TwoCitiesCapital

Excessive fees is relative to value. It costs me a few dollars to send my BTC around from exchange to wallet etc. It's still way less than a wire, way faster than ACH, and I'm moving sums large enough where the fee is only a fraction of a percent of the value. I'd say it's still super efficient form for moving amounts in excess of 10k, but lightning network will prove to be better for microtransactions. ETH is launching second level solutions similar to lightning network to increase scale and lower costs. But it's not there yet. There are still excessive fees to get onto, and off of, L2 solutions. It also can take a week or more in some instances to withdraw off of L2 back onto main chain. Also, having various L2s (Optimism, zkRollups, Arbitrum, etc) will lower the composability of the network until all of the L2s play nicely with one another or all dAppa launch on multiple L2s. So it's definitely a problem and not ready for mainstream acceptance yet. That being said, the primary competitors to ETH only have lower fees because 1) no one is using them or 2) they're centralized and bypass the decentralized network for computing. Both of these severely limit the value add that crypto is supposed to provide so I doubt they'll permanently supplant Ethereum or draw away it's developer base. Now that Bitcoin has a better developed base around smart contracts, and a workable L2 already in place, it will be interesting to see if BTC is able to supplant ETH there.

I have a similar view as a driver of a 2003 Porsche. Also, haven't done the numbers, but I wonder what my carbon footprint on incremental gas burn versus the carbon impact of building a brand new electric vehicle and then powering them with nat gas or coal? Almost seems to me I might be doing the environment a favor by continuing to utilize the sunk cost of carbon instead of incentivizing new emissions via new production

Dividend announcement is a little disappointing, was definitely hoping for something north of 5% and seems like we're gonna get closer to 2-3% pending price action. That being said though, everything else looks reasonably good and something is better than nothing.

Goodwill? Does China have goodwill? They basically disregarded the prior treaty regarding Hong Kong, have committed genocides of their own, have acted aggressively militarily over contested regions, and buddies up with enemies (a la Russia and Iran). Now we're all contemplating whether or not they'll invade Hong Kong. What goodwill do you imagine they have?

WSJ had an article today about China having interest in buying stakes in companies like Gazprom. You can bet that they'll eventually buy oil at a discount from Russia (just like they do Iran) and that they'll take a pound of flesh in strategic equity ownership in these companies now that valuations have been decimated.

Probably trying to be too smart, but sold April $183 calls against this. Got about $5 of time value per contract and some downside protection since they're ITM by a few percent. Kind of figured this may pull back some over the next month or so now that it's overbought and basically went vertical for a few days. Just want to take some gains off the table and get paid a little to wait for this to cool off a hair. Hoping for a retest of $180 sometimes around the time the Fed actually hikes rates.

Yup. They are successful in that they make the entire nation more dependent on centralized powers. And in a lot of cases, I almost imagine it makes things worse. It's people who are desperate who most often resort to violence. Do you think you'd have ISIS or the Taliban if all their foot soldiers were middle class with jobs and families at risk? Impoverishing a nation just makes for entire generations that hate the West and have little to lose by fighting against it.

While I don't yet dismiss the "store of value" argument for crypto, I do think the volatility gets in the way for use in trading it like that for these shorter term events. With gold, you typically don't have to worry about 50+% drawdowns over a matter of months in a favorable environment. Crypto on the other hand? Bitcoin has had 50+% corrections in the middle of its manic bull markets. I would think this makes BTC hard to trade on these macro concerns because at any given time you could find yourself in one of those 50+% corrections, in a broader bull market, and BTC doesn't respond to the event as you might expect. That uncertainty is enough for me to continue to own gold to hedge financial repression and geopolitics but I own way more BTC as a secular bet on it's future growth.

In Q4, FFH's USD share price went from ~$400 to ~$500. The current reversal "stinks", but ultimately would just be sending back about 1/2 of the cash the TRS minted in Q4 if we end the quarter near $450.

Probably about as cheap as it's been in USD or CAD. Seeing continued depreciation of the Indian Rupee in this risk-off environment let alone what the price of the underlying investments are doing (indian stock exchange is down 10-15% YTD too). Not saying we shouldn't be acquiring it - only that buying today at $11-12 doesn't seem that much better than buying previously at $13-14 in terms of discount to NAV.

Not enough - otherwise every household in the country is a target for theft. At some point, people will just have to admit crypto is better for these circumstances - particularly once the infrastructure and education are in place which are the only limiting factors here for Russia's adoption. It's censorship resistant, sanction resistant, highly transportable, more easily secured, has value in self-custody (not worried about bank failures), and can still offer near instantaneous electronic payments. Cash/gold under your mattress is difficult to secure, can't be safely custodied with a third party (as seen by the expected bank failures in Russia or the seizure of foreign denominations we've seen in other countries), difficult to transport in large quantities, and can't be used for electronic purchases.

AmEx announced the same thing.

Probably the first time in my life that a major options position has worked out for me TLT call spreads and APPL put spreads might get there too. We'll see over the next 6 weeks or so.

+1 Same with dollars. Sure, you can spend them on the black market in Russia, but can't put them in your bank or use for online purchases. Gold? Do you really want that in the custody of a bank in a country that might be incentivized to nationalize those holdings to stabilize the currency? I'm sure if they don't have them already, Russia could have an intermediary like Square where any buyer/seller can pay/receive in crypto if they want. At one time, nobody accepted Visa either. The savvier ones will be using lightning network or transacting on the Blockchain directly. As a result of the ruble depreciation, I'm sure more businesses will be open to alternatives as well so you'll likely see adoption grow. Could that be why BTC is up like 15-20% whole the NASDAQ is negative breaking months and months of positive correlation? Bitcoin is helpful for both Ukrainians and Russians in this situation.

Haven't looked into it, but during April of 2020 USO traded at a 40% premium to it's underlying NAV despite that NAV decaying at 2% a month with the negative roll yield. In these types of dislocations, arbitrage traders tend to step back and retail does at wishes. Also, it could be this is the only way some of these people can get exposure since some brokerages are restricting trading in the individual names. As long as the MICEX is closed, you really don't know what these should trade for. All you have is a bunch of illiquid proxy securities being traded by people who have limited insight into what is actually happening on the ground.

Yea. These guys probably own the stock on the Russian exchange. With it being closed and liquidity being denied to foreigners, probably tough to meet redemptions. Wait and see is now the name of the game. We've all hypothesized what it might look like to own a stock and close the market for 5 years. Anyone in Russian assets might get to experience that over the next 6-12 months.

I don't know the full extent of what utilities the US did and didn't destroy in those places, but we did. The Tabqa dam was controlled by ISIS in Syria. It was supposedly on our "no hit list" because a strike could cause 10s of thousands of civilian deaths from flooding and lack of access to clean water downstream. It was attacked and ISIS blamed the US. We denied it. But an unexploded, US made bunker bomber was found in the ruins. In 2015, the US bombed a Doctor's Without Borders hospital in Kunduz, Afghanistan. The military knew it was a hospital, had been in contact with Doctors Without Borders confirming the knowledge that it was a hospital and it's coordinates, but the US still bombed it anyways in belief that there was a target being treated inside. The US has does pretty heinous shit as part of its foreign policy, but it's ok because we're the US and they're just poor brown people and who is going to hold the US accountable for war crimes?

Currency fluctuations matter for price changes, but not the spread between the price and underlying value. That should be easily arb'd by market participants and the spread didn't exist pre-invasion that I know of. SBER closed at 130.5 rubles per share in Moscow. Each ADR is worth 4 shares or 522 rubles. RUB to USD exchange rate is currently 0.012 dollar per ruble, so 522 rubles is equal to $6.26/ADR. ADRs closed @ $4.43. The currency fluctuations impacts the $ price for sure could go from $6.26 to $5.75 if the exchange rate drops to $0.011 where it was at a day or two ago - but impacts to price just means the ADR would drop to reflect that new exchange rate - not trade at a 40% discount to that exchange rate. Can't speak to what happens to ADRs if the underlying gets delisted. Foror Sberbank, I don't believe that's a risk.

Only a modest add at $11.90. Definitely didn't get the best price or the biggest am liquidity constrained in the accounts I can actually buy this in.

This was exactly my thoughts. Go long Intel and if you want to hedge the immediate volatility than buy long term, way OTM puts on TSMC (at like $30-40) which is likely going to crater in the that scenario. Only spending a few pennies on protecting the downside and owning the alternative for the upside.

Spoke with Schwab on this. Sponsoring bank charges $0.05/share for the conversion, Schwab charges a $39 reorganization fee, and a $20 fee for the transfer. Seems reasonable. Suggested time is 1 week to convert all shares, but rep wasn't positive that they could actually trade on the Russian exchange to sell for rubles to complete the arbitrage and couldn't give me guidance on the sales commission b/c of that. Also, she mentioned the ADR was added to their restricted list today so no repurchasing the shares for a risen/repeat or to replace the position if done through Schwab. Still haven't heard back from IB yet, but I'm not seeing any notice of restrictions on their trade platform for Sberbank currently. Just trying to be the arb instead of waiting for the arb to happen. Spreads are still 30+% and if you could do this 2-3 times over the course of a month? Really attractive risk/return prospects IMO

Looking at arbing some Russian ADRs versus the value of the underlying shares on the MICEZ exchange. Have never done it before though. I know IB charges a $500 fee for the process, but can't find anything on the timing of conversion, the fees the sponsoring bank (JPM) might charge, or anything else that I might need to anticipate as part of the process. Anyone here ever done the share/ADR arbitrage or conversion before to help a newbie through it?

+1

+1 This is my view as well. A handful of people might recognize this for what it is. The rest will view it through the lense of their political bias.

In a crisis, correlations go to 1. During March 2020 both gold and treasuries we're down fairly substantially at first because thats what people COULD sell for margin calls and etc. Eventually they recovered and performed as defensive assets should, but there were definitely days they did NOT act as defensive assets and were down where cash would still have been cash.