I was watching CNBC Thursday when an interesting guest presented what may be the “Big Short” incredible play of 2011-2012. Bill Ackman, the founder of the Pershing Square Hedge Fund presented his thesis on a currency play that will pay out at 100 to 1 if it occurs. It’s a binary trade where he’ll lose his investment completely if it fails to come to fruition, but a 10,000% return on even a small portion of his fund’s total capital could boost him into a 3-4 digit return for investors in the next year. Here’s the premise broken down methodically as he explained it:
- The Hong Kong Dollar has been pegged to the US dollar for decades. Hong Kong has altered their peg multiple times throughout their history and now is an optimal time for them to do so…..
Continue Reading This Investment Pays Off 100:1 – The Thesis is Sound, but is the Timing Right?
Here’s another.
Start a bullshit “green tech” company. Then donate $800,000 to President Obama. Then visit the White House 7-8 times. Then get a loan from taxpayers for $500 MILLION..
That’s more than a 500:1 investment.
No wonder people lobby, bride, and pay off politicians. They can’t get that kind of return on their money anyplace else. And it’s guaranteed. Back by the taxpayers and the Fed.
Even honest farmers and the farm lobby get 250:1 return on their lobbying “investment”, paid in massive farm subsidies.
Who knows about timing the HK dollar? It seems to me the same thing could have been said every year for the past few years and every year going forward.
An easier way to play this, albeit both less risky and less profitable, and not worry about about the timing would simply be to buy some HK Dollars and hold them.
I keep some funds in CYB, which tracks the Chinese yuan, for similar reasons. It probably won’t do anything, but if it moves all, its almost certain to go up against the US dollar.
So if I throw in a $1,000 ….. the worst I can do is lose the thousand …. but I can make $10,000,000?
Fucken A. Sign me up.
But first …
…. is the guy from Nigeria? Does he have a rich King as a relative?
Stuck,
Learn to multiply goddamnit.
$1,000 @ 10,000% = $100,000.
Not $10 million you fucking imbecile.
One hundred times, not ten thousand times.
Smokey gives Stucky a math lesson.
RECENT PHOTO OF STUCKY
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Well, shit. That explains why I think I also have an 11 1/2 inch shlong.
Thanks for the correction.
Win some … loose some.
Smokey
Some months ago, Stucky posted a numbered list of items in response to an article. He went from 4 to 6 and completely omitted the number 5. Boy, did I have fun with that one.
Stucky
“Loose some.” Touche. Muck couldn’t have said it better.
Yup, just buying HK dollars is a lower risk 30% return gambit. See, there’s no downside (practically speaking) bc there’s NO way HK would ever depreciate against USD, only appreciate. So, if it’s a 2 or 3 year payoff, 30% is still pretty good on an annualized basis – with no downside. Beats the shit out of 2% in a CD.
In my best Marv Albert voice, “Oooooo, that’s gotta hurt!”
SSS,
LOL.
I’m glad I’ve never made any careless math errors.
Stuck, take heart it could have been worse. I take you still have your $1000.
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Love how Americans are still looking, trying to find the exact “timing.”
Since from the dotcom bust days, it is pretty obvious we are worthless at guessing the whole timing issue. Kinda like how the Fed was still raising rates as we entered the recession.
Had a recent conversation about “timing,” the future and I figured out what my timing strategy has become.
If the fiat I currently hold, can buy anything and I can afford it, then the timing is right.
Based on prior history I know that by the time the “correct” timing is screaming at you that the time is now right – it will be just a few seconds too late.
So, never thought about buying Hong Kong currency, but I don’t see how it could hurt me to trade more of my fiat for yet another hedge. Canada dollars, hell I’ve been considering pesos, silver, gold, sure throw in Hong Kong too since the Swiss can now kiss my ass.