TwoCitiesCapital

I use IBKR - The rates are dependent on the security that is being lent and how in demand it was. I believe IBKR has the best profit share arrangement with clients, but may be wrong there.

Crazy that basically the only valuable real world application to ETH, so far, is the bearish case for ETH? ETH needs a real world application. - not another DeFi/NFT summer. Perhaps Blackrock finds that with tokenization of the funds. But then people would be holding the funds, and not ETH, just like the stable coins. So that is also...bearish?

The bulk of their equity exposure if via minority stakes that aren't in the 13F because they're foreign (like Eurobank, Thomas Cook India, and Fairfax India) or private (like Exco). Also, the portfolio is fairly concentrated in a handful of these names at the moment and they're equity accounted so the mark-to-market doesn't flow through the income statement, but the lookthru earnings and dividends do.

+1 Thanks!

It is unclear to me what Ripple token does other than provide funds for the parent co/organization. Ripple has worked closely with banks for years to facilitate cross-border FX transactions via blockchain - but it doesn't require the use of their token. I'm not sure if that technology is "better" than Bitcoin or Ethereum - probably depends on what you prioritize in the ranking of things - but even if true the token could be a 0.

Right, but you don't get the Yen, right? It's like an option. When I short a call on Apple, I don't get $24k of cash to invest. I get a very small fraction of the notional (the premium). When you short a futures contract, which is functionally just a series of TRS, you don't get the cash upfront, right? You just enter a contract for future settlement and commit to the margin associated. So you can short $100 million JPY/AUD (obvious denominated outside of USD, just follow me here) and get $100 million worth of AUD. But going short $100 million in JPY/AUD futures doesn't produce $100 million in cash to invest in AUD. That's where my confusion is. It's just a large currency short. If it starts moving your direction, you get the variation margin, which can be invested, but it's still small relative to the notional and assumes the position immediately money in your favor.

I was under the impression the carry trade was typically a long/short arrangement where the sides were equal and invested and the proceeds used to actually buy assets. Not just held earning the overnight rate? In this scenario, you're short a ton of JPY notional with little upfront cash received, only receive a small portion of contract value over time via the variation margin payments (assuming it immediately moves in your direction), and even then most of that isn't investable but needs to remain held in cash to settle variation margin movements against you? So it's a very large short bet on JPY with a very small long bet on higher yielding assets - i.e. the vast bulk of the risk in the short currency side which has little offset. But the whole idea of the carry trade isn't a currency bet, but a rate differential - borrow at 1% and invest at 4-6% and try to hedge the currency movements while retaining a positive yield differential (or accept the currency fluctuations as long as the yield differential remains large enough to cover them). Right? Am I just missing something about how the mechanics of this are supposed to work?

I don't know how to value it, but I know back when I was following Blackberry that there was supposedly large value tied up in the patents that they own that they could license or sell. The market cap might be more reflecting the value of a competitor acquiring the patent portfolio versus anything the operating businesses are doing. I had hoped Fairfax would exit in the euphoria of 2021 that took this over $10/share. Hoping again they sell now just to get the money invested productively. But I tend to agree that it is rounding error for their overall portfolio at this point and have largely stopped following/caring about the position as a result.

So I was curious and tried looking at a number of Indian names on IB and am realizing IB doens't give me direct access to the Indian markets. I know at one point you had to register as a foreign investor if you had like $50 million in AUM, but is there still no other way to access the market as a non-resident/non-citizen? I'm not one to argue for premium valuations on CEFs, but if access can be had by certain parties, perhaps it DOES garner a premium for Fairfax India. At least no discount for the fees it charges since you're essentially buying admission to the markets you can't get otherwise.

This is what I figured - so you're not effectively "borrowing" the notional with this strategy to effect a "carry" trade like OP is referencing. You're just short JPY while receiving a small premium and then required to put up initial margin balance along with daily variation margin calls? It doesn't seem to be an effective way to do the carry trade in size as the short-end (JPY) is going to be a significantly larger notional than the cash received to reinvest at higher rates?

Maybe not AI generated. I'd expect AI would do a better job! I'm guessing he has some flawed model that he just plugs numbers into without any sort of critical thought as to whether the output makes any sense. I mean, for f*cks sake, the interest income alone would make his price target only 10-12x of earnings w/o considering ANY addition from equities, minority interests, or insurance contributing.... In what world does $1,290 CAD make any sense?!?!?

Perhaps. But to keep this in perspective, the sovereign wealth fund is estimated to be over $1.7 trillion. A $500 million stake is 0.03%. Better than 0, but hardly indicative of any level of confidence/belief/long-term commitment to the asset. My speculative positions are a higher weight in my own portfolio.

I think I'm fortunate in these cases because this is what I look for. Stocks down 50% from their highs, or more. Bad sentiment, negative headlines, etc. And a willingness to buy what is cheap without regards to a quality screen. I never owned the BATS when they were popular. But I started buying Alibaba last summer and have been adding to Prosus in recent months. Relative valuations were stupid and the sentiment surrounding the real estate made it clear there was an opportunity in China generally. Collectively, they're now my 3rd largest position behind Fairfax and Exor. Was happy to see Tepper buying in size recently which gave me added confidence given his track record calling these things.

BIAL IPO and* IDBI bid We'll see how those evolve but are the only two things that really have the potential to move the needle here.

I miss the days of the free peak, buying the stock, and then watching it bounce Markets are not always entirely efficient even when they're given all of the information.