TwoCitiesCapital

I don't disagree with y'all about Biden, but Trump literally invited an angry mob to try and lynch Pence for not overturning election results.... And literally took the first steps of undermining democracy by dismantling what 'truth' is and casting anything you see in media, and from official sources, into doubt in favor of believing your own 'truth' - like the election being stolen with literally no evidence turning up this entire time....

Would just point out that if everyone thought along the lines of "$100 of debt today is essentially worthless in 50-years" then you will have no one to issue the debt to...

To an extent. But there are a ton of foreign treasury holders too. And its not an insignificant portion that would be transferred from U.S. to Japan, China, Saudi Arabia, etc. on their reserves to be recycled into global trade. So more income at home, but also more income leaving, and if we're having 20-30% inflation every 5 years then fewer of them may be wiling to roll those treasuries, reinvest that interest, or to price goods in U.S. to build those reserves. Its more complicated than that because 1) we're the reserve currency and 2) the largest owners of the debt are U.S. institutions/citizens. So we're borrowing from ourselves to consume. How do you that? Print more currency to pay off the debt while continuing the consumption. That's hyperinflationary, right? Perhaps. But the world is constantly needing USD to pay for global trade and finds itself constantly short USD for USD denominated debt globally. So it isn't...until it is.

+1 Have been conservatively positioned since 2021 and have been wrong thus far to be light on equities - but the data is still there to support a fairly dramatic slowing IMO. Fixed I come hasn't been a terrible place to be over that period, but the last ~18 months or so have definitely closed the gap and "risk on" was the place to be.

+1 I trade a little around my IBIT held in my IRAs. I don't trade BTC directly for these reasons other than to capture losses on recent lots of we dip. I have a suspicion we'll see a dip - but I don't know how much and think odds aren't insignificant that it's small or doesn't occur at all. Instead of trimming positions, I've been selling OTM puts in my IRAs instead of buying outright exposure. Basically getting paid 2-3% every 2 weeks to have limit orders 5-10% beneath the market. Will be assigned on the dips, if any, and in the meantime getting fat annualized returns if I don't get assigned.

That's great. I've owned a condo whose price has gone nowhere in 7-years judged by the asking prices of my current neighbors. Significantly negative inflation adjusted returns on the gross asset value. Oil/gold/Tbills are available to everyone - and accessible in brokerage accounts. Your neighbor's house isn't Just a little to easy to cherry pick anecdotes in hindsight without considering the availability/luck involved with that. Really seems like the approach here is a rather flippant "it's easy to make money in real estate" and "if it didn't go up, you shouldn't have bought it" while ignoring every example of people who've lost money holding/buying real estate in the last few years. My brother is also upside down on his mortgage from 2021 - and he lives in an entirely different state/city/environment. Real estate is NOT working out for everyone for the last few years. Would also put many oil producers/gold miners against that 37% return. I've made more than 37% on most of the ones I own just this year - let alone their returns since late 2020.

Am torn between 1) BTC will drop immediately after halving as desperate miners sell and 2) We're in a new paradigm with ETF access opening tens of billions of dollars in regular, consistent, slow-trickle secular demand providing a floor Guess I'll just keep DCA'ing and rolling short OTM puts on BITO for fat premiums.

Depends on how short, but in general are a better inflation hedge than most other assets. The best immediate inflation hedge is oil. But oil is also exposed to idiosyncratic risks like cratering demand if the economy is also weakening (and politics!). So a basket that is heavily skewed to oil, some to gold, and some short-term fixed income should be a reasonably good hedge against inflation. Oil is immune to interest rates, but not immune to the economy. Gold/short term bonds are largely immune to the economy, but not real rates. As a basket, they should diversify the idiosyncratic risks of real rates, nominal rates, and the economy while hedging inflation. Future implications of deficit spending? More volatile inflation going forward.

Didn't Rome still burn, and later fall, despite devaluing their currency multiple times?

Wanted to go, but certain items came up that made it difficult to do so. Perhaps next year.

This is the age old question of commodity producers - hedge or don't. By selling every BTC they produce, they hedge their risk. They lock in profits/cash today and will be less volatile than their peers. They also will benefit a fraction of the amount for any rise in price in BTC relative to their peers who may be holding a portion, or all, of the BTC they mine. If selling BTC today, they lock in prices of ~70k. If BTC continues to rise, as many of us expect, they could be selling the same BTC for 100k in a few months at significantly higher margins and could have simply financed that additional gain at a cost of ~5-10% if issuing debt/equity to pay the daily expenses while they wait. +1 There will be a period of consolidation in the mining business immediately after halving when revenues for miners get cut by 50% waiting for the price of BTC to double to make up for it.

Muddy Waters, perhaps? I generally agree the banks were likely long the stock and then short the swaps collecting the financing spread for the bulk of the trade, but if they have a client who wants to short then they could offload some of that exposure to them by having them be the short-side of the swap that Fairfax is long and collect a spread from both counterparties while having no capital locked up themselves. It's possible that overtime they're unloading the share-hedge and offloading the short-risk to other clientele. Agreed. It doesn't make sense to mark the shares as cancelled either. Effectively, it gives Fairfax the economic benefit of going long its own shares, but it's not the same as cancelling them to other shareholders. Fairfax can exit the position at any time and is no longer exposed to the fluctuation in cash flows while the shares outstanding number doesn't change one iota. I think Viking's way of accounting for it (like it were any other MTM investment) makes the most sense until Fairfax cancels the shares.

I started DCA'ing in 2019. I'm up near 20x on certain lots acquired in 2020. 7-10x on most lots purchased in 2019/2020. And even up 1.5-2x on the most of the lots purchased in 2021. Have I outperformed NVDA? Hard to say - I haven't calculated my exact performance, but not outperforming a single stock for me isn't a sign of failure. Its a recognition that I would have been unlikely to pick NVDA in 2019 as a conviction pick and commit to holding it for years like I did for BTC. What I did instead was allocated to BTC with the thought it would likely outperform the average stock. It has done so in spades. As well as outperforming all of my individual stock picks - even fantastic ones like Eurobank, Fairfax, and Rolls Royce - all of which were acquired at great prices from the 2020 drawdown. You didn't need to buy BTC back in 2012 to do well. You just need to DCA with a 3-5 year time horizon. Will BTC achieve the same level of returns it had in 2013 and 2016? I doubt it. But that doesn't mean it still won't be the best place for incremental capital for most of us.

Butthurt much? I mean, I agree to an extent. Me buying Bitcoin and holding it is nowhere near the achievement of Carnegie, JP Morgan, Rockerfeller, etc. But just like one could simply get rich but buying Amazon stock and "white knuckling it" from 2002 onward, I don't see why BTC is any different. We saw the opportunity. We capitalized on it. We yelled its sermons of hard money and fiscal responsibility from the mountaintops. And we waited years to be proven right while few listened. I don't see any issues with being rewarded for that foresight, patience, ridicule, and risk undertaken.

I'm not finished - but the book has definitely improved my impression of Musk. I was unaware of how involved he actually was with the start of Tesla prior to taking control. Same with OpenAI. His contributions are even more impressive and his work-ethic is maniacal. That being said, it also doesn't paint him the best light when it comes to home life and how he treats others when he's in one of his moods and what he expects from others who work for him who aren't necessarily devoting their entire lives to launching an electric vehicle. It's also obvious to me now why Tesla had all of the quality control issues it has when he was "deleting" even minor details like going from 6 bolts down to 3 to secure things. There's absolutely good to his approach of "delete, delete, delete" and hope for the best. And while that is excellent for cost control and efficiency, the cavalier attitude in which it is approached echoes his attitude towards things auto-pilot deaths which are problematic when we can point to competitors like Google who have none. Overall - it's a good read. And leaves you with a mixed impression of Musk.

I believe the commitment was every new, non-insurance indian investment would be done via FIH to prevent a conflict of interest in determining which shareholders get access to which deals. If FIH and FFH are both contributing proportionately due to a deal being too big for FIH, I wouldn't be upset because it doesn't upset the apple cart of favoring one group over another. If it's structured where FFH gets the bill and FIH a token amount, I think you'll see problems.

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.

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) 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).

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.

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.

Perhaps Egypt will be the next country where a BTC parallel currency makes the most sense.

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.

https://www.zeebiz.com/markets/ipo/news-sebi-clears-fairfax-backed-digits-ipo-after-delay-letter-shows-278705

It's correlation to gold is pretty high at the moment.