Investment Thread

[Kdogg]

Down goes BlockFi

https://www.cnbc.com/2022/11/28/bloc...t-spreads.html

I know people don’t like having this thread hijacked with crypto talk so apologies in advance.

Who would have thought that making loans using volatile assets as collateral would be a bad business idea?
We did! Not specific to this company but we talked about what a bad idea it was last fall/winter.

[budwom]

I know people don’t like having this thread hijacked with crypto talk so apologies in advance.

Who would have thought that making loans using volatile assets as collateral would be a bad business idea?
We did! Not specific to this company but we talked about what a bad idea it was last fall/winter.

Every decade or so we get some new financial entity (maybe category is a better word) and they respond to warnings with "don't worry, we know what we're doing." Ha.

[snowdenscold]

I know people don’t like having this thread hijacked with crypto talk so apologies in advance.

Who would have thought that making loans using volatile assets as collateral would be a bad business idea?
We did! Not specific to this company but we talked about what a bad idea it was last fall/winter.

Even better, those volatile assets are also completely created out of thin air!

Pretty interesting to watch Binance re-invent the idea of a lender of last resort in real-time. I'm sure this time, unlike every single other time in crypto-world, it will work out.

[Jeffrey]

During the last week, the 2-10 year treasury inversion is greater than anytime since 1981. My wager:

1. Lock in long rates.
2. Next 2 years will be terrible for real estate.
3. Buy select growth stocks.
4. Send Wheat a sympathy card.

[budwom]

^ I can't feel awful for real estate. They were the beneficiaries of crazy low rates for an extended period of time...that just can't last (IMO). But I do agree, could be some rough sledding.

[PackMan97]

^ I can't feel awful for real estate. They were the beneficiaries of crazy low rates for an extended period of time...that just can't last (IMO). But I do agree, could be some rough sledding.

Nor I, but it's going to be a mess getting through it. Truth is anyone that bought pre-pandemic and locked in at a low fixed rate is sitting pretty.

[CrazyNotCrazie]

Nor I, but it's going to be a mess getting through it. Truth is anyone that bought pre-pandemic and locked in at a low fixed rate is sitting pretty.

Correct assuming they aren’t moving in the next few years. And anyone who took an ARM to squeeze out a few bps rather than locking in is probably not very happy.

[Jeffrey]

And anyone who took an ARM to squeeze out a few bps rather than locking in is probably not very happy.

IMO, they should have seen it coming… history repeats. History books are a great investment.

[YmoBeThere]

The month of November ended with a bang as Fed Chairman Jay Powell indicated that the Fed would cease the 3/4 point rate increases likely for a 1/2 point cut in December and the potential for future moderation. This likely means that stock picking(and sector selection) will continue to benefit in the near term but that some will be willing to start buying stocks that they found toxic a couple months ago like large cap tech companies.

Large cap value was up 5.7% from its October end close, large cap growth 4.4%, and the S&P 500 5.1%.

Each of the ETFs listed below will have another dividend payout in the month of December.

The market of large cap US stocks (S&P 500) since the end of November, 2021: (as of 11/30/2022)

iShares Core S&P U.S. Value ETF (IUSV) price at close 11/30/2021: 71.77
Total Dividends: 1.52
Annual Dividend Yield: 2.12% at purchase/ current 2.06%
Adjusted cost basis: 70.25
Close 11/30: 73.75

Return during that period at the end of November: +5.0%


iShares Core S&P U.S. Growth ETF (IUSG) price at close 11/30/2021: 113.07
Total Dividends: 0.80
Annual Dividend Yield: 0.71% at purchase/current yield 0.91%
Adjusted cost basis: 112.27
Close 11/30: 87.80

Return during that period at the end of November: -21.8%

iShares Core S&P 500 ETF (IVV) price at close 11/30/2021: 457.63
Total Dividends: 6.17
Annual Dividend Yield: 1.35% at purchase/current yield 1.51%
Adjusted cost basis: 451.462
Close 11/30: 407.45

Return during that period at the end of November: -9.7%

[bundabergdevil]

Tech layoffs continuing. 1,250 corporate axes at DoorDash...

[bundabergdevil]

^ I can't feel awful for real estate. They were the beneficiaries of crazy low rates for an extended period of time...that just can't last (IMO). But I do agree, could be some rough sledding.

I mean, I'm upset that the crazy run-up on my house's market valuation is about to come crashing down...!

[snowdenscold]

Two of the highest-profile Blockchain projects in recent years have both given up on it now:

Maersk-IBM shipping:
https://www.maersk.com/news/articles...inue-tradelens

Australian stock exchange:
https://www.ft.com/content/029dd01f-...5-299408b62469


On a related note, some thoughts from a former senior AWS engineer on their exploration of the space:
https://www.tbray.org/ongoing/When/2...AWS-Blockchain

The key moment was when we got in a room with the CTO of this one startup, in Tribeca I think. When I heard their VC funding number I thought it was the valuation, not the investment dollars. The customer list was blue f**ing ribbon and don’t you forget it. These guys were razor-sharp.

They presented some of the systems they’d built and yep, we were impressed. Then, with the startup CTO in the room, one of my fellow engineers asked the key question: “All these systems, are there any that wouldn’t work without blockchain?” The guy didn’t even hesitate: “No, not really.”

And that was about that.

Obviously we also talked to a few leading lights from the crypto scene. That wasn’t very helpful, because they seemed mostly concerned with the aspects that got you out from under troublesome government regulation and contract law; it all had an unsubtle aroma of libertarianism.

Lots of them mentioned the Australian Stock Exchange and said you must be a peasant if you questioned technology that was about to be adopted in such a Serious Enterprise full of Serious People. After all, it was being built by Accenture, no less! (Cue eye-roll.)

And then there was the other faction, all about number-go-up-we’ll-get-rich; these were the days of ICOs, each sketchier than the last.

There was still a gaping hole when we asked “What useful thing does it do?”

[Acymetric]

Two of the highest-profile Blockchain projects in recent years have both given up on it now:

Maersk-IBM shipping:
https://www.maersk.com/news/articles...inue-tradelens

Australian stock exchange:
https://www.ft.com/content/029dd01f-...5-299408b62469


On a related note, some thoughts from a former senior AWS engineer on their exploration of the space:
https://www.tbray.org/ongoing/When/2...AWS-Blockchain

“All these systems, are there any that wouldn’t work without blockchain?” The guy didn’t even hesitate: “No, not really.”

FWIW this has been one of my primary objections to enthusiasm for blockchain and the Metaverse.

Great set of links!

[OldPhiKap]

FWIW this has been one of my primary objections to enthusiasm for blockchain and the Metaverse.

Great set of links!

That it’s a solution in search of a problem?

Seems so to me as well.

[PackMan97]

FWIW this has been one of my primary objections to enthusiasm for blockchain and the Metaverse.

Great set of links!

I too appreciate the links and sporked!

I'm always amazed by the smart people who are wrong, or the big companies who miss it.

A great example is Sears. Who was better equipped to be Amazon before Amazon? Sears had a rich history or retail and mail order, but never saw the opportunity before them. Blockbuster quite literally laughed Netflix out of their boardroom. Microsoft wiffed on the smartphone revolution. etc.

[snowdenscold]

That it’s a solution in search of a problem?

The other phrase I just saw recently was: "A cure for which there is no known disease".

[Section 15]

The other phrase I just saw recently was: "A cure for which there is no known disease".

But, But... This time it's different!

I've been hearing this since 1969, and guess what... it isn't.

[Kdogg]

The other phrase I just saw recently was: "A cure for which there is no known disease".

That's the plot of Mission Impossible II.


It looks like crypto isn't the only place with liquidity issues.

Blackstone’s $69 Billion Real Estate Fund Hits Redemption Limit

"Blackstone Inc.’s $69 billion real estate fund for wealthy individuals said it will limit redemption requests, one of the most dramatic signs of a pullback at a top profit driver for the firm and a chilling indicator for the property industry."

Wall Street has been a big buyer of residential property. If more funds do this, it looks like it will artificially prop up the market. Wonder how long they could maintain it?

[PackMan97]

That's the plot of Mission Impossible II.


It looks like crypto isn't the only place with liquidity issues.

Blackstone’s $69 Billion Real Estate Fund Hits Redemption Limit

"Blackstone Inc.’s $69 billion real estate fund for wealthy individuals said it will limit redemption requests, one of the most dramatic signs of a pullback at a top profit driver for the firm and a chilling indicator for the property industry."

Wall Street has been a big buyer of residential property. If more funds do this, it looks like it will artificially prop up the market. Wonder how long they could maintain it?

I am uneducated when it comes things like this, is there a Situation that could force Blackstone to sell their property?

[YmoBeThere]

I am uneducated when it comes things like this, is there a Situation that could force Blackstone to sell their property?

Yes, to the extent that the fund owns assets that don't trade regularly and aren't easily liquidated for cash and redemptions exceed the cash on hand. Reductio ad absurdum, if everyone invested in the fund asked for their money back today, the entire portfolio of real estate would need to be sold. Investors would then get their pro rata share of the proceeds from the liquidation of the portfolio.