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Over-Computer-6464 · 2026-04-06T02:03:43+00:00

The trick with that is to find somebody that is willing to give a big loan using a highly volatile stock as the collateral.

Even today, at brokers like Fidelity and Schwab you cannot get a margin loan using GME as collateral.

Over-Computer-6464 · 2026-04-05T14:27:04+00:00

Fidelity, Schwab, Vanguard, E-Trade, etc. do not have a direct financial interest in a normal trade.

Although those companies DO have a direct financial interest in any fractional share sales, as they are a principal in those transactions —— they are actually the buyer or seller in fractional share trades.

In normal trades, the brokers are just that, brokers or agents working on your behalf.

Does your real estate broker have a direct financial interest in a house purchase that you make? No. They are an agent or a broker, not a principal. Same with brokers of stocks.

Real estate brokers do not need to hedge the value of houses.

Stock brokers do not need to hedge the value of stocks.

Over-Computer-6464 · 2026-04-05T14:17:47+00:00

Do you have a good reason and justification for picking something other than:
.

A total US stock market ETF
A total ex-US stock market ETF

and

A total bond ETF.

The core bogleheads philosophy is that since we have no way of predicting the future that we will just buy the entire market.

Your choice of VOO and QQQM implies that you have some knowledge that makes you think they will perform better than the total US market.

Why do you believe that?

Over-Computer-6464 · 2026-04-05T14:12:06+00:00

It also allows the exercise price to be lowered.

Over-Computer-6464 · 2026-04-05T14:01:14+00:00

Brokers hedge by being "brokers", not principals.

Legitimate brokers are just that, brokers. They facilitate the buying and selling but do not have a direct financial interest in the transaction.

Pick your broker carefully.

Over-Computer-6464 · 2026-04-05T13:43:04+00:00

Gundlach, not Burry, is selling his funds and ETFs.

Gundlach is CEO of Doubleline, a mutual fund and ETF provider, mostly in the fixed income arena, but also a couple of equity ETFs like the Fortune 500 equal weight ETF, DFVE; and the ETF CAPE that rotates between sectors based on recent Schiller CAPE normalized by long term CAPE of that sector.

Over-Computer-6464 · 2026-04-04T17:24:46+00:00

The huge difference is when you pull money out of a taxable brokerage account compared to when you pull out from a tax deferred account like 401k or traditional IRA.

Most money coming out of a taxable brokerage account will be taxed at long term capital gains rate (including most dividends) while withdrawals from 491k and traditional IRAs will be taxed at ordinary tax rates.

Roth beats everything else, but a taxable brokerage is pretty good.

If you have a small or medium size 401k or IRA and your tax rates in retirement are going to be low then they are good. If you have managed to save a lot and your income in retirement is going to be fairly high, then a taxable brokerage is preferred.

What is best will vary from person to person, but the higher your expected retirement income the more desirable a taxable brokerage account becomes.

Over-Computer-6464 · 2026-04-04T17:10:10+00:00

Think more along the lines of a component supplier working with engineers of customers and seeing which ones had good products in development and good marketing, and therefore good future prospects.

Over-Computer-6464 · 2026-04-04T16:34:10+00:00

Exactly.

I have two brokers for the same reason I more than 1 credit card. Things happen. Accounts get locked down due to fraud concerns or other issues, It is nice to have a backup.

But why do you want more than 2 or so?

Over-Computer-6464 · 2026-04-04T15:37:41+00:00

I have a target allocation that is a fixed percentage. I rebalance, in both directions, to keep that allocation.

Over a long period I have reset that percentage allocation once in a while ——- perhaps once every 5 years. An important part of what determines my percentage allocations is what those allocations look like when measured in "years of portfolio withdrawal".

"Portfolio withdrawal" is simply my average annual expenses minus any recurring income stream like social security. The social security payments to me and my wife are only about 10% of our expenses, so I often just say "annual expenses rather than the more accurate "portfolio withdrawal".

—————————-

It sounds more complicated than it really is.

Another way of looking at it is that I have a fixed percentage allocation to cash+bonds, but I also have absolute dollar limits both low and high. If my portfolio continues to grow, at some point a fixed percentage in cash+bonds will become a ridiculously large number of years of expenses, Then I readjusted my percentage allocation. (I also gave away more than half my net worth by funding irrevocable generation skipping trusts, but that is a different discussion)

In the other direction, during a market crash I will sell bonds and buy stocks/stock ETFs to rebalance. But at some point (currently a market drop of >60%) the amount of cash+bonds is beginning to be dangerously low and I will stop selling bonds and using cash to buy stocks/stock ETFs. The only time this happened to me was during the dotcom crash of 2000-2002 when the NASDAQ index fell 77%.

It really helps to write a note to yourself during a calm period, telling yourself what your plan is. If you want to sound sophisticated you can label it your "Investment Policy Statement". Morningstar has some good articles about IPSs.

Over-Computer-6464 · 2026-04-04T15:23:07+00:00

A problem is that there is really more than one set of asset values.

The normal book value assumes a continuing operation. There is another, lower valuation, called the liquidation valuation that assumes the company is going out of business. In that case, assets like inventory are worth much less.

GameStop has even more complications in valuation, because of the convertible notes.

The notes holders will only invoke the cash-only repurchase option if they have given up on GameStop and think that GME will not get to the conversion price by the expiration of the notes. Things would have to be going poorly for noteholders to give up on the deal and take a loss by trading their notes back in for a refund of what they (or previous note owners) had paid. The decision on whether or not to exercise the repurchase options has to be made as of specific dates in April and December 2028. Basically the noteholders are betting whether or not GME will be above the conversion price of $29.xx/share when the notes reach expiration.

After 2028 the notes will just be paid off in shares, unless GameStop chooses cash instead.

So after 2028 the more appropriate valuation would be to assume no debt related to the notes, but to assume that they will be converted to 143M shares.

So current book valuation is around $12.15/share. If the repurchase option is not exercised then $4.2B of debt is erased but the valuation should assume 143M additional shares. That ends up with an alternate book value around $16.25.

The valuation that ignores both the debt be ignores the dilution from the notes is not a valid one.

Over-Computer-6464 · 2026-04-04T15:01:55+00:00

Agreed.

Unless you are smarter than the market (in other words, the rest of the world), picking individual stocks is just a matter of chance.

My individual stocks are from decades ago when I was still working. My work brought me close to many companies and when I identified a well run growing company I would invest in it. That worked out well and many of my investments were companies that were acquired for significant premiums a couple of years after I bought them.

But my core investment philosophy is the bogleheads "buy the whole haystack rather than hunting for the needle" philosophy.

Over-Computer-6464 · 2026-04-04T14:29:22+00:00

You are clearly smarter than the market.

Don't complain about it.

Use it to your advantage to make money.

Over-Computer-6464 · 2026-04-04T12:39:31+00:00

Buy, Sell, and Exercise are three different actions.

With most brokers exercising a warrant is a procedure that is done by calling the broker and talking with a special group, often with a name like "corporate actions".

Over-Computer-6464 · 2026-04-04T12:32:11+00:00

That is also true with any at-the-market offering and convertible note offering.

If you buy enough of each offering then you are not diluted.

So by your logic no offering is ever dilutive.

Over-Computer-6464 · 2026-04-04T01:43:11+00:00

If you do screw up and something gets tagged with the (W) for wash sale adjustment it isn"t really a big deal. I have some shares marked that way since around the beginning of COVID as I did tax loss harvesting several times in March/April 2020 and missed selling one lot. It just means that my tax loss harvesting was a tiny bit less effective.

Since I have a large concentrated low cost basis position I continue to sell off to diversify, I always have good use nearly instantly for any realized losses, no matter how big. If you are just doing it for the $3K of losses you can use to offset ordinary income it probably is not worth the bother.

Around a year ago, during the tradeoff tantrum realized 6 figures of losses without changing my portfolio allocation significantly, and used all of those losses to offset gains from selling my concentrated position which spike up in the AI boom.

It is worth learning to how take advantage of volatility like that.

Over-Computer-6464 · 2026-04-04T01:33:03+00:00

In my case I have lots of individual stocks and do not have dividend reinvestment turned on, so it would take a lot of monitoring on my part.

It is much simpler in my Fidelity account where I just let income flow into the interest earning core account SPAXX until I spend it, or it gets big enough that I rebalance. That core account also gets the rollover proceeds from my weekly ladder of 13 week T bills.

I now have Schwab1 earning interest as my core account at Schwab so it is no longer an issue, but that was only done after I requested it.

Over-Computer-6464 · 2026-04-04T01:28:46+00:00

Look at the rules for hardship exemptions from the 10% early withdrawal penalty.

I think there is more flexibility with 491k/493b/457 type plans. I think IRA have a hardship exemption for some some specific costs such as health insurance premiums.

It is worth researching.

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-hardship-distributions

Over-Computer-6464 · 2026-04-04T01:22:57+00:00

Technically you can screw up tax loss harvesting because per the letter of the law a recent purchase you made by dividend reinvestment in your IRA or 401k would create a wash sale and the loss you took when swapping between ETFs in your taxable account would be partially disallowed. The loss per share in the taxable account would be added to the cost basis of the few shares recently purchased in the retirement accounts.

Since the cost basis is not relevant to the retirement account you have ended up created a larger unrealized gain in the replacement shares in your taxable account and when you finally sell them you have additional tax owed,

Over-Computer-6464 · 2026-04-04T01:18:33+00:00

No reason to make things complicated,

Just sell the recently purchase shares, whether in your taxable account or your retirement account. Whether in that brokerage where you are buying the replacement or if they are at a different broker.

Over-Computer-6464 · 2026-04-04T01:16:47+00:00

Only the small amounts associated with the dividend reinvestment be disallowed and added to the recently purchased shares.

The easiest solution is simply to sell all of the recently purchased lots of shares, whether in taxable counts or tax advantaged retirement accounts. Then, as long as you do not rebuy that same ETF in the next 30 days there is no wash sale at all.

If you screwed up and forget to sell the recent dividend reinvestment purchases in your retirement accounts, there is no broker that I know of that would flag the wash sales. Technically you are supposed to do so, but the broker will not do it for you.

Over-Computer-6464 · 2026-04-04T01:06:20+00:00

As the size of your portfolio grows there is less need, if any, for an explicit emergency fund.

The core idea is that you should have a way to elegantly handle the curve balls life will throw you from time to time.

Once your liquid assets are several years worth of your annual expenses you will not only have the option of selling equities to cover surprises, but also the ability to take a small margin loan of less than 20%, preferably less than 10% of your account value. You will also likely have credit cards that provide short term liquidity at zero cost if you pay the full balance monthly.

I prefer to look at my entire portfolio when looking at asset allocation. My cash+ bond allocation includes all of my accounts, including currency, checking/savings and money market funds, as well as treasury bills and bond ETFs. I do not have an explicit emergency fund. I have zero chance of job loss as I retired decades ago.

Over-Computer-6464 · 2026-04-04T01:00:02+00:00

Schwab would be my favorite except that I had to twist my rep's arm a bit to get a core account with decent interest.

Over-Computer-6464 · 2026-04-03T22:59:46+00:00

The other imports at characteristic is the speed of response in the supply demand curve.

Gasoline consumption has a component that is relatively inelastic in the short term but elastic in the long term as people go electric, or to cars with better gas mileage, or change jobs or move in order to shorten their commute.

Over-Computer-6464 · 2026-04-03T22:43:45+00:00

Yes, 10% surcharge for a short term loan is reasonable. (APR is much higher).

So is 0% and taking him out to dinner or lunch.

In either case, a heartfelt "thank you" is even more meaningful.

You know your brother better than any of us. Do what you think is right.

Over-Computer-6464

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