TwoCitiesCapital

Would be interested to know how it was structured - We're shares issued to create the $1B? If so - at what price? And if shares weren't created, who lent it them or what did they sell for the liquidity?

I understand how BNPL is currently implemented is perhaps hard to repliacte - but why not by the card issuers themselves on payment terms for the credit cards? AmEx used to be a charge card you paid off every month. And then over the course of 1-2 years back in the late 2010s, they opted to allow consumers to roll balances, charge interest, and have a BNPL option of paying off large purchases at a lower interest rate over the course of 3-, 6-, or 9- months. Why couldn't a credit card issuer simply adopt BNPL-like terms for a specific card they issue and then no infrastructure, buttons, or merchant partnerships need be had? I doubt AmEx would do this given their upper-income focus on consumers, but it doesn't strike as difficult for any card-issuer partnered with a bank focusing on mid- to lower-income consumers a la Capital One/Discover.

Concentration is how you make/lose money. Diversification is how you protect it. Over time, investment management is an exercise in both. I found early on that it was often my smallest positions that outperformed the most and my largest positions that would lag. Had I just equal weighted the portfolio, I'd have done much better. I made adjustments to my approach as a result. I never equal weighted, but set a limit on my largest positions as a % of my net worth to force more money to funnel down into the smaller ideas. The hope was I'd prevent some damage if I continued to be wrong, but still give myself grace in getting better/more right over time. As such, I typically start positions at ~1% of my net worth, a full allocation would be ~3-7%, and I only have two investments at the ~10% limit which have largely grown there and weren't allocated there.

But the Treasury can - by sending direct checks to consumers (2020) or by writing checks to take over companies (Fannie/Freddie), or by coercing corporations to buy out failing competitors, or by deficit spending in the trillions. All while Fed Reserve holds rates at 0% and buys treasuries. You tell me which Congressman, elected by popular vote, is gonna say "fuck it - we've got to do the difficult thing and deal with the pain instead of the easy thing and print" And not just one - but enough of them to push through legislation. America doesn't have the will to do the hard/right thing Exactly. Which is why it's easy to know they'll do the easy thing - and print.

Yes. But we've seen what happens when it's time to collect. The losses are socialized and the government prints and deflation is avoided. It's not morally right. And you should invest in the companies owing the credit. But as long as we're the reserve currency, we'll print. No, printing is the alternative outcome to offset the contraction in credit. And they'll print. And they succeeded both times. And will do again.... because they'll print.

When are we going to close the gap from $65-80 from May?

There's a reason deflation hasn't happened since the Great Depression and that inflation was the escape valve (devaluing against gold and then mass austerity of personal consumption to rebuild savings and investment in the war effort). Once we found Keynesian religion, and realized we could just print our way out of any mess (or default against the obligations of a hard currency), we did. I used to think along the same lines as you - that debt was deflationary. And it is - for anyone who can't print their own currency. But we're the latter and currently have forced buyers of the USD regardless of how much we print (at least for now), so deflation aint going to happen. Not to mention that other infrastructure in the area has been damaged/destroyed by Iran and nothing says new infrastructure wouldn't be under similar threats. I don't know what the right price for oil is - but if we could hit $150/barrel in 2008, I don't see why $150/barrel today is out of the question. It would still be a significantly lower inflation adjusted top from 2008, comparable to the Russia/Ukraine episode, and reflects the ongoing supply shock, the increased insurance premium, AND that nations will need to rebuilt some level of inventories even if traditional drivers of demand fall off. If oil wasn't going to head higher, I don't know why we're doing all of these reserve releases and jawboning trying to prevent it. I think it's clear that the price has been artificially suppressed and the only questions are by how much, and for how long, and how high will it go when that suppression stops.

+1 After seeing the results, I sold some put spreads at the open for beer money. $200/$195. 35% if it remains above $200 on any bounce

Also started a position in ADBE today. Wanted to get in before earnings, but content to hold long-term. Started a position in PYPL too. Both idea shamelessly stolen from Michael Burry.

Sounds like a good way to increase int'l traffic to the airport

Damn. Nice stink bid! I leave outstanding limit buys out for illiquid ADRS to try and get aggressive fills, but I can't ever recall it working out for me

+1 This stuff always seems to work until I try and trade it So you're welcome that I ignored it?

Bitmine just issued 3.5 million preferred with a 9% coupon at 80 cents on the dollar implying they're able to get filled at a ~12% yield. So seems like STRC is still in the right ballpark for yield. Honestly surprised Bitmine is able to fill at these levels - they're sitting on similar sized losses with a fraction of the notional exposure and I have a lot more confidence in BTC vs ETH. Would've thought they'd have to scale to a higher yield to reflect the risk to get filled. But the market seems to still be demonstrating demand for these securities at low double digit yields so I expect STRC will be fine.

Not that it's impossible with BTC, but with the code being open source for ~18 years at this point, it becomes less and less likely with each passing day. Is another reason why it's 'slow to improve'. It only has to do one thing - be sound money. And as long as it can do that reliably, the rest of the functionality will come in time - either on chain or via L2 functionality.

+1 It would've been nice if I could see all of these discounts persisting/growing in foresight - I could have traded more opportunistically. But Exor traded below its expected cash value in 2020 and was a boon to add at those levels even after the deal with Covea fell through. In hindsight, I'm glad I bought then. MSTR traded at a discount to its BTC on 2022 and would've proven an excellent buying opportunity even after considering the 80+% drawdown we've seen from the recent peak. In hindsight, I wish I would've bought then. Prosus is likely to outperform Tencent by at least 40% over the next decade - probably more - and I'm bullish on Tencent for the next decade. In hindsight, I'll be glad I bought. FFXDF will be no different. Size it smaller if you're impatient.

I have confidence in BTC - I have quite a bit less in ETH and others at this point. I think Bitcoin will work for Saylor, but I wonder what it looks like for Tom Lee to dump 5.5 million ETH on the market

Exor has been repurchasing shares opportunistically since 2015. Still at a discount. Prosus has been backing up the truck for the last 2-years. Still at a discount. Fairfax Financial arguably is still at a discount despite multiple years of execution and large share repurchases. MSTR has grown its BTC/share by ~20% per annum for the last two years and still trades at a discount to its BTC holdings on a diluted basis. All this nonsense of discounts being indicative of management behavior/quality and manage should 'do something about it' is so stupid when you consider all of the management's doing something about it and the 'problem' still persists. The 'problem' is actually an opportunity, all of these management's have taken advantage of that opportunity, and long term holders of each will benefit enormously when sentiment turns. Sentiment is the primary issue for any of these companies and sentiment is fickle and not within the control of management.

Luke Gromen had interesting commentary on reserves this AM Gold now surpasses USTs as the most reserved asset. We're watching the loss of reserve status by the USD even as it retains the ability to act as a unit of account. This 1) is probably signaling the beginning of the end of USD dominance in trade/reserves/reserve currency status And 2) goes to show that Bitcoin doesn't need to be one to be the other. It can take on reserve status long before it's a unit of account.

It's pretty easy - are you loyal to Trump? And does the action benefit Trump and those loyal to him? Or have you directly paid Trump a monetary token of fealty? A-ok. Otherwise, probably wrong and at his discretion how badly he wants you punished. Hopefully, at that point, you don't have any public mentions on social media of ever having supported Democrats....

I expect to lighten it up so some once it approaches a fairer value. I'll have to re-evaluate my expectations for future growths against the fees at that time, but will probably continue holding a small piece going forward. Concentration is how you make money and diversification is how you keep it - so will make some sense to me to trim after I get to a decent annualized return on the position and it's not trading obviously cheap.

Don't forget the members of this very administration are shorting/going long oil futures and predictions markets minutes before major announcements are made. But that's NOT illegal apparently.

In Q4 of 2023 this was $12-13/USD and then 12-15 months later it was $20. People seem to forget that pop - perhaps because it didn't prove entirely sustainable. But the precedent is there, and I can see a 75-100% gain from here over the next ~15-18 months on a successful IPO of Anchorage.

Surely this means an IPO is imminent, right? It couldnt mean that these entities aren't a priority for the administration

Basically the justification for every shit coun ever.... Someone asked me the other day "what's the next Bitcoin?". I told them the answer is Bitcoin.

There is a feedback loop - the TRS directly flow through to earnings. I.e. stock weakness can beget earnings weakness which can beget more stock weakness. Just depends on how steep the drawdown and if anything else is offsetting it. I don't think we're at a concerning point yet - from a liquidity perspective or a major earnings hit given how spread our between quarters the drawdown has been. But the possibility is why I was advocating they reduce before the draw down happened I dunno if I'd throw on more leverage, but they could certainly keep the TRS position in place now that we're down 25%. Too late to close out advantageously, but wouldn't be upset if they trimmed more next time we're at $2000/USD and just bought back cash shares now