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TwoCitiesCapital

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TwoCitiesCapital last won the day on January 17

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  • Birthday 04/04/1989

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  1. They can take it in cash and buy the shares at the same discount and end up with the roughly the same number of shares. The difference being float/tradable shares decreases (as opposed to increases) which may help close the NAV gap in the future AND is does NOT adversely impact FIH shareholders (including the existing balance of FIH shares Fairfax holds) via unnecessary dilution.
  2. This is why, historically, equal weighting has tended to outperform over long-periods of time. Hasn't been true of the last 10-15 years, but is likely to revert and come true for the decade ending 2030 IMO.
  3. 3) more people finding value and using it... as has been the case for the last ~15 years There are pros and cons to self custody. If you had a lot of money in a wallet and didn't take steps to safeguard this potential, it's on you and is a con. Long term store of value Online digital payments with immediate settlement Censorship resistance Cheaper payment processing than credit cards (when using L2 networks like CC networks are) Ability to remit payments across borders w/ no unnecessary fees/taxes/intermediaries I'm sure there are more. They are NOT free as all prices rise to reflect the cost to the business and They are NOT quick for the receiver. Cash is by far the loser here as you pay the higher prices and get no reward for it. Everything the consumer sees is a papering over of the problems that the processors/businesses see on the back-end of the financial plumbing. Some things I don't like as a consumer? 1) I don't like waiting 5-days at Schwab for the money to settle when I'm trying to do a IRA contribution/backdoor conversion. 2) I don't like waiting 3-5 business days when moving cash between one financial institution and another. 3) I don't like waiting 2 days for trades in my brokerage account to settle before the money can be withdrawn or redeployed into other securities with faster settlement. 4) I don't like paying wire fees to ensure large payments need to get where they're going more quickly than the standard 3-5 days when I had to close on my mortgage. BTC transactions settle in 10 minutes for lower fees than a wire transfer and BTC/blockchain solve the above issues. And these are just the issues I see as a consumer. It doesn't consider the immense pain/resources/delays that actually occur within the financial plumbing that we expend untold resources/time navigating it. No, it doesn't. It takes 10 minutes for the payment to be finalized (as opposed to days/weeks with a credit card). Lightning Network does it in seconds. Bitcoin doesn't SOLVE every problem. But it's superior to cash/credit cards in the ways that matter (long term wealth preservation) with other solutions to make it more competitive in areas of less importance (buying a latte).
  4. It was 20% of my net worth at the beginning of the year. Definitely higher now and predominantly in BTC with a little ETH. Wish I had been as hands-off. I lost 10-15k learning DeFi and altcoins in early 2021 by buying near the top and riding it down and then lost another 0.4 BTC in the Celsius bankruptcy. Would be doing quite a bit better had I just stuck with Bitcoin and kept it in my wallet.
  5. Im sure it depends on which currency you're looking at, but Bitcoin is hitting ATHs in several currencies including the USD. We just hit $69k+ a day or two ago surpassing the prior ATH by a few hundred $. In many non-USD currencies, the highs are more notable and 2021 levels surpassed much earlier. And while I understand the point that gold is up over the last 3-years while BTC is flat, would also note that 1- and 5- and 10- yr returns all favor BTC and that it's notable that we hit a new ATH before the supply shock of the halving which has never happened before - so I'm optimistic we're gonna turn the 3- time frame as well.
  6. Perhaps Egypt will be the next country where a BTC parallel currency makes the most sense.
  7. It's a ~9.25% portfolio position for me which is basically right at my self-imposed limit of 10%. I also have ~3% in Fairfax India and some overlap with their individual investments like the ~2% allocation I have to Eurobank which is why I haven't added more to Fairfax despite technically having some room to do so. As part of my net worth, Fairfax/Fairfax India are just shy of 10% collectively.
  8. https://www.zeebiz.com/markets/ipo/news-sebi-clears-fairfax-backed-digits-ipo-after-delay-letter-shows-278705
  9. It's correlation to gold is pretty high at the moment.
  10. Generally speaking it should behave bo different than the underlying bonds. In this case, my suspicion is that as 1-2 year bonds rolled down to 0-1 year type bonds, they were probably sold and 3-4 year bonds purchased - all the whole rates kept rising and 3-4 year bonds kept falling in price. This appears to have stabilized over the past year which is what we'd expect with few hikes and the amortization towards par. We'll likely see the opposite occur in a falling rate cycle. Bonds near par regularly sold to buy more 3-4 years which keep gaining on each subsequent rate cut. So your ups and downs are amplified by the ETF trying to stay true to its 1-3 year target you basically press-the-bet on 1-3 year bonds instead of allowing them all to to zero. Perhaps a better proxy for the underlying bonds would be to own a money market AND the 1-3 year fund so you have the spectrum of 0-3 years covered.
  11. What we saw for client accounts in 2020 was that we continued to get daily/intra-day liquidity for bond ETFs and Mutual Funds in 2020, but it could take days to get liquidity for individual bonds when it came to individual Muni and/or corporate issues unless if we wanted to take massive haircuts. Funds/ETFs will only have liquidity issues if the underlying bonds have them first. Outside of treasuries which remained very liquid, it actually seems safer to own the fund/ETF vs the individual bonds given how that has worked historically.
  12. Why can't you just wait a similar amount of time for the treasury ETF to amortize back to "par" i.e. rise in value? Owning a vehicle that owns bonds isn't any different than owning them yourself in regards to how it behaves for rising/falling rates. The primary differences come from fees and management decisions around what to buy/sell with inflows/outflows and the overall portfolio characteristics (average maturity/duration, coupon, etc). If you don't trust a professional manager to make those decisions on your behalf, then you shouldn't own a fund in the first place. Basically, it has nothing to do with how the vehicle behaves in response to interest rates.
  13. If it's cash as to not bear risk because it may be needed, money market and high yield savings account. If it's cash that's waiting for a better opportunity to deploy, my preferred vehicle is JSCP at the moment.
  14. Doesn't seem like the NY regulator views this as some massive fraud on behalf of Gemini either if they were willing to settle a multibillion "fraud" for just $37 million. I mean, Wells Fargo has probably paid that amount in settlements every month for the last several years
  15. Yea - I know he was still holding $10+ million when he went quiet and has suggested he wasn't selling But I also believe he has disclosed that he'd taken $5-10 million off the top at different times as he rolled some of the contracts so he probably did well even if he never sold another contract and rode them down to being worthless
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