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Thank you. My ideas might seem unusual sometimes but that is because I try to write when I got something different/new to say. I dont want to be repeating common ideas taught in books and blogs because I dont think it would add much value

A lot of really wealthy people seem to understand this in some level (conscious or uncouncious) because either they got wealthy that way (Silicon Valley folks, business people that did well, real estate investors who catched a big bull run in their markets) or they know people that got wealthy...

SNAP is worth about $22B now. FB is worth almost $400B. Will SNAP be worth anywhere near what FB is? Probably not and I will probably be stopped out of my trade at $23 (with a tiny little loss) but if I'm wrong and the continued US bull market leads to a more speculative mood, this could easily...

keywords: long-term inflation, global inflation, historical inflation

Yellen and her mouthpieces confirmed a rate hike for the next meeting. I will take all profits soon, will still leave some 3-4bps on the table of profits but its hard to tell what the new Effective Fed Funds will be. A good guess is that average (now) of 0.66% + 25bps, but I have seen the Fed...

I asked PSH IR today why they did not rebuy VRX after the tax loss selling late last year and the answer was "We have chosen not to rebalance the funds at this time. Should we choose to, there will be a filing." To me that is a very weird answer, which warrants further caution. So I sold the...

I also decreased a bit of my VRX exposure due the lack of Ackman re-buying (from the partial stake he sold in December). I got 1% there as well (plus some 2019 OTM calls). I will readd and go bigger if the right news comes out but as it stands I will keep my risk small

Along with this logic I just added a 1% position to SNAP (I know, sounds nuts right) at $26. Stop at $23. If US equities will be in this bull market for years as I expect, SNAP might go on a monster GPRO/FB type tear so there is a huge convex exposure there. And my risk is limited to the IPO...

But this doesn't mean that I think equities are so wonderful that one should have 100% of their assets in it at all times (like Buffett recommends). The data shows that people don't have that kind of risk tolerance (I certaintly don't, not unless I'm seeing HUGE bargains). One needs to figure...

Jim Chanos has a saying that says 'I have seen a lot of stocks go to $0 but I have never seen any stock go to infinity'. But he is wrong IMO, he needs to look at stocks that go up by 200-300-500-1000-5000%+ and weight those losses against the gains of a short that go to $0. I have seen countless...

So to recap, when someone sells/shorts/warns people about equity valuations in periods where business are or might do especially well, they are short so many things -They are exposed to that good business period going longer than it did in the past (with exponential/convex consequences) -They...

Here is an article talking about valuation and stocks in a different perspective. Very good read http://www.philosophicaleconomics.com/2017/02/asset-markets-as-banks/

I guess another way of saying this is that the stock market is quite forgiving of optimism that turns out to be mistaken. The stock market, however, is brutal to pessimism that turns out to be mistaken. All that to the convexity there which is amplified compared to most other markets. Therefore...

This rule can be applied to situations where a stock markets get hammered hard but then puts some kind of big bottom and then a positive news catalyst hits. In that case, shorting is so ridiculously bad (market upside is uncertain and catalysts could be increasing it), a long starts to make sense

So a rule can be derived from this: Avoid shorting (outright, by being in cash/bonds or through bearish comments) when the upside is unusually uncertain and certain catalysts could be increasing that upside. Err on the side of being long instead. If shorting is so risk, knowing how much risk...

The thing is when I say short convexity/compounding I'm not talking about the regular 'short' convexity exposure one gets when someone moves from stocks to bonds in normal times. Like say someone gets out of the stock market (which is expected to deliver 5% a year) to bonds (expected to deliver...

The easiest to get this is to look at Hussman's predictions and the total return of the S&P500 (with dividends reinvested). IIRC, he started to get bearish at around 1000 points in the S&P. I'm sure he will eventually get his pullback and he will say 'see, I told you that these valuations were...

I was thinking about one thing that Buffett said on CNBC this week when the discussion was about 'mean reversion' and my views about valuation and the stock market He said: "But when you say reversion to the mean, I'm not sure what the mean is. I mean, the mean is going to be based upon...

I'm in the April contract, my bet was for a March hike, down the line I haven't a clue how many hikes they will do. Depends on Trump I guess

This guy seems to have nailed it "Martin said the three most important Fed officials to comment this week were New York Fed President William Dudley, Fed Gov. Lael Brainard, usually very dovish, and Fed Gov. Jerome Powell. "When the regional presidents go out and talk, they're not as...