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Jimi

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Posts posted by Jimi

  1. 2 hours ago, potatohead said:

    Interesting comment by Michael J Burry yesterday. Been absent from twitter after being visited by the FBI.

    X74Iash5_bigger.jpg
     
     
    People always ask me what is going on in the markets. It is simple. Greatest Speculative Bubble of All Time in All Things. By two orders of magnitude. #FlyingPigs360

     

    Wait.

    You got visited by the FBI because of a tweet? That's disconcerting. Share if you are comfortable doing so.

  2. This feels more dislocated from reality than the 1995-2000 bubble run. At least back then, you could tell stories of eyeballs & metrics and this newfangled contraption “that changes everything!”
     

    This bubble run is darker and far more cynical. Financial nihilism. Meme-world without substance. Musk and his shameless self-serving pumping, along with “Pomp” & Raoul & the exploitive band of laser-eyes.
     

    All suspended by the barest of threads & barfing brontosauruses. 

  3. 6 minutes ago, potatohead said:

    Its all good....BIDEN BUDGET IS SET TO ASSUME THAT CAPITAL GAINS TAX RATE INCREASE STARTED IN LATE APRIL. - SOURCE.

     

    when the selling begins, capital gains tax will take its slice of the pie.

    $6 trillion budget.....what more could we ask for?

    Trying to understand this.

    If I sold a business with long term gains in March, I get old tax rate; but if sold it in April, I get new tax rate?

     

  4. 37 minutes ago, Jimi said:

     

    So, let's say that the 10-year reprices to yield 2.00%, the target on Doc's 10-year chart.

    N = 39 

    FV = $100 

    PMT = $1.13/4 = $0.2825

    I/Y = 2.00%/4 = 0.5%

    PV = -$92.13, or a loss of 2.86

    Assuming the $1m initial investment at $95 = ~10,526 bonds, your marked to market value would be 

    10,526 bonds X $93.13 = $980,315.... or a loss of about $20,000 (assuming not held to maturity).

    Oops. 
    Erred there. 
    Should be 10,526 X $92.13 = $969,760. 

  5. 1 hour ago, No Einstein said:

    to any Bond guru out there.

    my Daughter and hubby will close on the sale of their business shortly...she mentioned putting a portion ( say 1 million) into 10 yr Treasuries....and i said stop...no way...but i am ignorant as to a concrete example of what a .25% increase would do to a position of that size... what would be the capital loss....

     

    Look here:

    https://www.bloomberg.com/markets/rates-bonds/government-bonds/us

    I see the 10-year quoted at a price of $95, with a coupon of $1.13 and priced to yield 1.68%.

    A financial calculator has five buttons, N, I/Y, PV, PMT, FV

    I plug in the following

    N = 39 (4 quarters X 10 years minus 1 for a quarterly coupon already paid)

    PV = -95.00 (minus, because you are purchasing)

    FV = $100 (10-years are sold par)

    PMT = $1.13/4 = $0.2825 (because paid quarterly.

    Then, I compute I/Y = 0.4218%... however, we need to multiply that by 4 (quarters) = 1.68%... which is the value found as yield above.

    Math checks out (if you use N = 40 instead, you get 1.674%... close enough).

    Now, you can entertain different impacts on price by assuming a different I/Y rate.

    So, let's say that the 10-year reprices to yield 2.00%, the target on Doc's 10-year chart.

    N = 39 

    FV = $100 

    PMT = $1.13/4 = $0.2825

    I/Y = 2.00%/4 = 0.5%

    PV = -$92.13, or a loss of 2.86

    Assuming the $1m initial investment at $95 = ~10,526 bonds, your marked to market value would be 

    10,526 bonds X $93.13 = $980,315.... or a loss of about $20,000 (assuming not held to maturity).

     

    Let's say the 10-year climbs to 2.5% (these changes are assumed to happen very quickly... because over time, N changes as quarterly coupons are paid)

    N = 39 

    FV = $100 

    PMT = $1.13/4 = $0.2825

    I/Y = 2.50%/4 = 0.625%

    PV = -$87.91

    10,526 bonds X $87.91 = $925.356.... or a loss of about $75,000 (assuming not held to maturity).

    Hope that helps. 

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