Ross812

I bought some 6 month zeros on Fidelity @ 4.79% today.

WMT, many utilities, and Michelin. I'm surprised those taking about irreplaceable assets don't include telecommunications, there is only so much airspace. I would dare to say UPS, Brown Forman, Disney, and LMT.

Sold options around JOE and some $23.50 puts of OSTK. The pricing on options has been really nice lately. OSTK has been paying 5% for 10 day ATM puts lately. On JOE, 6% ITM 3 week buy-write contracts were paying 4%.

I like tikr as well and pay for a subscription. I believe subscriptions are on sale right now. Seeking alpha is good to get a company overview, but I like looking through fund filings to find ideas. You can find ways around the SA paywall if you only want to read the article.

Sold $50, 18 November Puts on IAC.

Gold has a 6000+ year history as a store of value and use as a hard currency. BTC has a 13 year history. @rkbabang as for valuing BTC by total Fiat/ total BTC - LOL. At best BTC, is an alternative asset class. During WW2 fiat was worthless for international trade between governments and gold was used as THE hard currency. It was worth about $750/ounce in 2022 dollars. Total world gold reserves amounted to 1.2B ounces in 1950. The total war effort cost $4T in today's dollars and the peak market cap of gold was $900B.

Increase of 85% of MKLs CABO holdings. It's less than 1% of Markel's 6.7B portfolio.

Sold a bunch of daily calls on META ($111) and GOOG ($95). I have a bunch of $25 OSTK puts expiring today, sometimes its better to be lucky than good.

I don't like seeing stuff I own in this thread because it means it is down! I bought a little more DFIN, its now at 3%. I think there is a low hurdle for this to double and hit $70 in a few years with the assumed growth of the SaaS side of the business and no change in valuation. I want to watch it for a while before I am comfortable making it a significant position. I had a small position in MSGE which I am trying to get more comfortable with.

3-mo. t-bills (4.32% on the ask), DFIN, and CLPR

@RedLion - that is the case I have observed. The issue is you have rising NG costs and debt is more expensive to roll forward. Many of the utilities have rate increase caps though so the ROE can lag the regulated limit.

Bought more META today. Also bought a starter in DFIN.

Agreed. We won't have a full break down if companies are able to pass inflated costs onto the strong consumer. An increase in the risk free rate should drive down risk assets as a whole though. Banks are forecasting a FFR of 5-5.25% in May 2023 and continuing through the end of '23. If the December meeting results in another 75bps hike, I think we are going to blow through the 5-5.25 prediction and we can expect a rerating of risk assets. I am worried the Q1'23 wage increase print. What is the FED going to do if they start to see signs of a wage spiral? Talking to friends who are recruiters, they are seeing 10%+ wage increases across multiple industries.

I wouldn't view the political risk as any more extreme than the risk to O&G, technology (privacy), or healthcare. Utility political risk is local on the state or even city level as well so diversification is important. The adoption of EVs is going to drive increased electricity demand similar to the widespread adoption of the AC and the IRA solidified 10-yr tax credits for green infrastructure spending by utilities. At least in my home state, increased input costs and initiatives to improve safety and reliability are an easy lift for a rate increase. In my view, the primary concern with utilities is the debt load. ROE gets cut as debt payments go up and debt is rolled.

@ERICOPOLY I hope samsung has worked out the kinks in their refrigerator line. We have a french door model, purchased in 2013, and the refrigerator fan freezes up causing it to get too warm which freezes up the ice maker. Samsung had a couple of service bulletins but they didn't solve the issue.

@changegonnacome I agree the fed is going to keep at it. What is the right course of action then? You can invest in toll type companies - online market places, payment processors, maybe, financials, but you are going to get killed if the coming recession results in a lot of unemployment. I actually like utilities if inflation doesn't bounce around too much (ie the Fed remains committed and we dont have a 70s scenario). Utilities have a lot of tail winds with the green initiatives coming out. I think long term the utilities are going to replace a lot of the o&g. Staples? Healthcare? Wait it out in t-t-bills? What worries me is we start to see a wage spiral in 2023. The FFR will need to stay elevated and the yield curve starts to normalize (1% spread on the 10yr, 2% on the 20 yr over the FFR). Risk assets are going to get smoked.

So in the US we still have about 2400 covid deaths per week which is around 4% of that number. I would be interested to see excess deaths prior to 2020 to see the typical variance. The stats were not readily available. I'm sure the covid number is under reported as well as the hangover from the disruption of healthcare the last couple of years.

For me, I was trying to update bank information. I've had an account since 2008 or 09 and had multiple checking accounts linked (you used to not have to get the wizard's seal). I deleted two accounts no problem, deleted the third and my account was locked for suspicious activity. The agrivating thing was most of the time I called, it would go through the menu and just hang up due to high call volume. They conditioned me to be thankful to be on hold! We have a lot of i-bonds so I was pretty motivated to regain access.

@TwoCitiesCapital, fair point on the Atlanta Fed. Below is the historic spread between the 10-yr and the 30-yr mortgage (borrowed from Wabuffo's twitter). I think it tells an interesting story about the uncertainty the banks have about the direction of long term rates. The longer term average spread is about 170 bps and is nearly 300 bps right now. To me, this implies the risk departments at the banks are projecting a future the 10-yr around 5.8% (170 bps off the prime mortgage rate). The 10-yr is at 4.16 today which is 33 bps over the FFR. I'd say the risk departments at the banks are much more informed than any of us so they are thinking a FFR of maybe 5.5% in today's messed up economy? What are the implications of a FFR of 5.5%, 5.8% 10-yr, and a 6% 20-yr? That's an implied hurdle on the SP500 of 7.3% with a risk premium of 1.5% over the 10 yr. A DCF of the SP500 at 8.9% growth with today's earnings and a that discount rate gets us to the SP500 at 3670. Does that mean we are fairly valued now?

Edited to say this has since been revised from 3.1% to 3.6%.

I mean the 20-yr is a 4.56% today with a FFR today at 3.83%. I think you might be right and the yield curve may stay inverted if we have a short peak and relaxation of the FFR. If we get something akin to the 90's with the FFR, I think the curves will normalize and you have a 10-yr about 1% over the 2-yr and 20-yr 0.5 to 1% over the 10-yr. I don't see any way the 20-yr doesn't at least stay within 50 bps of the FFR. I think the FFR is going to have to go over the PCE inflation rate. We are a 80 bps from parity now. The amount of overshoot needed and the timing is the problem.

The trimmed mean PCE inflation rate is 4.7% right now. I think the FFR needs to go at least 100bps over this (lets call it 5.5 to 6%) to help tamp down inflation. The 10-yr should be about 1% higher at 6.5% - 7%. Throw on an equity risk premium of 1.5% and need equities to yield 8-8.5%. We have a lot more downward momentum if rates keep being pushed up and have to stay there for a while. The smartest move might be to follow @thepupil into bonds and hang out in 90 day T-bills and add duration once the yield curves start to normalize. The 20-yr should be paying around 7-8% with the FFR at 5%+. Wait for equities to over correct and sell the bonds once rates are cut. I am starting to see the wisdom in what @changegonnacome is saying about only investing in EV/FCF monsters with a margin of safety to the 8-8.5% required equity yield coming.

Closed out my $38 ebay puts on the bump after earnings thus morning. Bought some 90 day treasuries yielding 4.2%.

The bulk of our money is in the following allocation: 25% - Utilities (increased from 20% this year) 20% - Healthcare 20% - Small cap consumer staples 10% - Berkshire 10% - Nasdaq 10% - Gold 5% - Small Value The benchmark (with the representative ETFs) is down about 8% as of this morning. I am down 6% as I trade around in those allocations and play with lots of options. My pooled trading account with OPM which I mostly discuss here is down 6.6% this year. I was up 15% at one time this year.

Gamestop was just the beginning. The number of retail traders through around trading daily options on SPX, XSP, SPY, QQQ etc is through the roof. The reddit bro with a 20k account trading 5 options of XSP is controlling $187.5K worth of equities for $950. The last chat room I looked at had about 50 people actively posting at any given time and three times that during a big new event like the FOMC. The IWM trade I posted about in the other thread came off the message board. You take 150 people throwing $500 leveraged 200x and you are talking $15M repeated two or three times this afternoon. They are not all winning, but the market maker has to buy the shares to remain neutral. That is one message board. If the average stock bro had 20k - the total collective account size on the board is $3M. COBF has individuals with far larger accounts, but I doubt we threw around $15M collectively today. Their message board threw around $30M+ today!