TwoCitiesCapital

Get a hardware wallet https://www.ledger.com/ I second the hardware wallet approach, but not certain that it helps in a retirement account unless if there is some way to do it via self-directed accounts. OP - are you able to access foreign markets? GBTC trades here in the US and is probably accessible through a broker like Interactive Brokers.

I'd also add it's not about paying everyone 60-70k. It's about paying a fair wage across the board, but paying everyone the same wage, or the same starting wage even, is probably a terrible idea. IIRC, when this CEO first implemented this policy, he lost a ton of employees. Not because he was paying everyone 70k, but because some of those making 70k realized they were doing far more value-add work to the company then their peers that were being paid the same amount. Maybe it's working now b/c he's attracted a type of workforce where this is no longer an issue, but I don't think we can expand that success to the broader workforce because there will always be those (like myself) who want more than the next person in recognition of a higher quality of work. The reason that ~70k is where incremental satisfaction with more money stops is because you're already near 2x the median salary and know that you're making more than most. You feel valued for your work and feel adequately compensated. If EVERYONE made 70k, these self-actualization type emotions dissapear and you're being paid just as much as the next bum who binge watches Netflix while "working from home."

300x the median wage. So in a company with 100,000 employees you could double the wage of 300 of them, or increase 600 of them by 50%, or increase 1200 of them by 25% or increase 2400 of them by 12.5%, or increase 4800 of them by 6.25%, or increase 9600 of them by 3.125% or increase 19,200 of them by 1.0625%, or increase 38,400 of them (still only 39% of the workforce) by 0.53125%. So you propose that CEOs make nothing so that less than 40% of their employees can get a half of a percent wage increase? In order to pay the average employee $75k the average employee of your company has to be producing more than $75k of value. This is the narrow view and assumes it's only the CEO's comp who is out of whack instead of nearly the entire C-suite and from there on down. Real time example - PIMCO has something like 30-35 managing directors that split ~1/3 of the profits of a company that manages ~$2 trillion dollars. Those 30 individuals are making WAY more than 300x the average salary of starting associate (let alone back office staff!). Keep in mind that when Bill Gross was just 1 of those 30, he was making $200 million a year. And it's not just the MDs making a ton of money, but everyone below them too all the way down to the associate level where they pay 6-figure salaries to overworked associates that are told there isn't the budget to hire more of them which is why they're there at 9 PM on Tuesday doing a slide-deck while the MDs are all at home relaxing. It's no different at publicly traded companies. Probably a little better in check, but it's not like the CEO is the only one overpaid. It's whole inverted pyramid - everyone at the top is skimming off the excess profits from underpaying those at the bottom. Ultimately, I agree that while even cutting the pay of all of the C-suite and upper level executives is unlikely to make a huge difference in the average pay across mega-cap companies, cutting the return to stockholders by 0.5-1.0% a year in addition to that WOULD. For a market that's done ~13% annualized over the last decade, I think stockholders have some room to spare.

~10% at this point. Added a hair during COVID drawdown, but not much. Already very large and bumping my own person position limits. Am optimistic about the direction and recent events, but definitely consistently disappointed on timing.

Prem's decision is to grow the insurance companies instead. If they can do so profitably, the additional float is worth more in the long-term than a one-time repurchase would be. The gains from float are compounded returns with attractive economics and the flexibility to do buybacks later, if still attractive, where the gain from the buyback is a one-off return with no flexibility to increase economic return of the company beyond that. Also, the increased profitability could be the catalyst to rerate the share where a buyback isn't guaranteed to cause any re-rating. The "guaranteed" return is just the increase in BV/share which the market may, or may not, take notice of. I'm ok with the limited buyback approach if they can capitalize on a hardening insurance market and expand float by 30-50% instead - I just feel it was disingenuous of them to use Templeton as the comparison if they're not going to act at the scale that would imply.

Definitely questioned. If you do a search for Sokol on this site, you'll probably get a few threads where this is discussed outside of the ATCO thread.

I could be wrong but this doesn't seem like a temporary move. Guessing this is one of a few levers FHFA is going to pull to increase rev and be able to demonstrate a higher ROE on the high capital level they will have the companies raise over next year. Could be. Politically it'll be unpopular due to those costs just being passed on to consumers in a month or two. And with a title like "adverse market fee", it'll be hard to justify continuing once forebearance and defaults renormalize. But I also understand that the one of the most powerful forces in the political universe is inertia and so once the fee is there it may not come off.

https://www.wsj.com/articles/borrowers-face-new-fee-to-cover-heightened-risks-11597282215?mod=markets_lead_pos13 Fannie and Freddie increasing fees - seems temporary though given the "adverse market" title.

+1 It's all about the price you pay. KOs stock is basically up 20% since the late 90s. Of course there is the dividend, but the real return of a 30-year period of excessive spending and asset inflation left much to be desired because it was FAR too expensive in the 90s. Methinks we'll see the same with today's "quality" investments. Mid-20s on fictitious earnings. Mid 30s on actual trailing 12-month earnings.

I buy both pending which account has the availability of the cash. FRFHF is lower liquidity, but I do all my trading with limit orders and haven't typically had much trouble entering or exiting.

Ok, now that we've had a few responses, what about the another scenario. Instead of 5% per annum, inflation is now 15% per annum. Interest remain @ the lower bound. Do equities continue to do well due to low interest rates? Or do they crater due to negative real rates? Does your answer differ from the 5% scenario? If so, why? What makes a -2% real return dramatically different from a -12% real return when it comes to comparing and changing your preference for investable alternatives all impacted the same way?

So let me ask this - since everyone seems to be on the "low rates = high multiples" train of which I'm still yet unconvinced: If inflation goes to 5% per annum, but the Fed represses all interest rates to continue being below that nominal figure, do equities rally because interest rates are low? Or collapse because a 3-4% nominal earnings yield is still a negative real return to equity investors?

Can definitely attest to the benefits of intermittent fasting. Have been doing it for 3-4 years at this point. Meditation is only something nice recently done. I did a 30-day guided meditation and now I have been doing 10 minutes a day off and on - but I don't really notice any difference between the days I do and don't meditate. I'm primarily focusing on my breathing and trying to get to the point where it's less focus and more second nature + empty relaxation of the mind, but am concerned I'm approaching it wrong if I'm not noticing a difference when I'm not doing it. Any advice for a newb?

The individuals are definitely fucking this up. Trump has just been encouraging them from a position of authority and a wide reaching audience. Also, Trump being president is in a position to make decisions that positively or negatively impact tens of millions (if not hundreds). Any decision made by an individual is likely limited to directly impacting a handful of people. So individuals are making poor decisions that impact tens of people and Trump has been making terrible decision that impact tens of million of people.

I thought the same about iPhone sales, but in environment where ~20 million people are collecting unemployment and the government is debating how to keep them in their homes, Apple had a record quarter. If this is what people are spending the stimulus on, and the government keeps the stimulus going, then we should all probably remain bullish as dumb as it seems compared to fundamentals. The time to be concerned will be if the government passes a reduction in stimulus spending that goes straight to consumers (like the Republicans are currently proposing).

Fairfax has agreed to roll it's Blackberry converts. Current debentures @ 3.75% and $10 strike are being redeemed @ 101.6854. Principal is being reduced slightly and rolled between Fairfax and one other institutional investor for new converts @ 1.75% coupon and a $6 strike for conversion.

I like the 4 quadrants (that's how Dalio does it too, p his All Weather/risks parity strategies). I'm not certain a $20 trillion economy moves back and forth between those quadrant over days though. Also not certain we can simply look at gold price and assume it's inflationary environment. Didn't gold triple during the Great Depression when cumulative deflation was ~25%? It seems to me it's less of an inflation hedge and more a hedge against negative real rates (when inflation exceeds nominal rates) AND/OR financial repression (when 0% rates lower the opportunity cost of owning gold increasing demand). This deflationary environment probably fits the bill of the latter and we're probably still in the lower left quadrant IMO.

Coming back to this after watching the video of Day Dalio in the other thread and I think I understand your position better this time around. Thanks for sharing your insights! I've been leaning towards the bolded part of your comment myself. Don't fight the Fed works until it doesn't and the fact that we had 50+% declines in 2000 and 2008 depsite Fed stimulus suggests sometime "it doesn't". To no one in particular - I'm trying hard to reconcile Ray's "no one will want to own bonds and stocks can trade @ 40x earnings" with Hoisington's "unproductive debt = deflation and lower rates" and I think the primary difference is probably timeframe. My main thesis has been it's the backstop of unemployment benefits @ $+600/week that has resulted in this rebound. Also, backdoor unemployment benefits via PPP loans which is subsidize employment so unemployment is underreported. All of this is the Treasury - not the Fed - and this money has the potential to circulate. Most likely, these programs are reduced/end soon so I think results are probably in Hoisington's favor in the short-to-medium term. There will be a huge income hole and some reconciliation to debts/liabilities must occur - and liabilities are still growing dramatically relative to incomes so the reconciliation grows more painful by the day. This is deflationary and a credit negative. Interest rates go lower, credit spreads go higher, equities probably go lower (but maybe won't get "cheap" as I previously hoped) and Fed/Treasury will step in once again to mitigate. All this intervention takes 18-24 months to really hit the economy. Starting sometime in mid-to-late 2022 we'll probably see the green shoots of inflation. You'll have an improving economy, improving demographics, stimulus sloshing around, and rates near 0%. This is probably the environment stocks can make the run to 40x earnings in as per Day Dalio. It's also when the USD is probably losing its relative advantage over other developed currencies with the Fed's repression in full swing. So stocks remain high until the combo of currency debasement and prior stimulus work inflation sustainably above 4ish%? Do any of you have thoughts on how this plays out differently?

https://www.coindesk.com/bitcoins-price-correlation-with-sp-500-hits-record-highs Record correlation with S&P 500 at the current time. Obviously a changing relationship, but just another bullet in the "not a safe haven" column.

Nice! Plenty of places I imagine they could reinvest that if we get some more turbulence which is looking more likely by the day.

And once again....Bitcoin down 43% over the last 24 hours. This is NOT a safe haven asset. It’s volatile to be sure. For a new asset class that has only existed for a few years, it’s to be expected. Still, up over 33% since this last comment. What I’m really interested in seeing is how it performs once the wealth taxes, capital controls and bail-ins start happening. No doubt. To be clear - I own it. I'm not detracting from Bitcoin ownership at all. Just cautioning that it is NOT a safe-haven asset and juxtaposing it's performance against other "safe-haven" or "crisis-hedge" type assets. If you own this going into a crisis and you're in for a wild-ride like the 50% price dump we saw over-night in March. Safe haven's don't do that. Best case scenario is that it has zero correlation to stocks. Most likely case is that it is slightly correlated to stocks because it is a risk-based asset class for those seeking risk exposure. Think of 'safe haven' - as Long Bitcoin PLUS Long Bitcoin Put. Every time it drops radically sell the put, buy it back on the bounce, keep the cash difference. Volatility is your friend ;) Just keep in mind that Bitcoin options are NOT a deep market. Same thing, but on the major indexes, is a lot safer. SD You can do this with any asset including an equity. The existence of protective puts does not make it a safe haven. It's just a trade of decreasing risk for decreasing return. Anyways, I'm sure this debate is useless. Those who believe it's a crisis hedge can buy it and ride the vicissitudes of +/- 30-50% swings if they so choose. I'm just not disillusioned into believing this is a replacement for traditional safe haven assets and did not want others to be confused into thinking but was. For a longer term perspective - gold is near all time highs. Treasuries are near all time highs. Bitcoin needs more than a 100% return to get to all time highs. There's obviously something very different about its behavior compared to other traditional safe-havens.

And once again....Bitcoin down 43% over the last 24 hours. This is NOT a safe haven asset. It’s volatile to be sure. For a new asset class that has only existed for a few years, it’s to be expected. Still, up over 33% since this last comment. What I’m really interested in seeing is how it performs once the wealth taxes, capital controls and bail-ins start happening. No doubt. To be clear - I own it. I'm not detracting from Bitcoin ownership at all. Just cautioning that it is NOT a safe-haven asset and juxtaposing it's performance against other "safe-haven" or "crisis-hedge" type assets. If you own this going into a crisis and you're in for a wild-ride like the 50% price dump we saw over-night in March. Safe haven's don't do that. Best case scenario is that it has zero correlation to stocks. Most likely case is that it is slightly correlated to stocks because it is a risk-based asset class for those seeking risk exposure.

That while ago I think was 12 years ago. Maybe we can agree they were wrong. Yes, spigots can be turned on fairly easily. There's a lot of supply out there. If you're not talking about a massive increase in demand oil is gonna suck. Can you elaborate as to why you say that there is a spigot that can be turned back on? I listened to a podcast today with Art Berman today specifically saying this wasn't the case. Basically was saying new technology means shale wells deplete MORE quickly/efficiently and that it takes ~10-12 months to get newly discovered wells producing. So if we're not currently exploring/drilling wells, it'll take some time to ramp up to meet that demand once it does normalize.

We're not really going to know whether a second wave materializes until late 2020 - even if things quiet down, the threat will be looming over us with the return of cold weather and flu season. So it's hard to justify a runup in the market on that basis. We've got 6 months to kill until then. But every day that ticks by we are one step closer to effective treatments and/or vaccine discovery. And we've already learned a lot about how to treat people and keep them out of ICU's, all of which is positive. At this point I'm seeing businesses closing every day, jobs being lost that will not come back any time soon, and investors that don't seem to care. I'm pretty certain we're seeing the numbers bear out the start of the second wave as we speak. We hit a low point in daily cases at end of May with ~18k/day. Since then, multiple places have reopened and some semblance of normalization has occurred and we're back to ~25k+/cases per day for the last 4-days in a row (30k today!) - the last time this happened was early May when we were still coming down from the major spike. Also, keep in mind NYC just reopened and is not yet contributing meaningfully to the spike despite being the absolute largest contributor the first time around. Anecdotal evidence from friends who live in Florida, Georgia, Louisiana, Texas, and California paired with my own observations here in Missouri suggests that most people still aren't wearing masks and still aren't really taking this seriously. A second wave is all but a foregone conclusion and I think we're seeing that play out in the data today. We're damn near close to doubling the daily case load nationwide, from the lows, without NYC contributing yet and having only been re-open for ~3 weeks.

No doubt! That's my concern though - when the benefits end, so does the spending. Everyone is so excited about the increase in consumer spending we had in May, but of course you had an uptick in a month where every American making less than $90k received $1,200+ check and the 15 of the 20 million unemployed received a raise due to the extra $600/week. But $1,200 checks don't go out every month and, if not extended, the $600/week ends next month too. The propensity to spend is greatest amongst the people who were given money to spend AND spending is what happened - a big uptick month-over-month retail sales ( a proxy for consumer spending), but still dramatically lower than pre-Covid levels and still recessionary despite all of the stimulus. So what happens when the gov't shuts the spigot of cash?