LC

The description of "fraudulent" is unsubstantiated as I correctly explain here: http://www.cornerofberkshireandfairfax.ca/forum/politics/climate-change-flawed-statistics/msg384557/#msg384557 Yes but if certain forms of energy extraction are (1) more environmentally neutral and (2) comparable in cost, it makes sense to transition towards those.

Shout out to abe, some of the best private conversations i've had. the guy has such a broad and weird perspective.

Good luck bidders! Probably one of the best places to put your charity dollars. Plus, take a look at Mohnish...with that belly, you know this man knows good food! I'd wager that lunch is going to be DELICIOUS! ;D ;D

Royalities usually command the highest premium, but a royalty on nothing is still nothing. I would also caution on the assumption that hard assets are particularly 'inflation-protected'.

One other explanation (or contributing factor) is that the low-hanging fruit has all been plucked.

I see your Zappa and raise you Team America: World Police https://en.wikiquote.org/wiki/Team_America:_World_Police#Dicks,_Pussies,_Assholes_Speech Obviously some crude language but it gets the point across. Maybe? ;D

Poor and middle class assholes are easier to dismiss. Rich assholes live rent free in your head because jealousy is also involved. This is why people remember the Benz that cuts them off when merging lanes, but not the 1989 Toyota Corolla. Assholes are probably evenly distributed amongst the wealth groups, as are (I would wager) most personality characteristics.

The master strikes again :D I've been reading your posts doing this for years now - can you comment on average returns (or at least a sense of them, if you don't track explicitly?)

Bingo. In terms of the Charlie Munger generalized mental models - this is one of the top models you should have in your mind when thinking of the banks. They do "the dirty work" of the central bank.

It's like Phil Fisher said...invest in what you know. Explains your portfolio of weed stocks and roadside greek diners ;D

I'm playing devils advocate here but I think you guys underestimate the banking business, particularly in today's world. Calling the banks stodgy or tech-averse is superficial IMHO. Banks are not tech averse, they are incredibly financially disciplined (it's their raison d'etre!). These are not VC shops looking to cash in by inventing the next best tech. Additionally you are ignoring the regulatory component. The FRB will be so far up a new bank's colon that it's too painful to think of. The large banks took 10 years to comply with FRB/OCC matters. And they are still not done. Citi, Wells, JPM all have over 200,000 employees, each. Google and apple have half that. Simply to bring on the kind of manpower needed will be a billion dollar endeavor. It is not just 'lets build some credit models and start slingin' cards". On the models side, these banks have 2, 3, 4 thousand models each. Who is going to build these? Who is going to validate them? How long is that going to take? It is not feasible. And the people building these models - they are not cheap. We billed out at 600, 700 an hour for regulatory models, not even valuation models which are much more important. And then you need a validation group which again, is incredibly not cheap. Then you need to integrate into the markets. On the consumer side, now you need instantaneous scoring services at a massive scale and you need retail partners to integrate it. Retail partners who are already being serviced by these large banks and at a lower cost than you can provide. And these banks and policy teams who know these business better than you (and they) do. This is not just incredibly expensive but a hell of an endeavor to start from scratch. Systems migrations take two years - and that's a migration. On the institutional side, it's even more opaque. First you have no idea what these product which are being traded. Show me anyone at Apple or Google who can explain why Kirk's spread option model is conceptually unsound but under what circumstances it is still acceptable to use. Nobody. Now tell me who is going to figure that out and then design a systems application to price certain products with certain models under specific circumstances. Of course you can use vendors to tap into the market in this way but the regulators will destroy you. And they're expensive as hell and there's a reason all the banks have migrated to in-house solutions. So unless you want to lose money on every trade for 4-5 years until you can build your own system to migrate over from a vendor platform, you're out of luck. This article: https://seekingalpha.com/article/2561895-apple-pay-has-long-term-implications-for-visa-mastercard-and-retail-banks postulates that Apple is entering the retail payments sphere as a means to enter the financial industry at a whole. Well look at the payments - has Apple or Stripe built their own systems? No, they are playing on top of the established rails. Maybe this will change but it is difficult to see why. To build out such a system is incredibly expensive and the payoff is very uncertain. Expected ROI today is almost certainly very negative. And V/MC and the banks are expected to sit tight while this happens? I think not. Even if Apple or Google does go down this road they are opening themselves up to so many costs it will be absolutely brutal and the banks will slaughter them on the institutional side. Anyways take it with a grain of salt because predicting the future is a foggy endeavor but if I had to wager I would say the odds are with the status quo.

Also, who has billions/trillions on hand to lend out to massive companies and massive populations? And, who has the institutional know-how to effectively risk manage that entire operation? The barriers to entry to banking are immense. This is why we haven't seen a new big bank in a looooong time.

Great article. In my opinion he makes very compelling points: he gets demographics right, he gets power-dynamics right. I think he gets information sharing right as well but his arguments were a little kitschy there. Thanks for posting this one.

California has implemented data privacy laws, Spek: https://en.wikipedia.org/wiki/California_Consumer_Privacy_Act Most companies are wrapping up their adoption.

For institutional trader yes. For PAs you can wait until expiration and take delivery or close out with limited vega and theta exposure.

There is little economic difference between selling puts and going long. Compare the payoff curves. The key is you need to be correct on underlying direction. Whether you are long the underlying or short the put, you need to be right on the stock. This is where I want to put my analytic efforts and take my brain damage. Shorting puts present more brain damage in the form of portfolio management. Now you are sorting through another calculation. Which puts to sell? 3 month, 6 month, 1 week? What prices are fair? I'll let you guys with more energy and brain power to get paid from taking that brain damage :D

It's a pretty good idea - I am not denying that. The other component is the "brain damage" associated with this. I do not invest for a living, so I have to ask myself, what do I want to spend my energy on: 1- trying to be correct in the long term, or; 2- trying to be correct in the long term AND trying to trade around relative valuation AND trying to value put premiums on a risk adjusted basis AND trying to manage exposure per trade and per portfolio? For those with the time and energy, it is a great idea. Just take a look at boilermaker's posts about doing this with BRK over the years, he is an inspiration in this sense!

Because it is the same strategy that people used in the housing market in 2005. The assumption is "the market will keep going up - it has for 100s of years!" Then you are put to.

The way I think of it is like this: First, you have a fair value which you believe BAC is worth. Lets say you think fair value or intrinsic value etc. is $35/share, well then you are buying at 77% of FV and selling at 85% of IV. So I agree with Cardboard this sounds like a pretty decent strategy (or as he put it, one could do much worse). And I think it can be generalized and improved in two ways: 1) Limit this to companies you would 'buy-and-hold' 2) Expand this to multiple companies because really you taking advantage of volatility

The main ingredients are water, pea protein, canola oil and coconut oil. On canola oil, it is accepted as a healthier fat, certainly compared to lard or tallow: https://www.hsph.harvard.edu/nutritionsource/2015/04/13/ask-the-expert-concerns-about-canola-oil/

Back in the day, SL Green actually paid their invoices, which was something special amongst NY RE managers. Vornado was pretty good too IIRC but we did more work with SLG.

To me, it's entertainment. Nobody is changing anyone's mind but treating it like theater is fun and engaging. Some people watch the Kardashians, others watch the news. The only difference between a pleasure and a guilty pleasure is that feeling guilty is no fun :D The rule I set for myself is not allow judgement to bleed over to the other sections of the forum. Do I think it's silly for someone to be religious, or support Trump? Maybe - but that doesn't mean that person can't identify good investment opportunities. Furthermore, take a look at the investment section of this board - how many people here are adhering to something resembling the "25 punchcard" philosophy? Not many I would wager. Within a single day you can see 15-20 different investment ideas being debated just on the first page of that board. And I'll browse them, but 99% simply don't interest me. Not that they aren't profitable potentially, but I like to keep the 'too hard' pile stacked high. So, when 99% of the time is not having anything to add to the investment ideas discussed, the politics section is an area to post and debate something.

Anthem still looks a little expensive, doesn't it? Mind sharing the napkin thesis?

Bamsec is good, rocketfinancial as well is another good one. There was a gentleman on here who I was alpha testing a financial website for, one of the tools he implemented (or tried to, I am not sure what became of it) was a way to individually whitelist/blacklist news sources. Let's say I follow FB - I don't want to see AI generated "news" articles from clickbait websites. But something like crunchbase or other tech-focused websites with quality content, or similar financial websites (WSJ, etc.) - those I would be interested in. Give me the old google finance interface, with the above whitelist news service, and BAMsec/rocketfinancial's management for company filings, and you have the greatest financial website ever created. ;D

I agree wholeheartedly. If you'll notice IQOS is a true "vaping" product - heat the leaf and inhale the fumes. Where did this technology originate in consumer products? Puff Puff Pass, my friends ;D It is possible, I started a thread about it here: http://www.cornerofberkshireandfairfax.ca/forum/strategies/housesenate-financial-disclosure-reports/ Agree again. Cannabis prices are rock bottom and as seen in all forms of agriculture over time it is a race downwards. Glad you came out to play today, Abe ;)