Too Hot Investment Thread

CPI lower than expected. Figured green.

Still hope for soft landing!

 

Do you crypto investors see a buying opportunity or are you looking for a get out opportunity?
My DIL travels the globe (London this week) pitching crypto for CITI Bank and suggests interest remains high. I’ve never understood what “it” was I was buying enough to invest. Of course, as of late I’ve taken a real thrashing on some of the investments I did understand.

 

you could be this guy. $15.6B net worth (on paper) down to only $1B in a couple of days as the house of cards of debt collapsed.

shocked to read that a teachers pension fund would have $400M in this, maybe going to get 10% of that out if lucky


Sam Bankman-Fried’s $16 Billion Fortune Is Eviscerated in Days (msn.com)

In the span of days, it became clear that Bankman-Fried and FTX were in the midst of a liquidity crunch and needed a bailout of their own. Changpeng Zhao’s Binance swept in to take over, and, while exact terms weren’t disclosed, it’s likely that SBF’s $15.6 billion fortune will be annihilated at the hands of his billionaire rival.

That might come as a shock to investors including Softbank Vision Fund, Singapore wealth fund Temasek and Ontario Teachers’ Pension Plan, who sunk $400 million into the exchange at a $32 billion valuation in January. But it also put the broader crypto industry on notice: If SBF isn’t safe, who is?
..........................................................
The Bloomberg wealth index assumes existing FTX investors, including Bankman-Fried, will be completely wiped out by Binance’s bailout, and that the root of the exchange’s problems stemmed from Alameda. As a result, both FTX and Alameda are given a $1 value.

That leaves SBF’s net worth at about $1 billion, down from $15.6 billion heading into Tuesday. The 94% loss is the biggest one-day collapse ever among billionaires tracked by Bloomberg.

 

and it got worse, as I read on, I see that Binance is backing out of the FTX takeover and that FTX has $6B in liabilities and is headed to $0. So teachers union loses $400M???...ouch....that has to leave a mark

Binance Backs Out of FTX Bailout Over Issues Beyond Its Control - Bloomberg

Changpeng “CZ” Zhao walked away from his bailout for Sam Bankman-Fried’s FTX.com almost as quickly as he offered a rescue.

“Our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help,” Binance, the crypto exchange founded by Zhao, said in a statement.

It became evident in a matter of hours that rescuing FTX would be a tall order for Binance. Its executives found themselves staring into a financial black hole -- a gap between liabilities and assets at FTX that’s probably in the billions, and possibly more than $6 billion, according to a person familiar with the matter.

On top of that, US regulators are circling FTX, investigating whether the firm properly handled customer funds, as well as its relationship with other parts of Bankman-Fried’s crypto empire, including his trading house Alameda Research, Bloomberg News reported Wednesday.

 

Market is up huge today on the hopes inflation might have finally topped out.

 

Up from big losses. Need a lot more up to get back where we were.

 

Dollar is down the most in one day since 2015. Weakening dollar and the 10 yr retreating are both gasoline for the Nasdaq. Crazy that the Dow is only about 8% from being flat on the year!

 

I moved a good chunk out of small and mid caps and into large caps last year. Has served me well mostly, but today is the opposite.

 

I personally still think value continues to outperform growth over the next 6-12 months. However, if you have time on your side some of the prices on the Nasdaq could look silly in a few years. Today is why analysts say it’s not timing the market it’s time in the market. Can’t anticipate moves like this; up or down.

 

Had to watch this twice, but an interesting case

 

Good market day yesterday, but equally crappy so far in the first hour today. With all the doom and gloom predicted for some/much/all of '23, is it time to hide out in low guaranteed returns for a while?

I've recently taken over handling my elderly parents' affairs as well, so looking to go into ultra safe/preservation mode with their stuff, which most is already very safe.

 

Stocks often rally in December as consumer spending increases demand and investors sell off losers for tax purposes. I’ve seen it referred to as the Santa Rally.
Sometimes there is a January rally as investors reinvest into the market after selling poorly performing stocks in Dec.
I am retired and have started putting cash into I-Bonds that bring a high rate of return - it was over 9% in the fall but around 6.8% now. I don’t worry about that money unlike the money I have in the market.

 

Was doing some quick math today. My net worth I think is roughly back to where it was before the downturn.
Of course, that doesn’t take into account inflation or all the money I poured in the last year and a half, so I am still well behind in real terms, but progress is progress.
Guess it’s time for another downturn!

 

As to ibonds, the new inflation adjustment is down significantly but the new fixed rate is 0.9%, the highest it has been in a long time. This year I will be selling some of my zero percent fixed rate and buying new 0.9% fixed rate.

 

I have a savings account at wealthfront that is insured up to 500k, pays out immediately if I need it and is paying 4.55 %.

 

It just went to 4.55 on Friday.
I like them, they aren’t perfect but pretty innovative. I opened up with them around 2016 as kind of a play account, and a hedge against my own investing biases. Opened up the savings account last year as rates went up.
Now I have enough there to qualify for direct indexing in my investment account, so I’m interested to see that in action.the tax loss harvesting they offer has been pretty beneficial to this point.

 

ibonds right now aren’t any better than some of the better interest bearing accounts or tbills. But I keep them longer term as a way to match inflation, and with a higher fixed rate slightly higher than inflation. My guess is interest rates are going to trend back down.

 

What sort of fees do they charge for direct indexing? It seems like it would kind of be a mess if one ever decided to get out of it.

 

My Tiaa $ mkt is up to 4.87 eff rate!