Greed

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RYAN   By Guest Blogger Ryan Lewenza
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In Oliver Stone’s classic movie, Wall Street, the protagonist and iconic character, Gordon Gekko, famously declared “greed, for lack of a better word, is good. Greed is right. Greed works”, while providing an impassioned monologue on the merits of capitalism.

We’re all susceptible to greed in some form or degree. If greed pushes us to study and work harder, save more and gives us drive, then it can be a good thing. But as the saying goes, “too much of a good thing” can lead to disaster and financial ruin.

Well, we’ve seen yet another example on Wall Street of extreme greed that brought down a billionaire hedge fund manager in a matter of days. Bloomberg wrote a big piece on this individual perfectly titled “How to Lose $20 billion in 2 days”.

Bloomberg Article on Archegos

Source: Bloomberg

Today I’m going to discuss the story of hedge fund manager, Bill Hwang, and how his greed and avarice led to him blowing up and wiping away billions of dollars of capital in a matter of days.
Mr. Hwang started his investing career as a stock salesman in the 1990s but then moved up to be an investment analyst working for a well-known and well-respected hedge fund manager Julian Robertson, who ran a fund called Tiger Management.

Bill and a number of other analysts (notably Catherine Wood of Ark Funds) learned the tricks of successful stock investing and ultimately went out on his own to start the hedge fund company, Tiger Asset Management. There he made billions based on his aggressive stock trading strategies, but at an expense, when Mr. Hwang was caught up in some shady insider trading stuff that led to him getting fined for insider trading and being banned from trading Hong Kong stocks for a number of years.

Following this misadventure he changed Tiger Asia Management into a ‘family office’ investment shop (what many hedge fund managers do after getting caught doing something illegal), called Archegos Capital Management. This is when things went sideways.

Initially he was very successful, quietly amassing an incredible net worth of over US$10 billion dollars. Apparently, this wasn’t enough for him as he then leveraged up this capital, multiple times over, amassing a stock portfolio estimated at over US$100 billion dollars.

Below is one of the stocks that he bet on huge, with Viacom surging from a low of $11/share last March to a peak of $100 by March of this year. According to Bloomberg and other news outlets, he used margin to leverage up his bets on Viacom and other stocks, while also using a derivative product called a total return swap. With total return swaps you don’t own the underlying stock, but make or lose money based on the daily price changes of the stock. If the stock is down on the day, then Bill would need to cover this decline with his broker.

Viacom’s Roller-coaster Ride

Source: Stockcharts.com, Turner Investments

Leverage can help goose stock returns but just as easy it can compound losses as Bill borrowed more and more from his prime brokers, while also obfuscating his massive concentrated stock exposures, through these swap contracts.

This was working just fine until Viacom announced a big stock sale, taking advantage of the big move in the stock price, and the shares dropped like a stone taking Bill and his portfolio along with it. As the stocks fell further and further his brokers (Morgan Stanley, Goldman Sachs and many more) then forced him to cover the loans, which he could not do, leading him to default and in ruin.

And the losses keep piling up across Wall Street with Morgan Stanley, Credit Suisse and many other banks taking huge losses in the quarter as they unwound their positions and closed out the risk. Credit Suisse, once again is knee deep in it with losses so far totaling US$5 billion, but the pain is wide spread across the banking sector.

What is the point of this story?

Control your greed and risk taking! First, excessive greed is generally an unattractive human trait in my opinion. Second, it can cause you to make mistakes, taking on way more risk than you realize or is appropriate, all potentially leading to downfall and tears.

As we like to say “we prefer singles and doubles versus going for the homerun” in meeting our targeted returns for clients. Sure it’s not as exhilarating, but that’s just fine with us and our clients.

Ryan Lewenza, CFA, CMT is a Partner and Portfolio Manager with Turner Investments, and a Senior Vice President, Private Client Group, of Raymond James Ltd.

 

109 comments ↓

#1 Penny Henny on 04.24.21 at 9:40 am

Oh good the charts guy is here.
Simple question for you Ryan.
What is a log rhythm?

The content published here is free, original and professionally presented. Your comment is disrespectful and puerile. Time to leave, since you cannot graciously accept a gift. – Garth

#2 Disney invented it on 04.24.21 at 9:50 am

#1 Penny Henny

Log rhythm is the function Disney uses to ensure the logs can successfully and smoothly navigate over the falls without the greedy falling out.

#3 Flop... on 04.24.21 at 9:52 am

Happy Charturday, Rhino.

When I see the words “upgrade the U.S water system” I read make it easier to get more water from Canada.

Also, 174 Billion investment in electric vehicles?

I just survived an hour in a car with Tiger Woods, no thanks, gonna walk from now on…

M46BC

————————————–
“What’s in Joe Biden’s American Jobs Plan?

President Biden’s American Jobs Plan proposes to spend hundreds of billions on new infrastructure, upgrading the U.S. water system and creating a variety of new jobs across industries. The total proposed spending comes out to around $2.65T, and here is where all that money is likely going.

Transportation infrastructure is the single biggest category of spending in President Biden’s American Jobs Plan, totalling an eye-popping $621B.

Biden’s plan includes money for different enhancements in several sectors, including $40B to improve public housing, $52B for domestic manufacturing and $100B for expanded broadband.

President Biden’s $2.65T in additional spending is meant to be offset by corresponding tax increases, making it revenue neutral despite the high price tag.

It remains to be seen how the American Jobs Act will change as it becomes law, with several congresspeople proposing to increase allocations to pet projects”

https://howmuch.net/articles/joe-bidens-american-jobs-plan

#4 William tells it on 04.24.21 at 9:52 am

BANKS are lending money to people KNOWING that they are helping them to over extend.and KNOWING that interest rates will go up at some point and those people will pay a huge price.

Let me ask all of you a question:

Would YOU lend a large amount of money to someone you KNOW will likely be unable to pay you back as expected, for the relatively small return affordeded by current mortgage rates?

No?

Then what is motivating the banks to do so?

#5 TurnerNation on 04.24.21 at 10:05 am

The March toward UBI and Supply Chain Shortages? This is the New Green Deal/Economic Lockdowns globalist extravaganza.

We have inter-city checkstops, provincial check stops, national checkstops, national kamps, now Mandatory kamps for travelling to some provinces. Boy they have just about destroyed Kanada. This ain’t going away. Lockodons till 2022-23 at least.

https://www2.gnb.ca/content/gnb/en/corporate/promo/covid-19/travel.html
“Anyone returning to the province from leisure travel, as well as individuals moving to New Brunswick and business travellers who are not rotational workers, truck drivers or regular cross-border commuters, will be required to self-isolate for at least seven days in a designated isolation hotel at their own expense”
***These rules apply regardless of whether or not the traveller has been vaccinated. ***

.High-profile Manitobans urge Pallister to impose more extreme measures (winnipegsun.com)

— Oops I mean 2024:

https://www.ctvnews.ca/health/coronavirus/ottawa-inks-deal-with-pfizer-for-millions-of-covid-19-booster-shots-through-2024-1.5399696 Ottawa inks deal with Pfizer for millions of COVID-19 booster shots through 2024

— Naw let’s make it 2025:

So…per IMF documents seen elsewhere and I posted it here, their “Aid” plan for CV is set to run from April 2020 to 2025
How’d they know…

….yes as noted many many months ago kids are the key target of the New System. Not us aging folks. You want the illusion of rights back? Here:

.The new normal? Experts say B.C.’s current vaccination plan doesn’t lead to COVID-free future
B.C.’s plan will likely lead to protection for about 51 per cent of the population, but 60 per cent is needed for herd immunity. Kids may be the key. (vancouversun)

#6 uncle dave on 04.24.21 at 10:23 am

Great response to comment #1. I personnally find the posts intereting even if they don’t relate to my situation and this blog has been a great source of comfort and calmness during these crazy times. Great work chaps keep it up.

#7 crowdedelevatorfartz on 04.24.21 at 10:23 am

The only thing I find truly frightening about the story is if one person………one person…… can leverage himself to the sky to the tune of $20,000,000,000.00 and large firms like Morgan Stanley and or Goldman Saks go along with it until the music stops……. and everyone is scrambling for a chair.

How many other people out there are leveraging and hiding their precarious positions?

#8 Habitt on 04.24.21 at 10:28 am

Thanks Ryan for the good read. I come here for a dose of reality. Don’t always agree but utmost respect for you guys. A huge thank you to our host.

#9 Andrewski on 04.24.21 at 10:30 am

Thanks Ryan, so many highly paid individuals at these huge financial institutions & no one sees what’s possibly coming? Such risk. Avarice will always exist.

#10 crowdedelevatorfartz on 04.24.21 at 10:31 am

@#134 Billybob
“Diversity really is our strength. If you happen to be a novel virus.

Forget waves, here’s a cogent article positing a new pandemic. Much higher transmissibility, younger victims, etc.”

++++

This interesting parallels between this flu virus and the 1917-20 “Spanish” Flu are striking.
The “third wave” was the most deadly and affected the young the worst.
The fourth wave wasn’t as virulent and then the flu death rate petered out.

Get your flu shots folks…..before the panic sets in.

#11 Jake on 04.24.21 at 10:32 am

I always say “Green is Good, Greed is not”. I prefer to scoop profits on the way up and look for better entries somewhere else. Add in good ole boring dividends which are no fun to play but pay you in silence.

Greed eventually gets you under the bridge. The best example are casino winners who always recycle their profits back into the same machine or table. Maybe not on the same day, but the casino knows they will eventually clean out your pockets as greed brings them back.

#12 crowdedelevatorfartz on 04.24.21 at 10:33 am

@#4 Billy gets told.

“Then what is motivating the banks to do so?”

++++

Dividends.

#13 greaterfool on 04.24.21 at 10:39 am

a friend who already owns 4 properties just bought one more. where are we with house price in Canada, in the context of viacom stock price? $90?

#14 Cici on 04.24.21 at 10:46 am

Hwang sounds like he was using the “Reddit” strategy with his own hedge fund assets. Of course 10 billion wasn’t enough, he needed more and more money to make more and more money by pushing the low-valuation stocks he had selected to the moon. What could go wrong? Answer: someone else who you thought was a pawn got greedy too and stole your game.

With all the money they’re pumping into the markets right now I fear Gamestop and Archegos are just the tip of the iceberg. There’s got to be a lot of this happening at the moment. “Pump & Dump” and her brother “Pump and hope nobody else dumps” are pretty popular strategies right now, and not just in the stock markets. It’s all around us. Beware of greedy speculators.

#15 TurnerNation on 04.24.21 at 10:47 am

The economy. Weekend reading. This likely is why your city as been ordered closed and economically bom’d.

https://www.coreysdigs.com/big-tech/amazons-impending-takeover-the-one-stop-shop-for-smart-cities-with-digital-currency-control/

……
Kanada sliced into two. Read your history books. More on the Berlin Wall surrounding New Brunswick.
The Least Coast is now East Germany. (The poor side of the Wall.)

“Under the new restrictions, Canadian residents who own property in the province or who have family members (parents, children, siblings, grandchildren, grandparents, significant other) residing in New Brunswick will no longer be permitted to enter the province.”

https://en.wikipedia.org/wiki/East_Germany
” Commonly described as a communist state in English usage, it described itself as a socialist “workers’ and peasants’ state”.”

———
———Tears for Fears.

We have a (Former) Drama teacher & dress-up afficionado, and…and actor.

https://www.imdb.com/name/nm6091799/?ref_=fn_al_nm_1
Doug Ford was born on November 20, 1964 in Etobicoke, Ontario, Canada as Douglas Robert Ford Jr. He is an actor, known for Toronah (2015), CTV National News (1961) and The Sunday Scrum With John Northcott (2019). See full bio »

———-

–Severe Crime Wave in Kanada. The crime is out of control here!!

MONTREAL — Montreal police responded to a 911 call tonight in Mile End about a large religious gathering, but upon arriving, they found that the situation was much more serious than even the caller realized.
At around 8 p.m., police got a call about a gathering inside a place of worship that the caller believed was around 100 people, in violation of COVID-19 rules. However, a source told CTV that it was a synagogue.

#16 Ken on 04.24.21 at 10:49 am

Actually, I think the chart shows a lot. It shows how price inflated everything has become because of too much government stimulus.
When the stimulus ends (it will) and, when it has to be paid back (it must), look out below. My dividend aristocrat ETF will get hurt as well (but my cash flow won’t!). Thankfully, I am not greedy and live well within my means.

#17 ogdoad on 04.24.21 at 10:50 am

Ouch Penny…not cool!!!

OAN, leverage can be oh so fun! FOREX, for example. Just set your stops. Too bad stops can’t be set on a 1M mortgage.

Enjoy the weekend!

Og

#18 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 04.24.21 at 10:52 am

“As we like to say “we prefer singles and doubles versus going for the homerun” in meeting our targeted returns for clients.”

Ryan, this reference may be traumatic for some of your readers. Please let me assist by translating this for Toronturds.

“Singles”, “doubles” and “homeruns” refer to successful performance outcomes regularly achieved by competent baseball franchises.

If your grandparents were around 28 years ago, they may be able to put this in context for you.

To reduce any mental distress for those in the GTA suffering from sporting dysfunction, please continue to leverage yourselves in order to flip condos and shacks, and drive aggressively through school zones as you feel you are entitled to. Ignore the latest 1-5 streak of the Make Believes, because, of course, things are different there.

#19 millmech on 04.24.21 at 10:53 am

#4
Housing is the end all and be all of Canadian society, people will work three jobs and have every family member contributing to pay the mortgage.
The banks know this and sure it is a small amount of interest but on a large amount of principal, $1.56 Trillion is the current mortgage obligation and growing daily. So at 1% annual profit is $15,600,000,000, for the banks(pre coffee numbers).

Ryan,
I bet Mr. Hwang will be back in business very soon doing what he always does, there will be no repercussions or hearings about his activities.

#20 KNOW IT ALL on 04.24.21 at 10:55 am

These corrupt wallstreet and baystreeters are starting to make the Cryptocurrency industries look like angels.

Blockchains are 100% transparent and every transaction can be traced.

No hiding and cheating games – everyone can see your cards.

#21 Eco Capitalist on 04.24.21 at 10:59 am

Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.

– Archimedes

#22 Penny Henny on 04.24.21 at 11:10 am

My apologies Ryan and Garth.

#23 Ponzius Pilatus on 04.24.21 at 11:16 am

Just watching a series on the Medicis, the famous bankers in Florence in the 15th century.
Really nothing has changed much since then.
Even the Popes were in it.
It’s said that greed and envy made Abel kill Cain, if you believe that kinda stuff.

#24 Faron on 04.24.21 at 11:19 am

Thanks for your post Ryan. I always enjoy your work and value your insight. Very timely now where we all see massive parabolic moves happening and thus think there is “easy” money to be made and forget that the risks parabolically mirror the price moves.

If anyone is interested in hearing the words of a quant who understands how this derivative driven equity market of today runs, here’s an interview for you. Cem Karsan does a great job talking about quant and macro drivers of equities — highly complex and mathematical — for the lay person. Essentially, options buying and selling has exploded this year and the dealers of those options contracts increasingly move the markets to cover their risk.

Youtube video:

https://t.co/axGqzWr2f8?amp=1

Don’t day trade unless you want to see -10% annual performance year after year.

#25 joblo on 04.24.21 at 11:21 am

“Two things are infinite: the universe and human stupidity; and I’m not sure about the universe.”

― Albert Einstein

#26 Dougie on 04.24.21 at 11:23 am

Note to “Turner Nation”:
While scrolling as speedily as possible past your literally pointless postings, I can’t help noticing out of the corner of my eye that you seem to be mistaken about the spelling of this country’s name as well as that of its citizenry. Here, we spell our country Canada and our people are Canadians. You may want to adjust your Spell-Check app to recognize Canadian (or even American) English spellings.

#27 Ponzius Pilatus on 04.24.21 at 11:29 am

One thing is for sure sure:
Greedy people are sharp dressers.

#28 Km on 04.24.21 at 11:32 am

Greed is definitely one of the most ugly traits, leads people to do things that can ruin lives in so many ways. My mother is not rich but she has always been the most generous person I know and may not live high off the hog but is happy and loved and taken care of. Greedy people tend to be lonely unhappy people. Keeping a balanced view of money is very important.

#29 Faron on 04.24.21 at 11:32 am

#7 crowdedelevatorfartz on 04.24.21 at 10:23 am

How many other people out there are leveraging and hiding their precarious positions?

According to FINRA, there was $822 Billion in margin debt at the end of March in the NYSE. Add in a few more global exchanges and you have a huge amount. Some of that will be Hwang-sized whales. Either way, the larger the margin debt, the harder the fall if things go south. There could be a lot of selling with very few buyers.

Interestingly, margin debt is highly correlated with the S&P suggesting that some of the price increase is simply reflecting the margin buying. Furthermore, in a typical recession, margin debt decreases. During COVID, it went up. I take that as a huge caution sign.

Sorry for the terribly long links:

https://imageproxy.themaven.net/https%3A%2F%2Fimages.saymedia-content.com%2F.image%2FMTgwMTU0NDczNjczNDAxNjg4%2Ftotal-margin-debt.png

https://www.advisorperspectives.com/dshort/updates/2021/04/19/margin-debt-and-the-market-up-another-1-1-in-march-continues-record-trend

#30 Ponzius Pilatus on 04.24.21 at 11:39 am

Turkish Crypto boss takes off with 2 billion.

Thodex, a crypto platform based in Turkey, said its platform has been “temporarily closed” to address an “abnormal fluctuation in the company accounts.”
Local media reports say that Faruk Fatih Ozer, Thodex’s founder, has flown to Albania, taking $2 billion of investors’ funds with him.
According to the state-run Anadolu Agency, Turkish authorities have now issued an international warrant seeking Ozer’s arrest.

#31 Dharma Bum on 04.24.21 at 11:46 am

#4 William Tells It

Then what is motivating the banks to do so?
—————————————————————————

‘VOLUME!”

https://www.youtube.com/watch?v=42thVR4Y5HI

https://www.youtube.com/watch?v=g-4-gLlF0uw

#32 Question About Inflation on 04.24.21 at 11:54 am

While inflation is to be expected, given how much the money supplies have increased in response to the pandemic, is there any measure of how inflation is divided up between the rise in price of the goods that make up the CPI versus doing what was done in your case study to buy up financial assets?

CPI-based inflation is straightforward and affects all of us but leveraged buying of assets is probably restricted to wealthier individuals.

I realize this may be apples and oranges and perhaps there is no relationship but if you could shed some light on this, I would appreciate it. My position, having a portfolio in the mid-seven figures, is that I do not like to take on debt particularly for such things as shorting the markets. I get the sense though that there may be a lot shorting going on, as your case study suggests.

#33 Grand Master D formerly known as DON on 04.24.21 at 11:56 am

Thanks for putting all the pieces together in a coherent manner. Especially the background story…puts this into perspective.

This blog is priceless. Thank you! A good read on a Saturday morning.

Enjoy your day.

#34 Dolce Vita on 04.24.21 at 12:04 pm

Nothing ventured, nothing gained.

vs.

Quit while you’re ahead and greed kills.

Somewhere in their lies the truth. Trick is to find it.

———-

Good story Ryan.

#35 Steerage on 04.24.21 at 12:12 pm

Nice shot at ARK :)

I believe a Bill protege was working at AIMCo last year… hey what’s a couple of billion on a side bet….

#36 Ponzius Pilatus on 04.24.21 at 12:14 pm

#20 know a little

Blockchains are 100% transparent and every transaction can be traced.
No hiding and cheating games – everyone can see your cards.
—————
See post #30

#37 mark on 04.24.21 at 12:17 pm

Thanks Ryan, always enjoy your weekend posts.

2 days to vax countdown.

#38 Alberta Ed on 04.24.21 at 12:32 pm

Thanks for the useful insights, once again. Good health and time to appreciate what life gives us for free are more precious than wealth.

#39 Dolce Vita on 04.24.21 at 12:34 pm

June Garth, June. It will be soon over after then.

https://i.imgur.com/Y42iVpR.png

Yesterday June deliveries at 2M/wk now showing 2.4M/wk.*

This week, 19-25 Apr, 1M doses a fantasy since only 52K delivered. Thus, expect May numbers to change soon as well. *

Blame the EU, 83% of doses so far are from them or 100% of the “good stuff” (Pfizer, Moderna).

Hopefully the Americans will waft some more of their unwanted, unloved AZ to Canada and J&J, the latter in part will come from the EU then again, given America’s “giving, caring, sharing” vax history…probably all of Canada’s J&J will come from the EU.

——————

* And ya, I keep track, I ask Minister Anand on Twitter when she will begin to post reality and not fantasy. As a result, change afoot it would appear. The people have a right to the truth. Everytime I go to Gov Canada “Vaccines for COVID-19: Shipments and deliveries” they ask me to take a survey about what I think. EVERY time.

Someone has to keep them honest to wit the GOOD Cdn people. Heaven forbid the Cdn MSM would do some basic Math and keep a track of things for a few days at least.

#40 Robert Ash on 04.24.21 at 12:37 pm

Thanks Ryan for the Analysis, it is interesting to learn about major events, that disrupt markets. I am hopeful, this Family Office, had some good intentions, and donated to Charity, or Helped some others, in their quest to get it all… Here’s a salute to the Health Care folks, saving us, and putting themselves at risk, the true Hero’s in our World today.

#41 Dolce Vita on 04.24.21 at 1:00 pm

#41 Sail Away

Should of bought Novavax like I did, dilemma free thanks to a no brainer pandemic and you would be 1550% ahead in < 1 year rather than a paltry 250% which will go down once profit takers do their thing in a few days.

You'd also be keeping it since, you know, there are still a few billion in orders to fulfill for the Planet (not as many space shots).

No soul searching questions either for you other than will Tesla find little Green Men?

There are many others here that invest and have done much better than myself and you and, do not use a Greed Blog to boast about their single stock pick successes yet, do not report their failures.

#42 Faron on 04.24.21 at 1:09 pm

#35 Steerage on 04.24.21 at 12:12 pm

Nice shot at ARK :)

I believe a Bill protege was working at AIMCo last year… hey what’s a couple of billion on a side bet….

Are you referring to the short Ivol position entering the corona crash? Trying to generate a little additional return during 2019, a gangbusters year — facepalm. May as well short this thing that’s at all time lows. Free money amirite? Pure premium…

But hey, Alberta is used to transfer payments. In this case they transferred Alberta Advantage to some market maker in Chicago. The firm on the other side of that one must have been laughing — long vol heading into Corona… FTW.

ARK — now that’s a Cluster F waiting to happen. Described by some as a smouldering doom’s-day machine. If you see that one start to unwind, put yer helmets on.

Finally, recently the % of the Russel 2000 that’s non-profitable hit all time highs. That’s a lot of bets on future cash flow.

#43 Faron on 04.24.21 at 1:18 pm

#36 Ponzius Pilatus on 04.24.21 at 12:14 pm

#20 know a little

Blockchains are 100% transparent and every transaction can be traced.
No hiding and cheating games – everyone can see your cards.
—————
See post #30

Good one. I like how the crypto-ers are simultaneously all about transparency yet also enjoy pumping a mechanism for all kinds of money laundering and criminal funding that thrives on the anonymity of the blockchain. The anonymity that allows the guy in Turkey to walk with $2 Billion and potentially cash out. Hope he realized that walking with that much caused reflexive price response, but I’m sure he’ll be happy with $1.5B.

Transparency, I took out a YOLO $100 position in ETH yesterday on analysis that crypto may be hitting a local bottom. Pure gambling. Might be a $100 bag. Might make me a hundrednaire!

#44 Stone on 04.24.21 at 1:32 pm

Initially he was very successful, quietly amassing an incredible net worth of over US$10 billion dollars. Apparently, this wasn’t enough for him as he then leveraged up this capital, multiple times over, amassing a stock portfolio estimated at over US$100 billion dollars.

———

I don’t know…I think once I’d hit $1 billion without leverage, I think I could be happy with that. What can’t you buy at that point? I mean, really! What can’t you buy?

#45 Dogman01 on 04.24.21 at 1:46 pm

#27 Ponzius Pilatus on 04.24.21 at 11:29 am

One thing is for sure sure:
Greedy people are sharp dressers.

—————————————–

“There is a tendency to confuse good manners and good tailoring with integrity and intelligence.  J.K. Galbraith”

#46 Ponzius Pilatus on 04.24.21 at 1:50 pm

#43 Faron
The guy who walked away went to Albania, of all places.
He probably can buy up the whole Country.
Until the Communists come back and confiscate everything.
Easy come, easy go.

#47 the Jaguar on 04.24.21 at 2:01 pm

I liked the Wall Street movies by Oliver Stone. But the quote that I think sums up “Greed” comes from another film called “All the Money in the World”. Here it is:

“- Fletcher Chase: I mean, what would it take for you to feel secure?
– J. Paul Getty: More.”

There are all kinds of reasons to recommend and admire another persons comfortable lifestyle, genuine accomplishments in professional and private life. Especially those who pay it forward , mentor others, and generally leave the people and places they meet on the path of life better than they found them. ( sounds a lot like someone with the initials G.T.)

Everyone likes nice things and some luxury in life, and some like ‘collectables’. Enjoy your life. But extreme excess and conspicuous consumption signal something else. Insecurity and a desire to excite and attract envy in others. Like the Little Prince said ” It is only with the heart that one can see rightly. What is essential is invisible to the eye”. Amen.

#48 Karl hungus on 04.24.21 at 2:13 pm

Speaking of greed:

https://www.cnbc.com/amp/2021/04/22/reddit-trader-im-a-dogecoin-millionaire-inspired-by-elon-musk.html

#49 alexinvestor on 04.24.21 at 2:14 pm

Game theory suggests that if someone lets you leverage 10x on a 50/50% bet (ie Viacom) you should take that bet. After all, it’s heads you win and tails they lose. What were the investment banks thinking of when they sold these TR swaps. The investment banks were not scammed. It’s as much their fault as it is Bill’s.

#50 crossbordershopper on 04.24.21 at 2:23 pm

so 5% down on a million dollar cardboard house in southern ontario, with 95% leverage, and super low interest rates. How is this any different done every day compared to this hedge fund guy?
the world is a scam, everyone knows that, people lie, and cheat each other, with incredible easy, greedy beyond belief and someday the party we call western civilization will come to an end.
human nature, never enough, back to biblical days.

#51 Young Guns WC on 04.24.21 at 2:27 pm

Great post! Interesting that Bill Hwang holds an economics degree from UCLA and an MBA from Carnegie Mellon University. He is a co-founder of the Grace and Mercy Foundation that serves in the areas of Christianity, art, education, justice, and poverty. Has seen many market crashes and what it can do to reckless risk takers. Well travelled guy who dresses well.

In the end, he got smoked by simple GREED. This to me is just crazy. Can’t wrap my head around it.

#52 mark on 04.24.21 at 2:33 pm

Ryan, thanks again for your weekend posts much appreciated.

On a technical note is their anyway to evaluate if a small cap value etf is currently “overpriced”?

AVDV by advantis, the chart on my RBC brokerage account looks like at a all time high, and Leading P/E is 13 vs S&P 500 of 28.

Even with a low p/e of 13 vs s&p 500, still trading at near all time high price of $65, is that value?

Thanks in advance.

#53 Another Deckchair on 04.24.21 at 2:52 pm

Hey Ryan:

“we prefer singles and doubles versus going for the homerun”

Can you please tell successive governments to apply that to climate change, rather than kicking the can down the road for “after the next election”?

I feel like all PMs since climate change came on the screen should have a) listened to Garth (more than they did) b) realized that doing something now was better than doing a lot later, despite inevitable pushback from the voters.

(figure out what living “net zero” is going to be like; lots of very unhappy voters! (that’s an understatement!))

Have a good weekend! Merci!

#54 crowdedelevatorfartz on 04.24.21 at 3:39 pm

@#44 Stone
” …. What can’t you buy at that point? I mean, really! What can’t you buy?….”

++++

Fiscal intelligence for our Liberal Leadership?

#55 Flop... on 04.24.21 at 3:51 pm

So towards the end of March, just before his death, I watched the HLN special “How it really happened.” starring Mr Bernie Madoff.

Probably going to get a little loose with my lines, as I only got one pass, but I swore they said each investor had been returned 75 cents on the dollar, which if true I find surprisingly high.

The main thing that stuck out to me though, was that during a jailhouse interview, last year I think, Madoff still believed he never really got caught.

The reporter apparently asked him something about reflecting on his failed Ponzi scheme, and he allegedly bristled and said it never failed, and he let the authorities catch him because he was tired of playing the game.

Anyway, if you love watching anything to do with white collar embezzlement and charades, there is only truly one show to watch.

American Greed…

M46BC

—————————————————————

“The business-reality program focuses on the stories behind high-profile corporate and white-collar crimes, betrayals, and scams in American history, including the financial scandals involving WorldCom,[5] HealthSouth,[6] Tyco International,[7] and CyberNET.[8] Besides these high-profile cases, stories have featured lower-profile financial crimes that have affected individual investors and smaller companies, including various Ponzi schemes, real estate and other investment frauds, bank robbery, identity theft, medical fraud, embezzlement, insurance fraud, murder-for-hire, art theft, credit card fraud, money laundering, and crimes committed by elected officials.[1]”

https://www.cnbc.com/american-greed/

#56 S.Bby on 04.24.21 at 3:54 pm

Thanks for the post Ryan. With human emotions, we don’t always see our own greed due to overconfidence until it all goes pear shaped. My guess is this will happen to Cathy Wood at some point.

#57 Ryan Lewenza on 04.24.21 at 3:54 pm

mark “Ryan, thanks again for your weekend posts much appreciated.

On a technical note is their anyway to evaluate if a small cap value etf is currently “overpriced”?’

To determine if a security or ETF is “overvalued” you need 1) all the historical data (P/E’s or P/B’s) of the stock or ETF and 2) compare the current P/E or P/B to it’s long-term average. Now getting historical P/E data on ETFs can be challenging, so I just use the data of the actual underlying index. For example if looking at US small caps I would grab the historical P/E’s of the Russell 2000, calculate the average, then compare current level to average. To get this data you would need to pay for a data service provider like Bloomberg or Factset. Currently US small caps are expensive on P/E’s (since earnings are low) but cheap on P/B. – Ryan L

#58 ts on 04.24.21 at 3:54 pm

#47 the Jaguar on 04.24.21 at 2:01 pm

Everyone likes nice things and some luxury in life, and some like ‘collectables’. Enjoy your life. But extreme excess and conspicuous consumption signal something else. Insecurity and a desire to excite and attract envy in others. Like the Little Prince said ” It is only with the heart that one can see rightly. What is essential is invisible to the eye”. Amen.

Great insight. Thank you.

#59 Ryan Lewenza on 04.24.21 at 4:08 pm

Young Guns MC “Great post! Interesting that Bill Hwang holds an economics degree from UCLA and an MBA from Carnegie Mellon University. He is a co-founder of the Grace and Mercy Foundation that serves in the areas of Christianity, art, education, justice, and poverty.”

Agreed! Based on what I’ve read he’s brilliant, spiritual and very charitable. He seems like a decent guy, notwithstanding the insider trading bit. But he couldn’t control his greed impulses and now he’s lost nearly everything. – Ryan L

#60 Faron on 04.24.21 at 4:18 pm

#50 crossbordershopper on 04.24.21 at 2:23 pm

so 5% down on a million dollar cardboard house in southern ontario, with 95% leverage, and super low interest rates. How is this any different done every day compared to this hedge fund guy?

Typically, lower volatility makes leverage less risky. Flip side is high leverage marketwide increases potential volatility so getting caught offsides becomes much more painful.

If there were an options market for residential RE, I bet the skew would be way way out of whack. If everyone thinks the markets are going uppa, puts will be cheap. Gotta wonder if there’s another Burry out there holding a massive short on cdn RE.

#61 mark on 04.24.21 at 4:26 pm

Hi Ryan,
Thank you very much for the reply, appreciated!

#62 Wrk.dover on 04.24.21 at 5:11 pm

#44 Stone on 04.24.21 at 1:32 pm

I don’t know…I think once I’d hit $1 billion without leverage, I think I could be happy with that. What can’t you buy at that point? I mean, really! What can’t you buy?

_______________________________________

Me. I’m good with out the billion. I can’t be bought.

#63 wallflower on 04.24.21 at 5:52 pm

My thoughts: at some point the line is crossed… Bill Hwang left greed behind. He moved into the hubris zone.

#64 Ponzius Pilatus on 04.24.21 at 6:10 pm

#60 Faron on 04.24.21 at 4:18 pm

If there were an options market for residential RE, I bet the skew would be way way out of whack. If everyone thinks the markets are going uppa, puts will be cheap. Gotta wonder if there’s another Burry out there holding a massive short on cdn RE.
——————
I always thought that renting is kinda like shorting the residential RE.

#65 Bk on 04.24.21 at 6:27 pm

Even more greedy home owners out there….

#66 Ponzius Pilatus on 04.24.21 at 6:28 pm

Sorry, off topic, but I think it’s worth reflecting about.
Watching the news and hear 52 sailors suffocated in a damaged sub marine.
Possible because rescue came too late.
And lack of resources and technology.
Next clip, SpaceX Astronauts land safely on the Spacestation.
Hugs and jubilation all around.
Billions spent, so a few can play hero.
Gotta have my Saturday Jägermeister.
Prost! Have a nice weekend.

#67 espressobob on 04.24.21 at 6:39 pm

Some good points there Ryan.

Today it’s all to easy for neophytes to set up an online account and play the uber trader. All to easy playing around with dynamite like leverage, inverse ( I call perverse ), sector plays or commodities.

Homework is always lacking and one finds themselves in a world of hurt along with an embarrassing loss that will never be posted in the comment section.

I’ve made some of those mistakes. I have big shoulders and enough smarts not to repeat them. Much better to acknowledge ones misgivings and as any process goes, is to learn from them.

Today it’s global index investing with a contrarian angle. For some, professional management might be their ticket.

#68 Sail Away on 04.24.21 at 6:45 pm

#41 Dolce Vita on 04.24.21 at 1:00 pm
#41 Sail Away

Should of bought Novavax like I did, dilemma free thanks to a no brainer pandemic and you would be 1550% ahead in < 1 year rather than a paltry 250% which will go down once profit takers do their thing in a few days.

———–

Oh, I bought in 2015, so 250% in 6 years, not one. And I did realize it, but now have to repurchase.

Good move on Novavax!

#69 Inequity on 04.24.21 at 6:53 pm

Everyone beating up on Greed…. next you bullies will pick on Fear… then we won’t be left with anything to drive the market. :P

Great post Ryan and thank you!

#70 Sail Away on 04.24.21 at 7:03 pm

#63 wallflower on 04.24.21 at 5:52 pm

My thoughts: at some point the line is crossed… Bill Hwang left greed behind. He moved into the hubris zone.

————

I expect it was also grabbing the tiger by the tail and not being able to let go without being devoured.

#71 Nonplused on 04.24.21 at 7:04 pm

Deep down inside we all kind of have a secret amount of respect for the kid who swings for the fence though, even if he strikes out. Maybe we’re just curious to see if he can do it, because we are afraid to try and just want to get on base.

The fee structures and bonuses these funds use (or at least use to) have a lot to do with why things go so wrong. In short, the traders do not have enough “skin in the game” but stand to make fortunes if they win big. This encourages risk taking, because it isn’t their money if they lose but they can become rich if they win. Something like a 2&20 was common. (2% management fee plus 20% of any gains.)

So if we examine someone like Brian Hunter https://en.wikipedia.org/wiki/Brian_Hunter_%28trader%29 , he walked away with millions even though his trading strategy eventually bankrupted his fund. He is reportedly still very wealthy. A few good years put millions in his bank account but when the firm went broke he was not required to return much if any of it. His “winter car” was a Bentley. I’ve actually met him a couple of times, but then pretty much everyone in the business had. My opinion of him was that he was a nice guy, and very intelligent. But I guess anyone can get cocky when they seem to just keep winning. And that would include the Amaranth investors, who had a few really good years in which they could have withdrawn profits before the firm went down. If they lost everything, well, hopefully it was their poker money and not the whole estate.

And it should be remembered that with these things whenever somebody loses big, somebody else won. There is the business of Wall Street which is selling stocks to investors who hold them for the dividends, but once you walk into the world of swaps and options there is always somebody on the other side taking the opposite bet. Strangely the media seldom discloses who the winners were when a fund goes down, but the money doesn’t just “disappear”. I know the names of a couple of the entities that ate Amaranth’s lunch when they went down, but I don’t remember them ever being discussed in the media. It was more or less a coordinated attack by other players who had access to more margin. The same players that squeezed California in 2000.

#72 mark on 04.24.21 at 7:14 pm

I’ve found greed type behaviour can sometimes be intertwined with the lack of any goals. If you don’t know when to stop and why, you’re liable to blow past what you need without realising it and blow yourself up because of the lack of any finish line.

#73 Nonplused on 04.24.21 at 7:29 pm

#4 William tells it on 04.24.21 at 9:52 am
BANKS are lending money to people KNOWING that they are helping them to over extend.and KNOWING that interest rates will go up at some point and those people will pay a huge price.

Let me ask all of you a question:

Would YOU lend a large amount of money to someone you KNOW will likely be unable to pay you back as expected, for the relatively small return affordeded by current mortgage rates?

No?

Then what is motivating the banks to do so?

——————————————-

The banks are in the business of “sleeving credit”. What that means is that if you put together a large enough portfolio of loans, you can calculate how much money you need to set aside for defaults, and it is a fraction of how much money you’ve loaned out in total. Not everyone will default at once. In the case of mortgages, the amount can be even smaller than say for credit cards because you get the house back, so the exposure is really just the difference between the mortgage amount and the amount the house will sell for. With at least 5% down and the CHMC insurance the total exposure is actually quite low. The banks can then present their portfolio of mortgages as “low risk” (that’s the sleeving part) and borrow money as if it was nearly risk free to fund the mortgages.

The banks do not have a soul so they really don’t care if the person involved is screwed so long as at the end of the process they make their dollar. The only incentive they would have to not make a loan is a fear of a loss to themselves. If it bankrupts you or puts you in a lifetime of debt servitude they really couldn’t care less.

You might not encourage your children to drink or smoke or do drugs, but there are lots of people who stand to make a buck who will.

It is an interesting reflection on the human predicament. Your banker is probably the nicest guy you know when you are sitting on the sidelines watching your kids play baseball, but when it comes to the “deal” his only concern becomes how the numbers shake out. I guess that’s why we say “it’s only business”. Money does not have empathy, nor friends, nor conscience. Only math.

#74 Where's My Money Going Greedeau? To Keeping Themselves And Insiders Out Of Jail! on 04.24.21 at 7:31 pm

GREED-you only have to look at the comments of the former BC Liberals testifying at the money laundering commission and the ensuing reader comments.
The arrogance of politicians knows no bounds.

Here’s Mike de Jong-Allegations B.C. prioritized gaming revenue over money laundering are ‘offensive,’ former minister says”
And Christy laughing the whole time (a guilty trait in liars) makes a person sick.
https://www.cbc.ca/news/canada/british-columbia/former-cabinet-minister-money-laundering-1.6000426
What are the odds on who will bend and tell the truth. My guess, plausible deniability for all involved, screw the proletariat and let’s inflate them into insolvency, we have our indexed pensions.
And how does the Commission’s Cullen excuse them from further questioning?
Rigged.
A pox on all of them!

#75 Nonplused on 04.24.21 at 7:49 pm

#44 Stone on 04.24.21 at 1:32 pm

“I don’t know…I think once I’d hit $1 billion without leverage, I think I could be happy with that. What can’t you buy at that point? I mean, really! What can’t you buy?”

————————————-
-happiness
-love
-health
-immortality
-a subscription to GreaterFool
-intelligence
-morality

But as my dad always said, “They say money can’t make you happy, but I’m willing to give it a try.”

I think some of these folks just get drawn in by the game, same as any other gambler. It’s easy to do if you win a few times in a row.

When someone blows up big like Hwang did, we all like to say “greedy rich people who don’t understand risk” as we turn back to our VLT and put another $20 in.

Rest assured, Hwang still has more money in the bank than all the commenters in this stowage section put together. He won’t be “sleeping rough” tonight.

#76 Axehead on 04.24.21 at 7:57 pm

Singles and doubles are just fine Ryan. Thanks.

#77 espressobob on 04.24.21 at 7:59 pm

Warren Buffett,

” be fearful when others are greedy, and greedy when others are fearful”.

A contrarian view. This never gets old.

#78 Faron on 04.24.21 at 8:07 pm

#71 Nonplused on 04.24.21 at 7:04 pm

And it should be remembered that with these things whenever somebody loses big, somebody else won.

Not always. If you hold something (like a house) that is priced based on a market with x rate of buying and selling and more buyers than sellers, the price will be high or have upward pressure. If the pressure evaporates, suddenly the price drops until it’s low enough to draw a buyer. Nobody gains.

With Hwang’s stocks, the prices started to roll down forcing a margin call and liquidation of the fund. Millions of shares flooded the market and the price had to drop instantly until a big buyer or buyers could be found. The only winners were those who were short names like GSX (a massive fraud) and the other names and the few people who sold at the top unknowingly. In a case like this, notional value just evaporates.

#79 Sail Away on 04.24.21 at 8:24 pm

#42 Faron on 04.24.21 at 1:09 pm

ARK — now that’s a Cluster F waiting to happen. Described by some as a smouldering doom’s-day machine. If you see that one start to unwind, put yer helmets on.

———-

That’s just, like, your opinion, man.

ARK:
5 year CAGR: 47%; 5 year total return: 650%
1 year return: 140%

And your returns were…?

#80 baloney Sandwitch on 04.24.21 at 9:21 pm

Bill Hwang is a devout evangelical. He thought God was on his side. He gave him $10 billion and he would shoot for $100. God bailed.

#81 DON on 04.24.21 at 9:22 pm

#74 Where’s My Money Going Greedeau? To Keeping Themselves And Insiders Out Of Jail! on 04.24.21 at 7:31 pm
GREED-you only have to look at the comments of the former BC Liberals testifying at the money laundering commission and the ensuing reader comments.
The arrogance of politicians knows no bounds.

Here’s Mike de Jong-Allegations B.C. prioritized gaming revenue over money laundering are ‘offensive,’ former minister says”
And Christy laughing the whole time (a guilty trait in liars) makes a person sick.
https://www.cbc.ca/news/canada/british-columbia/former-cabinet-minister-money-laundering-1.6000426
What are the odds on who will bend and tell the truth. My guess, plausible deniability for all involved, screw the proletariat and let’s inflate them into insolvency, we have our indexed pensions.
And how does the Commission’s Cullen excuse them from further questioning?
Rigged.
A pox on all of them!

**************

The Cullen zcommision could be the first step. Now they are all on record.

#82 Nonplused on 04.24.21 at 9:24 pm

#78 Faron on 04.24.21 at 8:07 pm
#71 Nonplused on 04.24.21 at 7:04 pm

And it should be remembered that with these things whenever somebody loses big, somebody else won.

Not always. If you hold something (like a house) that is priced based on a market with x rate of buying and selling and more buyers than sellers, the price will be high or have upward pressure. If the pressure evaporates, suddenly the price drops until it’s low enough to draw a buyer. Nobody gains.

With Hwang’s stocks, the prices started to roll down forcing a margin call and liquidation of the fund. Millions of shares flooded the market and the price had to drop instantly until a big buyer or buyers could be found. The only winners were those who were short names like GSX (a massive fraud) and the other names and the few people who sold at the top unknowingly. In a case like this, notional value just evaporates.

——————————————

I like this new Faron who is respectful even when disagreeing. We must disagree or there can be no real advancement of thought.

I will disagree with you respectfully: When the price of a house or anything else drops, the buyer gains. This is a conversation I had with my grandfather years and years ago. He would always wait for a sale before he would buy anything he didn’t need today. He said he was saving money. I think the conversation started over a volt-ohm meter he’d got at Radio Shack for 50% off. I countered he’d merely “spent less”. Needless to say he disagreed. He was not a man of means but liked to dabble in electronics. But his approach to purchasing all items was pretty much the same. Why pay more? Wait for a sale.

And it has affected me. I’ve been wanting a new cordless drill for a few years because the batteries are dead on the one I have, no replacements available unless I want to take them apart and see if I can find cells and solder them together. But then CT had one with lithium cells for 50% off. It went in the cart. Pretty much all the tools I have in the garage were 50% off. But that said I have many that I have never used. You buy a socket set, but you only really need a 10 and 12 mm. Maybe the 8 once in a while. 50% off is like all you can eat. Make it a life style.

#83 crowdedelevatorfartz on 04.24.21 at 9:57 pm

# 66 Ponzie
“Watching the news and hear 52 sailors suffocated in a damaged sub marine.
Possible because rescue came too late.”

++++

Unfortunately.
The sub was only good to a depth of 500 meters.
It was discovered at 850 meters.
Well below crush depth.
They didnt suffocate.

#84 NoName on 04.24.21 at 10:28 pm

#82 Nonplused on 04.24.21 at 9:24 pm

You buy a socket set, but you only really need a 10 and 12 mm. Maybe the 8 once in a while.

—-

You in know what’s funny, i europe you need 9-11-13-17 95% of time and other 5 % its 19-21-27…

I was fixing wheelbarell wheel yesterday and i needed 14mm. I did notice that funny thing about evens here when things are metric, but is funny those 9-11-13-17 commonly used every where are very easy fit on 3/8 – 7/16 1/2 11/16 — 3/4 -etc.

Funny

#85 Bdwy on 04.24.21 at 10:45 pm

I like sales too.
Crappytire does it the best on tools.
For a socket set or a multimeter patience can get you 70%!

And for the food snobs big macs have been 2 bucks for quite a while for canucks gamedays!

#86 Nonplused on 04.25.21 at 12:22 am

This might explain what’s happening:

https://www.youtube.com/watch?v=kaoejgnFFP8

#87 Where's My Money Going Greedeau? For Lawyers To Hide Malfeasance! on 04.25.21 at 1:35 am

Here’s one for you, from a comment on another site.
Perfect!:
“In any line of work, a person is responsible to perform due diligence.
By not doing so, and thus causing harm or death by negligence of duty shall be considered criminal.
In any line of work, a person is responsible to perform due diligence.”
That’s all to be said, including all the money laundering scandals, vax scams that are or will come to fruition across Kanadah-post Castro national state.
Will greasy Castro slide out from under this morass?
Not if the Laurentian Elite have anything to do with it, of course it will be an easy stand-up double (baseball term), just like SNC-Lavalin, etc.

#88 Faron on 04.25.21 at 3:14 am

#79 Sail Away on 04.24.21 at 8:24 pm

#42 Faron on 04.24.21 at 1:09 pm

———-

That’s just, like, your opinion

Ha, no. Not just mine. The concentration risk assures that ARK will suffer extreme and outsized losses if there are substantial redemptions. Go read about what will happen if ARK has to sell significant shares in corps ARK’s been the only buyer of. If you are an investor and aren’t aware of the risks, god help you.

#89 Gotta Get Out of Calgary on 04.25.21 at 3:30 am

#36 Ponzius Pilatus on 04.24.21 at 12:14 pm
#20 know a little

Blockchains are 100% transparent and every transaction can be traced. No hiding and cheating games – everyone can see your cards.
—————
See post #30

———————————————————

And don’t forget……..

https://en.wikipedia.org/wiki/Quadriga_Fintech_Solutions

#90 Willianm tells it on 04.25.21 at 7:14 am

#73 Nonplused on 04.24.21 at 7:29 pm

I had not expected a reply to my comment (#4) that was insightful. Until I saw your reply that is.

You are absolutely correct, and I 100% agree.

But to be honest I can’t FATHOM the myopic ideals of others. It’s hard to believe that people are that Head-Up-A$$?

Thanks for taking the time to reply so eloquently. I appreciate it.

Sidenote: Mr Turner, you clearly are waging an uphill battle here. I don’t know how you persevere. I would consider it a lost cause.

#91 KNOW IT ALL on 04.25.21 at 8:08 am

#36 Ponzius Pilatus on 04.24.21 at 12:14 pm
#20 know a little

Blockchains are 100% transparent and every transaction can be traced.
No hiding and cheating games – everyone can see your cards.
—————
See post #30

———–

That isnt the result of dishonesty in the company but an order from the Turkish Government and Army.

“If you dont shutdown and disappear we will do it for you”

Turkey is overwhelmed with human rights issues.

#92 Bert on 04.25.21 at 8:15 am

Ryan, what’s your view of C Wood and ARK Invest? Is she the next W Buffett or was she just lucky in 2020?

#93 B on 04.25.21 at 8:29 am

Cool story Ryan, crazy stuff! Wondering if you’d consider dedicating a column to the clean tech sector, and specifically the concept of fully ESG/low-carbon investing? I’ve got a 30 year investment time horizon, and hope the world can get off oil and fully onto renewables for the sake of my kids, so would like to put my money where my mouth is! Cheers

#94 crowdedelevatorcoughz on 04.25.21 at 8:38 am

This was a great article, Ryan, but….cough! cough! come on everyone, we’ve got to get Ryan over 100 comments…Cough! Cough!..I’ve already done 4, can’t the rest of you …cough! cough!…chip in with your own rambling narcissism just like mine to help out!?

We’ll call it…Cough! Cough!…crowdedelevatorfunding!

#95 Franklin Muon on 04.25.21 at 8:38 am

DELETED

#96 Steven Rowlandson on 04.25.21 at 9:09 am

Excessive greed to the point of genocide has manifested itself in the form of the real estate markets of the western world. Life is not supposed to be a mouse utopia experiment or a real life monopoly game and real estate is just a place to live or do business. Real estate is not and should not be an investment. Those that think other wise ought to be put on trial for the crime of genocide under article 2 sections c and d of the convention. Intent to profit even if it destroys a nation, race, ethnic group or religious group in whole or in part or suppresses the births of an identifiable group in whole or in part is wickedness. There are plenty of other ways of making money other than screwing each other over for everything they earn for the sake of a place to live.

#97 Ryan Lewenza on 04.25.21 at 9:32 am

crossbordershopper “so 5% down on a million dollar cardboard house in southern ontario, with 95% leverage, and super low interest rates. How is this any different done every day compared to this hedge fund guy?”

The leverage is similar but the asset is totally different. Homes are not ‘mark to market’ every night based on today’s value like stocks are. And home prices are not nearly as volatile. But I agree with your point that many homeowners are over leveraged and at risk should home prices ever correct in a meaningful way. – Ryan L

#98 Sail Away on 04.25.21 at 9:52 am

An excellent use of 30 minutes is reading Charlie Munger:

https://fs.blog/great-talks/academic-economics-charlie-munger/

#99 Oakville Rocks! on 04.25.21 at 10:06 am

#82 Nonplused
For all the reasons you list I also try to never pay full price for tools (or kitchen gadgets, gardening supplies etc).

One place I have been finding specialty tools at a huge discount is a site called MAXSOLD. Basically it started as an online estate sale but it has now morphed into an online garage sale. If you are willing to wait, the odds are very good that you will find the tool you want at a discount in a gently used condition and in many cases almost brand new. But you have to be willing to wait and you may still lose out on the bid. I have picked up some specialty carpentry tools and kitchen gadgets this way (in addition to rare cookbooks, vinyl records and books). Sadly for you, Maxsold does not seem to be in AB yet, maybe there is a business opportunity here.

Also, with respect to cordless tools and batteries, you might find this post on Karen Bertelsen’s blog The Art of Doing Stuff helpful.
https://www.theartofdoingstuff.com/battery-that-wont-recharge/
Karen’s blog is full of a lot of great advice (gardening, chickens, home repair, tools), she is a funny writer and local to southern Ontario.

#100 catnogood on 04.25.21 at 10:14 am

Great article that skewers bitcoin/blockchain etc.
https://www.currentaffairs.org/2021/04/why-cryptocurrency-is-a-giant-fraud

#101 Dan in Nanaimo on 04.25.21 at 10:51 am

The Greed is Good mantra has become impermeably tethered to American Exceptionalism (a.k.a. Infinite Quantatative Easing) which has been exported to the world as a cure all.

Let’s hope the smartest men in the room don’t stop the carnival anytime soon

#102 crowdedelevatorfartz on 04.25.21 at 10:57 am

@#94 Crowdedelevatorcoffee
“I’ve already done 4, can’t the rest of you …cough! cough!…chip in with your own rambling narcissism just like mine to help out!?”

++++
Glad you and I could help to get the count over 100.

I consider my narcissism anything but “rambling”…

Brilliantly, self absorbed, highly intelligent, mirror gazing, false modesty, banter…… would be far more accurate.
Alas, with your jealous, envious, obviously stunted, intellectual limitations forcing you to desperately attempt to be amusingly critical……..
You will forever just be ….. second in the crowdedelevator….
But keep those comment numbers rising.

#103 Ryan Lewenza on 04.25.21 at 11:10 am

Bert “ Ryan, what’s your view of C Wood and ARK Invest? Is she the next W Buffett or was she just lucky in 2020?”

She’s very bright and really knows these cutting edge tech companies and trends. But I think a lot of her success last year was luck or being in the right place at the right time. Last year it was all about tech stocks and WFH. I’ll be interested to see how she performs coming out of the pandemic when many of these hot stocks/themes start to fade. – Ryan L

#104 Ryan Lewenza on 04.25.21 at 11:13 am

B “ Cool story Ryan, crazy stuff! Wondering if you’d consider dedicating a column to the clean tech sector, and specifically the concept of fully ESG/low-carbon investing?”

I’ll add this to my list of topics and try to cover this over the next few months. Great suggestion as ESG and clean tech investing is becoming a big deal. – Ryan L

#105 NoName on 04.25.21 at 11:50 am

#99 Oakville Rocks! on 04.25.21 at 10:06 am
#82 Nonplused

Battery that wont recharge.

If its NiCd battery and its not taking any charge while plugged in, Give ‘er small jolt with much more voltage, but limit the current, that works most of the times.

So if 12v bat i would try with 18-20 and limit current to 1,5-3A for a sec or two, than put it in charger.

#106 Sail Away on 04.25.21 at 11:51 am

#88 Faron on 04.25.21 at 3:14 am
#79 Sail Away on 04.24.21 at 8:24 pm
#42 Faron on 04.24.21 at 1:09 pm

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That’s just, like, your opinion

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Ha, no. Not just mine. The concentration risk assures that ARK will suffer extreme and outsized losses if there are substantial redemptions.

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Imaginary scenario. IF tech stocks dropped hugely and IF there were to be a run on the ETF, and IF the ETF were unable to sell holdings, THEN it is sorta, kinda, maybe possible that investors might take some losses.

Although, even in this vanishingly unlikely scenario, the fund itself would incur no damage.

Haters gonna hate… let’s revisit ARKK in 6 months- it’s 123.7 today.

#107 NoName on 04.25.21 at 11:52 am

#99 Oakville Rocks! on 04.25.21 at 10:06 am
#82 Nonplused

Battery that wont recharge.

If its NiCd battery and its not taking any charge while plugged in, Give ‘er small jolt with much more voltage, but limit the current, that works most of the times.

So if 12v bat i would try with 18-20 and limit current to 1,5-3A for a sec or two, than put it in charger.

https://www.youtube.com/watch?v=2FORZQtnNz8&t=79s

#108 Faron on 04.25.21 at 12:31 pm

#106 Sail Away on 04.25.21 at 11:51 am

Are you serious? Have zombies invaded Nanaimo recently and slurped your brain out your ears?

First, for LOLs, ARK’s “space” ETF holds Netflix and John Deere.

So, when you designed the Tillicum bridge you didn’t do any calculations on forseeable load factors? Climatic design values (drainage, wind, icing)? Seismic? If you were to do that project today you would have to include risks of climate change as well. Because those are all hypothetical safety factors you are saying you ignored them?

As Biden was elected, you could have forseen that he would re-instate Obama era bans on federal private prisons and that GEO was going to get hit.

It’s called risk management and showing an understanding of risk. Doesn’t stop you from investing, but keeps your eyes open to what you are exposed to.

#109 Galt on 04.25.21 at 12:57 pm

Hedge funds and high frequency traders are parasites on the human race. They are a threat to the future of our civilization. They produce nothing of value. They are useless and dangerous