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I think the same argument applies for real estate as well. If you have a 4 CAP rate on a residential investment property you should pay basically zero taxes on the cashflow since it will be covered by non cash depreciation charges, and then likely to appreciate in line (or faster) than inflation on a tax deferred basis if held for the long term.

The right to lend out your collateral shares if you utilize margin borrowing is a regulatory requirement if I recall, some brokers are much better about trying to recall your shares on dividend dates or at least truing you up if you are given a worse tax treatment when lending. IBKR also doesn't even seem to have any concept that REITs get a special dividend treatment since 2017, it's baffling. I think poor management of this as basically a hidden cost on IBKR's margining rate. I ended up shifting my margin borrowing to Fidelity after IBKR jammed me on this a few times, Fidelity matched IBKR's margin rate and seems much more conscious around the issue. https://www.fidelity.com/tax-information/tax-topics/annual-credit-for-substitute-payments

1.65% real IF there is no rerating to the mean. If you factor that into the equotation you are looking at negative real returns for the index. But most here probably dont invest into the index, so who cares?

Well that is an excellent and important point. Ukraine itself will have to judge what price they wish to pay in lives. Our view shouldn't matter in that regard. As an outside observer, I do not think Ukraine can afford to lose a generation of young men and survive as a nation. In that regard, Putin has them over a barrell with an extended campaign. I do hope that Zelenksky is acting in the majority interest, but I have my doubts with all the corruption and thievery in Ukraine. When you've suspended civil liberties, imposed martial law, canceled elections, outlawed the opposition party - one has to wonder about the current leadership.

Great insight.

I'm with TwoCities about the persistent discount - the important thing is that the investments are doing well, and if so, the share price will eventually follow, providing for some additional oomph in the meantime via repurchases. So the private investments have to be strong, but the translation into market price doesn't concern me. Anchorage is the same sort of deal - is the airport doing well, or not? It seems that it is. At over 50% of assets, an IPO would be nice, just to take some cash off the table and to allow for other investments (IDBI?), but there are likely to be opportunities to do the same thing with private investors, so maybe we don't have to worry about whether an IPO happens or not.

As a side note for fellow North Americans and West Europeans, you do realize that we collectively (aside some energy price spikes) have not seen or felt the impact of Ukraine War at a personal or family level. So our collective points of view (whatever those may be) is really shaped without having paid the real cost of expanding the war.

Bought a little more DFIN at $60.

You have to consider tax impact to make a fair comparison, for a high income person that "0 risk" treasury is actually locking yourself into a loss when you consider your marginal post-tax real return in a 3% inflation world treasuries at 4.5% * (100% - 37% ordinary income federal tax - 3.8% investment surtax) = +2.66% gross return - 3% inflation = a -0.34% annual loss in purchasing power your 6.1% steady state return from stocks benefits from a lower cap gains / qualified dividends tax rate (and a real life huge advantage of mostly being tax deferred) and gets hit less hard if inflation goes higher in the future (either taxes/inflation/government spending presumably have to rebalance eventually) stocks at 6.1% * (100% - 20% - 3.8%) = +4.65% gross return - 3% inflation = +1.65% real return expected

I, for one, am ok with the persistent discount. The historic execution is there on the BV side. The present execution is there on the buybacks and future opportunities side. I have no doubt that the longer term execution will be there as a result. The discount won't persist forever if BV performance continues, but am glad for the opportunity to increase my ownership via occasional incremental buys and let FIH increase my ownership for me with time as long as it does persist.

I just noticed there was a 25,000 share trade in FFH yesterday. Looked to be initiated by the buyer but obviously there was a buyer and a seller. That's a large single trade for Fairfax -

Here's one the much older folks have probably experienced: When you're "young" (50s, 60s) start looking at single-story living (no stairs) with restrooms within walking distance. There's an age when you hate being seated close to the restrooms, there's another age when you greatly appreciate it

Sounds like Munger's advice - you aren't going to get too many trips to the pie counter so you ought to serve yourself an indecent helping when you find yourself there.

Holding back too much. Back in the day when Russia was breaking up, some friends and I got access to a military warehouse. Whatever we wanted, including transportation to the border, as long as we paid in untraceable USD, and weren't buying weapons. We did very well (after a lot of work!), but barely scratched the surface of what was available to us. An additional 3-5 truckloads would have set us up for life very early on, at almost zero incremental risk. When you have the brass ring, keep pulling on that sucker for everything you're worth! SD

Lots of inflows into the US and MAG 7+ because they are perceived as ultra safe and "only go up" (based on last 20 years)...the SP 500 is priced at 27x earnings, the last 10 years these 500 companies grew their sales at 4.1% all together and they pay out 1.3% annually at current valuations. Shares outstanding for all SP 500 companies went 0.7% lower per year over the last 10 years. If you have margins stable you will make-> 4.1% sales growth+1.3% divid. yield+0.7% buybacks= 6,1% annualized the next 10 years. 10 year treasury is at 4.5% with 0 risk. Lots of value in smallcaps, europe/emerging markets/asia.

While i believe there are still cheap stocks available, i would not be surprised by a large crash this year. In fact all facts that i see point to at least a 70-80% chance of a 15-20% drawdown. Not because stock market valuations are very high by historical standards, but because the economy is slowly bending over. I looked at the past 50 years, and 1 year after the yield curve inverts and the unemployment rate creeps up (vs. the 3 month average) in 80% of all cases the stock market tanked at least 15% over the summer. Maybe history is not a good guide here, but i see no reason why it should be different this time. You see it already in the numbers of retailers like TGT, SBUX or MCD that the consumer is stretched to the hill. So be prepared

My view - Western countries should have been involved to a much greater degree and from much earlier. I think the West should close the sky in Ukraine to Russia jets. They should be operating artillery, operating drones, destroying weapon depots etc. No Western infantrymen on the frontline right now, Ukrainians should be the front line soldiers, it's their country and if they want it to remain free they should fight for it. But most of everything else on the table from the West. I'm OK with Russia keeping what it has if it is peace, and lasting peace, whatever. Russia should be prepared that Ukraine joins the EU, or even NATO for that concession.

Good luck trying to make sense of stocks using a 10% discount rate. Valuation is largely subjective, and I think it is fairly clear that very very few people are using a 10% discount rate, and haven't been for many years. My own mantra, posted in another thread, is that if you feel the urge to crank numbers into a DCF to check if it is a good investment, its almost certainly not a good investment. Buffett talks discounted cash flows, Munger said he has never seen him using DCF model even once. I do believe though there is no sense investing in a company at PE 25 with little to no growth, when you could just buy a treasury yielding 5%. I do expect valuations to rerate over time especially if GDP growth slows, but I would be surprised at a large crash.

I'm pretty sure that Seth Klarman's record has sucked ass since around 2010. That's 15 years nearly and he is one of those people vinod is talking about.

https://michael-von-der-schulenburg.com/with-its-role-in-the-ukraine-war-the-european-union-may-risk-its-own-political-future/ With its role in the Ukraine war the European Union may risk its own political future Is a political elite in the EU risking Europe’s future out of a false sense of self-righteousness? And yet, peace is not part of the EU’s discourse. It is the language of war that unites the majority of European governments and the established media today – and this, although there is no common EU strategy on the Ukraine war, no common approach on what can be achieved and how. The Polish Prime Minister, for example, declared that Europe was already in a pre-war situation, perhaps already at war, and Sweden’s Prime Minister called on Swedish families to prepare for war. The President of the EU Commission can think of nothing else but to demand more and more money, more weapons and more ammunition and demands a conversion of Europe to a war economy. Even Chancellor Scholz, who we must thank for having prevented the deployment of Taurus missiles so far, only talks about Russia not being allowed to win the war. Wouldn’t it have made more sense for him and his European colleagues to think rather about how to win peace in Europe? The acrimonious and irreconcilable attitude of the EU towards Russia is particularly evident in Germany in the two motions tabled by the governing and opposition parties in the Bundestag, the German parliament, on the second anniversary of the war in Ukraine. These motions read more like declarations of war against Russia, in which highly questionable arguments are combined with unrealistic maximum demands and simultaneous threats. They leave no room for compromise. Hence, any attempt at negotiations is made impossible from the outset. After two years of war, this approach is tantamount to a denial of reality. It is a policy of clinging to a continuation of the war, knowing full well that there is no realistic hope of a victorious peace in Ukraine. This may also explain why individual EU member states are plunging into irresponsible actionism. This includes France’s proposal to send NATO troops to fight in Ukraine and its plans to station French units in Moldova. It also includes once again the believe in a miracle weapon by German political hardliners and their demands on making Taurus missiles available to Ukraine. Such plans appear to be ill-conceived and therefore potentially dangerous. They are also unrealistic. The EU has neither military capabilities, nor sufficient political unity nor any popular support for individual states or the EU as a whole to launch such adventurous ventures. In any case, they would be unlikely to change the course of the war but would lead to further killing and destruction in Ukraine. Furthermore, such plans run the risk of leading to an escalation of the war in Ukraine, with the frightening prospects that this could develop into a pan-European or even a nuclear World War. When a French president claims that such considerations are just a sign of cowardice and a German Green party tells us that there is no nuclear risk at all, even if Moscow or Russian military nuclear installations are attacked, they are gambling with the survival of us all. And for what? Just because we don’t want to admit to ourselves that we can no longer win this war and that negotiations are the only option left. @Gamecock-YT Time is also running out for the EU in another respect. In just a few months, political relationship with the USA could change dramatically should Donald Trump become US President. There are already considerable differences among the EU member states, and a political landslide in the USA could divide the EU member states rather than bring them closer together. With its uncompromising pro-war and anti-Russia policy, the EU will also further isolate itself from most non-NATO states in the world. There will be no understanding there for continuing to escalate militarily while at the same time refusing to negotiate with Russia without preconditions. The EU sets itself up for a massive failure if it continues its current path of seeking solutions through ever more weapon deliveries and sanctions. In its own interests, the European Union urgently needs a change of strategy that must aim at a pan-European peace and security order based on the 1990 Charter of Paris for a New Europe and that must include Ukraine and Russia. The forthcoming elections to the European Parliament would therefore be an opportunity for Europeans to say no to the EU’s militant policies by voting for peace on June 9.

Michael von der Schulenburg, former diplomat with the UN and OSCE, was Assistant Secretary-General in UN peace missions in Iraq and Sierra Leone: https://michael-von-der-schulenburg.com/understanding-the-ukraine-conflict-michael-von-der-schulenburgs-insights/ One must Negotiate with Putin "The situation must be extremely difficult for the Ukrainians. Through more than two years of war, Ukraine has paid a heavy price in blood on both sides of the front lines, with large parts of the country having been destroyed. The country is deeply divided politically, has become the poorest country in Europe, continues to suffer from widespread corruption, and is in the process of becoming increasingly depopulated. The military situation also looks extremely unfavorable. The Ukrainians are today the cheated people of Europe, also cheated by us. Their country has become a battlefield for geopolitical interests, including Western geopolitical interests. It could now even face the risk of collapsing. If we really want to be friends with Ukraine, as we like to claim, we should now do everything we can to end this war through a negotiated peace." "What he wants is pretty clear: Putin does not want NATO or foreign military bases so close to Russia in Ukraine; he wants to secure Russia’s access to the Black Sea and to protect the security of the pro-Russian population in Ukraine. We can assume that these goals are shared by the vast majority among the Russian elites and among the Russian population. As early as 1997, President Yeltsin already warned US President Clinton against wanting to bring Ukraine into NATO; he emphasized that there is a thick red line for Russia. Russia’s position has not changed since. Michael von der Schulenburg was actually involved with the draft of the piece treaty in Istanbul 2022: "Yes, I mean the Istanbul Communiqué of March 30, 2022, which both sides accepted and initialed. It was drawn up by the Ukrainians and consisted of 10 proposals. It is an amazing document, a brilliant achievement of Ukrainian diplomacy. In it, Ukraine did not formally give up a single square meter of land. Kiev only accepted that the status of Crimea would be decided peacefully in 15 years. There was no mention of Donbass; that was to be negotiated directly between Zelensky and Putin. At its core, the Istanbul peace proposal was a deal between Ukraine and Russia in which the Ukraine committed itself to remaining neutral and not to allow any other state to establish military bases on its territory. Russia, in return, would guarantee the territorial integrity of Ukraine and withdraw all invading troops. In this document, Russia even undertook to support Ukrainian membership of the EU. But the West did not want the treaty. A week before Istanbul, there was a special NATO summit in Brussels, which Biden also attended. There, it was decided not to support any negotiations with Russia until Russia withdrew from the whole of Ukraine. This meant nothing other than NATO demanding Russia’s military defeat and, hence, clearing the way for Ukraine’s membership in NATO. When Zelensky nevertheless stuck to the peace negotiations with Russia, British Prime Minister Johnson paid an unexpected visit to Kiev on April 9, 2022, making it unmistakably clear to the Ukrainians that they would lose all support from the West if they signed a peace treaty with Russia. This put an end to the possibility of an early peace." "If the USA continues to escalate with NATO support and, as announced, now sends weapons with which Russia can be hit at its strategically important locations, Russia, as indicated, would not shy away from extreme reactions. The danger of this conflict escalating into a nuclear war is therefore higher today than ever before. NATO should not underestimate Russia’s determination again." "Such demonization of the opponent is common among warring parties. The other party is always the embodiment of evil against whom we, as the good guys, must fight to save the world. We will certainly find similar demonization of the West in Russia. What is perhaps unusual here is that we in the EU behave like a warring party, even though we always claim not to be a party in this war." "I find it frightening that I am now getting reactions from senior German diplomats who are full of hatred for Russia. Such “diplomats” would never be in a position to conduct peace negotiations. But why do we have them then? In wars you need diplomats with a cool head, diplomats who can also understand their opponents and thus look for feasible compromises to end the killing in wars. In doing so, they must not allow themselves to be captured by their own war propaganda or pro-war media. It also plays a role here that we in Germany find it difficult to accept a different point of view, even if it advocates the silencing of weapons and peace negotiations. It’s no coincidence that I can only give this interview to a Swiss magazine, which then also publishes it." "The closest we came to a solution was when the Ukrainians and Russians talked to each other directly, without Western interference. I’m sure there will be talks between the military on both sides; they all know each other because nobody wants all their people to be slaughtered. But we won’t find out about the talks until the time comes. Then it could happen very quickly. I can well imagine that the Russians are making offers to the Ukrainian military that are better than something that could be negotiated here in Switzerland, especially now that Switzerland is likely to have lost a lot of international sympathy as a neutral state due to its stance on the Gaza war."

It just seems to be an ever increasing series of small escalations via 'red lines' that were previously forbidden, suddenly being allowed. So if you follow it to it's logical conclusion, where is the tipping point? Or the point of no return? I would posit it will be if/when NATO member countries are in Ukraine in an 'official' capacity as trainers, or some similar capacity, and they are attacked by Russia. Until that happens everything else is only building until that potential moment. And what the response of the west will be to it. The other immediate tipping point is the US election results and should Trump win and likely pulls the plug of American support, what is the European response? But I do think we are ever increasingly spiraling towards a larger conflict. Red lines are continuing to be violated with no parties even remotely interested in a resolution or a reduction in combat activities.

Good points. Makes sense to hold past the Indian elections and also see the outcome of the IDBI bidding. Fairfax India has apparently offered an all cash deal, so they are coming in strong and I assume must have a plan in place. OTOH, their private Indian investments, no matter how strong they are (ie BIAL), are not translating into market price very well. Anchorage seems like a pipedream to me years after their initial proposal.

https://www.zdf.de/nachrichten/politik/ausland/bundesregierung-deutsche-waffen-ukraine-krieg-russland-100.html Germany allows Ukraine to use German weapons in Russian territory! It begins!

no - most recent KBRA report below - but I do notice their secured vessel financing program has BBB rating 'On August 23, 2023, KBRA affirmed the BB+ issuer rating of Atlas Corp. (Atlas), a global asset management company based in Vancouver, BC with focuses on assets in the maritime sector, energy sector and other infrastructure verticals. KBRA also affirmed Atlas' wholly-owned subsidiary Seaspan Corporation’s (Seaspan) BB+ issuer rating, the BB+ rating on Seaspan’s $750 million senior unsecured notes due August 2029, as well as the BBB ratings of Seaspan’s $1.1 billion Term Loan due March 2028, $410 million Term Loan due March 2029, and $400 million Revolving Credit Facility due March 2028 comprising the secured Vessel Portfolio Financing Program. The ratings Outlook is Stable.' https://www.kbra.com/publications/rrpFtbKq/kbra-releases-surveillance-report-for-atlas-corporation-and-seaspan-corporation