The Great Unwinding: Why WSB Will Keep Losing Their Tendies
I. The Death of Modern Portfolio Theory, The Loss of Risk Parity, & The Liquidity Crunch SPY 1 Y1 Day Modern portfolio theory has been based on the foundational idea for the past 3 decades that both equities and bonds are inversely correlated. However, as some people have realized, both stocks and bonds are both increasing in value and decreasing in value at the same time. This approach to investing is used pretty much in everyone's 401K, target date retirement plans, or other forms of passive investing. If both bonds and equities are losing value, what will happen to firms implementing these strategies on a more generalized basis known as risk-parity? Firms such as Bridgewater, Bluecrest, and H2O assets have been blowing up. [2,3] Liquidity has been drying up in the markets for the past two weeks. The liquidity crisis has been in the making since the 2008 financial crisis, after the passage of Dodd-Frank and Basel III. Regulations intended to regulate the financial industry have instead created the one of the largest backstops to Fed intervention as the Fed tried to pump liquidity into the market through repo operations. What is a repo?
A repo is a secured loan contract that is collateralized by a security. A repo transaction facilitates the sale and future repurchase of the security that serves as collateral between the two parties: (1) the borrower who owns a security and seeks cash and (2) the lender who receives the security as collateral when lending the cash. The cash borrower sells securities to the cash lender with the agreement to repurchase them at the maturity date. Over the course of the transaction, the cash borrower retains the ownership of the security. On the maturity date, the borrower returns the cash with interest to the lender and the collateral is returned from the lender to the borrower.
Banks like Bank of New York Mellon and JP Morgan Chase act as a clearing bank to provide this liquidity to other lenders through a triparty agreement. In short, existing regulations make it unfavorable to take on additional repos due to capital reserve requirement ratios, creating a liquidity crunch.[7,8,9] What has the Fed done to address this in light of these facts?
In light of the shift to an ample reserves regime, the Board has reduced reserve requirement ratios to zero percent effective on March 26, the beginning of the next reserve maintenance period.
II. Signs of Exhaustion & The Upcoming Bounce is a Trap, We Have Far More to Go A simple indicator to use is the relative strength index (RSI) that a lot of WSB is familiar with. RSI is not the be all and end all. There's tons of indicators that also are indicating we are at a very oversold point. SPY 1 Y1 Day RSI Given selling waves, there are areas of key support and resistance. For reference, I have not changed key lines since my original charts except for the colors. You can check in my previous posts. 247.94 has been critically an area that has been contested many times, as seen in the figure below. For those that bought calls during the witching day, RIP my fellow autists. The rejection of 247.94 and the continued selling below 233.86 signals to me more downside, albeit, it's getting exhausted. Thus, I expect the next area in which we start rallying is 213. SPY 10 Day/30 min Another contrarian indicator for buying calls is that notable people in finance have also closed their shorts. These include Jeffery Gundlach, Kevin Muir, and Raoul Pal.[11,12,13] III. The Dollar, Gold, and Oil As previously stated, cash is being hoarded by not only primary banks, but central banks around the world. This in turn has created a boom in the dollar's strength, despite limitless injections of cash (if you think 1 trillion of Repo is the ceiling, think again) by the Fed. DXY Despite being in a deflationary environment, the DXY has not achieved such levels since 2003. Given the dollar shortage around the world, it is not inconceivable that we reach levels of around 105-107. For disclosure, I have taken a long position in UUP. However, with all parabolic moves, they end in a large drop. To summarize, the Fed needs to take action on its own currency due to the havoc it's causing globally, and will need to crush the value of the dollar, which will likely coincide with the time that we near 180. If we are indeed headed towards 180, then gold will keep selling off. WSB literally screams bloody guhhhhhh when gold sells off. However, gold has been having an amazing run and has broken out of its long term channel. In times of distress and with margin calls, heavy selling of equities selling off of gold in order to raise cash. As previously noted, in this deflationary environment, everything is selling off from stocks, to bonds, to gold. /GC Futures Contracts 5 Y1 Wk What about oil? Given the fall out of the risk parity structure, I'm no longer using TLT inflows/outflows as an indicator. I've realized that energy is the economy. Closely following commodities such as light crude which follow supply and demand more closely have provided a much better leading indicator as to what will happen in equities. Given that, oil will also most likely hit a relief rally. But ultimately, we have seen it reach as low $19/barrel during intraday trading. /CL Futures Contracts 1 Y1 D IV. The Next 5 Years In short, the recovery from this deflationary environment will take years to recover from. The trend down will not be without large bumps. We cannot compare this on the scale of the 2008 financial crisis. This is on the order of 1929. Once we hit near 180, the Fed crushes the dollar, we are in a high likelihood of hitting increased inflation, or stagflation. At this point the Fed will be backed into a corner and forced to raise rates. My targets for gold are around 1250-1300. It may possibly go near to 1000. Oil could conceivably go as low as $15-17/barrel, so don't go all in on the recovery bounce. No matter what, the current rise in gold will be a trap. The continued selling in the S&P is a trap, will bounce, forming another trap, before continuing our painful downtrend. I haven't even mentioned coronavirus and unemployment until now. I've stated previously we are on track to hit around at least 10,000 coronavirus cases by the end of this month. It's looking closer to now 20-30,000. Next month we are looking to at least 100,000 by the end of the April. We might hit 1,000,000 by May or June. Comparison of the 2020 Decline to 1929 ------------------------------------------------------------------------------------------------------------------------------------------------ Chart courtesy of Moon_buzz tl;dr We're going to have a major reflexive rally starting around 213, all the way back to at least to 250, and possibly 270. WSB is going to lose their minds holding their puts, and then load up on calls, declaring we've reached a bottom in the stock market. The next move will be put in place for the next leg down to 182, where certain actors will steal all your tendies on the way down. Also Monday might be another circuit breaker. tl;dr of tl;dr Big bounce incoming. Bear trap starting 213. Then bull trap up around 250-270. We're going down to around 182. tl;dr of tl;dr of tl;dr WSB will be screwed both left and right before they can say guh. Hint: If you want to get a Bloomberg article for free, hit esc repeatedly before the popup appears. If it doesn't work, refresh the article, and keep hitting esc. Remember, do not dance. We are on the cusp of a generational change. Use the money you earn to protect yourselves and others. Financial literacy and knowledge is the key to empowerment and self-change. Some good DD posts: u/bigd0g111 -https://www.reddit.com/wallstreetbets/comments/fmshcv/when_market_bounce_inevitably_comesdont_scream/ u/scarvesandsuspenders - https://www.reddit.com/wallstreetbets/comments/fmzu51/incoming_bounce_vix_puts/ Update 1 3/22/2020 - Limit down 3 minutes of futures. Likely hit -7% circuit breaker on the cash open on Monday at 213 as stated previously. Do not think we will hit the 2nd circuit breaker at 199.06. Thinking we bounce, not too much, but stabilize at least around 202.97. Update 2 3/23/20 9:08 - Watching the vote before making any moves. 9:40 - sold 25% of my SPY puts and 50% of my VXX calls 9:45 - sold another 50% of SPY puts 9:50 - just holding 25% SPY puts now and waiting for the vote/other developments 11:50 - Selling all puts. Starting my long position. 11:55 - Sold USO puts. 12:00 - Purchased VXX puts to vega hedge. 2:45 - Might sell calls EOD. Looks like a lot of positioning for another leg down before going back up. It's pretty common to shake things out in order to make people to sell positions. Just FYI, I do intraday trading. If you can't, just wait for EOD for the next positioning. 3:05 - Seeing a massive short on gold. Large amounts of calls on treasuries. And extremely large positioning for more shorts on SPY/SPX. Will flip into puts. Lot of people keep DM'ing me. I'm only going to do this once. https://preview.redd.it/uvs5tkje1ho41.png?width=2470&format=png&auto=webp&s=c6b632556ca04a26e4e08fb2c9223bfcb84e0901 That said, I'm going back into puts. Just goes to show how tricky the game is. 3:45 - As more shorts cover, going to sell the calls and then flip into puts around the last few min of close. Hope you guys made some money on the cover and got some puts. I'll write a short update later explaining how they set up tomorrow, especially with the VIX dropping so much. 3/24/20 - So the rally begins. Unfortunately misread the options volume. The clearest signal was the VIX dropping the past few days even though we kept swinging lower, which suggested that large gap downs were mostly over and the rally is getting started. Going to hold my puts since they are longer dated. Going to get a few short term calls to ride this wave. 10:20 - VIX still falling, possibility of a major short squeeze coming in if SPY breaks out over 238-239. 10:45 - Opened a small GLD short, late April expiration. 10:50 - Sold calls, just waiting, not sure if we break 238. If we go above 240, going back into calls. See room going to 247 or 269. Otherwise, going to start adding to my puts. https://preview.redd.it/ag5s0hccxmo41.png?width=2032&format=png&auto=webp&s=aad730db4164720483a8b60056243d6e4a8a0cab 11:10 - Averaging a little on my puts here. Again, difficult to time the entries. Do not recommend going all in at a single time. Still watching around 240 closely. 11:50 - Looks like it's closing. Still going to wait a little bit. 12:10 - Averaged down more puts. Have a little powder left, we'll see what happens for the rest of today and tomorrow. 2:40 - Closed positions, sitting on cash. Waiting to see what EOD holds. Really hard trading days. 3:00 - Last update. What I'm trying to do here posting some thoughts is for you guys to take a look at things and make some hypotheses before trading. Getting a lot of comments and replies complaining. If you're tailing, yes there is risk involved. I've mentioned sizing appropriately, and locking in profits. Those will help you get consistent gains. https://preview.redd.it/yktrcoazjpo41.png?width=1210&format=png&auto=webp&s=2d6f0272712a2d17d45e033273a369bc164e2477 Bounced off 10 year trendline at around 246, pretty close to 247. Unless we break through that the rally is over. Given that, could still see us going to 270. 3/25/20 - I wouldn't read too much into the early moves. Be careful of the shakeouts. Still long. Price target, 269. When does the month end? Why is that important? 12:45 - out calls. 12:50 - adding a tranche of SPY puts. Adding GLD puts. 1:00 est - saving rest of my dry powder to average if we still continue to 270. Think we drop off a cliff after the end of the quarter. Just a little humor... hedge funds and other market makers right now. 2:00pm - Keep an eye on TLT and VXX... 3:50pm - Retrace to the 10 yr trend line. Question is if we continue going down or bounce. So I'm going to explain again, haven't changed these lines. Check the charts from earlier. https://preview.redd.it/9qiqyndtivo41.png?width=1210&format=png&auto=webp&s=55cf84f2b9f5a8099adf8368d9f3034b0e3c4ae4 3/26/20 - Another retest of the 10 yr trendline. If it can go over and hold, can see us moving higher. 9:30 - Probably going to buy calls close to the open. Not too sure, seems like another trap setting up. Might instead load up on more puts later today. In terms of unemployment, was expecting close to double. Data doesn't seem to line up. That's why we're bouncing. California reported 1 million yesterday alone, and unemployment estimates were 1.6 million? Sure. Waiting a little to see the price action first. Treasuries increasing and oil going down? 9:47 - Added more to GLD puts. 10:11 - Adding more SPY puts and IWM puts. 10:21 - Adding more puts. 11:37 - Relax guys, this move has been expected. Take care of yourselves. Eat something, take a walk. Play some video games. Don't stare at a chart all day. If you have some family or close friends, advise them not to buy into this rally. I've had my immediate family cash out or switch today into Treasury bonds/TIPS. 2:55pm - https://youtu.be/S74rvpc6W60?t=9 3:12pm - Hedge funds and their algos right now https://www.youtube.com/watch?v=ZF_nUm982vI 4:00pm - Don't doubt your vibe. For those that keep asking about my vibe... yes, we could hit 270. I literally said we could hit 270 when we were at 218. There was a lot of doubt. Just sort by best and look at the comments. Can we go to 180 from 270? Yes. I mentioned that EOM is important. Here's another prediction. VIX will hit ATH again. 2:55pm EST - For DM's chat is not working now. Will try to get back later tonight. Stream today for those who missed it, 2:20-4:25 - https://www.twitch.tv/videos/576598992 Thanks again to WallStreetBooyah and all the others for making this possible. 9:10pm EST Twitter handles (updated) https://www.reddit.com/wallstreetbets/comments/fmhz1p/the_great_unwinding_why_wsb_will_keep_losing/floyrbf/?context=3, thanks blind_guy Not an exhaustive list. Just to get started. Follow the people they follow. Dark pool and gamma exposure - https://squeezemetrics.com/monitodix Wyckoff - https://school.stockcharts.com/doku.php?id=market_analysis:the_wyckoff_method MacroVoices Investopedia for a lot. Also links above in my post. lol... love you guys. Please be super respectful on FinTwit. These guys are incredibly helpful and intelligent, and could easily just stop posting content.
I beat Bloodstained recently, and because this forum seems to think Hollow Knight is the greatest game ever while Bloodstained sucks I decided to go against the grain a bit and create a different discussion. Granted, overall I think Hollow Knight is better, but that's doesn't mean it's better on every aspect. Now, I found Bloodstained and Hollow Knight essentially took opposite approaches to building large Metroidvanias (in summary, Bloodstained gets it's complexity by filling out large continuums with quantitative variations, while Hollow Knight gets it through combinatorics by giving unique behavior to simple things which then synergize), so I don't think it's necessarily fair to compare them, but I'm going to do it anyway. This post is very long as I've found a lot to talk about, so I don't recommend reading the whole thing. Each paragraph is one aspect, you should be able to get what it is just from reading the first sentence, the rest of the paragraph is just an argument as to why I found that aspect to be better if you care to read it. I'll post the list of all the aspects in the concluding paragraph. With that being said, here it goes. First, I prefer Bloodstain's save/death system over Hollow Knight's. While autosaving is convenient, I honestly prefer manual saving as I like having control over those cases where you don't want to overwrite your savefile. In Hollow Knight's case, it's clear that they implement autosaving specifically to prevent you from doing that, as otherwise their death mechanic wouldn't work, and it makes certain choices permanent. It really says something about how brutal Hollow Knight's death mechanic is that it would be preferable for the game to just end and have to be reloaded from a save point. In addition to being brutal, I find such a mechanic to be a poor fit for Metroidvania's, as forcing the player to go to the same destination to recover discourages exploration or trying different routes when a particular ones proves too hard. The logistics of the whole thing are also pretty iffy, both with the shade mechanic and with autosaving and returning to a save point on quitting, and both can be exploited in ways that feel to defy the logic of the game. The thing I like the most about Bloodstain's save system is that it has lots of slots you can branch out into, which I like using to save before boss fights in case I want to refight them. Hollow Knight's Hall of Gods is much more convenient, but it still fails to capture all such fights that a player might want to reattempt with a different strategy (the big one being the Pale Lurker), and not all the fights it does have are quite the same as the original (Uumuu in particular feels like a completely different fight), so it does not make having such a feature be obsolete. Even when bosses are available unchanged in the house of gods though, the fact that the Hall of Gods can't even be unlocked until midgame needs to be considered, while save branching can be done immediately after the boss is fought. Finally, even though Hollow Knight has autosaving, it still has save points, and Bloodstained does a much a better job at placing save point in desirable locations. In particular, Bloodstained always has a save point before a boss, while there is some frustrating exceptions in Hollow Knight. Next, I prefer Bloodstain's map system. It's simple, but effective, and in terms of functionality has most of the features of Hollow Knight's, with essential features like save points and NPCs being marked in one way or another, and personal markers are given as well. Hollow Knight's maps are certainly prettier, but that doesn't necessarily make them more useful. They have a couple advantages with the colored regions and drawn out landmarks, but are also frustrating in other ways, such as with the limited markers, and the fact you need to buy everything first. The biggest issue though is the fact that maps must be bought before they can be used. This wouldn't be a bad idea by itself, but in practice it isn't used particularly well, as the map is often either is often either hid so near the entrance that they might as well start with it, or being hidden so late that they needs to frustratingly memorize the area before getting to it. The fact they cost geo is little more than a nuisance, as they don't cost enough for the player to ever be worth passing them up for now, but it's still often enough to just waste time grinding until enough geo is gathered to buy them. The problems with the map system are exacerbated by the shade mechanic, as a map is needed to track down the shade. This further discourages exploration, as it encourages someone to either just map a beeline towards the map while ignoring everything else, or just avoid areas entirely that they don't have the map for. Fog Canyon in particular was frustrating, as the map in positioned in such a place to actively discourage exploring the region until the player gets the shade cloak, but the area was designed to be cleared with either the shade cloak or Isma's tear, and the map can actually be picked up pretty easily picked up with the latter if the player wasn't discouraged from exploring by the tease combined with frustrating game mechanics. Bloodstained did a much better job at handling money than Hollow Knight. I never found myself having to grind for money in Bloodstained, but I did in the early game for Hollow Knight. The biggest issue with currency in Hollow Knight though is in the late game, which is that geo becomes absolutely useless once everything is bought. There is one stock that never exhausts, the rancid eggs, but these become all but useless after everything else is bought out as the only use for rancid eggs is recovering the player's shade, where the primary purpose for doing such is just to recover geo. The only other reason would be to fix the soul gage, but in most cases it would probably be faster to just kill yourself than to return to Confessor Jiji in order to fetch the shade. This issue is amplified in Steel Soul mode, where geo will likely accumulate to a greater extent due to not being lost on death, rancid eggs can no longer be bought, and the end game geo sinks are useless as they only prevent an effect that occurs on death. The one other replenishable stock, fixing the fragile charms, can't be restored either as the charms only break on death. This is not an issue as Bloodstained. Not only is it much harder to pay for everything, and consumable items ensure that there will always be practical stock remaining, but there is uses for money other than buying items, namely the gold bullet spell and the gold power ring. While charms can slightly modify the attack in Hollow Knight, the overall form remains the same, with the same nail attacks and the same spells. Meanwhile, by changing up weapons and spell shards, several different modes of combat are possible in Bloodstained. For example, one spell I enjoyed using in Bloodstained is Plume Parma, which launches a flying pig that bounces around the arena, and it's fun challenge to work on the geometry of arenas and boss patterns to figure out where to launch the pig so it hits the boss the maximum number of times before it pops. Hollow Knight has nothing comparable. As far as actual weapons go, boots encourage completely different fighting styles than swords or guns do. The fact there are different attack types as well also mixes stuff up in Bloodstained by more explicitly encouraging different builds. With that said, I did find Hollow Knight to have much better synergy between charms than any items in Bloodstained did, the limitation is just in modes of combat. I found the traversal items to be much more interesting in Bloodstained. Hollow Knight's are pretty generic, with the most interesting one being super-dash, which is kinda annoying. Bloodstained had three more interesting traversal abilities with reflector ray, invert, and dimension shift. I do have to say the Hollow Knight did a much better job at actually putting it's traversal abilities to use, but even then I do think Bloodstained had a much more useful invert mechanic than most games where something similar can be done. Even with some of the more generic abilities Bloodstained had more interesting traversals. The best example of this is with how they handle water, where all Hollow Knight's traversal does is make some more water swimmable on the surface, while Bloodstained has two different traversal abilities for water, each allowing different ways to explore it in 2d space. One thing that always frustrated me in Hollow Knight is how little of a difference upgrades in the game actually made. The clincher is the fact that once you get ALL mask upgrades and vessel fragments, you're still not even twice as powerful as you were at the start of the game. This difference is even more marginal when you consider how easy it is to heal and recover soul in this game, so in practice you have much more soul and life available then the meters indicate. On the other hand, if you do get pushed to the edge (which is the only point where health upgrades make a different anyway) and recover, then the effect is amplified as you could recover more than one mask after you otherwise would have died. For what they are worth, it annoys me that there are much easier method to continue pushing life past the limit, such as by farming lifeblood, making there be little incentive to actually track down any upgrades. This is one area where Hollow Knight's emphasis on the discrete works against it, as complete sets are needed before mask shards or vessel fragments, while any individual health or magic upgrade in Bloodstained makes a difference, even if it's so small that it's only situational. What really makes this bad is exactly how the upgrades are obtained. In short, I've found that for both masks shards and vessels fragments there is one that is extremely hard to get, a few that are fairly challenging, and most are a matter of going to the right place. As a result, there is little incentive to tackle the fairly challenging ones unless one is also confident that they can get the extremely challenging one as otherwise they won't amount to anything once all the easy shards and fragments are picked up, collapsing challenges with rewards of varying levels of difficulty into one. Unlike the masks, the fully upgraded nail is significantly more powerful the original nail. I don't like the way I paced the upgrades though. Each nail upgrade adds a constant amount of damage to the nail which is slightly less damage than the starting nail. This is fine, though the practical effect is somewhat sporadic due to most enemies having so few hit-points that the ratio between the previous number of hits it took to kill an enemy to the new number of hits is often quite different from the ratio between the previous amount of damage the nail did to the new amount of damage. It would be more consistent against bosses, if it wasn't for the fact that many bosses are giving more hits as the nail is upgraded so the effect is nerfed. Even worse, spells don't become more powerful, so a boss can actually become HARDER when thought with more powerful nail. While not a boss, I noticed this effect with the shade, which was quite annoying. With those aside, the issue comes from the fact the requires for upgrading the weapon are not constant, but instead increase linearly. By itself this would be reasonable as it would be expected for their be a greater requirement to get a constant improvement later on to reflect the increasing difficulty of the game, but the issue comes from the fact that the upgrade requirement is from a rare item, of which each is required to get the final upgrade. As result, the difficulty of upgrading the item increases superlinearly, not linearly. To explain why, I'll use this example of completing a set of trading cards by buying random cards. Say there are twelve possible cards that could be randomly gotten, there is six in the set you're trying to complete, and the package contains one card. With the first package, you have a 1/2 chance of getting a card in the set, and thus getting one card closer to complete set. Once you have 5/6 cards in the set though, you only have 1/12 chance of getting one card closer to completing the set as you need the specific one that you are missing, not just any card in the set. You can't apply the same calculations to Hollow Knight as obtaining the ore isn't random, it's gotten by performing certain tasks, but similar reasoning applies. The issue isn't just that it's superlinear though, but the exact values are poorly balanced. To get the first nail upgrade, you need zero pale ore, while the final upgrade needs three pale ore, which is half the total pale ore. As a result, it's strictly harder to get the final nail upgrade than to get ALL the nail upgrades before it, but the proportional effect isn't anywhere close to what you get for ANY of the upgrades before it. This lack of marginal improvement is then exacerbated by the fact that some pale ore is much easier to get than others (easiest is basically just found on the wayside on a route you have to go down anyway, hardest requires completing the second of three gauntlets), so of course the easy to find ones are all going to found before the hard ones. The reward to effort ratio is just completely out of wack for the final nail level, and I find that it just added one more nail level and four more ore it could have been much more reasonable without changing the overall system. Meanwhile, Bloodstained does damage upgrades completely differently. Frankly I don't know how Bloodstained scales damage other than it being much more complicated, but in practice I found it to be much better paced than it was in Hollow Knight. There is an issue where occasionally you randomly got a weapon that's much more powerful than the weapons you should have at that point so until you get to the next stage most weapons you pick up are useful, but overall I found it to be much better. Bloodstained has much more interesting alternative game modes than Hollow Knight does. First off, it has different difficulty settings, which Hollow Knight just lacks. If we consider Hollow Knight's alternative game modes, none of them actually add any functionality. Steel Soul mode technically adds a single new feature in the form of Steel Soul Jinn, but as all she does is convert eggs to geo, which is not particularly useful for the reasons explained in the section on money. The fact the save file deletes on death doesn't actually add functionality as a player could impose this challenge on themselves by choosing to manually delete their save file on death, all it does is automate the process. I guess you could consider the achievements associated with the mode as an added feature, but those are spoiled by the fact you can save you run by just quitting before death, meaning you can play as if you only have one less hit, and can't do any shade-jumping exploits. The other mode is Godseeker mode, which is it's answer to Boss Rush mode. It sounds like a good idea, but it's pretty terrible in practice because you can already do all of Godhome in the main game, and all Godseeker mode is just Godhome and nothing but Godhome. I see two potential uses for this mode, the first is that in Godseeker mode you're fulling upgraded so it can be done to get around having to get all the upgrades yourself, and the second is that Godhome is a pain to get to to and get out of, so just opening a second save file can be done instead for convenience sake. The problem is, it's so hard to unlock Godseeker mode that by the point you've gotten there you've probably already done every else, so you don't need to unlock any upgrades, and you can just set around in Godhome while you try to clear it in the main game as you don't actually need to leave. As it is I still haven't cleared the third pantheon, but the only upgrade I'm missing is the fourth level Grimm charm, which I frankly don't find to be worth beating either Nightmare Grimm or the third Pantheon for. The fact the Hall of Gods is almost filled in Godseeker mode means it could be used to fight the handful of bosses (Pure Vessel, Winged Nosk, and the Sisters of Battle) that still need to be unlocked in Godhome if you're unable to clear the fourth Pantheon, and it can be used to fight Grey Prince Zote if you let the real one die, but that's not much. Bloodstained also has a Boss Rush Mode, but it's much more reasonable to unlock, just requiring the bosses to be rather than tracking down some obscure location and complete the challenges there, and it doesn't waste an entire safe file. It also actually emphasizes the rush part, with a timer for high scores, and performance rewards that can actually be used in the main game instead of just being some weird isolated challenge for getting an alternative ending. With boss revenge mode it has another fun challenge mode that's unlike anything in the game, but it also has a couple full length modes that act like full games. Right now they have Zangetsu mode and randomizer mode, both of which are substantially different from the main game. Bloodstained is still being updated to add new game modes, while Hollow Knight is now capped at it's definitive version. Finally, I found Bloodstained to be much more reasonable with how it distributed its alternative endings. Hollow Knight has five endings, but two of them are just variations, so I'll only consider three of them. Bloodstained also has three endings, so we can compare them. As far as it can be measured, I feel these endings are roughly distributed in the same way: the first ending is a bit over half-way through the game, and final ending requires doing a bit more than the second one. The main difference I feel in between how this three endings are distributed between the games is that in Bloodstained, the first two endings are the result of aborting the main path through the game early. Meanwhile, you get the first ending in Hollow Knight if you go and do exactly what you are supposed to do, and the other two endings are for doing extra. There is one issue though: the first ending in Hollow Knight SUCKS. I swear it's one of the worst endings I've ever seen in modern commercial game, not only is the outcome unsatisfactory for our characters, but it's just short and feels like it doesn't actually resolve anything. It's the second ending that feels canonical, and that you need to actually get to for the game to feel complete. This is where the issue comes in. To get the best ending in Bloodstained, you pretty much just have to finish exploring the castle, and everything else will fall into place as long as you take advantage of what you were told along the way. That's not the case in Hollow Knight, where I feel they were trying to find an excuse to force player to hit all the important lore spots, but it never really came together in a meaningful way. Half of it is reasonable, where you need the shade cloak to explore through Queen's Garden so you can get half of the kingsoul. The Pale King's half though, is kinda ridiculous. The first issue is getting to the White Palace, which requires using an ability that isn't used anywhere else in a specific location. The bigger issue than finding the White Palace though is getting that ability. For reasons I don't understand, they decided to make it the final upgrade that you get from collecting dream essence, when I think it would make more sense to include at least one optional upgrade past it instead of just having the seer disintegrate. The larger issue though is what it takes to get that point. The game points to two sources of dream essence, warrior dreams and whispering roots, and they contain enough essence to get all the upgrades EXCEPT the awakened dream nail. For the final bit of essence, you're expected to beat one of the champions, most of which are harder than the tyrant lord so it brings into question of what's the point of even including the queens path. The Hidden Dreams updated added some somewhat more reasonable alternative champions to get this final bit of essence from, but they have the same issue of the other champions in that not only are they hard to beat, but they are also hard to find. It's not that they are actually hard to find if you know to look for them, but as far as I'm aware the game gives you know hints that these bosses even exist, and they are all located in isolated areas that you already visited and would have no reason to revisit unless you're specifically looking for the champions. The Hidden Dreams ones are even worse in this regard, as you can be locked out of one if you miss something much earlier in the game, while the other requires a trigger completely unrelated to the character to appear, and is located in a secret area which is the one region I know of that requires desolate dive to access without any sort of visual cue. The real problem though comes once you actually get to the White Palace though, which is this seemingly never ending platform section that is FAR harder than anything before it, feeling more like you're playing Super Meat Boy than Hollow Knight. It's one thing if was just an optional challenge like the Path of Pain that it also contains, but I find the fact you need to beat it to get a decent ending to unreasonable, the game doesn't even do anything to prepare you for it. The only reason I got through it was with an optional charm, Hive Blood, whose use involves a lot of just sitting around and waiting and it is so tedious. I wonder if the White Palace feels some out of place specifically because it was a stretch goal that happened to be part of the main quest instead of a side quest like the colosseum is. Maybe it would have been even harder, but I feel like the whole ordeal would have at least made more sense if the abyss was actually completed as originally planned. The final ending doesn't have the same weight the second one does, but it's even more ridiculous. For unknown reasons, they decided to make the sole reward of boss rush side quest to be getting this final ending, and then center the entire ending around this boss rush mode, and it's just weird. What makes it absurd though is what it takes to actually get the ending, which is beating the Pantheon of Hallownest. It's hard enough to unlock as it requires clearing all the other Pantheons, but the real issue with it isn't that it's hard, it's that it's LONG. To get the hard part of the Pantheon, the player needs to spend like 20 minutes fighting all of the bosses that they've already mastered on the previous pantheons, and if they die they need to restart the entire thing. Because the ending is so hard it's like 20 minutes wasted each failed attempt, and that's just not worth it for most people. The worst part is the ending ends in a bit of cliffhanger, letting people to believe it was sequel bait, in turn frustrating countless player's trying to avoid spoilers who fruitlessly beat themselves against this ridiculous challenge. Bloodstained has it's superbosses too, but those are just additional challenges, not being required to get what seems to be an important ending. To get that you just need to be beat the game. In conclusion, I preferred Bloodstain's save and map systems, found it did a better job at handling money, had more combat options and more interesting traversal items, had more useful upgrades to health, magic, and damage, has more useful alternative game modes, and has more reasonable conditions for getting the good endings. While I'm not saying these are the only things Bloodstained did better, I do think Hollow Knight is better in most other aspects, including graphics, story, bosses and enemies, and sound and level design, and these aspects are considered to be more essential. I will not argue why I think Hollow Knight does this better people seem to generally be in agreement to this, and I've already written well more than enough. I'd like to hear any differing opinions, but again, I recommend only reading the sections you're interested in discussing and not the entire essay.
Where we're going, we don't need magic. Chapter 1 "Inventory Check"
So last time I've been told that there's not enough human kicking non-human ass, I don't want to give spoilers but Mendur is a dwarven city and guess what happens when SUPERIOR GERMAN ENGINEERING meets drawven steel? Stay tuned for the next chapter when our engineer flexes on the dwarves via superior engineering. First / Previous *** I woke with a splitting headache, and most likely, quite a few bruises. Looking around me, I seem to be inside a wagon, the top's been covered with a piece of cloth suspended by a few wooden arches. This one's carrying a few crates, but overall, this cart seems relatively empty. I attempted to sit up, reaching around for the toolbox that I had just been carrying and patting myself down to check if I still have everything. "Hey, you're finally awake." I froze, I've seen that memes a few times too many and played Skyrim a few times too much and nearly entered another panic. And I would have if the voiced came from a middle-aged man similar to the Skyrim intro. I slowly turned towards the source of the voice, it was a girl, maybe in her early twenties or late teens, wearing what seems to be religious garments, parchment colored robes with faded green trims. She held what appears to be a short mace, Indo-Persian design from what I can identify, decorated with what is probably religious symbols non of which I can recognize. "Where am I?" I asked, "and who are you?" At this moment, I imagine that I'm making quite a confused face, I didn't have a mirror, I can't be sure. "You are on a merchant caravan to the City of Mendur, I am but a humble cleric traveling with this merchant caravan." She replied, exceedingly calm. "And where is the City of Mendur? And were those goblins that were chasing me?" I asked her as I looked around the carriage inside. I feel like I should be a lot more surprised, confused, and probably scared than I currently am. Maybe it's just because of the shock I'm presently in or the fatigue of having been chased through a forest by goblins. "The city of Mendur is a center of trade and industry in the Cedal Kingdom," she explains, "and yes, those were goblins. Given that you were able to venture far enough into Silvester's Forest to be chased by that many goblins at once, I had assumed that you could have handled them yourself." I recognized none of those names, but I supposed I'll have to figure it out later. "I take it that you saved me, thanks," the cleric only nodded in acknowledgment. I looked around for my toolbox and my backpack, I still have my toolbelt, fortunately enough, they were just next to me. I opened my toolbox, checking if I still have everything. Caliper? Check. Craftsman 61-Piece Mechanics Tool Set? Check. Torque Wrench? Check. Not missing anything here. A handful of files, a hammer, a can of PB B'laster, 2 rolls of duck tape, and 2 tubes of superglue. In hindsight, I probably could have just wack the brains out of those goblins with my toolbox. Going through my backpack, besides the assorted wires for everything I have, I found that I still have the pack of two dozen hose clamp I bought at Home Depot a while back. A digital multimeter and spare batteries, I'll probably have uses for it eventually. My laptop is likely done for since the battery is not going to last even an hour, unless... My notebook and a few pens, it is probably the 12th notebook I've had since the start of college, this one is brand new. My collection of engineering degrees, which I am very proud of. For some reason, I have a solar charger that would work with my phone, most likely something that I just left in there from the last camping trip I went on with my college roommates before we parted ways; at this rate, I'll probably never get to see them again. Speaking of college roommates, the English major coerced me into buying a hunting knife, which I still have. I still have my kindle, I won't be getting my pre-ordered books, unfortunately, but I still have an entire library of books at my fingertip, which is fortunate. My phone is still intact, the battery's at around 80%; no signal, don't know why I thought there would be. "What are those items?" As I was inspecting my phone, the cleric asks, "I've never seen such an artifact, what kind of magic is it?" I was caught a bit off guard with the question and put checking my tool belt off for later, "magic? There is no magic. I'm an engineer, and these are my tools." While I did spend a good chunk of my time reading fiction, but this question really put the nail in. I probably unconsciously wished for this to all be a dream and that I woke up at a rest stop next to the highway instead of here, but this is when I finally computed that I've ended up in some utterly absurd situation, far from home. As if goblins and horse-drawn carriage weren't enough of a hint or the religious garments with medieval qualities and entirely unfamiliar symbology and the odd place names that shouldn't be near my home much less exist. "What do you mean, how could that slab of... whatever it is glow if it is not magic? And what is an Enja-Near?" The cleric asks. "Engineer, 'enjəˈnir,' not that the pronunciation matter much here," I sigh, now having a marginally deeper grasp of where I am, "the term is derived from a word meaning ingenuity, just think of me as a very advanced tinker." I pause for a moment, contemplating how I would even start explaining the simple idea that you don't need magic to make cool things happen. I remembered Clarke's Third Law: any sufficiently advanced technology is indistinguishable from magic, "if I even try to explain to you the things that are possible without magic, I'd be talking till you're raising grandkids. I suggest that you just pretend that these trinkets are just some different magic that you don't get." I turn back to check my tool belt, a pack of self-driving wood screws, not very useful without any powered tools, A hammer, another item that I could have used as a weapon earlier if I wasn't panicking as much. A roll of nail gun nails, the big ones on belts, is not as useful as it could be since I don't have a nail gun, but I got a hammer. Rummaging through the rest of my tool belt, I found my needle-nose plier, a vise grip, wire stripper, wire cutter, a triple jet lighter and fuel, a utility knife, and a pack of spare utility knife blades. As I was finishing my inventory check and actively ignoring the curious looks from the cleric, the carriage comes to a stop. I look out the back, it's starting to get dark, they're probably going to make camp now. Just as I step out of the wagon, the cleric warns me, "I had insisted that they take you along because it is the right thing to do; however, not everyone is appreciative being able to follow the teachings of Eldath." "I'll keep that in mind," I reply as I step off, pulling my backpack over my back and my toolbox in my other hand. The other caravan carts seem to have already stopped, and their drivers and passengers already out and about. Some of them have started work on building a campfire. They seem to be using the "Fire-Plow" method for starting a fire, I supposed it's high time I thank my English major roommate again for coercing this knowledge into my head. "Coercing" as in he locked his car keys in his car on a camping trip and all we had out was a tent and a small bit of food, because of how far out we were, we ended up stuck there for three days until Triple-A was able to get someone out to unlock his car. He claimed that it was "unintentional." It requires a special kind of dumbass to take what he said for granted. The original plan was to stay out there for a week, thanks to his little antic, we tied him up in his own car and drove back to our dorm as soon as the Triple-A guy left. He's a real ass some times. Looking around, it's starting to get dark fast, and they probably need the fire up a bit faster than using the fire plow can get them. I took out my jet lighter and walked up to the group, there were 3 people around this campfire, "Hey, umm, I'd like to thank you all for allowing me to tag along. I'm sure that I had delayed you guys quite a bit, I'm not sure how much this would make up for it, but may I help with the fire?" Their reactions varied quite a bit, they were all wearing what looks to be boiled leather and carried short swords, I assume that they're hunters. One of them, an older man, probably in his late thirties, blond, looked me up and down, "ye don't look like someone who's experienced with survival; in fact, I don't think ya spent a day outside of civilization ye entire life. Tell me, how ye going to start a fire faster than I can?" "Tools, good sir, I use tools," I reply as I take out my hunting knife and picks up a twig. Using my hunting knife, I split one end of the twig, then I proceed to stuff the split with tinder. Taking out my jet lighter, I click it on, lighting the twig's end and tossing it into the campfire. "Now that's a magic tool I've not seen before, where you get that?" One of the younger hunters asked. He seems to be in his late teens, just a few years younger than me, blond. His surprise was shared by everyone next to the fire at the moment. "This exact one? Well, first off, it's not magic." I contemplated momentarily how to answer his question, "secondly, I got it quite some time ago, and in a place pretty far off. I have reasonable doubt you'd be able to get there. Although I might be able to make something like it if you can pay for one. It'd definitely be cheaper than trying to go to where I came from; that's for sure." "So ye an artificer!" The older man exclaims just as I offer to build them a simple candle lighter, "that explains how ye can't fight for shite yet ye bein' so confident! I take up ya offer, how much would it be?" "I suppose you can call me that, but I prefer being called an Engineer," I replied, "In terms of how much it costs, it would really depend on how much things cost in the next city. I do you guys not have any flints? It would have made starting a fire a lot easier." "One of us miss placed it in the previous camp." The third person of the little hunter group spoke up, looks to also be in his late teens, unlike the rest of the group, he had ginger hair. "Usually, we would use it since it's nearly as good as the little tool you got, but..." he says as he glared daggers at the younger blond, "well, no matter, what's your name by the way. I don't think anyone of us ever asked." "Albert B. Henschel, what about you guys?" I asked "Nathen Daniels," replied the older hunter, "This here is my son, Roberts." He puts a hand on the younger blond's shoulder. "Dave MacAllen," the ginger answered. "Back on the topic of the fire starting tool, how about I offer ye 5 gold pieces and get ya the material ye need?" Nathen offers, obviously eyeing my lighter as I put it away. "Not a bad offer, how about this, I'll write up a quick agreement, I can ask the cleric to oversee it if you don't trust me. I'll ask that you pay me 3 gold pieces first. Meanwhile, I'll draw up the plans and talk to a few blacksmiths. Once you have the rest of the parts, I'll give you the blacksmith's invoice and let you handle it, and I'll build your lighter. Then you pay me the rest of the gold." I made a counteroffer. "Not a bad offer, I'll sleep on it." He replies, "I'd say you should probably go rest, we'll arrive at Mendur tomorrow. If I decide that your offer is worth it, I'll ask you when we're at the city gates." "I thank you for your consideration Mr. Daniels," I reply as I look for a place to rest, maybe they'll let me sleep in the carts if I ask nicely. I'll have to look forward to tomorrow whether or not I can land myself some surviving funds. *** First / Previous
You may have heard about off-shore tax havens of questionable legality where wealthy people invest their money in legal "grey zones" and don't pay any tax, as featured for example, in Netflix's drama, The Laundromat. The reality is that the Government of Canada offers 100% tax-free investing throughout your life, with unlimited withdrawals of your contributions and profits, and no limits on how much you can make tax-free. There is also nothing to report to the Canada Revenue Agency. Although Britain has a comparable program, Canada is the only country in the world that offers tax-free investing with this level of power and flexibility. Thank you fellow Redditors for the wonderful Gold Award and Today I Learned Award! (Unrelated but Important Note: I put a link at the bottom for my margin account explainer. Many people are interested in margin trading but don't understand the math behind margin accounts and cannot find an explanation. If you want to do margin, but don't know how, click on the link.) As a Gen-Xer, I wrote this post with Millennials in mind, many of whom are getting interested in investing in ETFs, individual stocks, and also my personal favourite, options. Your generation is uniquely positioned to take advantage of this extremely powerful program at a relatively young age. But whether you're in your 20's or your 90's, read on! Are TFSAs important? In 2020 Canadians have almost 1 trillion dollars saved up in their TFSAs, so if that doesn't prove that pennies add up to dollars, I don't know what does. The TFSA truly is the Great Canadian Tax Shelter. I will periodically be checking this and adding issues as they arise, to this post. I really appreciate that people are finding this useful. As this post is now fairly complete from a basic mechanics point of view, and some questions are already answered in this post, please be advised that at this stage I cannot respond to questions that are already covered here. If I do not respond to your post, check this post as I may have added the answer to the FAQs at the bottom.
How to Invest in Stocks
A lot of people get really excited - for good reason - when they discover that the TFSA allows you to invest in stocks, tax free. I get questions about which stocks to buy. I have made some comments about that throughout this post, however; I can't comprehensively answer that question. Having said that, though, if you're interested in picking your own stocks and want to learn how, I recommmend starting with the following videos: The first is by Peter Lynch, a famous American investor in the 80's who wrote some well-respected books for the general public, like "One Up on Wall Street." The advice he gives is always valid, always works, and that never changes, even with 2020's technology, companies and AI: https://www.youtube.com/watch?v=cRMpgaBv-U4&t=2256s The second is a recording of a university lecture given by investment legend Warren Buffett, who expounds on the same principles: https://www.youtube.com/watch?v=2MHIcabnjrA Please note that I have no connection to whomever posted the videos.
TFSAs were introduced in 2009 by Stephen Harper's government, to encourage Canadians to save. The effect of the TFSA is that ordinary Canadians don't pay any income or capital gains tax on their securities investments. Initial uptake was slow as the contribution rules take some getting used to, but over time the program became a smash hit with Canadians. There are about 20 million Canadians with TFSAs, so the uptake is about 70%- 80% (as you have to be the age of majority in your province/territory to open a TFSA).
Eligibility to Open a TFSA
You must be a Canadian resident with a valid Social Insurance Number to open a TFSA. You must be at the voting age in the province in which you reside in order to open a TFSA, however contribution room begins to accumulate from the year in which you turned 18. You do not have to file a tax return to open a TFSA. You do not need to be a Canadian citizen to open and contribute to a TFSA. No minimum balance is required to open a TFSA.
Where you Can Open a TFSA
There are hundreds of financial institutions in Canada that offer the TFSA. There is only one kind of TFSA; however, different institutions offer a different range of financial products. Here are some examples:
The Canadian big 5 bank branches and most other financial institutions offer a TFSA that allows you to buy mutual funds, hold cash, GICs, term deposits, and possibly ETFs. This is a good choice if you want guaranteed returns or diversified investing.
There are a number of on-line banks such as Tangerine, Simplii Financial, Oaken Financial, and many more that offer the TFSA.
The discount DIY brokerage arms of the big 5 banks give you more choices, including stocks, warrants, bonds and options. There are also standalone brokers like IBKR Canada, Questrade, Qtrade, and Virtual Brokers, among others, that offer this.
Some brokerages and financial advisors also offer TFSAs that give you these investment choices, in different formats such as:
Traditional brokerage, where a stockbroker invests your money (BMO Nesbitt Burns, RBC Dominion Securities and others)
Financial advisor who will invest your money according to a plan you put together with the advisor (TSI Network and many others)
"Robo" advisors such as Wealthsimple, RBC InvestEase, BMO SmartFolio, or Wealthbar
BMO's AdviceDirect, which is a semi-directed hybrid between standalone DIY investing and fully-advised investing, where you operate on a DIY basis but have access to a registered investment advisor (a live person) who can give you suggetions and advice.
Your TFSA may be covered by either CIFP or CDIC insuranceor both. Ask your bank or broker for details.
What You Can Trade and Invest In
You can trade the following:
GICS, mutual funds, term deposits
individual common and preferred stocks listed on an "approved exchange" which is the TSX, TSX-V, NASDAQ, NYSE, and about 20 other exchanges worldwide, but not the US OTC pink sheets. Many examples, such as Suncor, Linamar, Apple, any of the big banks, and many thousands of others, when you want to buy into an individual company
stock-like securities like REITS, ETFs and ETNs, including 2x and 3x leveraged
gold and silver certificates
cash of many countries (CAD/USD/EUGBP/AUD/NZD/JPY/CHF and many others)
government bills and bonds of most countries, subsovereigns like Canadian provincial bills and bonds, and most corporations
options that trade on the Montreal Exchange or various options exchanges in the USA and the rest of the word (see FAQ for details)
gold, silver bullion certificates
shares in certain private companies -- but consult your tax advisor on this
What You Cannot Trade
You cannot trade:
commodity futures contracts
option spread positions (see FAQ for details)
anything that requires a margin account, meaning, a special kind of account that allows you to borrow money directly from the broker against the assets you have in your account and the assets you intend to buy.
crypto (although there exist crypto ETNs that you can buy)
Again, if it requires a margin account, it's out. You cannot buy on margin in a TFSA. Nothing stopping you from borrowing money from other sources as long as you stay within your contribution limits, but you can't trade on margin in a TFSA. You can of course trade long puts and calls which give you leverage.
Rules for Contribution Room
Starting at 18 you get a certain amount of contribution room. According to the CRA: You will accumulate TFSA contribution room for each year even if you do not file an Income Tax and Benefit Return or open a TFSA. The annual TFSA dollar limit for the years 2009 to2012 was $5,000. The annual TFSA dollar limit for the years 2013 and 2014 was $5,500. The annual TFSA dollar limit for the year 2015 was $10,000. The annual TFSA dollar limit for the years 2016 to 2018 was $5,500. The annual TFSA dollar limit for the year 2019 is $6,000. The TFSA annual room limit will be indexed to inflation and rounded to the nearest $500. Investment income earned by, and changes in the value of TFSA investments will not affect your TFSA contribution room for the current or future years. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/tax-free-savings-account/contributions.html If you don't use the room, it accumulates indefinitely. Trades you make in a TFSA are truly tax free. But you cannot claim the dividend tax credit and you cannot claim losses in a TFSA against capital gains whether inside or outside of the TFSA. So do make money and don't lose money in a TFSA. You are stuck with the 15% withholding tax on U.S. dividend distributions unlike the RRSP, due to U.S. tax rules, but you do not pay any capital gains on sale of U.S. shares. You can withdraw *both* contributions *and* capital gains, no matter how much, at any time, without penalty. The amount of the withdrawal (contributions+gains) converts into contribution room in the *next* calendar year. So if you put the withdrawn funds back in the same calendar year you take them out, that burns up your total accumulated contribution room to the extent of the amount that you re-contribute in the same calendar year.
E.g. Say you turned 18 in 2016 in Alberta where the age of majority is 18. It is now sometime in 2020. You have never contributed to a TFSA. You now have $5,500+$5,500+$5,500+$6,000+$6,000 = $28,500 of room in 2020. In 2020 you manage to put $20,000 in to your TFSA and you buy Canadian Megacorp common shares. You now have $8,500 of room remaining in 2020. Sometime in 2021 - it doesn't matter when in 2021 - your shares go to $100K due to the success of the Canadian Megacorp. You also have $6,000 worth of room for 2021 as set by the government. You therefore have $8,500 carried over from 2020+$6,000 = $14,500 of room in 2021. In 2021 you sell the shares and pull out the $100K. This amount is tax-free and does not even have to be reported. You can do whatever you want with it. But: if you put it back in 2021 you will over-contribute by $100,000 - $14,500 = $85,500 and incur a penalty. But if you wait until 2022 you will have $14,500 unused contribution room carried forward from 2021, another $6,000 for 2022, and $100,000 carried forward from the withdrawal 2021, so in 2022 you will have $14,500+$6,000+$100,000 = $120,500 of contribution room. This means that if you choose, you can put the $100,000 back in in 2022 tax-free and still have $20,500 left over. If you do not put the money back in 2021, then in 2022 you will have $120,500+$6,000 = $126,500 of contribution room. There is no age limit on how old you can be to contribute, no limit on how much money you can make in the TFSA, and if you do not use the room it keeps carrying forward forever. Just remember the following formula: This year's contribution room = (A) unused contribution room carried forward from last year + (B) contribution room provided by the government for this year + (C) total withdrawals from last year. EXAMPLE 1: Say in 2020 you never contributed to a TFSA but you were 18 in 2009. You have $69,500 of unused room (see above) in 2020 which accumulated from 2009-2020. In 2020 you contribute $50,000, leaving $19,500 contribution room unused for 2020. You buy $50,000 worth of stock. The next day, also in 2020, the stock doubles and it's worth $100,000. Also in 2020 you sell the stock and withdraw $100,000, tax-free. You continue to trade stocks within your TFSA, and hopefully grow your TFSA in 2020, but you make no further contributions or withdrawals in 2020. The question is, How much room will you have in 2021? Answer: In the year 2021, the following applies: (A) Unused contribution room carried forward from last year, 2020: $19,500 (B) Contribution room provided by government for this year, 2021: $6,000 (C) Total withdrawals from last year, 2020: $100,000 Total contribution room for 2021 = $19,500+6,000+100,000 = $125,500. EXAMPLE 2: Say between 2020 and 2021 you decided to buy a tax-free car (well you're still stuck with the GST/PST/HST/QST but you get the picture) so you went to the dealer and spent $25,000 of the $100,000 you withdrew in 2020. You now have a car and $75,000 still burning a hole in your pocket. Say in early 2021 you re-contribute the $75,000 you still have left over, to your TFSA. However, in mid-2021 you suddenly need $75,000 because of an emergency so you pull the $75,000 back out. But then a few weeks later, it turns out that for whatever reason you don't need it after all so you decide to put the $75,000 back into the TFSA, also in 2021. You continue to trade inside your TFSA but make no further withdrawals or contributions. How much room will you have in 2022? Answer: In the year 2022, the following applies: (A) Unused contribution room carried forward from last year, 2021: $125,500 - $75,000 - $75,000 = -$24,500. Already you have a problem. You have over-contributed in 2021. You will be assessed a penalty on the over-contribution! (penalty = 1% a month). But if you waited until 2022 to re-contribute the $75,000 you pulled out for the emergency..... In the year 2022, the following would apply: (A) Unused contribution room carried forward from last year, 2021: $125,500 -$75,000 =$50,500. (B) Contribution room provided by government for this year, 2022: $6,000 (C) Total withdrawals from last year, 2020: $75,000 Total contribution room for 2022 = $50,500 + $6,000 + $75,000 = $131,500. ...And...re-contributing that $75,000 that was left over from your 2021 emergency that didn't materialize, you still have $131,500-$75,000 = $56,500 of contribution room left in 2022. For a more comprehensive discussion, please see the CRA info link below.
FAQs That Have Arisen in the Discussion and Other Potential Questions:
Equity and ETF/ETN Options in a TFSA: can I get leverage? Yes. You can buy puts and calls in your TFSA and you only need to have the cash to pay the premium and broker commissions. Example: if XYZ is trading at $70, and you want to buy the $90 call with 6 months to expiration, and the call is trading at $2.50, you only need to have $250 in your account, per option contract, and if you are dealing with BMO IL for example you need $9.95 + $1.25/contract which is what they charge in commission. Of course, any profits on closing your position are tax-free. You only need the full value of the strike in your account if you want to exercise your option instead of selling it. Please note: this is not meant to be an options tutorial; see the Montreal Exchange's Equity Options Reference Manual if you have questions on how options work.
Equity and ETF/ETN Options in a TFSA: what is ok and not ok? Long puts and calls are allowed. Covered calls are allowed, but cash-secured puts are not allowed. All other option trades are also not allowed. Basically the rule is, if the trade is not a covered call and it either requires being short an option or short the stock, you can't do it in a TFSA.
Live in a province where the voting age is 19 so I can't open a TFSA until I'm 19, when does my contribution room begin? Your contribution room begins to accumulate at 18, so if you live in province where the age of majority is 19, you'll get the room carried forward from the year you turned 18.
If I turn 18 on December 31, do I get the contribution room just for that day or for the whole year? The whole year.
Do commissions paid on share transactions count as withdrawals? Unfortunately, no. If you contribute $2,000 cash and you buy $1,975 worth of stock and pay $25 in commission, the $25 does not count as a withdrawal. It is the same as if you lost money in the TFSA.
How much room do I have? If your broker records are complete, you can do a spreadsheet. The other thing you can do is call the CRA and they will tell you.
TFSATFSA direct transfer from one institution to another: this has no impact on your contributions or withdrawals as it counts as neither.
More than 1 TFSA: you can have as many as you want but your total contribution room does not increase or decrease depending on how many accounts you have.
Withdrawals that convert into contribution room in the next year. Do they carry forward indefinitely if not used in the next year? Answer :yes.
Do I have to declare my profits, withdrawals and contributions? No. Your bank or broker interfaces directly with the CRA on this. There are no declarations to make.
Risky investments - smart? In a TFSA you want always to make money, because you pay no tax, and you want never to lose money, because you cannot claim the loss against your income from your job. If in year X you have $5,000 of contribution room and put it into a TFSA and buy Canadian Speculative Corp. and due to the failure of the Canadian Speculative Corp. it goes to zero, two things happen. One, you burn up that contribution room and you have to wait until next year for the government to give you more room. Two, you can't claim the $5,000 loss against your employment income or investment income or capital gains like you could in a non-registered account. So remember Buffett's rule #1: Do not lose money. Rule #2 being don't forget the first rule. TFSA's are absolutely tailor-made for Graham-Buffett value investing or for diversified ETF or mutual fund investing, but you don't want to buy a lot of small specs because you don't get the tax loss.
Moving to/from Canada/residency. You must be a resident of Canada and 18 years old with a valid SIN to open a TFSA. Consult your tax advisor on whether your circumstances make you a resident for tax purposes. Since 2009, your TFSA contribution room accumulates every year, if at any time in the calendar year you are 18 years of age or older and a resident of Canada. Note: If you move to another country, you can STILL trade your TFSA online from your other country and keep making money within the account tax-free. You can withdraw money and Canada will not tax you. But you have to get tax advice in your country as to what they do. There restrictions on contributions for non-residents. See "non residents of Canada:" https://www.canada.ca/content/dam/cra-arc/formspubs/pub/rc4466/rc4466-19e.pdf
The U.S. withholding tax. Dividends paid by U.S.-domiciled companies are subject to a 15% U.S. withholding tax. Your broker does this automatically at the time of the dividend payment. So if your stock pays a $100 USD dividend, you only get $85 USD in your broker account and in your statement the broker will have a note saying 15% U.S. withholding tax. I do not know under what circumstances if any it is possible to get the withheld amount. Normally it is not, but consult a tax professional.
The U.S. withholding tax does not apply to capital gains. So if you buy $5,000 USD worth of Apple and sell it for $7,000 USD, you get the full $2,000 USD gain automatically.
Tax-Free Leverage. Leverage in the TFSA is effectively equal to your tax rate * the capital gains inclusion rate because you're not paying tax. So if you're paying 25% on average in income tax, and the capital gains contribution rate is 50%, the TFSA is like having 12.5%, no margin call leverage costing you 0% and that also doesn't magnify your losses.
Margin accounts. These accounts allow you to borrow money from your broker to buy stocks. TFSAs are not margin accounts. Nothing stopping you from borrowing from other sources (such as borrowing cash against your stocks in an actual margin account, or borrowing cash against your house in a HELOC or borrowing cash against your promise to pay it back as in a personal LOC) to fund a TFSA if that is your decision, bearing in mind the risks, but a TFSA is not a margin account. Consider options if you want leverage that you can use in a TFSA, without borrowing money.
Dividend Tax Credit on Canadian Companies. Remember, dividends paid into the TFSA are not eligible to be claimed for the credit, on the rationale that you already got a tax break.
FX risk. The CRA allows you to contribute and withdraw foreign currency from the TFSA but the contribution/withdrawal accounting is done in CAD. So if you contribute $10,000 USD into your TFSA and withdraw $15,000 USD, and the CAD is trading at 70 cents USD when you contribute and $80 cents USD when you withdraw, the CRA will treat it as if you contributed $14,285.71 CAD and withdrew $18,75.00 CAD.
OTC (over-the-counter stocks). You can only buy stocks if they are listed on an approved exchange ("approved exchange" = TSX, TSX-V, NYSE, NASDAQ and about 25 or so others). The U.S. pink sheets "over-the-counter" market is an example of a place where you can buy stocks, that is not an approved exchange, therefore you can't buy these penny stocks. I have however read that the CRA make an exception for a stock traded over the counter if it has a dual listing on an approved exchange. You should check that with a tax lawyer or accountant though.
The RRSP. This is another great tax shelter. Tax shelters in Canada are either deferrals or in a few cases - such as the TFSA - outright tax breaks, The RRSP is an example of a deferral. The RRSP allows you to deduct your contributions from your income, which the TFSA does not allow. This deduction is a huge advantage if you earn a lot of money. The RRSP has tax consequences for withdrawing money whereas the TFSA does not. Withdrawals from the RRSP are taxable whereas they are obviously not in a TFSA. You probably want to start out with a TFSA and maintain and grow that all your life. It is a good idea to start contributing to an RRSP when you start working because you get the tax deduction, and then you can use the amount of the deduction to contribute to your TFSA. There are certain rules that claw back your annual contribution room into an RRSP if you contribute to a pension. See your tax advisor.
Pensions. If I contribute to a pension does that claw back my TFSA contribution room or otherwise affect my TFSA in any way? Answer: No.
The $10K contribution limit for 2015. This was PM Harper's pledge. In 2015 the Conservative government changed the rules to make the annual government allowance $10,000 per year forever. Note: withdrawals still converted into contribution room in the following year - that did not change. When the Liberals came into power they switched the program back for 2016 to the original Harper rules and have kept the original Harper rules since then. That is why there is the $10,000 anomaly of 2015. The original Harper rules (which, again, are in effect now) called for $500 increments to the annual government allowance as and when required to keep up with inflation, based on the BofC's Consumer Price Index (CPI). Under the new Harper rules, it would have been $10,000 flat forever. Which you prefer depends on your politics but the TFSA program is massively popular with Canadians. Assuming 1.6% annual CPI inflation then the annual contribution room will hit $10,000 in 2052 under the present rules. Note: the Bank of Canada does an excellent and informative job of explaining inflation and the CPI at their website.
Losses in a TFSA - you cannot claim a loss in a TFSA against income. So in a TFSA you always want to make money and never want to lose money. A few ppl here have asked if you are losing money on your position in a TFSA can you transfer it in-kind to a cash account and claim the loss. I would expect no as I cannot see how in view of the fact that TFSA losses can't be claimed, that the adjusted cost base would somehow be the cost paid in the TFSA. But I'm not a tax lawyeaccountant. You should consult a tax professional.
Transfers in-kind to the TFSA and the the superficial loss rule. You can transfer securities (shares etc.) "in-kind," meaning, directly, from an unregistered account to the TFSA. If you do that, the CRA considers that you "disposed" of, meaning, equivalent to having sold, the shares in the unregistered account and then re-purchased them at the same price in the TFSA. The CRA considers that you did this even though the broker transfers the shares directly in the the TFSA. The superficial loss rule, which means that you cannot claim a loss for a security re-purchased within 30 days of sale, applies. So if you buy something for $20 in your unregistered account, and it's trading for $25 when you transfer it in-kind into the TFSA, then you have a deemed disposition with a capital gain of $5. But it doesn't work the other way around due to the superficial loss rule. If you buy it for $20 in the unregistered account, and it's trading at $15 when you transfer it in-kind into the TFSA, the superficial loss rule prevents you from claiming the loss because it is treated as having been sold in the unregistered account and immediately bought back in the TFSA.
Day trading/swing trading. It is possible for the CRA to try to tax your TFSA on the basis of "advantage." The one reported decision I'm aware of (emphasis on I'm aware of) is from B.C. where a woman was doing "swap transactions" in her TFSA which were not explicitly disallowed but the court rules that they were an "advantage" in certain years and liable to taxation. Swaps were subsequently banned. I'm not sure what a swap is exactly but it's not that someone who is simply making contributions according to the above rules would run afoul of. The CRA from what I understand doesn't care how much money you make in the TFSA, they care how you made it. So if you're logged on to your broker 40 hours a week and trading all day every day they might take the position that you found a way to work a job 40 hours a week and not pay any tax on the money you make, which they would argue is an "advantage," although there are arguments against that. This is not legal advice, just information.
The U.S. Roth IRA. This is a U.S. retirement savings tax shelter that is superficially similar to the TFSA but it has a number of limitations, including lack of cumulative contribution room, no ability for withdrawals to convert into contribution room in the following year, complex rules on who is eligible to contribute, limits on how much you can invest based on your income, income cutoffs on whether you can even use the Roth IRA at all, age limits that govern when and to what extent you can use it, and strict restrictions on reasons to withdraw funds prior to retirement (withdrawals prior to retirement can only be used to pay for private medical insurance, unpaid medical bills, adoption/childbirth expenses, certain educational expenses). The TFSA is totally unlike the Roth IRA in that it has none of these restrictions, therefore, the Roth IRA is not in any reasonable sense a valid comparison. The TFSA was modeled after the U.K. Investment Savings Account, which is the only comparable program to the TFSA.
The UK Investment Savings Account. This is what the TFSA was based off of. Main difference is that the UK uses a 20,000 pound annual contribution allowance, use-it-or-lose-it. There are several different flavours of ISA, and some do have a limited recontribution feature but not to the extent of the TFSA.
Is it smart to overcontribute to buy a really hot stock and just pay the 1% a month overcontribution penalty? If the CRA believes you made the overcontribution deliberately the penalty is 100% of the gains on the overcontribution, meaning, you can keep the overcontribution, or the loss, but the CRA takes the profit.
Speculative stocks-- are they ok? There is no such thing as a "speculative stock." That term is not used by the CRA. Either the stock trades on an approved exchange or it doesn't. So if a really blue chip stock, the most stable company in the world, trades on an exchange that is not approved, you can't buy it in a TFSA. If a really speculative gold mining stock in Busang, Indonesia that has gone through the roof due to reports of enormous amounts of gold, but their geologist somehow just mysteriously fell out of a helicopter into the jungle and maybe there's no gold there at all, but it trades on an approved exchange, it is fine to buy it in a TFSA. Of course the risk of whether it turns out to be a good investment or not, is on you.
Remember, you're working for your money anyway, so if you can get free money from the government -- you should take it! Follow the rules because Canadians have ended up with a tax bill for not understanding the TFSA rules. Appreciate the feedback everyone. Glad this basic post has been useful for many. The CRA does a good job of explaining TFSAs in detail at https://www.canada.ca/content/dam/cra-arc/formspubs/pub/rc4466/rc4466-19e.pdf
Unrelated but of Interest: The Margin Account
Note: if you are interested in how margin accounts work, I refer you to my post on margin accounts, where I use a straightforward explanation of the math behind margin accounts to try and give readers the confidence that they understand this powerful leveraging tool.
Why we need to think more carefully about what money is and how it works
Most of us have overlooked a fundamental problem that is currently causing an insurmountable obstacle to building a fairer and more sustainable world. We are very familiar with the thing in question, but its problematic nature has been hidden from us by a powerful illusion. We think the problem is capitalism, but capitalism is just the logical outcome of aggregate human decisions about how to manage money. The fundamental problem is money itself, or more specifically general purpose money and the international free market which allows you to sell a chunk of rainforest and use the money to buy a soft drink factory. (You can use the same sort of money to sell anything and buy anything, anywhere in the world, and until recently there was no alternative at all. Bitcoin is now an alternative, but is not quite what we are looking for.) The illusion is that because market prices are free, and nobody is forced into a transaction, those prices must be fair – that the exchange is equitable. The truth is that the way the general money globalised free market system works means that even though the prices are freely determined, there is still an unequal flow of natural resources from poor parts of the world to rich parts. This means the poor parts will always remain poor, and resources will continue to accumulate in the large, unsustainable cities in rich countries. In other words, unless we re-invent money, we cannot overturn capitalism, and that means we can't build a sustainable civilisation. Why does this matter? What use is it realising that general purpose money is at the root of our problems when we know that the rich and powerful people who run this world will do everything in their power to prevent the existing world system being reformed? They aren't just going to agree to get rid of general purpose money and economic globalisation. It's like asking them to stop pursuing growth: they can't even imagine how to do it, and don't want to. So how does this offer us a way forwards? Answer: because the two things in question – our monetary system and globalisation – look like being among the first casualties of collapse. Globalisation is already going into reverse (see brexit, Trump's protectionism) and our fiat money system is heading towards a debt/inflation implosion. It looks highly likely that the scenario going forwards will be of increasing monetary and economic chaos. Fiat money systems have collapsed many times before, but never a global system of fiat currencies floating against each other. But regardless of how may fiat currencies collapse, or how high the price of gold goes in dollars, it is not clear what the system would be replaced with. Can we just go back to the gold standard? It is possible, but people will be desperately looking for other solutions, and the people in power might also be getting desperate. So what could replace it? What is needed is a new sort of complementary money system which both (a) addresses the immediate economic problems of people suffering from symptoms of economic and general collapse and (b) provides a long-term framework around which a new sort of economy can emerge – an economy which is adapted to deglobalisation and degrowth. I have been searching for answers to this question for some time, and have now found what I was looking for. It is explained in this recently published academic book, and this paper by the same professor of economic anthropology (Alf Hornborg). The answer is the creation of a new sort of money, but it is critically important exactly how this is done. Local currencies like the Bristol Pound do not challenge globalisation. What we need is a new sort of national currency. This currency would be issued as a UBI, but only usable to buy products and services originating within an adjustable radius. This would enable a new economy to emerge. It actually resists globalisation and promotes the growth of a new sort of economy where sustainability is built on local resources and local economic activity. It would also reverse the trend of population moving from poor rural areas and towns, to cities. It would revitalise the “left behind” parts of the western world, and put the brakes on the relentless flow of natural resources and “embodied cheap labour” from the poor parts of the world to the rich parts. It would set the whole system moving towards a more sustainable and fairer state. This may sound unrealistic, but please give it a chance. I believe it offers a way forwards that can (a) unite disparate factions trying to provoke systemic change, including eco-marxists, greens, posthumanists and anti-globalist supporters of “populist nationalism”. The only people who really stand to lose are the supporters of global big business and the 1%. (b) offers a realistic alternative to a money system heading towards collapse, and to which currently no other realistic alternative is being proposed. In other words, this offers a realistic way forwards not just right now but through much of the early stages of collapse. It is likely to become both politically and economically viable within the forseeable future. It does, though, require some elements of the left to abandon its globalist ideals. It will have to embrace a new sort of nationalism. And it will require various groups who are doing very well out of the current economic system to realise that it is doomed. Here is an FAQ (from the paper).
What is a complementary currency? It is a form of money that can be used alongside regular money. What is the fundamental goal of this proposal? The two most fundamental goals motivating this proposal are to insulate local human subsistence and livelihood from the vicissitudes of national and international economic cycles and financial speculation, and to provide tangible and attractive incentives for people to live and consume more sustainably. It also seeks to provide authorities with a means to employ social security expenditures to channel consumption in sustainable directions and encourage economic diversity and community resilience at the local level. Why should the state administrate the reform? The nation is currently the most encompassing political entity capable of administrating an economic reform of this nature. Ideally it is also subservient to the democratic decisions of its population. The current proposal is envisaged as an option for European nations, but would seem equally advantageous for countries anywhere. If successfully implemented within a particular nation or set of nations, the system can be expected to be emulated by others. Whereas earlier experiments with alternative currencies have generally been local, bottom-up initiatives, a state-supported program offers advantages for long-term success. Rather than an informal, marginal movement connected to particular identities and transient social networks, persisting only as long as the enthusiasm of its founders, the complementary currency advocated here is formalized, efficacious, and lastingly fundamental to everyone's economy. How is local use defined and monitored? The complementary currency (CC) can only be used to purchase goods and services that are produced within a given geographical radius of the point of purchase. This radius can be defined in terms of kilometers of transport, and it can vary between different nations and regions depending on circumstances. A fairly simple way of distinguishing local from non-local commodities would be to label them according to transport distance, much as is currently done regarding, for instance, organic production methods or "fair trade." Such transport certification would of course imply different labelling in different locales. How is the complementary currency distributed? A practical way of organizing distribution would be to provide each citizen with a plastic card which is electronically charged each month with the sum of CC allotted to him or her. Who are included in the category of citizens? A monthly CC is provided to all inhabitants of a nation who have received official residence permits. What does basic income mean? Basic income is distributed without any requirements or duties to be fulfilled by the recipients. The sum of CC paid to an individual each month can be determined in relation to the currency's purchasing power and to the individual's age. The guiding principle should be that the sum provided to each adult should be sufficient to enable basic existence, and that the sum provided for each child should correspond to the additional household expenses it represents. Why would people want to use their CC rather than regular money? As the sum of CC provided each month would correspond to purchases representing a claim on his or her regular budget, the basic income would liberate a part of each person's regular income and thus amount to substantial purchasing power, albeit restricted only to local purchases. The basic income in CC would reduce a person's dependence on wage labor and the risks currently associated with unemployment. It would encourage social cooperation and a vitalization of community. Why would businesses want to accept payment in CC? Business entrepreneurs can be expected to respond rapidly to the radically expanded demand for local products and services, which would provide opportunities for a diverse range of local niche markets. Whether they receive all or only a part of their income in the form of CC, they can choose to use some of it to purchase tax-free local labor or other inputs, and to request to have some of it converted by the authorities to regular currency (see next point). How is conversion of CC into regular currency organized? Entrepreneurs would be granted the right to convert some of their CC into regular currency at exchange rates set by the authorities.The exchange rate between the two currencies can be calibrated so as to compensate the authorities for loss of tax revenue and to balance the in- and outflows of CC to the state. The rate would thus amount to a tool for determining the extent to which the CC is recirculated in the local economy, or returned to the state. This is important in order to avoid inflation in the CC sector. Would there be interest on sums of CC owned or loaned? There would be no interest accruing on a sum of CC, whether a surplus accumulating in an account or a loan extended. How would saving and loaning of CC be organized? The formal granting of credit in CC would be managed by state authorities and follow the principle of full reserve banking, so that quantities of CC loaned would never exceed the quantities saved by the population as a whole. Would the circulation of CC be subjected to taxation? No. Why would authorities want to encourage tax-free local economies? Given the beneficial social and ecological consequences of this reform, it is assumed that nation states will represent the general interests of their electorates and thus promote it. Particularly in a situation with rising fiscal deficits, unemployment, health care, and social security expenditures, the proposed reform would alleviate financial pressure on governments. It would also reduce the rising costs of transport infrastructure, environmental protection, carbon offsetting, and climate change adaptation. In short, the rising costs and diminishing returns on current strategies for economic growth can be expected to encourage politicians to consider proposals such as this, as a means of avoiding escalating debt or even bankruptcy. How would the state's expenditures in CC be financed? As suggested above, much of these expenditures would be balanced by the reduced costs for social security, health care, transport infrastructure, environmental protection, carbon offsetting, and climate change adaptation. As these savings may take time to materialize, however, states can choose to make a proportion of their social security payments (pensions, unemployment insurance, family allowance, etc.) in the form of CC. As between a third and half of some nations' annual budgets are committed to social security, this represents a significant option for financing the reform, requiring no corresponding tax levies. What are the differences between this CC and the many experiments with local currencies? This proposal should not be confused with the notion, or with the practical operation, of local currencies, as it does not imply different currencies in different locales but one national,complementary currency for local use. Nor is it locally initiated and promoted in opposition to theregular currency, but centrally endorsed and administrated as an accepted complement to it. Most importantly, the alternative currency can only be used to purchase products and services originating from within a given geographical range, a restriction which is not implemented in experiments with Local Exchange Trading Systems (LETS). Finally, the CC is provided as a basic income to all residents of a nation, rather than only earned in proportion to the extent to which a person has made him- or herself useful in the local economy. What would the ecological benefits be? The reform would radically reduce the demand for long-distance transport, the production of greenhouse gas emissions, consumption of energy and materials, and losses of foodstuffs through overproduction, storage, and transport. It would increase recycling of nutrients and packaging materials, which means decreasing leakage of nutrients and less garbage. It would reduce agricultural intensification, increase biodiversity, and decrease ecological degradation and vulnerability. What would the societal benefits be? The reform would increase local cooperation, decrease social marginalization and addiction problems, provide more physical exercise, improve psycho-social and physical health, and increase food security and general community resilience. It would decrease the number of traffic accidents, provide fresher and healthier food with less preservatives, and improved contact between producers and consumers. What would the long-term consequences be for the economy? The reform would no doubt generate radical transformations of the economy, as is precisely the intention. There would be a significant shift of dominance from transnational corporations founded on financial speculation and trade in industrially produced foodstuffs, fuels, and other internationally transported goods to locally diverse producers and services geared to sustainable livelihoods. This would be a democratic consequence of consumer power, rather than of legislation. Through a relatively simple transformation of the conditions for market rationality, governments can encourage new and more sustainable patterns of consumer behavior. In contrast to much of the drastic and often traumatic economic change of the past two centuries, these changes would be democratic and sustainable and would improve local and national resilience. Why should society want to encourage people to refrain from formal employment? It is increasingly recognized that full or high employment cannot be a goal in itself, particularly if it implies escalating environmental degradation and energy and material throughput. Well-founded calls are thus currently made for degrowth, i.e. a reduction in the rate of production of goods and services that are conventionally quantified by economists as constitutive of GDP. Whether formal unemployment is the result of financial decline, technological development, or intentional policy for sustainability, no modern nation can be expected to leave its citizens economically unsupported. To subsist on basic income is undoubtedly more edifying than receiving unemployment insurance; the CC system encourages useful community cooperation and creative activities rather than destructive behavior that may damage a person's health. Why should people receive an income without working? As observed above, modern nations will provide for their citizens whether they are formally employed or not. The incentive to find employment should ideally not be propelled only by economic imperatives, but more by the desire to maintain a given identity and to contribute creatively to society. Personal liberty would be enhanced by a reform which makes it possible for people to choose to spend (some of) their time on creative activities that are not remunerated on the formal market, and to accept the tradeoff implied by a somewhat lower economic standard. People can also be expected to devote a greater proportion of their time to community cooperation, earning additional CC, which means that they will contribute more to society – and experience less marginalization – than the currently unemployed. Would savings in CC be inheritable? No. How would transport distances of products and services be controlled? It is reasonable to expect the authorities to establish a special agency for monitoring and controlling transport distances. It seems unlikely that entrepreneurs would attempt to cheat the system by presenting distantly produced goods as locally produced, as we can expect income in regular currency generally to be preferable to income in CC. Such attempts would also entail transport costs which should make the cargo less competitive in relation to genuinely local produce, suggesting that the logic of local market mechanisms would by and large obviate the problem. How would differences in local conditions (such as climate, soils, and urbanism) be dealt with?It is unavoidable that there would be significant variation between different locales in terms of the conditions for producing different kinds of goods. This means that relative local prices in CC for agiven product can be expected to vary from place to place. This may in turn mean that consumption patterns will vary somewhat between locales, which is predictable and not necessarily a problem. Generally speaking, a localization of resource flows can be expected to result in a more diverse pattern of calibration to local resource endowments, as in premodern contexts. The proposed system allows for considerable flexibility in terms of the geographical definition of what is categorized as local, depending on such conditions. In a fertile agricultural region, the radius for local produce may be defined, for instance, as 20 km, whereas in a less fertile or urban area, it may be 50 km. People living in urban centers are faced with a particular challenge. The reform would encourage an increased production of foodstuffs within and in the vicinity of urban areas, which in the long run may also affect urban planning. People might also choose to move to the countryside, where the range of subsistence goods that can be purchased with CC will tend to be greater. In the long run, the reform can be expected to encourage a better fit between the distribution of resources (such as agricultural land) and demography. This is fully in line with the intention of reducing long-distance transports of necessities. What would the consequences be if people converted resources from one currency sphere into products or services sold in another? It seems unfeasible to monitor and regulate the use of distant imports (such as machinery and fuels) in producing produce for local markets, but as production for local markets is remunerated in CC, this should constitute a disincentive to invest regular money in such production processes. Production for local consumption can thus be expected to rely mostly – and increasingly – on local labor and other resource inputs.
*** Updated Research SWK provides an amazing opportunity to take advantage of the bull market in precious metals at an undemanding valuation with excellent operational momentum. Environment: Precious metals have had a phenomenal ride lately; both due to fear arising from COVID-19, and coordinated monetary policy stimulating economies at an unprecedented level. The graphic below shows the recent parabolic move in GLD (overshadowed by SLV) and reflecting upon the 08 crisis and the numerous QE policies that followed, this upward trajectory may continue further. GLD vs DJIA (2006-Present) With rises in commodity prices, the logical next step is to get some operating leverage and purchase the gold miners. No doubt, this second level thinking has been handsomely rewarded albeit encountering the sovereign and FX risks with many of the global miners domiciled in South Africa and Russia: DRDGold, Polyus and Polymetal (April 20 - Present) Since many of these miners are in the process of expanding production, cash flow won't be realised for several years and operating margins may not improve as much as managements' forecast (i.e. ASX: DAC). Further, since the market has drawn the logical connection between commodity prices and miners, these companies have run a very long way in the last few months. Company Overview: This is where SWK provides us with a cheaper and lower risk opportunity to gain access to this thematic. SWK provides drilling services to large miners of metals (i.e. nickel, silver, gold etc.) in US, Canada, Europe and Australia. Specifically, they use specialised drills to extract samples, which they analyse to then assess to the viability of a site. Increasing demand for mining exploration will, intuitively, increase drilling utilisation and drilling rates. SWK also entirely owns Orexplore, which provides mobile sample analysis to determine the characteristics of extracted cores. This improves the efficiency of examining the quality of a site by removing cost (transportation and storage), timing (it can be conducted on-site), and operational risk (damage in transit) all of which further benefit the mining co. and embed SWK into the exploration process. Competitive Advantage: SWK’s competitive advantage is being able to a world class cost effective and efficient underground drilling. For example, their development of DeepEX allows for longer hole from underground that are cheaper than many shorter surface holes. Their recent contract extension from BHP at Olympic Dam despite competitors (i.e. MSV and BLY) rigs being used onsite is testament to their value proposition. SWK has also invested heavily (~$25mn) into their Orexplore technology in an attempt to move up the value chain away from high-capital intensive drilling into a higher margin business. This technology removes significant operating expenses (employees and equipment), reduces lead time (can be built and shipped globally within 2 weeks), is very simple to use (technical training is not required), and most importantly, is currently being purchased for free and is the main catalyst in this investment (more on this later). Furthermore, SWK has made a concerted effort to increasingly diversify their product offering to different miners (with exposure to various commodities), and geographically. Their global and diversified footprint has provided them with a world-wide footprint, with costs to build their global business already incurred (most recently in Pogo – Alaska), further encouraging a buyout (more on this later). FY19 Financial Report H1 2020 Financial Report Catalyst and Valuation: Exit Options: The primary catalyst for a revaluation in SWK is a huge macroeconomic tailwind providing momentum that might facilitate a sale of the drilling business to a strategic buyer. Without doing too much crystal ball gazing, I view the exit opportunities as follows: 5% - Amazing sale of drilling business = >100%+ returns; 65% - Solid sale of drilling business = 50-100% returns; 20% - No sale and general re-rate = 25-50% returns; 10% - Languishing business and capital destruction = -25%-0% returns. Given management’s firm guidance towards the sale (https://www.openbriefing.com/OB/Swick-Mining-Services-Ltd/2020/2/25/Swick-HY20-Results-Conference-Call/3716.aspx at ~08:00) I will focus on our base case that entails: (i) selling or closing surface drilling business as it’s the lowest margin / weakest vertical; (ii) selling underground drilling business; and (iii) refocus towards Orexplore either through taking the business private, IPOing a new entity or rebranding SWK. Given shareholders have been frustrated with SWKs delay in progressing the business towards a sale and having difficulty commercialising Orexplore it has been important to wait for a noticeable inflexion point in the business to attempt to “time” entry as much as possible. Let’s see how the inflexion point is here beyond the macroeconomic environment above. Miners around the world are aggressively looking to expand their operations due to increasing commodity prices and SWK's services become front of mind. Recent news is ticking all the boxes and adding huge momentum in the stock to catalyse a re-rating.
Reinstatement of dividend payment and share buyback program showing prudential capital management and a positive outlook relating to future financial position. This is a double-edged sword as management raised capital at 23c and bought back shares from 12.5c through to 17.5. By buying now, we have avoided this dilution although acknowledge this was not the best form of capital management. On the other hand, it does suggest management are flush with cash and happy to redistribute to existing shareholders before a possible sale; that is, we get paid to wait:
Contracts are being extended, new contracts being won, and guidance on FY21 figures. Management are highlighting clear intention to demerge and growth is providing EBITDA growth for a better sale price:
The Orexplore website (https://orexplore.com/the-orexplore-review/) has received increased attention with far more activity within their “Review Blog” section leading towards commercialisation. Posts are being made almost weekly increasing its awareness:
MSV as the strategic buyer for the drilling business has shown intent to inorganically expand their operations. Deepcore had an EV of ~$44m (excl. additional earnout payments), revenues of ~$50m p.a., and an EBITDA of ~$12m with approximately half the rig number of SWK. This purchase confirms the “fair value” multiple for a drilling business is ~4x EV/EBITDA, even for a significantly weaker private business due to utilisation, profitability, scale and contractual certainty.
https://preview.redd.it/jumpn58y2dh51.png?width=602&format=png&auto=webp&s=ad650e7b63b341e06ddd0a8bff88121249a03925 Valuation: Ok, so let’s turn our attention to the forward guidance and conservative estimates for SWK. SWK against mostly all metrics is very cheap. Management have forecast EBITDA to be ~$25mn in FY20. Although I think we can conservatively estimate this to grow significantly throughout FY21. The improvements to EBITDA will come from the following: (i) commercialisation of Orexplore = $0.5-1mn, (ii) ~$3-4mn in reaching steady state (20%) margin from the Pogo contract as costs normalise and backdated earnings flow through; (iii) ~$2mn in operating expense reduction during COVID-19; (iv) the $120m increase in the order book between 30 July and 14 August implies $120/5 = $24m p.a. at a slight discount to target margin of ~15% gives another $3.5mn EBITDA. Putting this all together FY21 EBITDA might be ~$35mn. In addition to the purchase of Deepcore, we can use the current valuation ratios of MSV and CAPD as a guide. Currently competitors trade between 3.5x (CAPD) and 4.5x (MSV) EV/EBITDA multiples. If we use 4x as a reasonable multiple on current EBITDA, this would imply an enterprise value of ~$100mn (or a 30% upside) whilst paying nothing for Orexplore. Upon conservative forward FY21 EBITDA figures, the enterprise value could easily reach ~$150 (or a 100% upside) again paying almost nothing (only $1mn / $35mn in EBITDA) for Orexplore. By way of reference, SWK with similar metrics in 2011/12 was trading at a ~100% premium (i.e. ~40c (market cap $90-110mn) whereas now it is ~$20 (market cap $50mn). A decade ago, it also did not have the same existing clientele and large-scale contract wins (see 3a above with a forward order book of $363mn (relative to current revenues of ~$150mn). The cherry on top of this investment is Orexplore, which we buy for free. None of the revenue and earnings multiples above include any real impact from Orexplore. On 14th August the commercial viability of Orexplore was been partially validated with their first contract win. Although its value is only $700,000 over 6 months this call option like payoff comes entirely for free. Further, the true profit margins of SWK has been hidden due to the losses incurred from Orexplore, which has to date cost $25mn in R&D (or equal to almost 10yrs of earnings), the amortisation of associated software development, and continued global expansion (Portugal and Europe before North America) each requiring initial costs prior to achieving target margins. Even better we get a first glimpse at how attractive Orexplore might be. Combining discussion in the latest conference call (https://www.openbriefing.com/OB/Swick-Mining-Services-Ltd/2020/2/25/Swick-HY20-Results-Conference-Call/3716.aspx 04:30 - 06:30) with the recent contract we can conclude the following: (i) 3 machines at Sandfire will generate ~$3.6mn in revenue covering approx. 50% of cash flow with nearly no operating expenses; (ii) $700,000 for 6months scanning 1500m of core per month implies ~$75/m (against an estimated $100m from guidance). As per guidance, if we assume Orexplore machines can scan ~$4m/hr ($300hr) and total costs may include one unskilled technician and minimal overheads ~$50mn this provides a gross margin of ~75% (or almost 4x undergrounding drilling). Due to the profitability of Orexplore, 15-20 operational machines on yearly contracts would provide greater earnings than SWK’s entire business. Hopefully the publicity of Orexplore at Sandfire can attract some attention, and in turn some additional contracts. Risks: No investment is without its risks, and for SWK they fall into: (i) capital mismanagement; and (ii) poor communication / delays. Firstly, the recent capital raise at ~23c followed by aggressive buybacks at ~12.5-14c-17c seems unwise. Although buying now avoids this dilution, it is unclear why excess capital was required if dividends and buybacks were announced shortly thereafter. Secondly, the share price has historically languished due to a lack of publicity and detail on the transformational Orexplore. It is likely that management were unwilling to oversell the Orexplore narrative before genuine contracts were won and the technology was established. Now that these are in place, hopefully the corporate restructure can take place and the upcoming strategic review can provide a clearer picture for the near term.
What the graph doesn't show (sadly I thought I saved my data and reset TSM because of an issue I had) is Jan-April where I first found out about TSM. It took me about 3 months to go from 10g to 1000g and figuring out my process. Sniper This is where the majority of the gold comes from, basically being AFK and clicking buy if something pops up. It obviously helps to have a second account if you want to actually play the game at the same time. However, if you are doing work, sitting on a conference call or watching a movie it is quite easy. I haven't found much success with the Bid sniper so I stick to Buyout sniper.
This is how to set up sniper on classic, and this is for retail. The main difference is retail has an extra 3 0's on the price.
Be quick but pay attention!
Sometimes items show up that are only marginally good. Don't feel you have to buy everything that pops up
Hover over the item icon and find the Regional Market Value Avg
Compare this to the Buyout price
Check to see how many of these items you already have in stock
I try to keep 3 max unless they sell quickly
Make a macro to buy items quickly
Macro: /click TSMSniperBtn
This is not the TSM macro, but rather one made in game
Bind it to mouse4 or something easily accessible
Click the item once, then click the button assigned to the macro. This way you don't have to move your mouse all the way down to the Buyout button. One second can be the difference between buying a Freezing band at 32g and missing out (See sniper pic above)!
Selling Sniper Items I found it less of a headache and still profitable setting up the sniper Operations universally. Reselling vendor items is addressed in a seperate section below.
You can make 1 group if you want. I have Green/Blue/Epic just for fun. They all have the same operations in the end (unless selling groups of 5 like Onyxia scales)
I try to post around 12pm server time
This is early enough for raiding/etc and not wasting time sitting in the AH late at night with nobody looking
Early on I posted twice a day to make more sales, but once I was paying over 40g/day to post I switched to once
Post cap: 1
Don't compete against yourself
Bid %: 100%
Nobody bids on items, they just buyout. Lots of people put 95%, why lose 5%?
Undercut amount: 1c
Just be lower than the next guy
Min Price: 100% dbregionmarketavg
Below minimum: Don't post
Max Price: 150% dbregionmarketavg
Above maximum: Post at maximum
Normal Price: 125% dbregionmarketavg
Min/Max/Normal Price I used to tinker with these but the settings listed are simple and work as long as you have patience. Why lose money undercutting the guy who wants to sell fast and is therefore putting the item up at ultra cheap? Let him lose profit for that day while you get full value the next. I also found that the Regional Market Value Avg is much more reliable, so I trust all my sales to it. I never think twice anymore about why up to 20 items out of 74 are still in my bag after posting. You are reselling for profit, not for quick cash. 15 Minute Daily Process This is the brainless part of the system, 10 minutes putting up sniper items and 2 mins per 2 vendor scroll alts. The process begins assuming you have items from the previous day that you couldn't post because there were cheaper on the AH already. Scroll alts just need go straight from mailbox to bank once and log out, that's why it its so quick. Make sure when you get new items you add them to your group in TSM, otherwise they won't post.
Open bank and click Move to Bags
If you don't see the TSM bank screen, type /tsm bankui
Feel free to make this a macro
Make sure your group(s) are selected
Open mail and click the Expires button
If you have more than 50 items, don't wait for the mailbox to refresh, click the refresh button right above the count down timer in the upper right or type /reload
Once your bag is full, run to the bank
Interact with the auctioneer
Scan the AH
Feel free to make this a macro
Pay attention to your system text, sometimes it fails. If it does, just click it a few times until it runs. If it still won't, try /reload or log out/in.
Do this once a day before your first posting
Run post scan
Can take around a minute for a full bag
Spam Post button
If any errors, check operations or groups are fully updated
Remember, don't fret items not posting because they are cheaper elsewhere
Run back to bank and click Empty Bags
Repeat again starting from opening the mailbox
Storing Items Everything you aren't putting on the AH will sit in your mailbox as messages from an alt. I currently post about 150 items to the AH and have 150 AH backup items in the mailbox.
Empty your bag
Click Open All Mail
Go to the Groups tab
Select all groups (highlight in yellow)
Click Mail Selected Groups
Reselling Vendor Scrolls This requires seperate grouping from sniping and I use 2 alts: 1 for recipes and 1 for patterns/schematics/formulas. Since you can only view 50 items in your mailbox, find which 5 scrolls sell the least and drop them from rotation. This lets you have 5 open slots for newly sold items each day. Buy 12 (or 13 if you want to be fancy and have 1 in the AH and 12 in the mail) of each scroll and send to an alt. Some are unlimited and some are on 2+ hour timers. Just do the same thing like sniping and let it sit in the background. Wowhead.com is useful to find the locations of which vendor sells which scroll.
Click the mailbox refresh icon or type /reload
This lets you view all the scrolls so when you search (next step) everything shows up
Search for scrolls which have sold
Restock and take gold
Post to AH and log out
Quick way to double check you aren't forgetting a scroll
Hover your mouse over each scroll
Check to see your inventory says 1 in bags
As long as you do this before you post the AH, don't not pay attention to the number under AH. This will most likely say 1 and obviously you just logged on to post so there are 0 posted in reality
Highlight each scroll to find the Region Market Value Avg and round up
Create a group for each price point
I use 2/3/5/8/10/15
If sales are slow, move to a lower price group
If sales are fast, move to a higher price group
Misc Vendor Items These are items you that sell well besides scrolls. Follow the same group process as scrolls. You might only profit 1-2g but hey, it's free money.
All skill books (first aid/cooking)
This one is hit or miss, but I have sold 5 (2.5g) thread for 10g on many occassion
Manually Finding Deals If sniping is slow or you just have spare time, a quick way to make some cash is to scan the AH manually. Typically weapons/armor under 10g is the gold mine, but I normally will look at everything. I mad 500g on one item buy manually finding it on the AH (see item #2 on most profitable items picture). Another potential gold mine is recipes. This whole process works because if you recall, we sell for everything for 125% Regional Marget Value Avg. I usually pick up anything that is 50% of the that price point. The Auctionator addon makes this easier to view items/prices.
Select Weapons or Armor (whole group)
Sort by Price (lowest)
Hover your mouse over the item icon
Compare AH vs Regional Marget Value Avg
Make sure you look for items with low bids, this is usually the best way to get a deal
Check that you don't have more than 3 in your possession already
Patience and consistency are key
If you see people WTB in trade channel, try selling to them to save the 15% AH cut.
Keep in mind the more items you list, the more listing cost you pay to the AH
Today I paid 45g to post 163 items, but made 119g from yesterday's posts on 3 items sold (74g daily turnaround)
Average of 2-5 items sold on each alt per day (sniper alt/scroll 1 alt/scroll 2 alt) for a total of around 10
At my stage, this ends up being around 180g (30g scrolls, 150g sniper items) because I have several expensive items listed
I always try to have 1 major item that I invest a lot in and can sit on it for a few weeks. Lionheart took about 3 weeks to sell but made me 450g (resale profit - listing cost)
Conclusion This is a pretty good snapshot of my routine that you can tweak as you like. Of course part of it is timing/luck with sniper. In the beginning I was leaving sniper open several hours a day, stocking up all kinds of items. Nowadays I only snipe once in awhile to keep over 150 unique items on the AH. /insert cheesy goodbye line here
Experience and Gold per Hour of Crafting Slayer Rings
ABSTRACT: This study seeks to identify the viability of an alternative method of training - crafting Slayer rings. Data was collected though in-game testing and observations. The method does not seem to be viable as a training method, giving only 10.6k exp per hour, and is rather ineffective as a money making method, giving about 244k in alchs per hour. More testing would likely prove beneficial as data for trips per hour is extrapolated from a single data point. INTRODUCTION: Many methods for making money exist within Oldschool Runescape. The most consistently lucrative, typically, being player versus monster interactions. There are, however, some occasions where generating money through skilling can prove to be effective, such as Thieving, Hunter, and high level Runecraft. Other money making methods exist as a secondary effect of the experience gained while doing the activity. Crafting gold bracelets is a commonly suggested method to train crafting at a low rate of experience while gaining marginal profit, but the data for profit and experience per hour is already available. This paper seeks to explore the profitability of crafting Slayer rings, and its viability as a training method. MATERIALS AND COSTS: Nature rune: 201 gp Gold bar 52 gp Enchanted gem: 1 gp Total Cost: 253 gp DATA: HA value of Slayer Ring: 600 gp Profit per ring = 600 - 253 = 346 gp Time of round trip: 48.2 seconds per trip + 4-8 seconds per 4 trips ≈ 54.2 seconds per trip / 60 min per sec = 0.90333 trips/min 13 rings per trip = 11.74 rings per minute 11.74 rings per minute * 346 gp per ring = 4,063 gp per min 4,063 gp per min * 60 min/hour = 243,792 gp per hour 195 exp per trip * 0.90333 trips per min = 176.15 exp per min * 60 min/hour = 10,569 xp per hour METHOD: Start with a stack of coins and a ring mould in the Edgeville bank. Open bank and withdraw 13 Gold bars (set Quantity withdraw to 13 bars). Run northeast to trade Krystilia. Buy 13 Enchanted gems. Run south to furnace. Make 13 slayer rings. Run west-southwest to bank. Deposit 13 slayer rings and repeat, swapping worlds every 4 trips for slayer shop stock. DISCUSSION: Data was collected by one trial run and then extrapolated to produce the expected experience and gold rates per hour without including the time to buy the materials or alchemize the product. Data for costs of materials were collected directly from the grand exchange value for the items and the shop price for the slayer gems. Data for high alchemy value was obtained by casting High Level Alchemy on one Slayer ring (8). Repeat trial runs to better quantify the number of realistic trips per hour would be beneficial to data validity. CONCLUSION: This method is not an efficient method for training or money. 10.6k exp per hour is not a competitive rate, and 240k gp per hour is achievable with no requirements. It is worth mentioning this method requires 75 crafting and 300 slayer points to unlock slayer ring crafting. Other methods exist that prove more lucrative and effective for training, such as casting Superglass Make which yields around 719k GP, 46k magic, and 108k crafting exp per hour; however, does require completion of Lunar Diplomacy, 77 magic, and higher initial investment (Old School RuneScape Wiki) The GP per hour in the calculations also requires later high alchemization to liquidate the value created in the rings, showing it to be even less viable as a money maker. In addition, it is worth noting that opportunity cost for this method is high. Crafting can be trained at a loss, but if a significantly more lucrative money maker exists to cover the loss, then the total exp and GP gained per hour is much higher. WORKS CITED: “Money Making Guide/Casting Superglass Make.” Old School RuneScape Wiki, oldschool.runescape.wiki/w/Money_making_guide/Casting_Superglass_Make. EDIT: Formatting
Isembard Baelish, Lord Consort of Lannisport (AC Included)
META Character Name: Isembard Baelish Starting Title(s): Lord-Consort of Lannisport, Scion of House Baelish Age: 23 Physical Description: Dark of hair and humor, Isembard takes good care of his body, always grooming and dressing his finest before presenting himself to Lannisport's court. Starting Location: King's Landing Attribute: Diligent Skill Points: 20 Skills: Naval Warfare, Awareness, Fortification, Finances Mastery: Steward
Username:BillieBaelish Discord Username: Mathus Other Characters:Abelon Tarth Auxiliary Character Name: Tysane Baelish Starting Title(s): Scion of House Baelish Age: 19 Physical Description: With dark-blonde tresses and a slight figure, the blood of Hightower and Baelish runs strong through this daughter of Harrenhal. Her eyes are as bright as they are mischievous, but beyond her laid-back nature lies a keen sense of detail and decor. Starting Location: Harrenhal Attribute: Gregarious Skill Points: 14 Skills: Leadership, Silver Tongue, Awareness, History & Law
BASIC INFORMATION Birth name: Isembard "Izembaro" Baelish Titles: Lord-Consort of Lannisport, Knight of House Baelish Gender: Male Date of birth: 7th day of the 2ndth Moon, 360 AC Location: King's Landing Culture: Andal-Braavosi Religion: Faith of the Seven, nominally Affiliations: House Baelish of Harrenhal, House Lannister of Lannisport Eye colour: Blue Hair colour: Dark brown Height: 189 cm (6'2") Weight: 84 kg (185 pounds) Liege: Lady Theodora Lannister Appearance & Character Taking after both his parents, Isembard is tall and slender, with hawkish blue eyes, groomed dark brown hair, and a smoothly shaved jaw. Carrying himself with an easy, if not quite relaxed gait, his straight posture could be described as proud and proper, and his hands are quite smooth thanks to his stewardly lifestyle. This extends to his fashion sense, where he dresses up in bright, expensive garments that vary depending on the occasion, mood, and current fashion trends. Though he typically sticks to Westerosi norms, he is known to possess articles imported from Essos, kept marginally "normal" in light of the more eccentric raiments that are seen in the Free Cities. A man shaped by his eastern heritage, Isembard considers himself to be of two worlds - both Isembard and Izembaro - an ambitious pioneer seeking to take the best qualities of both in order to create a greater whole. He has a deep-seated curiousity for foreign cultures, having studiously read about them in books and talked to merchants from the Summer Islands and Essos before, and while it cannot be said that he has any greater love for their distant gods, more pious men would call him unorthodox in his fascination and tolerance of them. Similar things can be said for his interest in architecture and the arts. While a lord might be expected to know about basic stewardship, Isembard takes things a step further by involving himself in the infrastructure of Lannisport, realizing their vital role in the city's continued prosperity. Life needs not exclusively be pleasure or business, in his eyes, but instead they can co-exist provided that proper discipline is utilized. Such a thing can be difficult to moderate, and when things align in the right - or perhaps wrong - way, he is known to have become a victim of his own indulgences and desires. But in spite of his grand plans, he cares very deeply for those nearest to him, whether it is his wife, family, or friends. He is reluctant to step on people to achieve what he wants, and is quite insistent on being doing things openly and - in his own sense of the word - honourably. HISTORY It is recorded that Florys Hightower, wife of Ser Benjicot Baelish, went into labour on the morning of the 7th day of the 2ndth Month in 360 AC, and that later that evening, she gave birth to their firstborn child, a boy. This birth was aided by the Septas Dalla and Shyra, as well as Maester Joseran, who reported that the boy required outside assistance in crying and taking his first breath, but that he was otherwise of remarkably good health. After some debate, Benjicot named his newborn son Isembard, for Isembard Arryn, the infamously wealthy Patriarch of the Gulltown Arryns who had tried to press his claim on the Eyrie by hiring a great army of sellswords and sellsails from Essos, as well as garnering the support of Gulltown for his cause. Though he ultimately failed, the Gilded Falcon was later appointed to the Small Council upon the recommendation of Alyn Oakenfist. Together with Lord Torrhen Manderly, he was responsible for reforming the tax system following the economic turmoil resultant from House Rogare’s treason and downfall, saving the Crown from destitution and bringing some relief to lords who’d suffered by the Rogare Bank’s bankruptcy. With such a notorious forebear, it was of little surprise when Benjicot set on to educate his child almost as soon as he could walk and talk. Young Isembard was taught how to read and write in the common tongue so well as High Valyrian as was the norm among the high nobility. He was instructed in finance, the doctrine of the Seven, law and customs, the history of the Seven Kingdoms so well as that of his own family. It was during one of these lessons that Isembard took a fascination to the Free Cities, in particular Braavos, the origin of House Baelish’s founder. He quickly fell in love with tales from the East, beginning to style himself as Izembaro in the Braavosi fashion, and begged his father to visit the Free Cities. Though this would not come to pass until Isembard was in his early adulthood, Benjicot did agree to send for teachers from the Free Cities. who agreed to teach Isembard all that they know. So it was that Isembard was taught not only about Essosi customs and rhetoric, but also of their history, studying detailed accounts about vicious power struggles between merchant-princes, families, and even cities. Rather than being horrified and dissuaded from the alien ways of the Free Cities as originally thought and hoped for, Isembard seemed to only grow more obsessed with their ways, being quoted as stating during one dinner that “the Seven seem a rather dull lot in the shadow of such gods like the Lord of Light or the Merling King,” after which the Essosi tutors were summarily dismissed from Harrenhal. Isembard’s love for the cutthroat ways persisted even after being reprimanded on several occasions by relatives and septons alike. But in spite of his queer beliefs, none could deny that he showed aptitude in his studies. Though no great swordsman, he presented a keen mind for stewardship, writing up numerous systems and proposals on how to better make use of current resources while keeping expenditures to a minimum through the implementation of better record-keeping. Indeed, it was through the limited implementation of one such plan that two stewards were discovered to have been embezzling funds from House Baelish’s cofferts. A few days past his eighteenth name-day, Isembard was knighted before the court of Harrenhal in a grand ceremony. While he had not yet displayed any grand valour in the lists or even in the sparring grounds, the knighthood was reportedly bestowed upon him for his understanding of military strategy, an underestimated trait for those charged with leading men into battle. However, some speculate that the honour was duplicitous, and that the real reason for the ceremony revealed itself when Isembard departed Harrenhal for Seagard on the 15th day of the 2ndth Moon of 78 AC. There, he booked passage aboard a ship that took him south to Lannisport. There, Isembard was met by a cadre of courtiers vying for the hand of Lord Archibald Lannister’s eldest daughter Theodora. Without sons, she was heir to the veritable wealth and power of Lannisport, and sons, brothers, and uncles of Houses great and small had traveled from near and far in the hopes of establishing themselves as the future Lord of Lannisport. Some had known Theodora for years, while others had come bearing gifts for the promising young heiress, in some cases purchased with the remainder of a particular family’s wealth as a last gambit. Isembard had neither experience nor any great gifts of note with him, so the Baelish was quickly dismissed by other courtiers as a non-contender, much to the chagrin of historians. What exactly he did during his premier days in the Westerlands are unknown, but whatever it was left an unmistakable impression on Lord Archibald, who declared that Theodora’s hand in marriage would go to the Gilt Mockingbird. When both Casterly Rock and Harrenhal affirmed the betrothal, their wedding was all but set. But no one could have foreseen the arrival of Daena Targaryen, the Last Dragon. The drums of war beat all across Westeros, and the Iron Throne rallied all able-bodied men to arms. Betrothed to the future Lady of Lannisport, Isembard rode with Lord Archibald, staying by his goodfather-to-be’s side throughout the war. Seeing little of live combat himself, Isembard distinguished himself in his own small way by coordinating the organization of Lannisport’s army logistics. As Daena fell in battle to Alaric Seaworth, the war of the Last Dragon mercifully drew to a close, but all was not well. In their absence, reavers from the Iron Islands had stormed Lannisport, sacking the city before making away with thralls and gold. Worse, Lord Archibald had sustained a grievous wound to the leg at the battle of the Goldveins, and the wound had festered. Maesters and healers tried and failed to help the battleworn lord, and a year later, he would finally succumb to his wounds, but not before seeing his last wish of his daughter being wed fulfilled. Spending the following month in mourning, the new Lady of Lannisport announced that she and her lord-husband would be departing on a journey to reaffirm trading routes that had been severed during the war. Leaving her sister in command of the city, Isembard penned a letter to his family detailing the plans of their journey before setting sail with his wife aboard the Sunspeaker. Their first destination was Oldtown, where the young Lord Consort was greeted by his mother’s family in the Hightower. When he was not advising his wife during her business negotiations with Lord Hightower, Isembard spent his time in the city, visiting the Citadel and its library, or conferring with sailors from Essos and the Summer Islands about the latest rumours and news from afar. Later, he would hunt and hawk with his kinsmen, before feasting upon their game in the evenings. They stayed in Oldtown for a fortnight before setting off for the Arbor. Lady Rhea Redwyne proved as gracious a host as her island was beautiful, and wine aplenty was secured during fortnight-long stay on the island. There, Isembard met with some of the lesser nobility of the island, regaling himself with their tales of the Arbor’s uniquely chivalric traditions. To say that Isembard lamented their departure is an understatement, for in his short stay there, he had fallen in love with the island. Making anchorage in Dorne next, Isembard and Theodora were met reluctantly by the Martells, who had not quickly forgotten the deeds of Lannister in years gone by. As Isembard’s own Martell blood - diluted as it was since the days of Petyr Baelish - came to light, he found himself marginally more well received when separated from his wife. The Dornishmen proved to be a comparably jolly people, free spirits in some aspects, and decadent in others. Indeed, as Theodora’s mood soured and their relationship tensed, Isembard grew close to Obara Martell, and it is said that he spent more time with his distant cousin than he did his wife during the stay, which would make the birth of Gerold Sand in the following year wholly unsurprising. Much as he enjoyed his kinsmen’s way of life, it was nonetheless a relief to cast off for other waters in the end, however. His wife’s mood remained terse throughout their voyage into the Narrow Sea, though as they got close to Estermont, Theodora began speaking to her husband once more, if curtly. Their next stop was Tarth, however due to the delays in both Oldtown and the Arbor, it was decided that the procurement of marble simply wasn't worth the time spent staying there. Passing the Sapphire Island, Isembard was left with no choice but simply imagine what the soaring mountains and great waterfalls looked like as they sailed north. However, as they tried to stay clear of a storm, they passed dangerously close to the coast of Pentos. Even from a distance, the City’s scars from the war were visible, a grisly reminder of the fate that had befallen Lannisport thanks to their rulers’ efforts. Not keen on getting any closer, they contented themselves with simply watching the city as they sailed onwards. Eventually arriving at Driftmark, the Velaryons played host to the Lannisport party, assuring them that trade would continue. It was there that Isembard and Theodora reconciliated their differences, with some purporting that they also consummated their marriage underneath Velaryon's roof. Later, he approached his wife in private, cautioning her that while the lords of Westeros had been receptive to her negotiations, many a things could still go wrong. A good portion of their trade came from the Free Cities, and with the Three Daughters and Pentos involved in the prior war, their options were limited. Suggesting that they go to Braavos, Theodora remarked that they’d been too long gone from Lannisport, and that such a detour would do more harm than good. So he pleaded to allow to go in her stead, alone, representing Lannisport as her husband, while wielding his ancestral name in the hopes that the merchant-families would recognize its Braavosi origins. Agreeing to this, Theodora told Isembard that she would linger with the Velaryons for just a while longer before setting sail for King’s Landing, where she would wait as long as possible for her husband’s return before leaving for Lannisport. So it was agreed, and booking passage aboard a ship in Hull, Isembard Baelish finally set out for the Secret City. Braavos, the fixation of his childhood dreams, revealed itself to him at long last as the Titan rose in the horizon. The Secret City was everything he could’ve hoped for, and more. Though his grasp of the Braavosi dialect of Valyrian was rusty after years of neglected practice, he was explore the streets he’d spent half his life learning about. Meeting with various merchant-families proved to be no small lesson in what his teachers had gotten right or wrong, and perhaps for the best, for his dinners and meetings had made waves on the political field, eventually reaching the palace of the Sealord himself, who summarily sent a courier inviting the Andal lordling to talk. Eager to prove his connection to the great city, Isembard spoke at great length what he’d been taught about the city as the Sealord gave him a tour of the city, speaking of his childhood nickname “Izembaro” and what he’d learned during his short stay. But as thrilling as his visit was, it was business he’d come for, and so he regaled Cato Nestoris about Lannisport and its trade, Academy of the Arts, and plights during the war. Though bemused by his eccentric love for the Braavosi way of life, the Sealord courteously humored the Baelish man, agreeing that the war had been a tragedy, and that he was not unsympathetic to the Westerosi’s cause. Rather, he seemed pleased that Isembard had come to him - furthermore having taken to the Braavosi so readily - and though no greater deals were made that day, Isembard was assured that trade would flow smoothly between their distant cities, and that Braavosi architects and artisans were available for hire to aid in the restoration of Lannisport. In addition, both agreed that further talks could prove mutually beneficial. Spending the last few days in Braavos dreading his departure, Isembard decided to heed the Sealord’s suggestion of seeking the expensive company of one of Braavos’ world famous courtesans. Having grown up with praise of them from his tutors, it was nonetheless awe-inspiring when Isembard met with Seranah Nestassar, the Daughter of the Dusk. Infamous in the city for her involvement in the city’s politics, Seranah proved a remarkably clever woman that surprised even Isembard’s expectations of Braavos’ courtesans. Where in Westeros such women were simply the vectors of men’s desires, courtesans were the centrepieces of culture, the focus of art, song, and even duels. Wealthy and respected, the Daughter of the Dusk only deepened his love for the city as they were poled across the canals aboard her barge, for a brief moment becoming the envy of Bravos, nobility, and merchants. All things come to an end eventually, and with his goal fulfilled, Isembard bid the Daughter of the Dusk and the city farewell, asking Seranah to pass along his compliments to Nestoris before departing on the purple-liveried cog that would take him to King’s Landing as part of its journey before sailing east for the Jade Gates. Saddened but content, he was surprised to find his wife still waiting for him in the capital. Eager to see Theodora again, Isembard recounted his experiences in Essos as they began the long ride home to Lannisport whilst a skeleton crew sailed the Sunspeaker back around the continent. AC History: Tysane's life is one set apart by her apparent mundane path throughout her childhood. Born the second child of Benjicot Baelish in 364 AC, it seemed as though her life was already set in stone. She would be taught in courtly etiquette, the history and members of the various lords of the Riverlands and beyond, how to sew, what to pray for, and to be a good stewardess when eventually she married a lord. For a time, she seemed quite content on following this plan, eagerly taking to her lessons as she knitted and attended the Septas in Harrenhal's sept. She learned to read at an early age, something which would develop into a lifelong passion for literature. But as she grew older and more aware of her surroundings, questions began to develop in her mind about where her path was taking her. Did she really want to spend the rest of her life mending her husband's surcoat, or pray to the Seven for another year of spring? While she had no interest in swordfighting or wearing breeches rather than dresses, Tysane began to develop quirks that could be considered unlady-like. She'd sneak into the kitchens to steal plumcakes with her friends, or lead her horse off the beaten path during family excursions, only to have to be tracked down and led by back by her father's men. Playing tricks and pranks was another hobby of hers, sometimes even convincing her cousin Jirelle to participate in sneaking a badger into a courtier's room or watering down the master-at-arm's gradually to see how long it took him to notice that was something was amiss. As the girl slowly matured into a woman during the War of the Last Dragon, new games replaced old ones. Rather than prank old men for a quick laugh, she'd put her education to use by seeing what news she could coax out of them that others were unwilling to tell her directly due to her being a lady. Her successes became small comforts in the war, while her failures were valuable lessons in honing her social skills, teaching her about the tells of people that gave away their emotions and lies. When the war finally drew to a close, Tysane was eager to leave the safety of Harrenhal's ghastly towers to visit places new and old. Her trips were rarer than she would have hoped for, however, for a lady grown was expected to serve her family as best she could, and what better place than at their court? Disappointed, but ultimately seeing the purpose of her lessons, Tysane has since done what she can to aid her cousin in keeping the Riverlands in check while dreaming of a life beyond the walls of Harrenhal. TIMELINE 360 AC - Isembard is born. 364 AC - Tysane is born. 368-375 AC - Tutors from Braavos and Volantis are hired to instruct Isembard in the ways of Essos. After worries of him accepting Essosi culture in full, the instructors are dismissed from Baelish's service. 371 AC - Isembard is taken on as a squire. 378 AC - Isembard is knighted and leaves for Lannisport, where he courts Theodora Lannister. Her father, Lord Archibald, agrees to a betrothal between the two, and both Casterly Rock and Harrenhal approve of this match. Before the two can be wed, however, the War of the Last Dragon breaks out. As Theodora's betrothed, Isembard joins Lord Arcihbald in the war, managing the logistics of the army. 379-381 AC - Isembard fights in numerous battles, including the Battle of the Goldveins. With the death of Daena Targaryen, Isembard returns to Lannisport, finding it sacked. Dying, Lord Archibald arranges his daughter's wedding with Isembard, and after mourning Archibald's death, the newly wed couple disembark on a journey to visit the Arbor, Oldtown, Sunspear, and Driftmark to negotiate trading deals. While in Sunspear, Isembard has an affair with Obara Martell, which later results in the birth of their bastard, Gerold Sand. 382 AC - Later, Isembard visits Braavos on his own, where he is greeted by the various families, including the Sealord of Braavos, who hosts him and agrees to speak further of dealings in the future. Isembard enjoys the company of the courtesan Seranah Nestasaar, the Daughter of the Dusk. Departing Braavos, Isembard reunites with Theodora in King's Landing, and together they return to Lannisport to oversee the restoration efforts. FAMILY Family Echo (Thanks JP) Household
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