TwoCitiesCapital

They e repurchased a few hundred million IIRC correctly, but that was also when the BTC prices were higher so still a losing trade despite the 20-30% to NAV that they were executed at. If the parent company wasn't also having liquidity issues at this point, I'd expect more repurchased to be made to sop up the excess liquidity from sellers in this market. And I doubt they can take out the whole trust. Would require me to give up my shares to them at 50% discount and I'm not taking anything less than 10% personally. Yes. This is the perfect storm for miners. They had uncharacteristically high revenues in 2021 from the folding up of Chinese miners, easing of difficulty adjustments as a result, cheap energy, and a high BTC price. Literally all of those factors have reversed - difficulty near record highs, BTC price down 80%, and energy prices have risen across the board (even for renewables). And all of he mining equipment purchased in 2021 with record profits is now being delivered and coming online presently exacerbating the problem and killing ROI for those machines. And then add leverage to all of that... I've never purchased BTC mining equity before, but honestly now might be the time. Whoever survives this is going to have their pick if cheap equipment and a business model that works for BTC @ 15k when my belief is it will be significantly higher in 3-5 years. Yes. This is the "critical thinking" that has been present in this thread on the bear side for awhile now. Let's take something that's clearly a commodity, apply valuation mechanisms that only work for corporate structured companies, and then use that to poke holes in any non-zero value for the commodity. You know what else have non-zero prices and no cash flows? Cars. Homes. Wood. Copper. Gold. Iron. Rock. Etc etc etc.

If they're as short-sighted as you seem to give them credit for, I agree. But in the long-run, they'll benefit enormously from being able to collect additional assets again instead of sitting on static trusts and dwindling fee revenue. The best way to do this is to demonstrate a commitment to liquidity at/near NAV.

https://www.wsj.com/articles/if-grayscales-bitcoin-etf-dreams-fail-firm-may-try-a-tender-offer-ceo-says-11671428078 Would love to see a tender of the SEC allows it. Sell the underlying BTC and buyback shares to allow NAV-gap closure by tendering @ NAV or offering a discount to NAV that is still sufficiently higher than the current price. Either way they execute, I'm happy as an owner as long as the SEC approves.

In the near/intermediate term you're betting on shortages. If you're holding the exposure long-term (years and years), then yes you're betting against technological innovation. Along with this technology, there's also ore in space and ore at the bottom of the ocean. We're probably years away from any of these being commercially viable in a way that solves the commodity shortage from a decade plus of underinvestment which is why I'm stills bullish on commodities. Feel free to call me out if I remain bullish in 2026 after prices have spiked.

It's 13+ years in. We've gone through these 80+% drawdowns 3 separate times so far. And each time it recovers and makes new highs after bottoming significantly higher than the prior cycle. I cannot guarantee it will happen again, but the history of BTC has been more indicative of a secular growth trend than a one off bubble that every here seems to infer from the last 18 months. Obviously past performance doesn't guarantee future results, but then I think the onus on you is to explain why this 80% decline is somehow different from the prior ones? Hint: It's not the Federal reserve hiking rates which happened in 2017/2018 when BTC was making new all time highs in the last cycle.

Same with international stock indices despite Europe's energy crisis and the currency collapse in Japan. Funny things happen when the relative valuations are so skewed with the S&P being in it's 95% percentile relative to Int'l valuations post 2021 (or something stupid like that). Most of my international positions were outperforming the S&P by 15-20% between November and January of 2021/2022. It wasn't until Russia invaded that they got knocked back down to "par". Low double digit P/Es, and single digits in some cases like EM, versus the 30x the S&P was trading for? C'mon.

BTC is still outperforming the S&P over a 3-year time frame and a 10-year time frame despite the 80% drawdown. Methinks you're dancing on the wrong grave or just have too short of a time horizon. If the S&P is acceptable for long-term savings and protecting purchasing power, why not the asset class that's trounced it over just about every time horizon with the exception of the last 18-24 months? And if you're only judging it by recent history, and not it's long term history,can you really make long-term statements about it?

I don't disagree there are variability within individual names. Fairfax is my largest position and has done quite well for me this year. Same with Altius. I've also got quite a lot of exposure to energy and other commodities that have done reasonably well on absolute or relative comparisons. That being said, I also have a ton of cash and fixed income. A receding tide tends to lower most boats just like a rising tide lifts them. I remember Exor trading for less than the expected cash from its announced sale of Partner RE in 2020 giving you Ferrari, Fiat, CNH Industrial, Juventus, The Economist, etc basically for free. Ultimately the deal DID fall through, but then they just owned an insurance co with a ton of bonds that were going through the roof so the valuation still didn't make sense. The larger point is that stupid cheap often gets even more stupid cheap in market panics. S&P 500 performance is more indicative of market sentiment and psychology than the performance of any individual name and can give clues if cheap is likely to get cheaper. I think the latter is likely. I'm not 100% certain which is why I still own equity risk, but I've been selling the rallies, buying the dips, and then selling even more into the rallies because if the S&P 500 drops another 20%, most names are going to trade down in sympathy.

I don't know if it'll be the bottom, but I expect quite a bit of support at 3200. That's really my base case for when I will sustainably start adding, and holding, equity exposure again instead of trading dips and rallies. If the decline in earnings is more than just a modest contraction, or inflation proves stickier because of some new supply chain crisis or oil shock, than I don't think 3200 holds and would be looking more towards ~2,800 as the level. We'll see how this unfolds

Any change in position here? 11/30 was the local top and were down ~6% on the S&P since. A handful of us were pretty consistent in saying it was a bear-market bounce from oversold conditions, but there were a number of people suggesting and intermediate bottom was in. Curious to hear how those people view the last two weeks of market activity and cratering PMIs that have occured since.

Look into the lightning network. For microtransactions, this is likely to be the solution for spending in the future. BTC itself will only move for very large settlements IMO as most people will be using it as a store of value and spending ANY other currency first.

Just to illustrate with an example - You're in Nazi Germany. The government has decided to make Bitcoin illegal and blacklists your address. All of the allied countries have decided they don't care about Nazi Germany's blacklisting of your address and will honor transactions coming from those addresses. Assuming you can get out of Germany, your money and wealth is intact Tell me how you'd do that with a farm?

Track and trace are entirely different from confiscation which is what we're discussing. I've regularly made the arguments FOR tracking and tracing when we've had similar debates on the merits (or lack there of) for criminal use. If the US turns authoritarian, they can blacklist an address. Other places that don't recognize authoritarianism might still choose to transact with you. Probably quite a bit harder for terrorists to find parties to transact with under the same terms.

Crypto is safe from such seizure. Governments can black list your address, but if others don't recognize it as a valid government, or valid reason, they can still choose to transact with you. Not so for farmland that isn't portable to a different jurisdiction. It's always a possibility, but prohibitively expensive at this point for BTC. That's the whole point of proof-of-work. BTC basically stands unto itself in security now that Ethereum has moved to proof of stake. Not sure the point you're making? You can buy a BTC, have immediate access to it, and liquidate it quickly with instantaneous settlement. The only thing you can't do above is buy one for $8,500 without giving up on some of those demands and buying GBTC @ it's 50% discount.

Until its seized, or taxed, by your local governmental authorities. Why assume they wouldn't if the world truly has "gone in the shitter"? Pretty certain you're already wrong on the 99% figure with each passing year showing increasing adoption and increasing propensity of people to HODL the BTC they've acquired.

I've seen the median house price charted in BTC on Reddit. There are definitely people who do this, but it's not widespread because BTC isn't yet the unit of account.

You'll see a lot of "1 BTC = 1 BTC" comments on crypto forums and gatherings. Not everyone is using it in reference to dollars. But as long as dollars remain the world reserve currency and primary unit of account, yes, you'd expect most things to be calculated relative to USD. It doesn't speak to the illegitimacy of BTC anymore than it implies illegitimate values for Euro or Gold or houses or oil that are all also often priced in USD Let's not forget this has been true of EVERY prior reserve currency and at some point they were all replaced with something anyways. Pricing things in dollars doesn't mean the things priced in dollars can't eventually become the new unit of account/reserve currency just because their value once referenced USD.

At this point, I'm basically leery of anyone that's not Kraken or Coinbase. These exchanges are all facing runs and it's unclear which ones were commingling funds and can make good good on withdrawals. Ultimately, I trust Coinbase is regulated and behaving itself and Kraken's CEO has always advocated their clients NOT keep balances on their exchange other than for immediate trading so would be hard for me to imagine him using client funds improperly.

I'm pretty in the middle. Down about ~15% at this point, but most of that drawdown is from crypto which I was very heavily into. My fixed income accounts are down less than 4% for the year (and duration appears to be making a comeback) and my equity accounts have done admirably well with my largest positions being Fairfax, Eurobank, Exor, and Altius (all doing MUCH better than the S&P 500 this year). Have also done well trading booms and busts in commodity names like Stelco and Whitecap Resources. But i still think equity and risk assets go lower, think duration should be a better hedge going forward 12 months, and am building out my defensive posturing by take every rally as an opportunity to reduce exposure by more than I added on the dips.

Yup. 2% was chosen deliberately for a host of reasons. The stock market does best when inflation is stable AND in the 2-4% range. Any higher or any lower has historically been paired with equity multiples significantly lower than average. In a world of fiat/unbacked currencies, central bank credibility is ALL that matters. It's a game of confidence and once confidence is lost, it takes a LONG time to come back. The Fed has lost some credibility by not hitting their 2% target over the last decade. But that is far less damaging and egregious of an error than letting inflation sit @ 5+% for an extended period of time. US is still the cleanest dirty shirt at the moment though, so capital flows will likely continue helping the Fed in it's fight against inflation and the Treasury in its issuance. +1 The moment 5% inflation becomes ingrained is the moment the CAPE multiples drop to 10-15x where most historical observations have occurred for inflation in that range. We're currently @ 29. Down from a high of 37 from a combination of equity performance and stronger earnings now than 10-years ago. Still a long way to go down to 15x though.

Jobs are the last thing to go - but will confirm the recession once here. Watch the leading indicators which have been falling for the last 8-months straight. Coincident and lagging indicators have basically fallen to the neutral stance so we'll likely see them turn down in coming months too. Everything I've been concerned about for the last 9-12 months is happening. Corporate profits are starting to fall, margins are starting to contract, consumers appear to be tapping out, and the multiples at the index level are still very high going into that environment. You can pick your spots - some stocks will do fine (like trading around my commodity names, or Fairfax and Eurobank this year), but a receding tide will lower most boats. Be quick to take profits and have some duration now that it pays as a hedge.

Is it typical to make such large investments in competitors in European banking? Or is this signalling a full take out and consolidation with their Cypriot subsidiary at some point?

That's my base case. Inflation has been higher for longer than I expected, largely because housing has been more resilient than I expected (prices only started to fall 3 months ago). But, my longer term view is that inflation will average higher this decade than the last one while being incredibly volatile - bouncing between 0% and high inflation to get there. Maybe a ~4% inflation rate when all is said and done. The cats out of the bag. The direct stimulus and payments are in the economy to stay for the foreseeable future. The money supply has exploded. All at the time where there are commodity shortages from underinvestment, war, green investments, and supply chain disruptions. The end result is the same as always - too much money chasing too few goods. The only thing different this time is that the Fed seems determined to force the economy into a recession to fight it and will probably do so again in a few years.

PMIs just came in massively negative in the US (47 nationwide). Chicago area PMIs came in @ 37 onon expectations of 47! Home prices have been in MoM decline for 3 months now and has largely been a nationwide trend. Earnings are going to get rocked - especially if the Fed maintains rates where they're at until inflation actually prints below 2% because they're watch trailing indicators as leading indicators are rapidly deteriorating. Buy bonds.

Less of a direct bet. You're adding operational leverage but also including idiosyncratic risks and idiosyncratic flows (if equities are included in major indices for example). Not a problem for a portion of your exposure, but you might find yourself disappointed with how they trade I'd it's your entire exposure. To this end though, most of exposure to industrial commodities is through producers. My exposure to gold is through ETFs that only hold gold because I'm not willing to accept that underperformance on my only stagflation hedge.