After trading profitably for a living every year since 2000, in late Jan of 2018 I lost 500k in an hour in the XIV blowup. It destroyed me mentally. I Couldn’t think clearly for 18 months. Couldn’t stop “trying to get my money back” which just made it worse.

Finally, I shut it all down scared shitless that I couldn’t trade any more. I had to protect what was left of what I had built over the previous years. The village of idiots in my head had somehow taken over the castle.

I had to dive deep and fully accept the financial loss and so many other life losses that I was carrying with bitterness and anger to find neutral again. My career had become my compulsion to fix the wrongs of the past, my opiate that had huge hangovers.

Thru the painful process of true awareness of what I was doing, I started day trading 100 shares of AAPL just to keep connected to my roots. Not thinking, not caring just trading my feel of the day from all that I had seen over the years.

Not caring was liberating. It felt so good to trade and simply not give a shit if I made money or not. I just flipped 100 shares around based on my feel of the tape and I did this for 3 months while I licked all my wounds trying to figure out how to let it all go. Summer 2019.

Are stocks overpriced? How much growth is required to justify a P/E of 100?

In this article, we shall explore how the one- and two-stage Gordon Growth Models, and Dividend Discount Model, relate growth rates, valuations, earnings, dividends, inflation, and return on investment.

Let
E = earnings
d = dividend
P = price
r = discount rate
g = (terminal) dividend growth rate

Then
y = d/P is dividend yield
Y = E/P is earnings yield
P/E = 1/Y
p = d/E is dividend payout ratio

According to the Gordon Growth Model (GGM),

y = d/P = r - g.

Hence,

Y = y/p.

So, for example, if r = 10% is the required return, and growth rate is g = 3%, then dividend yield should be y = 7%.

If also the payout ratio is 70%, then the P/E must be 10.
If the payout ratio is p = 100%, then the P/E can be ~14.

It may appear counter-intuitive that higher retention requires a lower P/E. But remember that we are talking about dividend growth rates, g, not earnings growth rates.

So if a firm is able to grow dividends without retaining earnings, this likely means that it benefits from pricing power, protecting from inflation, or that it has conservative accounting.

However, when the dividend is zero, g cannot be measured, and the model breaks down.

1/7: I understand that #Ripple's selling concerns many people. But the question is... how do you responsibly distribute Ripple's 50B $XRP? Ripple holding so much #XRP is one of the biggest complaints about XRP and why so many people don't like it and may also prevent ODL adoption

2/7: Escrow was introduced to help this, but that $XRP is still in Ripple's custody. They really need to distribute it. But how? Ideally, it should already have already been done years ago, but you can't go back in time to do it. @JoelKatz has talked about this challenge before.

3/7: So we're against them holding it and we're also against them selling it. So how do they distribute it? They can't give it away, who gets it, how do they choose? Giveaways this late in the game also negatively affect prices. Higher supply = lower demand = lower prices.

4/7: Ideally, they would only distribute this to Financial Institutions for use in #ODL, but unfortunately, there's not enough demand for the utility of XRP through ODL. Perhaps because Finacial Institutions don't want to hold it/use it due to regulatory uncertainty.

5/7: As I see it, there are a few options for distribution:
a) Incentivize the use of ODL despite regulatory clarity - such as giving incentives to #Moneygram,
b) Lock it back up in escrow, effectively reducing supply, but giving #Ripple custody.

A dumb thing I did in 2020:
Saw something that wasn't there on a maiden RE trade and bot late. Should have known bulk tonnage MRE/PEA etc almost all sold news in 2020 but was busy and rushed. Need to be early to best win those types of deposits. -25%ish for my trouble. 1/11

It was small money fortunately. <---GT Gold. Embarrassing thinking back on it. Industry guy told me it was kinda dumb after.😀I would say the lesson is to never rush into things but that's not true. There's times you can rush into things but it depends on the circumstances. 2/11

Example: I just happened to be watching the trading on Kodiak Copper as I thought it was through an interesting spot then all of a sudden the stock just started getting walked up. Grabbed some. It halts a minute later and releases proof of concept assays the next day. 3/11

Context is everything. Don't be afraid to try some things but keep it small when trying. You can learn really important lessons. Save piling in on concepts for when you've been doing this for years (10+?). You might win big early and think you're smart. Most of us are not. 4/11

No substitution for the grindstone. I won on a couple positions early. Tough to lose on Claude Resources buyout & finding Nexgen. Was saying to a few of the guys last night that I am surprised I did not go -50% on portfolio next. My strength was knowing I still knew little. 5/11

1) As the miserable year of 2020 reaches its end, it's time to return to the offices of Hindsight Capital LLC.

For those unfamiliar, this great, albeit imaginary, hedge fund invests with the benefit of a style guaranteed to beat all others: hindsight

2) As such perfect vision would allow infinite returns, certain limits are imposed on Hindsight Capital’s managers:

🚫It can't trade during the year
🚫It can't use leverage
🚫It can't invest in individual stocks
✅It must make broader or sectoral

3) Hindsight can, however, make “long-short” trades.

But the hedge fund must be able to explain how someone might have made such a trade based on only what they knew at the time. Foreknowledge of earthquakes and hurricanes, for instance, is not allowed

4) As for the pandemic, Hindsight Capital’s managers were aware of the novel coronavirus in Wuhan and had little difficulty in predicting how the world would react and what its effects would be.

That was crucial, as will be seen in this thread

5) Hindsight Capital always bases itself in the country with the year’s weakest currency.

In 2020, that was Brazil, giving its managers a great excuse to live out the pandemic from an office overlooking Ipanema Beach

‘Billions will be wiped off the stock market!’

‘Project fear’

‘There will be chaos at ports!’

‘Project fear!’

‘Supermarkets and shops will struggle to get products’

‘Project fear!’

‘Medicinal supplies could dry up!’

‘Project fear!’

‘Brexit will detrimentally affect the value of the pound’

‘Project fear!’

Listening to grumpy MPs in the Commons today, you might incorrectly think the UK-EU agreement didn’t cover much.

Find the agreements here:

https://t.co/RIg0yhl9ee

The contents follow below to illustrate scope.

PART ONE: COMMON AND INSTITUTIONAL PROVISIONS
Title I: General provisions
Title II: Principles of interpretation and definitions
Title III: Institutional framework

PART TWO: TRADE, TRANSPORT, FISHERIES AND OTHER ARRANGEMENTS
HEADING ONE: TRADE
Title I: Trade in goods
Title II: Services and investment
Title III: Digital trade
Title IV: Capital movements, payments, transfers and temporary safeguard measures
Title V: Intellectual property

Title VI: Public procurement
Title VII: Small and medium-sized enterprises
Title VIII: Energy
Title VI: Public procurement
Title VII: Small and medium-sized enterprises
Title VIII: Energy

Title IX: Transparency
Title X: Good regulatory practices and regulatory cooperation
Title XI: Level playing field for open and fair competition and sustainable development
Title XII: Exceptions