Checking in on the energy investing framework as we approach year end 2020

First we revisit the rules. 1) Equities follow crude

2) Crude timespreads momentum dictates crude price momentum. Strengthening timespreads = strengthening crude price

3) Over the medium term, crude follows a) global inventories & b) Emerging Markets (BRICS) growth.

In a nutshell, as goes the global business cycle, so goes the energy cycle

#1 Crude vs OECD inventories #2 Crude vs BRICs GDP

The energy cycle consists of inventory build & draw periods

Draws=bullish
Builds=bearish

Energy equities (red, inverted) and crude inventories

#wallstreetbets #WallStreetBetsnew #wallstreetsbets #GME #GameStop #reddit #robinhood
Hey, do you want revenge against #WallStreet ? #silversqueeze
Read this thread and RETWEET and speak of it around as much as you can please🚀
edit: Other threads to follow bcause not enough spc

Today wallstreet decided to take your money and pop the bubbles they helped you to create and I can say with 100% confidence that they made money on the way up then they gonna make money on the way down. They rule THEIR game!

But what they've done since a very long time to protect the system that serves their hegemony is suppress the price of one of the most ancient and most popular form of money throughout the history: SILVER

They do it because #wallstreet is dependent of the dollar printing machine of the central bank. Every competitor of the dollar must be eradicated or controlled. The Silver is especially important for them because of its history as money.

Silver has been money more often than Gold, there are still 42 countries (including mine: France) where the word money and Silver are the same.
It's people's money, that you used to use to fill your tank or buy your groceries.

Yesterday, responding to a Bloomberg article which claimed that Zimbabwe’s ‘trade surplus’ is evidence of progress, I pointed out that a trade deficit is not necessarily a bad thing. Indeed, it is not. 1/20

I illustrated this with FDI, which can result in trade imbalance. FDI is good but it can create temporary import pressures, a ‘healthy’ trade imbalance. A trade surplus in and of itself is not a measure of economic performance. 2/20

A number of people could not understand how FDI could in any way be related to imports. This thread is for their benefit i.e., @tafadzwamerere, @PatsDaMan, @sabepe83, @AlekeMukunga, @mkhwananzivusa, @muzekepwa and @DzeShe88. 3/20

The first point is that FDI is not limited to financial flows. To grow productive capacity of a country, it can lead to growth of imports of capital and intermediate inputs for industry. Zimbabwe has few industries producing these. 4/20

Those asset and intermediate inputs flows are recorded as imports. A simple example below: 5/20

Good evening and welcome to this week’s edition of 11 Wall Street.

This is a weekly thread where i look at happenings in the US equity space in the outgone week.

Please retweet from the very first tweet, so those on your timeline do not miss out.

If you have any questions or comments, please feel free to share.

It was a red week across board. The Dow Jones Industrial Average (commonly known as the Dow) fell by 0.91%.

The S&P 500 index fell by 1.48% and the NASDAQ composite index dipped by 1.54%.

Last week marked the commencement of the earnings season, with a number of banks releasing their earnings.

JP Morgan released its Q4 2020 numbers. It made $31.6 billion in revenue and an earnings per share of $3.79

Citigroup made $16.5 billion in revenue, and an earnings per share of $2.08.

Wells Fargo made$17.9 billion in revenue and an earnings per share of $0.64

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.

A thread on the Tasmota TLS MitM attack I found a few months ago since getting a proper blog post about it is taking me forever.

Tasmota is an open source firmware that runs on a number of ESP8266-based IoT home automation devices, which talks to an MQTT broker for management.

MQTT can be run over TLS to provide confidentiality and integrity, but given the constraints of running on an ESP8266 device, standard TLS certificate validation is rather heavy. As an alternative, Tasmota implements fingerprint based validation, like SSH

The fingerprint validation can do "trust on first use" (TOFU) and just remember the server's public key. This can work well if you're hosting your own MQTT server, and you can just use a self signed certificate. The fingerprint algorithm was even based on how SSH does it.

If you read RFC4253, it describes the RSA key format with the following encoding

string "ssh-rsa"
mpint e
mpint n

where e is the public exponent (usually 65537) and n is the modulus.

Slight problem. RFC4253 doesn't explain what an mpint is.

You have to go dig up RFC4251 for what an mpint is. The precise details don't really matter for this bug, but the critical detail is that an mpint is length-prefixed, which makes it unambiguous where when mpint ends and the next begins.

Tasmota's implementation missed this.

As promised, a thread on one of my largest holdings going into the new year...

Allow me to introduce Smart Eye, "the king of DMS"

A little background first

Driver monitoring systems (DMS) are a soon-to-be-introduced safety feature in cars.

As the name suggests, they monitor drivers to ensure they are not tired or distracted while driving and gives them a nudge if they are.

This is going to be legally required to be in all new cars in Europe and North America by the middle of the decade.

As auto OEMs sell on a global basis, what happens in developed markets usually ends up in emerging markets as well.

As a result of this legislation, there is a pretty clear path for increased penetration of DMS in the auto industry.

The slide below shows industry forecasts of around 60% penetration in new cars sold globally by 2025.

As a small aside, Volvo did a great ad for DMS last year. Just priming consumers for what's to

With a fixed supply of money, holding the money itself is similar to investing in a global index fund which offers no yield but appreciates with global productivity. Anyone can be an investor; zero fees, experience, or professional management required.

Anyone who earns money can expect to keep it and watch it appreciate, without needing to do any more work.

With easy money, you need to beat inflation to keep the value you earned & for that, you need several professionals working full-time trained for years and plenty of luck

Imagine if every child could expect any money they earn or get as a gift to appreciate over time without needing professional management. How much more would children grow up to value saving and low time preference?

Imagine if every professional could focus on their job and watch their savings accumulate & gain value without needing to have a side job trying to figure out what stocks, bonds, commodities, and other arcane instruments to buy & who to hire to manage them all?

Imagine if the old, retired, and widowed could just count on their savings maintaining value without having to follow & speculate on global macro trends & insane monetary policies.

HOW TO MAKE MONEY SELLING PUTS

The low-risk method for turning limit orders into cash.

It doesn't take a genius to know that the stock market is overvalued.

Airbnb shares hit the market today and doubled right away. This in a time when half the planet is shut down and many people are scared to travel.

Of course, that's just one example. There are plenty more companies with impaired fundamentals now trading at or near al-time highs.

It is very hard to find a bargain anywhere, similar to June / July where everything popped, only to tank in value by September.

This means you have three options:

1) Sit in cash.

2) Buy now, expecting both a future drop and recovery.

3) Sell puts , treating them like limit orders and collecting cash while you wait for share prices to fall.

We'll focus on number three.

Also, quick disclaimer: I'm obviously no financial expert and this thread is purely for entertainment purposes only.

Anyway, back to the main content.

Dear All,
1. A new year of hope started, I thought to pen some of my views about making money (Investing & Trading), these are the points which I keep telling me & I thought to share with you all. I hope, it will help both all. #investing #investingpsychology #tradingpsychology

2. Equity is a riskier way of making money, but still, the ease of control, liquidity & speculation attracts us all, more adrenalin rush in trading versus any other modes of equity-like MF, ETFs, Small-cases, Longer-term investment. #investing #investingpsychology

3. Everyone comes to equity to become millionaire/billionaire/..., but very few become so, otherwise, most of the analyst would not be running webinars or panel of TV or writing books for regular income.

Starting to collect important questions for 2021 and beyond in this thread.

Please send questions you are interested in too!

1. Will demand for compute continue to double every few months? Tons of implications for semiconductor design and manufacture.

2. What will be the next major use of mRNA vaccines? What will our new understanding of protein folding lead to?

3. How will better data and workflows improve our health care system (prediction, prevention, price of care, outcomes, compliance)?

4. Will we fully unbundle undergrad and graduate school into the information/learning component (which should be a fraction the cost for multiples the quality) and the networking component?

5. Digital art creation and collection make sense to me, but how will digital art be displayed?

1/ Who are the investors in GBTC?

Why is there a premium?

And what is the sweet trade they’re taking advantage of?

A thread 🧵

2/ Grayscale’s Bitcoin Trust made headlines again with their record 1-day addition of 16,244 Bitcoin, adding to their stack of over 630,000 Bitcoin and an AUM of ~$23B. Evidently business is good...So who are their investors? And is GBTC’s premium an incentive or disincentive?

3/ What is the Grayscale Bitcoin Trust (GBTC)?Grayscale owns BTC in the trust & investors buy shares to represent a # of BTC. There’s a 2%/yr fee+a “premium.”The premium is the diff. btwn underlying BTC value(Native Asset Value or “NAV”)vs. mkt price of holdings(what shares cost)

4/ There are 2 layers of investors. There are the base layer investors - accredited investors selected to buy into the private placement of the fund at the “NAV” price aka the price of the underlying BTC value

5/ They can send USD or Bitcoin and receive a # of shares equivalent to the BTC value (0.00094919 BTC/share). One catch is its 1 way - Once you put BTC into the trust, it can’t be redeemed. Investors can sell their shares, but the BTC will remain in the trust and off the market

Our major new analysis of the EU-UK trade deal highlights ten areas that must be addressed urgently to deal with non-tariff trade barriers looming come January 1st.

Although the Johnson deal is better than a WTO arrangement, it will still result in ‘considerably higher barriers’ to trade.

identifies areas of concern ranging from regulatory challenges and data issues to membership of the Erasmus scheme and climate change.

Commenting @BestForBritain CEO @pimlicat has said:

“This deal was negotiated at speed, and it shows. It is far from the comprehensive deal voters were promised”

“it is woefully thin on services that account for the lion’s share of our economic power, and it bares little resemblance to a modern trading agreement.”

How to become a SUCCESSFUL investor: a guide 1/n

1) Diversify but don’t. Diversification is for idiots, but it is also a free lunch.

2) Stay consistent but don’t. Have a consistent repeatable process, but also adapt to changing markets.

3) Read outside research but don’t. The best investors think for themselves and are lone wolves but they also talk to others to learn and copy ideas.

4) Use the sell-side but don’t. Your time is valuable and using the sell-side saves time, but it is also low quality and will add needless noise – don’t use them.

A thread on 𝐇𝐨𝐰 𝐓𝐨 𝐀𝐝𝐣𝐮𝐬𝐭 𝐚 𝐒𝐭𝐫𝐚𝐝𝐝𝐥𝐞

1/n

1. First of all one should know when to do a straddle, ideally when premiums are good and view is 𝐬𝐢𝐝𝐞𝐰𝐚𝐲𝐬 or when you are not expecting a huge trend.

2. When you do place a straddle, you will have good premiums so you will be covered for a good amount of move.

2/n

3. Find your breakevens, and ideally delta should also be neutral.

4. Do not adjust until your BEP is breached or the delta exceeds (+/-)40, whatever happens first, generally delta limit will breach first.

5. When delta reached lets say -40 it means you have to roll puts.

3/n

6. Just book profits in the current short put and roll put up by matching the premiums, delta should again be close to neutral but one can choose to have a little -ve delta since if there is mean reversion, PEs will spike.

7. This means you will be going Inverted(Short ITM)

4/n

8. Keep repeating the same process until expiry OR till either one option reaches 100 delta which will mean that you basically are short/long one future lot.

9. As soon as any option reaches 100 delta, just book the straddle be it in loss or profit, dont adjust at all.

5/n

Educational Thread :

#trading

1/1
Section 1 — Supply and Demand

Basic Trading Principles
Demand = Buyers
Buyers = Support

Supply = Sellers
Sellers = Resistance

Support will be the level at which demand will outweigh supply, causing the price to rise/increase.

1/2

Resistance will be the level at which supply will outweigh demand, causing the price to fall/decrease.
Supply and demand zones in trading are usually liquidity pools.
When an asset illustrates a sharp rise or decline large institutional players (whales in the case of crypto)

1/3
sometimes miss the entry or exit because of the size of the orders. When this happens they leave pending orders to buy or sell at the base of the liquidity zones, with the expectation that the price will return there to fill the remaining orders.

1/4
A high price rise zone is the demand zone (support) and the zone where price has made a sharp decline is the supply zone (resistance).
Demand Zone (Buyers Present)
Technical Analysis Term = Support