TwoCitiesCapital

I think it's possible. But people said the same with the launch of futures and futures ETFs and it played out the same. I know it WILL break. But until it does, I use it to guide me.

Oh, trust me. I'm watching MSTR too. Trading at a 3-4x premium to NAV was worrisome. The recent correction has me feeling better about the path forward though. Last cycle was similar. MSTR traded higher/faster than BTC appreciated, topped earlier, and then the ratio of MSTR/BTC faded into BTCs top. Then alt coins rallies. Then everything died. So far, only MSTR has topped so there are more steps left if we follow the same pattern. I dunno when the 4-year cycle will break. Maybe it's this year. But if it continues, it implied a high sometime in the fall with highs significantly higher than we're at now. And if it is broken? All bets are off, but that also means the traditional 80+% decline is probably off the table too.

Or full self driving. Yet here we are.

We don't need to worry about inflation again until Trump tries to spend his way out of the next recession. On a secular basis, I expect inflation to be higher than last decade. But not in the next year or two.

the hottest new meme coin is....Bitcoin? https://www.dlnews.com/research/btc-bull-token-soars-past-25m-in-presale-as-expert-tips-100x-gains-best-meme-coin-to-buy/ Not sure of the mechanics of how you can airdrop BTC on Ethereum - I have to guess that "$BTC" is some other bullshit token or is a reference to some version of wrapped BTC. But should then be referred to as wrapped BTC or wBTC instead. I will believe that the bull market is over when people start getting rich on this type of stuff. That will be the heigh of euphoria - people buying something that isn't BTC, but is tied to BTCs price/success, in hopes of getting rich buying something other than BTC. Would be nice of the crypto industry outside of BTC existed for something other than degenerate gambling on shitcoins, but here we are. All roads will eventually lead back to Bitcoin. In the meantime, capital will be eviscerated in alts space.

Doomed? Probably not. Elon has always found creative ways to save it - institutional investors buying minority interests, publicly lying about its finances while being days away from running out of cash, promises that build hype but then are never delivered on (or delivered years later), etc. He'll find a way. But it will be a no-growth company selling a fraction of the cars of other OEMs with no immediate pathway to revenue growth trading for $1 trillion.... who is going to want to own it? Maybe everyone can sell to Kathy Woods and the price will remain unchanged.

I will wait to see if an actual deal goes through before judging it - but we know that revenues are down over that time with fewer advertisers and fewer daily users (though hard to know how much of the drop was 'bots' like he claimed vs actual users departing the platform). So it is strange that a company that makes less money with fewer users would be valued at an amount that was known to be absurdly high when it had higher revenues and more users.... That being said, S&P 500 companies are still making less than they were in 2021 and the index is up ~25-30% from its 2021 highs...so perhaps this is exactly the type of environment where that can happen. Given the trend over the last 3-4 months...I think 2 million is going to prove to be optimistic.

Update as of 2/14. Bitcoin is now slightly below the one standard deviation line in terms of normalized price based on prior bull market cycles. Even if ignoring the prior cycles and just looking at its current trajectory over the last two years gets you to 200k by year end.

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.

Because with all of the negative sentiment surrounding China, as well as the ongoing real estate crisis, the valuations were abysmal. I suspect buying Chinese growth in 2024 may end looking similar to purchasing U.S. growth in 2008. Maybe not quite as good given the political tensions and starting maturity of the companies, but it is darkest before dawn and you want to be buying when its absolutely the "worst" time to be doing so.

For what is supposedly an asset class that is experiencing a secular growth trend, what matters is returns over the whole cycle, and that the pie keeps growing. People who started at the 2020 secular lows, rode it up, back down, and then back up to where we are today probably all still very negative returns in USD (and especially on a real return basis). I'm sure there are a handful of projects that bucked this trend - but a basket of them would have done abysmally. That' doesn't strike me as secular growth trend. They've had 4-years to recover while reinvesting supposed "yield" the whole time. But the problem with the yield was its value also fell by 80-90%. As mentioned, it's all very circular. STILL! after 4+ years of ongoing development - there is very little real world value taking place on chain and the returns haven't been there to support that its a secular growth trend. BTC on the other hand... +1 I have a hair of ETH left over from my days of paying for gas. And I have like 5% of my crypto exposure in LINK. But I'm basically BTC only at this point. Had an expensive education in 2021