TwoCitiesCapital

It won't be exactly correct - because you're only adjusting each individual portfolio for the cash flow as opposed to the consolidated portfolio - but you can probably just do a weighted average of the two to get in the ballpark for reporting purposes of an online forum. Wouldn't pass an audit, but it's not like you're reporting this too clients either.

Perhaps this is what drives the wealth of the country towards stocks vs real estate and is long term bullish?

My investments are ~85% of my total net worth with only my home equity as a meaningful contributor outside of my portfolios.

I have a spreadsheet. I take down the values of ALL of my portfolios every time there is a cash-flow (withdrawal/deposit) and then adjust for the cash flow and determine the return over that period. On 12/31, I can simply link all of the returns via multiplication to determine the compounded return for the year . This would be a Time Weighted Return calculation. Typically, its only appropriate when you DON'T control the timing of the cash flows. I use it as the majority of the cash flows into my portfolio in any given year tend to be bi-weekly contributions to my 401k and HSAs which I have limited control over the timing. I may change to a money weighted return for 2025 as I'm vastly de-emphasizing my 401k/HSAs contributions for the next year or two to focus on building a base of taxable/accessible savings and WILL control the timing of the cash flows more.

2015: ~(20) 2016: 24.7 2017: 25.9 2018: (14.1) 2019: 25.5 2020: (4.80) 2021: 18.8 2022: (19.66) 2023: 38.6 2024: 24.4 Fairfax was probably my primary equity contributor as my largest equity position and it being up ~50% this year. The year-end pop in Fannie/Freddie preferred helped too which I've lightened up on by selling ~25% of the position and rolling it into other names that were beaten up during the year. Options trading - primarily covered calls and the occasional cash secured put spread - added another ~1% to returns for the year. The biggest "anchor" on my performance was my fixed income accounts (accounting for 40-50% of portfolio at any given time), but providing a floor return of ~5-6% which I deem acceptable given my views on the uncertain path of the USD/inflation and the response I expect from equities to it. The rocket fuel was provided by Bitcoin which basically carried my portfolio this year (and last). Most of my other equity positions were modestly down, flat, or modestly up less than my bond funds returned so it was a pretty boring year outside of Fairfax and BTC.

First that I'm hearing of this token; however, it looks like it's already bounced this year and now has a market cap of ~$9B vs the $10B value of the potential recovered BTC? Seems unless if you expect Bitfinex to be a price insensitive buyer, or you expect to get additional value from the discounts on Bitfinex's platform, that perhaps the value play has already happened

The first time it hit $10k we had ~10 million addresses holding non-zero BTC value. Now there are over 18 million which doesn't count anyone who has proxy exposure via ETFs. To argue it is riskier at $100k than $10k, one has to make the case that 8 million MORE people are wrong today than one thought was wrong in 2019...after 5-years of additional data suggests those 10 million wallets were correct. #LindyEffect

I see you've done your research on the topic. BTC is only for criminals! I had hoped to hide the criminal activity from less astute onlookers! I concede defeat...

Not sure what you mean by "elusive". We have measurements of network adoption. Both the # of active wallets as well as transaction throughput/value are growing and have exceeded the growth rates of the internet...and that doesn't capture individual transactions over the lightning network or those batched by CEXs or ETFs. There's nothing "elusive" about it - we witness increased network adoption basically every calendar year.

Even if a true signal - isn't the drawdown expected to be symmetrical to the head to the neckline? So in this case about 20 pts or ~3%?

Leading lambs to the slaughter hoping that someone will feel bad enough about killing all of the lambs. Interesting strategy

More for me

And Fox was the only one who had to pay a $700 million settlement after being charged with knowingly peddling false information... When one side is content to peddle in lies, it's ok that everyone else is on the other side of the debate. MSM isn't perfect - and it is absolutely propaganda. But the propaganda is typically enacted in the framing or in what they don't talk about - not in outright lights like Fox and the more niche MAGA-sites/news run. Lol'd Even at its bottom of 15k in 2022 - the historical performance of BTC was far in excess of 50%/yr from its inception. And that was after an 80+% drawdown! I'm not saying you should pencil in 50% into perpetuity - but the network adoption and estimated growth curves supports 40-50% pretty easily for the next several years.

Yup - but neither Republicans nor Democrats want balance. They want control and power. Perhaps - but it was my understanding that Elon is still censoring Twitter. Now its just individuals he doesn't like and people on the left that he disagrees with. After buying Twitter, he hired an independent audit committee to investigate to ensure balance and then fired them when their reports was "you're doing the same things as the prior owners". So much for "free" speech. He who holds the bullhorn will be heard.

I don't disagree with this. They didn't fully exit their hedges/shorts in 2016. Fairfax maintained a regular short book until 2020/2021 and continued to lose quit a bit on them. Whether or not you consider the shorts to be hedges for the remainder of the equity book or not may depend on the person you ask. But I don't really care if they were shorting individual companies or the S&P - they lost money doing it through 2020/2021. Why only 1% a year? And why not consider the optionality/potential for billions of gains in 2020? And why not consider the compound effect on those billions being invested at the covid lows? I don't disagree with this. They've been exceptionally well positioned from 2021 onwards. My point is that it wasn't a home run and some visionary positioning decision made in 2021 that they moved to the short end - they had been there for 5 years and had suffered poor returns and limited optionality through Covid as a result. What made this trade work out for them was the hard insurance market. They had billions more in float when they were right vs when they were wrong which swings the numbers more in their favor. And that wasn't something they could have foreseen, or were betting on, when they went short in 2016. Making an extra $1-2 billion over the course of 8-years isn't a big win - especially when you they could have made that much, or more, in a single trade by dumping duration during Covid if they hadn't already dumped it. And then what would have happened to those reinvested monies? More gains! It ended up being a marginally good trade for them. And maybe I shouldn't be complaining - that positioning is probably what allowed me to buy them @ $250-450 as shareholders gave up after 7-8 years of exceptionally poor performance during a ripping bull market. But now that I own them in size, I don't want them making the same mistakes. I disagree. The initial thesis was that Donald Trump would take office and the economy would go gangbusters. In hind sight, they were wrong. But they waited 5-years and got lucky with a hard market insurance, Covid supply chain disruptions, and inflationary policies from both Trump/Biden. None of those had anything to do with the original thesis in 2016. You're resulting instead of judging the initial thesis and outcome. They were wrong, were patient, and got lucky. It WAS a macro trade. It was hugely risky in term of forward returns. And despite eventually working out, I'd rather them not being wrong on macro/rate calls with the entire fixed income portfolio again. Keep the duration within a reasonable margin of liabilities going forward, allow for the interest income to be predictable and provide optionality in crisis, and make your alpha being opportunistic. That is what I want from them instead of swinging for the fences and being wrong on a major call once every few years.

I made the argument awhile back that being so underweight duration relative to their liabilities absolutely WAS a macro call when people were suggesting Fairfax has learned their lesson and moved beyond that. It was a $20-30 billion bet that rates would go higher and it paid off. But the last time they made such a bet, in 2016, rates rose briefly and Fairfax never extended then rates collapsed in 2020 costing billions in interest and potentially billions in capital gains if you believe they'd have sold the bottom in 2020. I don't view the short duration between as a 2021 and onwards move. It's been a trade they've had on since 2016 and any gains need to be averaged out over that timeline and against the cost of earnings 2-3%, or more, on the bonds over that timeline.

As someone who is bullish on bonds, I'd like it. But honestly, my preference long-term for them is to keep duration +/- 1-year from their liabilities and to stop swinging for the fences there. There have been big wins, and big misses, and my preference would largely be for the fixed income to actually be predictable to allow for taking bigger swings in equities and insurance. They have plenty of opportunity for alpha on the fixed income side without having to swing for the fences. Opportunistic credit exposure in recessions, strategic partnerships with issuers (like Kennedy Wilson), and being a buyer of last resort like they were with the First Republic mortgage sales are all examples of them getting plenty of yield pick-up without having to make huge duration calls.

For me - its an amount where I could tell my boss to "fuck off", get fired, and not have to worry about finding another job. Already have enough that I could take a year or two off - but that isn't the goal and ultimately may actually hinder my ability to return to the workforce as gaps aren't viewed kindly. My retirement is already set - now its workings towards having enough to quit permanently or quit for long enough to find something more fulfilling to take its place.

$3-5 million in taxable savings

Lol - Honestly - good middle ground. Don't go whole hog. Just 11x your DCA

Historically - the 2-year treasury is a pretty good predictor of the Fed - but is some what volatile itself. It peaked in 2023 and has mostly been range bound since, but with lower highs and lower lows. The trend is flat-to-down.

Would lol I don't think Bukele is full-Saylor yet, but I believe he is still buying 1 BTC every day for the Treasury. Most businesses weren't accepting/processing transactions in BTC anyways, and the ones that want to still can. In ~3.5 years when this loan needs to be rolled though, I expect El Salvador's BTC stack to be in excess of the notional. So the question comes do they pay the IMF back and begin life as an actual sovereign nation OR do they keep stacking sats and voluntarily comply with western world direction in expectations of longer term profits on BTC.

So we're told... And yet, CPI-U is still sub 3%. Perhaps the trend is reaccelerating, but spending a few months between 2.5-2.7% hardly screams danger zone to me. My bias is for the intermediate outlook to be lower rates - especially with industrial activity/manufacturing shitting the bed again.

The US is the country in the world that has the LEAST incentive to give up the current system. That being said - the writing is on the wall for the current system. The only question is what would be the alternative. IF the alternative is Bitcoin, the US would do well by being an early adopter. That being said, I do NOT expect the US to adopt BTC in any meaningful way for the $ or the debt. I expect it to be other countries with significantly less to lose who make the move first - as demonstrated by El Salvador and Central African Republic being the first two.

If we stop looking at how much a coin is worth - because 21 million was largely arbitrary - and look at the market cap the picture becomes clearer. $500k for a BTC seems like a lot. But in reality - that is only $9 trillion on a market cap. For an asset class that has the ability to be a global reserve currency AND store of value that doesn't seem like a lot? Gold' market cap alone is estimated to be $17 trillion. In 2020, there was over $18 trillion of NEGATIVE yielding debt. These are the items BTC is competing with and it doesn't seem crazy to me that BTC could get to $18 trillion to compete with them.