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ES up +17 points. Short and bears realizing how fragile the bear thesis is. "Trump is crazy! Its the end of the world" Now this Wharton graduate and sucessful businessman is not acting in a way that implodes the US economic strength, shocking! Only the idiots are surprised

As far as VRX goes, Ackman sold late last year to generate a tax loss for his investors. He did not buy back that stake. If he doesn't buy again within 1 week (reflecting that the lack of purchases were related to issues related to having inside info), I'm going to size down. That will be the...

http://www.zerohedge.com/news/2017-02-28/march-hike-odds-soar-68-after-hawkish-assault-dudley-williams I'm likely to lock some gains on Fed futures later today and hold the rest

Longed some deep OTM Jan 2018 calls on HLF. I think I will do the last part of my PSH HLF hedge this way (the first part was through shares at $54, that got the PSH 10% short size down to 3-4%).

If someone invests in a stock at $1 a share, and it rises to $50 after 20 years, there will be a $1 cost basis $49 in capital gains at 35% tax there is a $17.15 tax liability But if taxes are slashed to 0% (temporarly), the person can then sell at $50, immediatly rebuy it and 'reset' their...

There is one known 'Buffett rule', that rich people shouldn't pay a lower tax rate than their secretary. Through his behavior I'm creating a 2nd Buffett rule. The first draft: When you have a lot of unrealized investment gains in stable investments (like safe/predictable businesses, real...

There is no trade that can be derived from this (that I know of) but its a huge lesson on how to maximize long-term wealth. The avg Buffett fan who read 3 books and thinks he's got Buffett figured out will miss out things like that (in fact, how many Buffett books even go in depth on the...

When Buffett does that (keeps a marginal stock because he doesn't want to pay a huge tax bill) he is risking that tax rates will increase but that's not a true risk because he doesn't have to sell. He can always hold and GAMBLE again that tax rates will come down in the next election (and the...

Truth is that Buffett is really a great tax accountant and mathematician, his actual strategy is not advanced. In fact, his strategy seems more of a natural consequence of his mastery of tax laws and compounding math rather than anything else

"But here’s the corporate math. Every $1 of capital gains that a corporation realizes carries with it 35 cents of federal income tax (and often state income tax as well). The tax on dividends received from domestic corporations, however, is consistently lower, though rates vary depending on the...

From the BRK letter "Sometimes the comments of shareholders or media imply that we will own certain stocks “forever.” It is true that we own some stocks that I have no intention of selling for as far as the eye can see (and we’re talking 20/20 vision). But we have made no commitment that...

Yes being all-in stocks and real estate has its problems. I was simply pointing out in most instances (at least on planet Earth), its more resilient than bonds given governments preference for inflating. I'm all for a balanced portfolio, but the more bond data I look at, the more I see that it's...

This is probably more up to the date and better than the Triumph book https://publications.credit-suisse.com/tasks/render/file/?fileID=B8FDD84D-A4CD-D983-12840F52F61BA0B4 keywords: Credit Suisse yearbook, historical returns, long-term returns

For the record, here is why I believe stocks and real estate are more resilient than bonds: If you consider that the risk premium of an asset is a form a compensation against bad events (as it enables one to accumulate profits over the good years as a buffer against future losses) and that the...

I believe its adjusted for inflation, Credit Suisse (which is the source) adjusts all returns for inflation. Its worrying but I guess not surprising. If there is one asset class that should behave like this it is bonds It offers the lowest risk premium but the highest 'stability'. Its not a...

Of course, that 'resiliency' depends on the market price. If bonds were priced lower, they would protect the investor against shocks more than they did in the past 117 years. So I guess what I'm saying is that its possible that bonds are consistently overpriced relative to the tail risks that...

Interesting chart. I mentioned in the past that I believe equities and real estate are more resilient than bonds (and bonds are more vulnerable to uncertainties). It sounds crazy but this chart shows that well, the best countries on earth have 4 bond markets with negative returns (after 117...

I now realize a mistake I had made. Deriving leverage from the bond should be pretty close to deriving from the futures (although cash bonds still have benefits) so there should be no savings (in terms of yields) or difference in interest rate exposure. Hence, there is no reason to expect much...

I'm comparing it to futures because they are both a levered play on rates. Someone could always use futures and 'free up' cash for other purposes. But that exposes the person to upside surprises in the repo rate (plus the commissions, spreads). The huge duration bond is more protected in that...

I'm talking about the latter. My point is that its a way to guarantee duration (vs futures) without being exposure to a upside surprise in the average repo in the long-run. Plus you save all the commissions/bid ask spread/time waste during roll overs