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maybe hedge with assets uncorrelated. or avoid bubble sectors.

Good question. I'm old enough to have been through a number of downturns, beginning in Oct. 1987 (though admittedly didn't have much back then). Never felt the need to hedge b/c always felt the asset mix was appropriate and had sufficient income coming in, which is probably the main point.

@Red Lion You are right, 3% is excessive. 1% might work if the hedge can throw cash to be invested as market goes down. "Maybe 10-15% tops to avoid selling during a protracted down market." - This sounds about right to ride out downturn. @73 Reds DCA works well if downturns happen early in career. In my case, annual additions are getting small relative to portfolio. The critical thing seems to have enough cash cushion to avoid selling during multi-year down markets like 2000-2003. A more general question - why would anyone hedge? Is it to manage short-term risks?

Fairfax is but a tiny fraction of Berkshire's total market cap. When Berkshire was the size of Fairfax, no one was even considering the possibility that Berkshire would outgrow its investment possibilities (I don't think they have even today). And when Berkshire was worth just shy of $40 billion, that same $40 billion was worth a lot more. No question, share buybacks are fine if they are the best investment available to management at the time. My question always is whether that is the case. Because of Berkshire's size, that question is more easily answered in favor of Berkshire. Fairfax still has a lot of growth ahead and shrinking the balance sheet to such a large extent at this stage gives me pause.

That‘s an interesting observation, and another accounting difference between share repurchases and the TRS, since swings in share price don’t affect earnings if they have bought back shares but do affect earnings and book value if they have established TRS instead. This means that the TRS might tend to increase volatility, which is just what we should want, given the fact that Fairfax takes advantage of low share prices to repurchase more shares. Share repurchase limit is 10% of float, or 2.1m shares, yes, thanks for the correction. That means they still have about 0.7m shares they can repurchase this year. If they have spent $2.8b on shares this year, maybe they will get to about $3.7b by September, reducing share count by a stunning 10%, but also preventing them from getting that much bigger. For comparison, they had record profit of $4.8b last year, and paid out about $300m in dividends in January. Yes they have sold some equities (Orla, Poseidon and Eurolife) but they can also buy back Allied and preferred shares, so altogether, 2026 will be a year where they will have postponed their growth in market capitalization, allowing them to remain that much longer in the sweet spot where they are big, but not so big that small investments stop moving the needle, a problem that Berkshire has run into by not paying dividends and only repurchasing small numbers of shares. There‘s a lot to be happy about with Fairfax in 2026, despite (and, to some extent, because of) the lull in its share price.

If you don’t speak with people that piss you off once or disappoint you in some way, the world becomes a lonely place fairly quick.

Definitely funny John. I always admire your love for Denmark and Greenland - the nationalism is commendable. I love America as well. But don't kid yourself - Denmark would have lost Greenland permanently from the Nazis if the USA had not saved Greenland and returned it to Denmark at the end of WW2. That's a fact. So send your 30 soldier army or whatever to Greenland to defend it now - against a Russia or China that wishes to have their foothold in the Western Hemisphere. Or ask the EU to do it for you... On second thought - no need to do that - as the USA will always pay for and defend Greenland from those adversaries that Denmark does not have a snowball's chance in hell of ever fighting. America has seen how Europe/Denmark have abandoned Ukraine after all their tough talk. We know how it will end with Greenland as well.

You deserve this to comment on, Mike [ @cubsfan ], You're as usual deflecting on posts, ref. just above. Landry to Greenlandic kiddo : 'You want a selfie with me?' Greenlandic kiddo to Landry : 'No.' - - - o 0 o - - - I'm still laughing!

It’s probably the cheapest leverage they have and from my framing that’s what the TRS are cheap (variable) leverage. Buy now pay later for share buybacks. The side benefit is that when the shares trade down, they reduce earnings and BVPS which allows the NCIB to pick up shares cheaper all else equal.

The P/L - less financing fees - is settled either monthly or quarterly (I can't recall which). All of the profits they've made have already been booked and taxes paid except the most recent 1- or 3-month period. Typically, either party could end the contract at any given settlement date. Fairfax has the option to discontinue the swaps basically at any time. Depends on what your objective is - minimize taxes or maximize exposure to your own shares. The TRS allow exposure to the Fairfax shares with only 10-20% of the required notional paid. The other 80-90% can buy more shares....but yes, you'll pay more taxes.

"If you've wondered how committed Washington is to making crypto succeed in the US, that tells you something." I thought the bitcoin maxis were libertarians who espoused a monetary medium free from big government involvement. I guess their new mantra is that "we are all chartalists now!" lolz. Bill

More sobbing and crying from the WSJ crowd who do nothing but predict "Storm clouds on the horizon for the USA" ---- 18 months of this bullshit by the "experts" predicting the end of the world for the USA under Trump. Common thread: they all look silly, stupid and envious. Serious question: What happened to that negative GDP print all these morons have been predicting?

Tvk

Tax changes for American business like accelerated depreciation to rebuild American industry/manufacturing. Tariffs to rebuild American business/manufacturing. Tax cuts for the middle class. Actual targeting of fraud schemes cutting billions of dollars of theft intended for social programs. Expanding fossil fuel production for energy dominance. There is no comparison from Biden's ridiculous and wasteful policies. Everything being done is to grow the economy and obviously the market is a believer.

Sanjeev [ @Parsad ] Easy-peasy to run and stimulate a growth oriented economic and fiscal policy, kicking the can [turd] down the road to descendants [in policy [in office], in the population]. Who is picking up the tap in the end? - - - o 0 o - - - What really happened with the infrastructure reform POTUS had on his agenda in his 45th period? - - - o 0 o - - - Some data :

The Ukrainian comedian means serious business against the adversary and agressor : Meanwhile, Putin spends gradually less and less time in Kremlin, scared sh*tless for getting something nasty dumped on his head, and all his advicers and generals don't dare explain him the reality, the real situation. Everybody near him is scared to be shot as the messenger. Now compare that to the management style of the comedian, getting the very best out of the people around him, based on mutual trust. - - - o 0 o - - - This morning at 4:00 AM I heard the noise from The Economist getting thrown in the mailbox, frontpage af it : When has that happened since Aleksej Navalnyjs euthanization [<- I had to get help from the Lady of the House [educated translator] to find that word! ] , perhaps blended with various throws from windows, none of them certainly from ground floor?

It’s like saying I should sell my FFH now because if I wait 5 years I’ll have to pay more taxes. That’s a good thing. I think it’s the same here. To me the point of the TRS is to let FFH maintain its leverage (via buybacks) even if the stock gets expensive.

added to netflix and fairfax

Yep. Anyone who feels the need to maintain 25-50% cash probably lacks confidence in their investment abilities. My advice would be to follow Jack Bogle's advice and remain nearly fully invested & DCA into broad based equity index funds, less any cash that you need for day to day expenses and a sufficient cushion. Hedging rarely works because you're typically over-hedged or under-hedged for any actual event.

Within the last days - since last post here by me in this topic on 2nd July -, I have been adding to : BALD B.STO - Fastighets AB Balder, CAST.STO - Castellum Aktiebolag [publ], DJUR.CPH - Djurslands Bank A/S, FYNBK.CPH - Fynske Bank A/S, FABG.STO - Fabege AB, & BRK.B - Berkshire Hathaway, class B.

UBS Wealth Report 2026 <Edit begin> For those CofB&F members who have joined CofB&F since the topic was started by @Luke on 4th October 2024, I'll just here mention that there early and upstream in this topic are comments from several CofB&F members containing qualifications about this report for prior years, comments that I personally am of the opinion are well thought ouit, well grounded and valid. </Edit end> - - - o 0 o - - - Attached also, for those CofB&F members, who will protect their privacy to a degree, so that download of the report is not possible. global-wealth-report-en-2026 - 20260711.pdf

Do you mean if the defender touches the ball? The Egyptian player did not touch the ball. I agree though that many penalties are given that are fabricated by the attacker, including Mbappe's yesterday. He could have jumped over the defender's legs, but he happily hooked his foot in and fell.

His trade policy was a disaster. No significant change in U.S. imbalances...tariffs had to be repaid...slowed global growth...no perceptible effect on China...forced allies to form more trade partnerships outside of the U.S., including China...U.S. growth would have been even better if Trump was muzzled! DOGE was somewhat of a bust! From 2T in savings, down to $215B in reported savings. What a shitshow it was! And they included the inflated value of unpaid years of future contracts. So really, they might have saved $50B. Which is still great, except that DOGE probably cost taxpayers $20B. In terms of Iran and WWIII...give him time! Someday he's going to get the response he doesn't want from some equally retarded leader, and he won't have any choice but to go to war. And do you still believe he's winning in Iran after this massive fuckup that's dragged on and on? He didn't finish the job, then keeps making empty threats, and the Regime just keeps toying with him until they get significant net gains from all of this. And still no guarantee that they won't have nuclear material available to them...if anything, he's agreed to enough enriched uranium so that they can pursue "nuclear energy" production. Cheers!