TwoCitiesCapital

Not even enough to pay the average monthly rent in Manhattan after 40 hours a week Of course, nothing stopping you from living an hour or two out, but you're still paying transportation/food/taxes/etc. which are unaccounted for. Only way to make this work is to share a 1-2 bedroom apartment with several other people, live way out in the outer Burroughs or further, and out in overtime hours. Sure - it's doable - but not a particularly attractive existence.

It does kind of make you wonder why though. BlackBerry had plenty of cash at quarter end to retire all the bonds plus receivables incoming..

/\/\ this You'd have to take enough of a haircut on the balance/economics to incentivize them to want to commit to an MTM loss through the income statement as opposed to hiding the loss in HTM on the balance sheet

"From ‘1 CCPS for 2.324 equity shares’ to ‘2.324 CCPS for each equity share’" So conversion ratio went from 1 : 2.324 2.324 : 1 anyone know if this was simply a typo/administrative mistake on filing documents and will be a non-issue? or did they literally 5x their conversion ratio?

I watched the whole thing - which is why I can point out the inconsistencies of his implying that Ray is just an attention seeking marketing genius out of one side of his mouth while then implying everyone who works at the firm, and the systematic trading in place, are all just a cover-up/smokescreen for it all actually just being Ray. Those are at odds with one another (and what I saw from my experience there). Like I said, I wouldn't be surprised if there was a kernel of truth in everything he wrote. I also wouldn't be surprised if it was exaggerated like much of what I witnessed the media do while I was there. I'm guessing the journalist is trying to make a name for himself and was happy to go after a whale like Ray to do it. Like I said, I'm still gonna read the book. I love a good drama and the dirt on billionaires. But I also know that the picture I've seen painted from the summaries/reviews I've seen so far don't align with what I witnessed the 4-years I was there. But I was a happy employee so perhaps my perspective differed from those who were discontent. Of the three institutional money managers I've worked for, Bridgewater was by far the best from an employees perspective

Just about everyone. You have a pension or a 401k or an IRA? The losses in stocks in bonds over the last 2-years - especially if the need to inflation adjust those returns is evident from anyone nearing, or in, retirement. You are in the market for a loan? You definitely feel the higher interest rates. Maybe the tighter credit standards as well as banks are balance sheet constrained because of their losses on bonds and lower liquidity. You buy insurance? You're feeling it as insurers wiped out a huge portion of good portion of their equity capital by owning low yielding securities so have to write fewer policies, with less coverage, for more premium. Inflation plays a roll here too. You want to move? Too bad. It'll cost you 50% more for 2/3 the house you're currently in. The effects of rates/inflation of the last 2-years is everywhere.

I mean, it didn't cause hyperinflation, but it did cause trillions of very real losses in fixed income markets ( and probably commercial real estate). Remains to be seen if anything else gets added to the tally. More has been lost in US bonds in 2021-2023 than was lost globally from 2008/2009 debacle....

So, full disclosure: I worked for, and with, Bridgewater from 2011 - 2014. I've never met Ray, or Bob, but did meet Greg once. I met Eileen Murray on one or two occasions as well. I was NOT regularly involved in the meetings where investment decisions were made and did not work regularly with any of the executive committee or investment teams outside of my limited capacity. All of that being said, there were definitely peculiarities to how Bridgewater did some things. Some were good. Some I disagreed with. Almost ALL were exaggerated by the media from what I could tell during my time there. I'll still probably buy and read the book just out of curiosity. I could believe some of the stories I've seen in the media from the book might be true - or be embellished based on a kernel of truth. But to paint Ray out to be an attention-seeking dude with no investment talent and just masterful at lying/deceiving clients is a hard swallow ... especially given their performance in certain off years like 2008 and again in 2022. Are all the employees they hire, and pay 6-7 figures to, just a smokescreen to cover Ray's strategies? If he's such an attention seeker, why do that instead of accepting credit for the trades? How do they seem to regularly do well in the big down years for the market like the tech bubble, the real estate bubble, and years like 2022 when they were up 30+% at one point while the market was down (ended the year at +7-8% IIRC). Has anyone considered that perhaps it's this journalist seeking attention and making a name for himself by intentionally going after a whale like Ray?

Yes - for tax deferred or tax free savings. That's the bulk of my savings outside of home equity and Bitcoin.

So I was listening to a podcast of a value manager recently where he talks about one of the reasons of his having significantly high concentration in the portfolio is because historically most stocks have underperformed t-bills and he wants to concentrate on the handful of stocks that do so. I know I've had the debate here ad-nauseum of long stretches where bills/notes/bonds outperformed equities broadly, but I don't think I realized it was a big of a performance differential more broadly over time for most companies. Most of the outperformance of broad equities can be attributed to fewer than 100 companies across history. You just don't see the underperformance in the indices because, by design, they're geared towards survivorship bias and the handful of companies that do outperform. Now that rates are nominally high relative to equities (and current inflation), seems it's pretty easy to beat t-bills going forward in fixed income. Take a little spread exposure in mortgages, corporates, high yield to increase yields 1-3% above bills and take a little govt duration exposure to lock some of that in for 2-4 years to hedge the spread exposure/falling rates components - and you have a high likelihood of outperforming t-bills over the next 3-5 years. Which apparently fewer than 1/2 of equities might be expected to do. I think I'm coming around to the idea of Blackrock flipping the 60/40 to 40/60 on a longer term basis. Focus heavily on bonds to get safe, reliable, high single digit returns, take index like exposure with ~1/2 of my equity exposure to lock in the bias of indices to those ~80-100 names, and then take individual positions in things like Exor/Fairfax/Altius to supplement and attempt to outperform those indices.

What's everyone's thoughts on BTC's rally this year despite the liquidity drain globally? Historically, BTC price was highly correlated with global liquidity. This was a much better predictor of its price than even the years where it was highly correlated with the NASDAQ. But here we are in 2022/2023 where there has been consistent contraction in global liquidity and yet BTC bottomed and doubled. Thoughts on what might be driving that and how sustainable it is?

Excellent points on the evolving social mood of what is considered an "investment"

I disagree. The higher the value, the more people will be using it and/or holding it. The more people holding it, the more people will need to pay to get a hold of it to use it. This the price. Just like anything - real estate, equities, art, etc. The more money flows into it, the higher the price gets to convince those already holding it to let go of some. More people using it = more money flows into BTC = higher price. The value is in the network. The network. The price will rise due to its scarcity and the increasing number of people/money flowing into it.

No, the utility expands exponentially via the growth of the network and the increasing places you can send/receive it along with a growing number of individuals holding it making it more scarce. The utility isn't what drives the value from 1k to 35k - it's the growth of the collective utility. Not unlike a social network.

It's very possible. I haven't considered much of what would drive the price at that point outside of just fundamentals of population growth, but it makes sense that population growth is just a rough approximation of productivity At this point BTC is my only taxable asset outside of my home. As a portion of my networth, it's ~12-13%. Considering that net worth has been building for ~16-17 years, and BTC only 4 of it, it's come along way from when I started accumulating in 2019.

I DCA into it adding ~$500/month give or take pending the price. Sometimes throw extra at it when bonuses are paid. I do expect the price to go up which is, in part, why I buy it. I'm not intentionally trying to lose money. But ultimately, what I care about is not it's denomination in USD but it's real purchasing power relative to other assets like houses, the S&P 500, etc and the value it affords me to have a portion of my wealth denominated in it. The reason I expect the value of it to go up is it's scarcity paired with the value it offers people in having a system of portable wealth, censorship resistant spending, and immediate access to digital payments system without requiring the current intermediaries(or fees) that exist today. At some point, the price of BTC will be more like gold. It will have been globally adopted and accepted as an asset class with a sufficiently high market cap and it's price action will likely roughly approximate population growth. But that's once it's been globally adopted. As demonstrated over the last 5-, 10-, and 14-year periods, it trounces traditional asset classes as it's going through that S-curve growth phase.

I converted most of my alt coins to BTC earlier this year to capture tax losses and because I expected BTC dominance to rise. While that overall trend has been true, I would've been way better off holding onto my Chainlink

I'm definitely a believer that we underestimate the impact long term and overestimate it short term. Just because some CEO is excited about what his company is working on doesn't necessarily change much for me. After all, Adam Neuman was excited about We work. But we'll see.

Well, he's either dead OR not subject to similar motivations as the rest of us . Because if he's still alive, he's one of the richest men in the world and hasn't touched a cent of it.

Was more than that this year. Was 7-9% last year. But who's counting?

Always fun to trade around these positions based on the immediate sentiment. Have made several rounds trips in WCP position I've been in since late 2020. 6-7 weeks ago, I sold a slug of shares @ 11.51. today I'm repurchasing them for 10.01. Love it!

All this upward volatility making my head hurt. Should probably move to USD....

Though I'm skeptical coke will be around in a billion years. Can't even recall the last time I had one myself and without other brands owned by coke, pretty the volume of soda in general is probably down over the last 10-years. Like I said, it's a lazy argument that breaks down when applied to anything other than a biased view of BTC. Despite the supposed negative blot of volatility, BTC still has outperformed EVERY fiat currency over a 5-year period But weld prefer to have long-term savings in depreciating currencies for certainty of value?

The liquidity risk is also what concernse the most. I don't need them to eliminate the TRS position, but an orderly wind-down over time is desirable IMO. Wouldn't mind if they took 10-15% of it off the table at prices between $900-1000/sh. Considering the extra liquidity they would have to hold at HoldCo is probably earning less than the financing spread, and quarterly movements in the stock are unpredictable even if the longer term direction is up, I'm ok with leaving money on the table to manage some of the liquidity risk.

At the maturity of the contract, they'd have that option. As long as the counterparty had other ways of hedging the exposure I can't see why they would. They're collecting the financing and the spread - as long as they priced it sufficiently and hedged sufficiently, Fairfax should be able to continue to roll it.