SharperDingaan

Agreed re the technical, but primarily because you would need a supercomputer processing in the peta-flops/second to achieve it. They do exist, but are tightly controlled. Not so much re the financial. All you need is a small change leveraged many times. Bitcoin is the only coin with both US futures and options contracts they allow a great deal of leverage, AND where you can be reasonably sure of collecting on your gains. Potentially a very great deal of money, were you so inclined. SD

I'm surprised no one else has commented on this, as a non-expert on this stuff it seems like a big deal, are the other cryptos at risk for this? Every distributed ledger token/coin that uses Bitcoin protocol is vulnerable to a 51% attack. The attack on Etherum has just proved that it can be done, and that if you don't pay the new 'fee' you are about to be asked for, it will also happen to you. If anyone sells any quantity of DL token in 'reaction', the sell-off may be irreversable; so sit quiet, don't do anything stupid, & pay up. Then along came a regulated exchange in Bitcoin options and futures ....... ;) Great opportunity, but a sh1tty way by which to make a buck. SD

'Bad' businesses are often pretty good businesses ... that are just badly executed. Example: 'Retail' is a terrible business? When did 'selling' suddenly become not very profitable? Next to the top-4 in most companies, who makes the most money in the company - the top salesperson! And that is pretty much true in every nation, and every industry. Why? Simply because the selling 'agent' carries no inventory, has no obsolence cost, can 'vote' with their feet, and does not have to put up infrastructure, the 'principal' does. And that principal is very happy to pay substantially more for any rainmaking (alpha from new clients) that 'agent' may bring. Hence the 'agent' who is very good at selling (their 'craft'), will enjoy a very comfortable life. 'Seling' is clearly a profitable activity. Maybe the real problem of 'retail' is that a great many 'retail' organizations really shouldn't be selling for themselves, but rather for someone else. Managements 'playing' at being 'principal', when they should really be doing what they do best - 'selling' through the traditional pyramidal incentive structure. The investors choice is just whether it's worth the wait. SD

We might want to keep in mind that leverage isn't mentioned (margin, option), and the very high likelihood that NOT everybody is calculating return the same way (ie: other than TWR). To a novice, return is just ((end of year value (ie: $200) divided by start of year value (ie: $100)) - 1) x 100 In this example: (200/100 - 1) x 100 = 100%. Looks impressive, but might not be. If the novice just contributed $90 of new funds at the end of the year, the actual return is of course a very different number. Also keep in mind that for many, voluntary posts merely serve as a learning vehicle. There is no intent to brag about 'size'. Obviously if you do well 'good on you', but that's about it. SD

-33% TWR, all unrealized. We are very concentrated, the portfolio is materially 'house money' funded, and we reduced cash in favour of additional equity over Q4. Large YoY change is inherent to our style, why we focus on 'outlay' versus return, and why we systematically take $ off the table when we 'win'. The majority of the portfolio is in o/g and commodities, and we will not need the money for many years yet. 'House money' means a position funded from cummulative position-to-date profit in the position; we have recovered our capital 'outlay', put it back into T-Bills/Canada's, and left our profit in shares at their average cost of purchase. We are not OPM, and hold all the professional designations that you might expect of an institutional portfolio manager. We suck at trading, but suck less than -33% per round-trip. Going forward we will trade the opportunities presented. Q4 additions are all up significantly since purchase. SD

I don't do your due diligence for you. I just rattle cages, to make the money flow ;D

Illustrative of what we can perhaps expect .... https://ca.reuters.com/article/topNews/idCAKCN1OY0D3-OCATP “Yes, I have. And I can do it if I want,” Trump said. “We can call a national emergency because of the security of our country ... I may do it. But we can call a national emergency and build it very quickly.” Emergency powers have been invoked by previous U.S. presidents during times of war. Senate Democratic Leader Chuck Schumer said Democrats had told Trump during the meeting to end the shutdown. “He resisted,” Schumer said. “In fact, he said he’d keep the government closed for a very long period of time, months or even years.” The source also said Trump brought up recent impeachment threats during those remarks, arguing that he had notched a strong performance as president and should not be a target for impeachment. The president later told reporters that Nancy Pelosi, the new Democratic speaker of the House of Representatives, said Democrats were not looking to impeach him. So ... we have a president who thinks he is in a 'war'; and is of the view that it's OK to 'fratenize' with the criminal element - so long as it results in ongoing 'strong performance'. And who apparently can no longer distinguish over the 'war' he is in over potential impeachment - and the USA which is currently not 'at war' with anybody. Escalating ongoing disruption ... And the investment opportunity? .... Options on the equipment and material suppliers that would be used to build 'the wall', and the closer their geography to the border - the better (bulk building material is heavy to move). As long as POTUS doesn't sprain his 'tweat' fingers, we should all be deep in the money! SD

Trade volatilty. Sell into the immediate story, and buy back 1-2 months later. If the financial press is positive (trend in prices, growth, etc.) sell down; and buy back when the first 'negative' appears - same as the market maker. Trump is just the loudest reliably 'disuptive' voice creating that volatility. Rattle Trumps base, and sell into the resultant xenophobia. Rinse and repeat ;) SD

Couple of observations ... The financial press is paid to 'set' storylines for the masses .... but do any kind of a 'back-test' on the accuracy of those predictions? Almost always, the better outcome is a bet against the prevailing story of the day. 'Storylines' are time-sensitive, meaning days - not weeks, or months. A story-line that persists over any length of time, has to be 'pushed' by someone - either 'unwinding', or building a book of business for later disposition. Selling against the storyline, puts you in good company. Size matters. Stay small and you cost more to remove than you are worth. It's just the cost of doing business. Then look around you ... Trump didn't achieve much when he had control of the US Senate; why do you think he'll do better now, when he no longer has that control? Trump creates 'crisis' and 'distraction' to enable a deal - but to get 'deals' done he needs movement; no movement, and sharks drown. Trump remains implicated in a criminal organization, and all the 'distraction' in the world, doesn't change that. We know the man is thin-skinned, and how long can it really be before Senate controlled investigations start to seriously cook the frog - 6 months, maybe 1 year? And if the 'wall' gets stymied, Iranian sanctions prove ineffective, and the 'rate' at which US troops return 'home' significantly slows? Isn't the smarter bet against the press stories, and in favour of greater Trump distraction? SD

What it's really doing is replacing the DL mining process with a version of algorithmic data-base validation. Most would expect 3 selected validators, and a comparisom test as part of the 'proof of stake'. It doesn't just reduce the power requirement, it also gives them a way to circumvent extortion through the sudden witholding of CPU power, and speeds up the validation process. One of those validators will be themselves, and it will affect anyone using the ERC 20 token standard. Enough cummulative critical mass to also make it happen. Clever. SD

A quick 'management accounting' example. Imagine you are a 'public' hydro-electric producer with lots of concrete dams, custom built turbines, electric generation facilities, etc. Why is the depreciation expense so low relative to the size of the facility? and why does that matter to you the investor? Concrete doesn't wear out, there is usually a deep 'stock' of turbines in 'stores', and current turbines are routinely pulled out of service and repaired as the facility generates. The life of these capital assets essentially becomes 'infinite'; meaning that if you use straight-line depreciation methodology, you will be dividing by infinity, and the resultant depeciation expense will be zero. Operating income is a lot higher than it should be, and so is the dividend payout. A lovely way to 'asset strip' ;D Mangement accounting has come a long way since its manufacturing cost accounting roots. And in the hands of a good operator ..... SD

Hate to tell you this, but you'll need to be more specific. If you expect to be looking at primarily the financials of US companies, you'll need to learn US GAAP. If you're looking outside the US, you'll need to learn IFRS. While mostly the same, there are some very material differences between the two standards. And it would be a very bad mistake, to believe that after only a course (or two) you're comparable to a CPA. If you expect to be looking primarily at a few companies, in specific industries, and in detail; you'll ALSO need to learn management accounting. If you're looking at manufacturing, extraction/mining, processing, supply-chain, etc. you will have no idea as to why things are as they are until you fully understand the incentives this accounting creates. Good luck to you! SD

Take a page from the investment world. The 'long straddle' was a great invention ...... ;) https://www.investopedia.com/terms/l/longstraddle.asp The volatility is the mass disruption/displacement of blockchain, smart-contracts, and artificial intelligence. Short-side gains from work displacement (education, employment agencies, consulting). Long-side gains from royalty/special purpose implementations, proof-of-concept start-ups, and buy-outs. All nice and private, very limited/zero reporting, and little real risk. The typical long-side JV is 2 coders in an incubator, and 1 day a week of your time, for a year, to supervise and prove concept. Repeat for a year to prove scalability, and negotiate/sell into the buy-out. Partner puts up the funding, you put up the results. SD

It's useful to keep in mind that 'Crypto' grew up in the 'techie' silo - isolated from everyone else. A great many people take the view 'I'm good at technology, and I do it very well' - but this 'society' stuff I'm not good at, and it's not my problem to solve. We often hear the same argument on this board - I'm good at 'investment' - but not this 'macro' stuff that generates it. It is just another version of Oppenheimer's (the bomber) approach when he brought the atomic bomb into the world; it's not the technology, it's the users! Of course, we know from law that even if you drive the getaway car - you still abetted the crime, and therefore share responsibility. But in 'crypto' ..... actions and responsibilities are particularly poorly correlated. It is begining to penetrate that the implications of blockchain/smart-contract technology goes well beyond the immediate application solution, but it is still well below the 'tipping-point' (Gladwell) of the general NA population. Different 'sectors' will hit the 'tipping point' at different times, and the early evidence is that 'tech' is fairly far down the list. By-and-large, the more 'EQ' involved the sooner the 'tipping point'. The long-term bet is against industry (screws-up its CSR), and with company specific applications. If only because you don't put a blockchain solution in a company unless you have a business plan, and know exactly how much, why, and when this application is going to make money for you ;) SD

The real power is that this allows governments to link various departmental data bases via a common data field. Tax, property, family, health, bank account, etc. All at the Oracles (the state) touch, and in live time, and no hiding behind maiden names, changed spellings, or recent deaths in the extended family. Works great on voter fraud, but makes it harder to fix an election. Therefore very limited use for the US! SD

Look at Estonia, where this has been in place since at least 2007. The key 'technology' is Keyless Signature Infrastructure (KSI), which runs on blockchain. https://en.wikipedia.org/wiki/Electronic_voting_in_Estonia SD

The 600,000 bpd is oil, not gas. Like any miner, oil-sand profitability is primarily driven by through-put; to drive the fixed cost/unit down as low as possible. Hence the bigger you are the lower your cost/unit, and the more 'clout' you can apply over allocated pipeline space. If you also refine (IMO), whatever you 'lose' on the upstream you make back on the downstream refining. Your growing monopoly/oligopoly can be 'controlled' a number of different ways; but ultimately there will need to be a new 'arrangement' - once pipeline constraints ease. There's lots of o/g in NA, and no need to develop the Alaskan North-Shore any time soon. Alberta bitumen will be pelletized and shipped west in open railcars well before Alaskan oil starts to flow. Japan and China also have material reserves of near-shore methyl-hydrates (substitute for natural gas), severely limiting what the North-Shore could export. https://www.theglobeandmail.com/business/article-cn-pushes-ahead-with-puck-sized-bitumen-for-rail-transport/ https://www.scientificamerican.com/article/should-the-world-tap-undersea-methane-hydrates-for-energy/ Politicians will do whatever neccessary to get, & stay, elected - for the least amount of ongoing effort. Sadly, until the Alberta 2019 elections are over, we aren't likely to see any significant 'change on-the-ground'. Lots of kissing babies, and stealing lolly-pops, but no new pipeline construction. Alberta has tremendous long-term opportunities, and the forced 're-set' has been a long time coming. But it will be to Albertans to decide. Nothing wrong in that. SD

SD sorry for my ignorance but what’s the capacity that’s coming back? Enbridge Line 3 replacement comes on-line at the end of 2019 (760,000 bpd), and the first of Alta's rail-car fleet starts arriving (120,000 bpd by mid-2020). The existing aged Line 3 does roughly 380,000 bpd. With 600,000 bpd of net new capacity becoming available, the current shut-in will end, differentials should further decline, and o/g properties currently listed for sale should start to move again. Then add to it that at current valuations it's far smarter for new money to simply buy P2P reserves at cents on the dollar, versus drill for them. Yet the oil-patch isn't talking about it? Our own view is that it's being 'squashed' until Alta's 2019 election gets going ;) https://ca.reuters.com/article/domesticNews/idCAKBN1O203A-OCADN https://www.enbridge.com/projects-and-infrastructure/projects/line-3-replacement-program-us https://www.mprnews.org/story/2018/11/19/line-3-oil-pipeline-moves-closer-to-construction-in-northern-minnesota SD

Heresy ... but pretty much any intermediate in the WCSB (WCP, OBE, PD, etc). With pipeline/rail capacity coming back by 2019 year-end, it's pretty hard to see how some of these do not at least double. SD

You might want to look 'up', not 'down', and ask what has suddenly changed? It would seem to us that the Fed credibly believes that Trump is musing 'firing' the Fed Chairman, after just 'firing' the US Secretary of Defense, declaring the war against ISIS won, and ordering the immediate withdrawal of troops from Syria. Zero consultation, and not exactly 'stabilizing'. The US markets are currently down how much this year?, the US Fed is supposed to be independent of politics, and the US government currently doesn't have the authority to pay its bills. What do you suppose happens when millions of government workers don't receive a pay deposit to cover their christmas bills at the end of this month? Do you really think Trump and the senate are going to agree on the spending bill anytime soon? The man merely asked the banks about their liquidity, and arguably has very good reason. We just didn't like the answer. SD

The report cited is 6 1/2 years old, and the world today is a very different place to what it was in mid 2011. Past results are also not a reasonable predictor of future activity, especially when the future conditions are very different to what they were. Vancouver real estate is a hot-spot for money laundering, and widely believed to be corrupt. Costs are set by the international buyer, and not the local trying to live there; and we have seen repeated market actions to diminish the influence of foreign buyers (foreign resident taxes, LOC rule changes, mortgage rule changes, etc.). The influence of foreign buyers it is also a common experience elsewhere (London). Most banks will not lend if the mortgage payment exceeds 1/3 of take-home, corresponding to a house value of roughly 3x salary (1/.33). In low rate environments, house values are higher and banks lend more as the lower interest cost permits a higher borrow. Floating rate mortgages issued over the last 12 months+ have also been subject to a 200bp stress test at time of issue. Comes renewal time your banker can either demand payment in full, only offer a fixed vs a floating rate loan, or demand a partial principal repayment; hence if you're a sh1t credit, you can become someone else's problem. It's a numbers game, the banker has deeper and better quality historic information than you have, and the bankers need fresh foreclosure examples to show others. We would suggest that while the 'Canadian' banking system has been reasonably prudent, it's borrowers have not been; and the chickens will come home to roost as interest rates progessively climb back to historic levels. It is not the BoC's job to protect the dumb from their own actions, and they will let the market solution prevail. People will get hurt, as they should do But it's not going to result in a systemic crash of the Canadian banking system. SD

Always keep in mind that banking in Canada is an 'oligopoly', that operates at the pleasure of her majesty. Her majesty has also been in the thieving busines since at least the 1500's, and is very 'old school' in the practice of 'good governance' :D https://en.wikipedia.org/wiki/Privateer As european banks are essentially too big for their sovereigns to control; one bets on them screwing up, & ultimately receiving some kind of bail-out. In Canada they get 'broken-up, and the pieces merged into others' ... arguably a similar discussion to the one that Deutsche Bank and Commerzbank are currently having ;) https://www.pymnts.com/news/b2b-payments/2018/deutsche-commerzbank-german-bank-merger/ SD

You might want to keep in mind that had Alberta NOT shut in production early this month, we would be reading about widespread mass lay-offs in Alberta today - and mass non-recourse mortgage foreclosures at the Sched-A banks by the end of March; with a number of o/g firms following shortly thereafter. Hence, most would think that at least some of the money going into those railcar purchases, has a BoC guarantee ;) You might also want to remind yourself that Canada has reverse mortgages. The borrower can borrow up to 60% of the equity in their property by taking receipt of a monthly 'reverse mortgage' payment. The premise being that if today's $1M of home equity declines to 400K by the time you're in your late 70's, the forced sale will clear your debts & give you the money to down-size to something smaller (& at a time when you really need to). If you then continue with the reverse mortgage, there will be near zero equity left by the time you're dead, & your heirs will essentially inherit nothing. A rude awakening for many heirs. Problem is 'what if the value of the property suddenly drops 30% to 700K?, from the prior $1M'?' Mom/dad get down-sized early, adult stay-at-home kids start getting evicted, & all those 700K houses suddenly start being listed for sale. What used to be a 'rarity' (& therefore higher priced) now becomes 'common' - reducing prices further. However, most would expect that at least some of a Sched-A banks capital being used to keep these houses off the market, would have an OSFI/BoC 'understanding' ;) There will not be a 'collapse'. Much more likely is a market driven 'controlled descent'. But there will be quite a bit of forced 'reckoning', and of course - the social disruption that goes with it. Versions of today's protests in Paris move to Vancouver, Calgary, and Toronto. Change. Not a bad thing. SD

Bitcoin is the ONLY shitcoin that is fully hedgeable (Chicago exchanges). Trade in the 'light', and along with the angels - you can quite safely short this sucker into the ground. Trade on the 'dark' side and you wake up next to a horse's head ;) A little research into the DL hash process will also take you a long way. The hash is little different to coke, the miner is essentially a dealer, and the P2P business model is addiction. Addict your business to high-speed miners executing rapid hashes, and at any time they can take their CPU power away - unless you pay the 'new' fee ;D Of course it's a toss up as to who makes the most the first time it happens .... the criminal extorting, the shorters on Chicago, or perhaps they're both one and the same! Welcome to Bitcoin SD

It's useful to recognise that cryptocurrency (Bitcoin) grew out of the cyberpunk manifesto of the 90's, and was located primarily in the former USSR states as the republic was breaking up. Anarchy was good, it was your only protection, and widespread state corruption was the norm. To many, central bankers were perhaps the biggest thieves there were; and there was a lot of objective evidence to support that. To these folks, there is nothing one can say that might change their view; just as there is nothing one can say to the goldbug fixated on the pecious metal. Nothing wrong in that, but it's not going to be the everyday reality in most applications. There will be central bank issued digital currency (E-Krone), it will become increasingly common, and frankly it does many things better than the fiat cash equivalent (ie: AML/ATF tracking). Like any venereal disease; Bitcoin is probably going to be with us for a very long time, and impossible to eradicate. ;) Except that this one gives you the ability to evade corrupt central bankers, & makes it very difficult to follow. Insurance against seizure, valuable to just about everybody. In the shipping world, it's customary to pay a 'fee' to ensure safe transit of your goods through some of the most corrupt ports in the world (& in everyone's interest). If 'breakages' exceed the agreed fee it's to the recipients to 'resolve' it, no questions asked. Bitcoin performs a similar function. Just a different POV. SD