gfp
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Posts posted by gfp
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I love it! If you know something please email it to me!
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This Destiny Tech100 closed end fund is wild! Lots of entertainment
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28 minutes ago, schin said:
When Warren passes, I would expect there will be selling of his prized holdings too.
I feel like the deferred tax liability will factor in heavily here and that he is spending a huge amount of time talking out these companies with Ted and Todd. I would be really surprised to see a position like American Express or Coca-Cola messed with after Warren passes. I could be wrong but my bet is that some of these are truly treated like the rest of the subsidiaries.
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Oh wow - yeah that's $4.84 per share vs $75 per share at one point on Friday. Yikes!
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On 4/2/2024 at 10:59 AM, KJP said:
That is possible. But take a look at insider ownership. The structure suggests to me that they want to cash out as many as possible.
EDIT: It's enough of an issue that I wouldn't buy this at, say, $4.80 today. I bought pre-market and my limit sell order already hit for most of those shares. I'm going to keep an eye on it and see if the spread widens out again.
Man, even thought this tightened up to around a ten cent daily range you can still take $900 per swing out of this range each trip. I for one have been enjoying the beer money
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Good post Cigarbutt. It probably obvious but of course the corporate income tax has been materially reduced as well.
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43 minutes ago, OracleofCarolina said:
I have never seen any stories on that, is he still making those books?
I don't think he still makes the books. He tells some stories about the margin and first BRK share purchase in '83 here: https://www.youtube.com/watch?v=n6bPl1IXlhs
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5 minutes ago, ValueArb said:
The US should voluntarily raise the interest rates on all federal debt to 20% annualized, not only would it make the owners of the debt really happy (including China) but it wouldn't cost anything because it would just flow back into the economy.
As far as T-bills go, which is where most of the government is funded, the Federal Reserve could do this almost immediately. And it would be incredibly inflationary. Not cost-less. Which kind of highlights the backwards nature of conventional thinking on Fed moves.
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5 minutes ago, Eldad said:
Like 10% of it is owned by the Social security trust fund, so higher rates keep that funded slightly longer.
Unfortunately like 30%+ goes overseas.
Please don't lose any sleep over the social security trust fund.
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15 minutes ago, Saluki said:
There's a video on CNBC now of Einhorn pitching his stock Solvay at the Sohn Conference. When I checked the prices, the shares in Brussels are up 4% and the OTC US shares are up 12%. And markets are efficient?
Presumably the Brussels market is closed and the OTC market in the US is open when he spoke about the stock
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3 minutes ago, blakehampton said:
We desperately need an undo button. I just accidently deleted a long written response and I now want to kms.
Anyway, my response was formed around how there is currently a spread between bank reserves and the recorded assets on the FED's balance sheet. I believe that this is cash that has made its way into the economy through asset inflation. By buying bonds and injecting cash, the FED essentially made owning assets more attractive relative to fixed-income and cash, especially when you consider how low rates were and for how long they stayed there. I do agree though that it ultimately comes down to bank reserves. I think that the biggest focus during QT is gonna be watching reserves as they let the bonds run-off. I'm sure they don't want to put banks in a precarious situation.
Yes the current net interest paid by the Fed is stimulative and should be added to the deficit to determine the amount of fiscal stimulus we are currently getting. But this is stimulus now, not during QE. The net interest paid by the Fed (the losses they are experiencing on their balance sheet) are not big compared to the "regular" fiscal deficit.
So - during "QE" they were accidentally taxing the private sector and now that we are inverted and in "QT" their balance sheet is stimulating the economy by paying net interest into the private sector.
Not exactly what they were going for on paper...
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1 hour ago, blakehampton said:
Isn't QE simply an asset swap of long-term bonds for cash, with QT being the reverse?
It sounds like that but in reality it is a swap of some type of Bond for Bank Reserves. Bank reserves are not useful or important and they can't be used to buy stocks or really make their way into the real economy. Lending by large Fed member banks is not constrained by bank reserves in the system. Lending is restrained by capital ratios, demand for loans, appetite to take risk, regulatory changes on what counts for what, etc...
New money ("inflation") makes it into the real economy in two primary ways. 1.) The government deficit spends it into the economy. and 2.) Banks make new loans.
Swapping one government liability (treasury bond) for another government liability (bank reserves) does not have much of an effect. It used to be that bank reserves didn't pay interest, so QE was actually taking away an interest bearing security that was paying interest to the private sector and leaving the bank with useless, non-interest-bearing, neutered banking system tokens. In that way, QE was the opposite of stimulus. It was more like a tax - and you can see that because the Fed was making a profit on the balance sheet and remitting the extra capital to the treasury. A tax is when money is transferred from the private sector and remitted to the treasury.
But then bank reserves started earning interest and the yield curve inverted and then you had bank reserves paying more than the bonds of the Fed's balance sheet so the Fed started running a loss.
The only thing QE did of any consequence was slightly tighten mortgage spreads while the Fed was buying those securities. That is it. A few basis points.
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Yes, today's "unskilled" labor hauling packs of shingles up an extension ladder on his shoulder is tomorrow's "skilled" roofer. Yes, we need the kid who carries the shingles up the ladder. No, the kid who carries the shingles up the ladder isn't going to ruin your country.
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I knew it was coming and Dinar did not make us wait for long. Take a trip out of New York City Dinar. There's a whole country full of hard working Latino immigrants out there literally building the country. It doesn't make sense to send them to NYC. That was a political stunt. Let them naturally flow to where they are needed and have family support systems.
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5 hours ago, changegonnacome said:
It's kind of upside down world.....turn on the TV.......and its the crisis at the southern border....Crisis? You mean the one that keeps sending industrious young people North who want to have families and are lining up to work on construction sites, clean drains, bus tables and generally work like three jobs in an economy/country thats sparsely populated, resource rich and fundamentally short labor while the rest of the world is facing demographic collapse & a kind of endemic laziness & lack of industriousness.....or maybe its Cold War 2.0 'crisis' with our enemy China?......the enemy that is exporting a tonne of goods disinflation to us now and accepting printed dollars in exchange for those very real goods they send....all from a sovereign fiscal authority that is printing 7% annual budget deficits in economic good times with a debt to gdp of 120%.....I mean lots of countries would love to a couple of crisis like that going on simultaneously.
Don't get me started...
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8 minutes ago, blakehampton said:
Does anyone here think that QT will have a big effect on markets?
No. Absolutely not
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5 hours ago, KJP said:
That is possible. But take a look at insider ownership. The structure suggests to me that they want to cash out as many as possible.
EDIT: It's enough of an issue that I wouldn't buy this at, say, $4.80 today. I bought pre-market and my limit sell order already hit for most of those shares. I'm going to keep an eye on it and see if the spread widens out again.
I see your added edit now and I was thinking the same thing. I was a very happy buyer at 4.36 and kept buying below 4.50 but I feel like a seller at 4.81 here. Maybe we won't get another swing at it but I appreciate you highlighting the opportunity - I wouldn't have seen it otherwise. I owe you a few thousand beers if we ever meet. Cheers!
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9 minutes ago, KJP said:
Ashford Inc. go private transaction via 1 for 10,000 reverse split: https://ashfordinc.q4ir.com/news-events/press-releases/news-details/2024/ASHFORD-INC.S-BOARD-OF-DIRECTORS-APPROVES-PLAN-TO-TERMINATE-REGISTRATION-OF-ITS-COMMON-STOCK/default.aspx
Stock price has been volatile this morning, but IRR would be good if deal closes on time. According to the press release, they don't appear to be aggregating across accounts either. So, if you're comfortable with the deal, you could put a decent amount of money into this. Subject to shareholder vote with targeted closing in summer 2024.
"Thanks for posting - regarding this statement, "Ashford estimates that approximately 1.1 million shares (representing approximately 31% of the shares of common stock currently outstanding) would be cashed out in the Proposed Transaction and the aggregate cost to the Company of the Proposed Transaction would be approximately $5.5 million, plus transaction expenses, which are estimated to be approximately $6.7 million. Ashford intends to fund such costs using cash-on-hand."
Isn't there a decent chance that shares transfer to a bunch of 9.9k share owners / baby arbs and the company doesn't have the cash to redeem the much higher than projected number of shares?
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Here is an interesting case study on Philadelphia & Reading Corp, an early Ben Graham and Warren Buffett holding. I found it interesting.
This is from Turtle Bay, who is on twitter and this website. Good BRK content
Case study link:
https://www.turtlebay.io/_files/ugd/f2fd00_f9def6fca1f4401f9d12a071be30352e.pdf
Other interesting notes from the website above:
https://www.turtlebay.io/notes
Twitter -
https://twitter.com/turtlebay_io
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2 minutes ago, Whensthepaintdry? said:
Navient is an interesting holding.
Word on the street is that they have been retiring some stock
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1 hour ago, sleepydragon said:
Hi gfp, unlike other miners, they sell all their bitcoins. I would think this is a good thing? If bitcoin stay at current price, they are certainly undervalued. If bitcoin goes down, their margin is currently at 20ish%
Since the rewards for mining Bitcoin get halved in a couple weeks I would not count on the business staying the same.
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10 hours ago, sleepydragon said:
For the experts here, has anyone looked
at the stock of Core Scientific , ticker CORZ
it seems interesting because:
1. Just got out of bankruptcy and stock is trading at only $3ish
2. insiders have been buying
3. They own their infrastructure and claim to have lower cost mining bitcoins
they also have some warrants which are also interesting.
I am not an expert, sleepydragon, but I will ask you this question - does Core Scientific sell all of the Bitcoin they mine for cash or do they accumulate Bitcoin holdings on their balance sheet? My understanding is that for the most part the miners sell their Bitcoin.
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The number one reason to consider cutting short term interest rates is that they didn't work as intended to slow the economy or reduce inflation. They used to work slightly better by pulling back on the creation of new bank money creation into the economy but that indirect dynamic has been overtaken by the fiscal effect of t-bill interest increasing deficit spending stimulus.
The best reason to stop doing something is that you realize it isn't working.
If the government is really concerned about inflation it isn't all that hard to figure out how to tackle it (moderate fiscal deficit stimulus as a percentage of GDP). But it won't involve the Federal Reserve except indirectly through their policy rate's influence on government interest expense / deficit.
I will add, like a broken record, also, that QE and QT are not effective tools and accomplish almost exactly nothing (and have several dynamics that are more effective in the opposite direction than the way they are used and commonly understood). The Federal Reserve is not the agency with the toolkit for this issue.
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19 minutes ago, Dinar said:
There may be a tax nuance with the swap. If Fairfax takes delivery there might not be tax implications while if it cash settles it, then there will be a large taxable gain? This in turn will likely affect the decision making of the company of when to terminate the swap.
The profits have been cash settled periodically the entire holding period. There is no lump sum gain at the "end." What we don't know is if these gains are taxable at all. In the United States, "profits" in an issuers own stock are not taxed. Someone should ask this question at the annual meeting.
Muddy Waters is short
in Fairfax Financial
Posted
There is this crazy school of thought out there that values companies based on their earning power but Carson knows that.