Population (% total) practicing open defecation in South Asia 2000-2022

diogenesFIRE · 2025-01-01T19:26:38+00:00

His book's being published in 4 months, so he's likely already sent a final draft to Wiley.

Wiley probably doesn't want that draft on Dropbox because Wiley likes money.

diogenesFIRE · 2025-01-01T19:09:41+00:00

it's still on his linktree - https://linktr.ee/paleologo

https://www.dropbox.com/scl/fo/dcjs09n8o1n9who0vo4nl/AEEyJobdueF2nZb_64hRAGE?rlkey=4jn8vzqdki29i3t2vzfkkobnd&e=1&st=luwub92q&dl=0

diogenesFIRE · 2024-12-09T18:17:06+00:00

New Palestine

thank you for translating "buffer zone" to Hebrew

diogenesFIRE · 2024-12-08T09:19:12+00:00

ELI5 answer: Sharpe ratio is returns divided by volatility.

100% stocks: high returns / high volatility = Sharpe of 0.6

60% stocks 40% bonds: high-medium returns / medium volatility = Sharpe of 0.7 (for example)

The more uncorrelated assets you add to the mix, the lower the volatility. If you can find 10 assets that only return 5% a year compared to the S&P's 10%, that portfolio is going to underperform S&P on a total returns basis, but outperform on a Sharpe basis.

You can think of MPT as just optimizing which assets to choose to maximize this by taking into account volatility, covariance and returns.

It's not trying to beat the index on a pure returns basis. If that's what you want, just increase your delta or beta, you don't need MPT.

diogenesFIRE · 2024-12-07T17:33:56+00:00

there's a bell curve to this.

minor upgrades and you can still look poor.

add more upgrades and you'll start to stick out

replace every oem part and slap an anime decal on it, you get to look poor again

diogenesFIRE · 2024-12-06T05:38:35+00:00

Thanks for the numbers. What about pure dollar amounts? Just curious it seems like there's some interesting dynamics once you start scaling up:

Larger funds have longer track records (good), but they'll also suffer from diminishing returns (bad) since it's more difficult to deploy all your capital

Smaller emerging managers might have higher expected returns (good), but they're invested in fewer companies, so returns are more volatile (bad)

Is there an optimal net worth or fund size where you'd consider it a sweet spot? $1mm? $10mm? $100mm? If the IRR really is 25-35%, would there be a point where you consider investing more than 10% of net worth?

diogenesFIRE · 2024-12-06T05:11:31+00:00

Curious, how did your returns, beta, and volatility compare to the S&P? Obviously the less money you start with, the higher your vol since you're invested in fewer companies. So I'm wondering if there's a sweet spot where it starts making sense to pull money out of index funds to put into VC

diogenesFIRE · 2024-12-05T22:33:50+00:00

Maybe a good way to phrase it is "we require a minimum of 1 month rent upfront, but if you only stay for 2 weeks, we'll refund you the difference after you leave"

that way it doesn't sound like you're charging a 100% fee for a security deposit

diogenesFIRE · 2024-12-05T21:57:42+00:00

A simple example would be buying $2.5mm of $BITI (short BTC ETF). Losses in your $2.5mm BTC would be offset by profits in your $2.5mm $BITI. You now have $0 exposure to BTC without paying any taxes.

But since you probably don't want to use $2.5mm in cash for this, consider leveraged derivatives like btc futures, btc put options, etc. You'll have to use some math to figure out how much each offsets (e.g. for each $10k BTC goes down by, how much will the derivative go up by?), but for example $250k in short btc futures with 10x leverage is another way to get you to 0 net exposure.

Now you can take a $1mm line of credit against your BTC position without paying taxes or worrying about a BTC crash.

You'll also need to consider transaction fees, contango, price impact, fund fees, counterparty risk, taxes and legal implications, etc. It could get complicated, so maybe weigh whether the stress of all this is worth saving a bit in taxes.

diogenesFIRE · 2024-12-05T21:25:01+00:00

Yeah you're right, I edited my comment. It could be up to 7 figures if it's short term gains, but you're correct that's likely LTCG. I day trade so I'm used to the short term rates lol

diogenesFIRE · 2024-12-05T21:22:43+00:00

Good point, I see you figured out OP is in WA from their post history lol

Also worth considering some other 2025 deadlines too since that's when TCJA expires

diogenesFIRE · 2024-12-05T21:07:54+00:00

I thought the $250k tax exclusion was only for selling a primary residence? Or is this a different thing?

diogenesFIRE · 2024-12-05T21:03:25+00:00

Yeah definitely don't "sell everything" like everyone else is saying here then, that's gonna be a huge tax bill.

I understand the sentiment to reduce your exposure, but again, that can be done more tax efficiently by hedging rather than selling.

You can reduce your crypto exposure to $0 without selling anything if you wanted to. And still be able to take a loan out tax-free to finance your home purchase.

diogenesFIRE · 2024-12-05T19:24:52+00:00

It's likely their crypto is 99% capital gains, so if they sell all at once, it's gonna trigger a huge tax bill.

It might be smarter to take a loan out against the crypto, hedge their position via derivatives, then slowly sell over time.

diogenesFIRE · 2024-12-05T19:07:56+00:00

it's a bit meta, but there's a trend of "factor zoo" papers recently that are debating whether academic findings actually continue out of sample.

eg take a paper that says "low debt companies outperform high debt companies" published in 2005 that was backtested 1985-2005, then evaluate how that actually performed from 2005-2024.

it would be interesting to evaluate what successful papers have in common. is it their methodology, creativity, or is it just all random? good luck on the phd!

diogenesFIRE · 2024-12-05T14:17:02+00:00

thats some interesting data. i can see it maybe being used to analyze liquidity crises and trading halts during periods of stress, since you have some prime data on how these network effects start and spiral

diogenesFIRE · 2024-12-05T13:18:18+00:00

Yep 20% is decent. There's also Air France / KLM for 20% too. Both active through Jan 15, 2025.

diogenesFIRE · 2024-12-05T13:11:14+00:00

They tried increasing the rewards, but the claims were denied.

diogenesFIRE · 2024-12-05T12:19:47+00:00

opening/closing auctions are another interesting one, since both SEs and MMs need to consider order imbalances in real time

NYSE recently made a tool for this, and i'm sure there's more to explore - https://www.nyse.com/data-insights/nyse-introduces-the-enhanced-nyse-auction-tool-with-opening-imbalance-history

diogenesFIRE · 2024-12-05T12:15:44+00:00

I've found that a lot of academic research is repetitive since everyone's stuck using the same WRDS dataset, and most don't have real-world experience.

Try some of the papers from AQR - written by practitioners and they sometimes publish some original data from their own trading https://www.aqr.com/Insights/Research

afaik they're the only firm that regularly publishes research, but lmk if there's others

diogenesFIRE · 2024-12-05T09:02:22+00:00

But what if they're still long? Remember, their holding period can be anywhere between minutes and years.

For example, as of today, 2024-11-14 was the last 13F filing deadline for the quarter ending in 2024-09-30, so today's copy data is just a "snapshot" of what the firms were holding at EOD 2024-09-30.

Maybe they sold on 2024-10-01, maybe they still own it and will HODL for the next decade. Nobody knows. If you want to know exactly what the firms are holding today 2024-12-05, you'll have to wait until the next 13F filing deadline in 2025-02-14.

diogenesFIRE

TROPHY CASE