The Problem With Ponzis…
Over the past few years, I’ve been highly critical of the Ponzi Sector. This is what I call a whole grouping of companies that has no ability or apparent desire to ever become profitable. Instead, these businesses have focused on rapid revenue growth because the stock market has rewarded them for this growth—especially if there […]
Gas Stimmys…
A few weeks back, I had dinner with a close friend. Naturally, our conversation turned to the markets (paraphrased). Friend: Kuppy, you need to be careful with those 2025 oil calls. If oil spikes to $200 in 2023, it’s going to take the global economy down with it. You could end up timing it wrong by […]
On Maxing Out Positions…
I believe the vast majority of publicly traded securities are roughly fairly valued. Sure, there may be a 30% or even 50% variance to fair value, but that’s mostly encapsulated in annual volatility. Unless I’m looking at something with an Event-Driven mindset, where my capital turns over rapidly, I’m mostly uninterested in such meagre expected returns. Honestly, […]
Will Risk Parity Blow Up…???
For four decades, the US stock market has traded up and to the right. During those brief moments of setback, treasuries usually rallied strongly. The fact that these two asset classes seemed to offset each other, creating a smoothed-out return profile, was not lost on certain fund managers who created portfolios comprised of the two. […]
It’s about to get wild…
A few years back, I was in NYC for meetings. All of a sudden, it started to pour, absolutely Miami style rain. Miraculously, an umbrella vendor popped out of nowhere (I’ve never understood how this works, but it is crazy how fast they can show up). Me: I’ll take a large umbrella. Him: That will […]
Will ESG Create The Next Lehman Moment…???
Ever since I can remember, billionaires have been taking private jets to conclaves where they strategized on how to reduce other people’s carbon emissions. At the time, I thought little of it—billionaires need hobbies and all. Besides, true billionaire credentials are gained when a squadron of luxury jets arrives to lecture some impoverished country on […]
When The Levee Breaks…
If it keeps on rainin’, levee’s goin’ to breakIf it keeps on rainin’, levee’s goin’ to breakWhen the levee breaks, I’ll have no place to stay. Mean old levee taught me to weep and moan, LordMean old levee taught me to weep and moanIt’s got what it takes to make a mountain man leave his […]
On Staying Liquid…
I believe investing is a game of keeping powder dry and waiting for layups. So many investors miss this lesson. They stay fully invested in middling situations for various reasons—often mental. Who cares if it is at 90% of fair value?? Recycle your capital. Why are you in a business with deteriorating numbers?? Recycle your […]
The New GBTC…
Last summer, I recognized an odd phenomenon. An obscure entity named Grayscale Bitcoin Trust (GBTC – USA) was slowly cornering the free float in Bitcoin. This was a result of the trust structure where any capital that went in, was converted into Bitcoin, but there was no mechanism in place to ever sell coins and […]
ESG = Energy Stops Growing
For most of my career, oil demand has grown each year and supply has roughly kept up. Sure, it’s overshot in both directions. We’ve seen shortages and we’ve seen gluts. We’ve even seen oil go negative. Throughout this time, we’ve always intuitively known that the cure for high prices is high prices. Last week may […]
Trading “Project Zimbabwe…”
At the depths of the COVID crash, I began writing extensively about the equity market ramifications of unlimited fiscal and monetary stimulus. To start with, I believed it was obvious that the equity markets would blast higher—as a result I strapped on as much exposure as I could stomach while remaining a responsible fiduciary. I was […]
Can’t Stop Selling GameStop Vol…
Ever since GameStop (GME – USA) pulled off a Melvinator, I have had various short vol GME option trades on. Often, this was some combination of deep out of the money (OTM) strike puts and a smattering of even further OTM calls. Yes, I know I said that shorting “Project Zimbabwe” is suicide and maybe […]
