But that's a story for another time. I agree, it makes no sense to take an on demand job with a contractor and then demand benefits. It’s also off base, because Uber right now loses money, so one could make the argument they it subsidizes the riders , but also the drivers. If some has a reason to complain, it would be taxi drivers since they get more unregulated competition. Uber is just a tech solution looking for a sustainable market, and is discovering that it isn't as big as thought. The protests evidence that labour wants benefits as part of the gigs pay; yet Uber apparently cannot accommodate what is a simple change (lower future pay + benefits = existing higher pay)? 'Cause MAYBE Uber is actually a very brittle business?, and this effectively destroys the business model? Labour laws typically require a minimum pay rate for a minimum shift length (ie: $10/hr for a minimum 3 hour shift), and exist to prevent abuse. Those labour laws also specify tests to determine if you're an employee, under the labour law, or not. Uber's model ASSUMES the driver is contracted PER RIDE, for which Uber will pay a variable rate based on various factors. If you did 5 rides for Uber over a continuous 3 hour period, were you ACTUALLY a contractor or an employee?, and did you receive AT LEAST the minimum pay as required by law? The protests imply that in many cases, Uber is actually underpaying, and it is widespread. So what? We have a tech solution that ONLY works in either a 'right to work' state, or for 'illegal' employment. And how many of the states where the bulk of Uber business is done, are 'right to work' states? Maybe folks overpaid for this IPO? SD

Could you expand on this a little? Liquidity is coming almost entirely from the underwriting group, the issues are being priced at slightly below market (to evidence a marketing bump on issue), and underwriters are focused on volume (fees) - not quality. Get as much out the door as possible before the opportunity closes, and dump the inventory as quietly as possible. SD

Yes, I think I saw this article too. I'm not saying SaaS companies are fairly valued, I'm just saying that part of the increase in P/S is due to increase in net margins which have been trending upward for the S&P500 for the last 10 or 20 years. That being said on the monopoly matter, there is evidence that companies are becoming more monopolistic over time. The increasing margins is one piece of evidence. The other is the rise of tech companies which have some upfront cost but most of there moat comes from intangibles like network effects, switching costs, high initial marketing spend, which didn't use to be the case (back in the manufacturing days, actual physical capital was the moat which meant companies were started a lot slower and also that most only earned their cost of capital). That being said I agree that companies are choosing ways to fleece investors like using stock compensation, or the Amazon argument ("we are in a land grab so pay no attention to our bottom line"). However, IMO there are good companies (at good valuations) that are mixed in with the bad in the tech bubble, its just not going to be as simple as P/E < 10. Not to rub this in ...but remember Nortel? Employees were amongst some of their biggest cheerleaders; via the employee pension fund, and software engineers dabbling in call options. If you questioned the crowd 'wisdom' you were a heretic, and out the door within months of losing 'faith'. Every generation has its 'cool' thing, and no matter what - you aren't going to change that. Then, as most likely now, the 'right' strategy was continuous roll-over of long out-of-the-money puts; on tech coy's other than the one you work in. Just be mindful that when you eventually reap that 'funny money', and everyone around you is going bankrupt; you will very likely be one of the most hated people on the planet. In a zero-sum game, nobody loves the out-sized winner. I'm told that it makes the workplace an incredibly miserable place to be; and that to preserve their sanity, most people will voluntarily quit their job within a year. SD

Time has also run out for them .... We're going into the 2019 'summer' fire season, and global warming remains alive and well. If you're the 'saviour'; you'll either want a guarantee that any 2019 fire season 'surprises' do NOT land on you, or to delay the discussion until after the 2019 fire season is done. No matter what, there will be ANOTHER hair-cut on whatever the current asset valuation is. SD

Few things to add to this. The more historic the data the less valuable it is for predictive purposes. Simply because todays economy is very different to what it was even 20 years ago, and we are not comparing apples to apples. Agreed central bank currency inflation is highly likely to continue; but asset inflation and 'growth' is a real crap shoot. Mathematically, the bigger you are the harder it is to get incremental growth; and most would suggest that for the forseeable future - the bulk of global growth will be in Asia, and not in NA or Europe. Most would also expect a run-off of NA/European assets in favour of a build-up of Asian ones. So what? The forecast for NA/Europe is essentially currency inflation +/- (asset inflation+growth); 2-3%+ nominal growth on a good day, or 0-?% after inflation. Charming. Sniff test. Aging NA boomers are now taking money retirement money OUT of their savings/retirement accounts; their net investments, houses, toys, etc. are now selling down, NOT being built up. So .... if the forecast bias is for ASIAN assets, and NA assets are persistently in a GROWING net sale position, NA asset prices must fall, and deflate. To avoid that deflation, NA central banks must print currency faster, & target higher inflation. Maybe 3% nominal growth, 0% after inflation, and never ending QE? Point? We may well see CYCLICAL equity returns of 12% plus; but we're compounding year-over-year at maybe 2-3%/yr nominal, and 0-1% real. SD

We've been through a decade? of deliberately artificially low interest rates, & extreme quantitative easing to avoid the next great recession. So ... if we include that history as a predictor of future events, are we not saying that we expect these historic conditions to continue? If we 'forecast' the future as just a series of short-term events, this might even essentially be true. Whitehouse pressure today to ease rates in response to economic slowdown; repeated tomorrow, and the next day, and the next. If we 'forecast' that over a period of time we should get back to historic rates, it might be true in the 'long-run'; but we're all dead! The short-term momentum (technical analysis) view versus the long-term value (fundamental analysis) view. So what? If would seem that if your investment horizon is very long; one should be betting on mean reversion via leveraged derivatives, and on the party continuing via long positions. Graham went broke waiting for the market to turn his way; we don't have to - we have derivatives that Graham DIDN'T have. If rates go up, only cash wins. BOTH equity multiples AND bond values go down But there is no reason that cash can't actually be a bar-bell allocation of cash + derivatives, al la Taleb ;) SD

The economic argument is to just sit on cash until there is a resolution. We have no idea which way this will go, or by how much when it does eventually go. You're also earning a risk premium on your cash, by AVOIDING the loss from the event itself; were bonds or equities to react negatively (ie: that 100 pound equity becoming worth only 95 pounds on the day of the announcement). Not what the trading folks want to hear. SD

The reality is that the MAJORITY of British citizens voted to LEAVE, and that it will affect individual citizens very differently. If an individual feels strongly enough; nothing prevents him/her from simply emigrating from the UK to the EU - and the younger that citizen, the easier it will be for them to do so. This is nothing new for the UK. Our own view is leave, and see where it goes. No matter what, 30 years on it will be a different conversation with the EU, and the EU will be a different place to what it is now. As a young person with only modest prospects, my future depends on disruption; and if I don't have the ability to emigrate, this is very likely one of my best opportunities. Additionally, there is nothing to prevent simply 'joining' the EU at a later date; it doesn't have to be done now. Of course, if you work around Canary Wharf - this is heresy! Just a different POV. SD

It's too early for the education decisions yet. A great many 'science' people end up doing an MBA to broaden their skills base. That MBA will include the accounting, finance, human resource, and strategic management skills that you currently lack; and it will also benefit you in your day job. The obvious 'investment' designation is the CFA. But it's a lot of work - and you don't have to know how to build a calculator, if you just want to use it. As with the dentist, or doctor; just buy the skill-set when you need it. You need to find out first if this is something you actually like, and whether you're any good at it, before putting any more time into it. If it wotks out well you've made the right decision, if it doesn't you've cut bait early and saved a fortune in tuition fees. Now get out of the way and let me at it! SD

Referendums are very dangerous things. If the MAJORITY decision doesn't go your way, you're trapped in an outcome that you don't want to do; and there is no 'un-do' button. There are no 2nd, or 3rd referenda, until you get the decision you want. In most places, the existing government falls, and there's a general election; where the deciding issue is the referenda question. In the UK case, if the winning party is for an exit, a brexit will take place. If the winning party is for remaining in the EU, there will not be a brexit. The MAJORITY decision prevails, and the issue is resolved upon election of the new government. Most people would think that by mid-summer, this will be resolved. And by the folks who have to live with it. Different POV. SD