RichardGibbons

Yeah, I think this is one of the key things I've got from reading this particular political board. Like, so many people online and offline seem to say that anyone who would support Trump is idiotic, ill-educated, and insane. You often hear the criticism that his supporters are too stupid to even realize that he's not on their side, but just working for himself. It never seems to occur to them that Trump can be a corrupt, self-dealing narcissist, and people might rationally conclude that he's better than the alternative. (That said, I think he's probably still worse than the alternative because of the second order effects--destroying democratic norms and causing to a socialist kickback that could cause immense harm. But the point is that if, without ad hominem attacks, you can't explain why a reasonable person would vote for Trump, then that's your failing, not theirs.)

I'd suggest all at once, for your sake and for the overall quality. My reasoning is, when writing longer works over the course of many days, you might be changing something later in the book, and it'll trigger some thought at applies earlier. Like, you could've phrased something different, or have another example you're trying to illustrate, or there's a really elegant way to express something, or you could have tied the chapters together better if you'd done something slightly different earlier. If you serialize it, these cases will likely frustrate you beyond all reason. It's very annoying when you think of something really elegant, but can't include it because the moment is past. So, while serializing is better for the short term readers, I think all at once is better for the author and also the quality of the final work. For my style of writing novels, it makes a huge difference, because I'm all about making my characters suffer. And there's many cases where I'm thinking, "X happening will make them miserable", and then realize, "but if ten chapters earlier, I show that they went through something that made them particularly emotionally vulnerable to X, then it'll be excruciating."

Yeah, I suspect, at heart, Buffett might have been a bit of an empire-builder, because it seemed to me that, for a thoughtful guy, he reacted too late to the challenges of scale. It feels like Fairfax has made that switch at about the right time if one is trying to maximize shareholder returns. You want the best of both worlds--economies of scale while still having a large universe of potential investments.

Yeah, at the time, I think it was a no-brainer. Why wouldn't you use a massive bomb you recently developed in a war that already lasted four years? It also was pretty tiny relative to nukes today. My impression is that the controversy only arose decades later, when the moment was long past and people had the prosperity necessary to develop luxury beliefs.

Yeah, I totally agree with your straw man, that Fair and Friendly shouldn't mean that no shareholder in the acquired company is disappointed with the price. The issue is integrity. Buying businesses below fair value (e.g. Atlas) is totally reasonable. For me, it lacks integrity to support a clearly inferior bid, even if it is legal (though there was also a minority shareholder lawsuit against Resolute that won, where the shareholders received $1.59 (boosted to $2.50 by interest and legal fees) rather than $1.) That said, integrity is fairly personal and often more flexible than one would think--people justify all sorts of things if it makes money--so your beliefs maybe be different than mine. Like, if Fairfax India were conservative in valuing its assets, and then Fairfax bought it all at roughly market price, I'd consider that to lack integrity, even though it would be quite good for Fairfax's shareholders and Fairfax would be paying what the market said was a fair price. But I don't think it's unreasonable if someone else considers that sort of transaction to be kosher. (Heck, Buffett used to argue that share buybacks could be considered questionable, while I have no problem with that outside of major undisclosed insider information.)

First, some context. When buying shares, I mostly open 1% positions, and might increase that to about a 3% position from buying. I tend to shrink positions when they get above 10-15%. I have way more positions than most here, I think. (I also don't work, so am averse to losing money.) When buying options, most positions start out at around 0.33%, though sometimes I'll do up to 1%. That said, for me, buying is completely opportunistic. Most of the time, I have 0% long options in my portfolio, and I'd guess I do one such trade a year. So maybe, at cost, I'd have less than 1% of the portfolio in options. I'm typically looking for something that is undervalued with low IV, mostly because I'm betting on a path to fair value, not a random walk with high volatility resulting in a payout, so I want to pay as little for the option as possible. I'll often roll up, potentially making the position bigger than 1%. Two recent ones that didn't pay out was buying Bell leaps when it first fell to the C$35 range, and Equinox Gold around $9 before gold spiked. Before that was Citi below $40 where I hit the bottom perfectly, and eventually after some rolls incorrectly closed in the low $60s. That 0.33% became about 5%. My biggest winner was UAN. I opened the 0.33% position when it was at $25. I had 3-6 month out expiries (not LEAPs) and rolled a bunch, and the underlying hit $180 or something. I sold out on the way down at about $120. At the peak, I think the position was around 40% of my portfolio (about 80% of the initial portfolio size, 320x the original outlay, though probably those numbers don't triangulate. I don't feel like doing any math). I think in the end, I think I made about 140x the original outlay. Wallstreetbets gets a lot of justifiable mockery, but it did drive home one thing for me--with long call options, there's potentially a lot of value in aiming for the fences because a small position can become huge, and psychologically it's much easier holding an extremely high-risk position if it has grown to become that. (Note: I'm not saying it's rational to believe this. Rather, I'm saying that if I come up with a strategy I think is rational but is hard psychologically to execute because the numbers get big, it's easier to do so if those big numbers are a result of massive gains. And generally, my strategy with long calls is to try to get massive gains.)

Yeah, I've had the same experience. I think long puts are particularly difficult for a few reasons. First, volatility skew makes them "overpriced". Second, as they go in the money, the time value gets crushed faster than with calls. Third, when the security trades in "your direction", a 1% move becomes a larger absolute move with a call and a smaller absolute move with a put, which means every additional dollar gets easier with a call, and harder with a put. And finally, related to that last point, calls can rise to the moon, while puts have a maximum gain. So, if you get an extreme move in your favour, the impact with calls can be much higher. (e.g. back in the day, when Fairfax was fighting the shorts, while I sold early, I still made 30x on a small call position. If Fairfax had a roughly equivalent down move, I doubt it would've been even a 10x.) For me, the impact has been that I'll speculate with calls and short puts. But I'll almost never speculate with puts. (In this context for me, speculate means "make a directional bet hoping to get at least a 4x payoff if the stock moves in my direction.")

Yep, particularly Ukraine. During the early invasion, there was a lot of discussion about "Ukraine gave up nukes for a guarantee of security from Russia". I'm sure every other country on the map made note of the implications.

Yeah, I agree with this. I think the main impact these issues have on my investing process are to assume, if Fairfax owns a company that I also own, that Fairfax will be quite willing to make a deal beneficial to them that screws me. So, I'd be less inclined to own a business that Fairfax owns than an equivalent business that Fairfax doesn't own. I guess one could argue that Atlas kind of fits that profile--nudging out minority shareholders at a price below intrinsic value. But I have no problem with that, because there was no competing bid, and because the price offered was reasonable when pegged against the stock's trading range at the time. So to me, that was completely kosher. Also, I guess the other change is that I now recognize that the Fairfax name (fair and friendly acquisitions) is marketing--neither reality nor an aspiration. It's all just data points forming my mental model of what Fairfax is.

The integrity dimension is an interesting one, because the Fibrek transaction was a bit sketchy--deliberately supporting a low bid when there was a much higher bid on the table. That was ruled by the courts to be legal. However, for me, it doesn't pass the "high integrity" test. There was also an insider trading investigation, but that was eventually dropped. It's unclear to me if the insider trading allegations were a case of "it happened, but couldn't be proven enough for charges" or "people were annoyed at completely innocent Watsa and Rivett, so decided to pursue regulatory revenge against them", or anywhere in between. As far as I know, Watsa's never done anything unethical that hurts shareholders of the various Fairfaxes. In sum, to me, that means on the spectrum of integrity, he's certainly well within the "integrity" half, but I wouldn't put him as far on that side as Buffett. (e.g. Buffett doesn't just avoid being unethical, but also tries really hard to avoid looking unethical.)

I've seen a fair amount of people being called Nazis on the Internet, but for me, this post is the thing that feels the most Nazi-like of anything I've ever seen on the Internet. I think it's to do with that visceral imagery--dehumanization like "bloodthirsty animals" and demonization like "experts at killing women and children", mixed with "they play the victim". I think maybe the only way to make it a tiny bit closer is to add the word "vermin" somewhere in there. Neat that I've been surfing the internet for 30 years, and still managed to see a new extreme today.

Thanks for your thoughts. I agree with your reasoning....

Y Yep. It will be trumpeted as a success regardless of the outcome, but it looks likely that the outcome will be net negative.

It would be pretty darn funny if Iran won the whole thing in New Jersey. Obviously can't really happen, but still amusing to think about.

I mean, if $300 Billion is a just a little money, then Iran's oil exports are almost irrelevant. Over the past few years, they've been just under $50 billion a year. So, the government has gifted their "enemy", an oil state, about six years worth of oil revenue. Amazing! I think the fact that some here are shrugging it off shows how much politics is a team sport to some people. It's not about truth or reality--it's about being a fan. That's been clear for a while, of course, but juxtaposed the $300 billion with the complete outrage over Obama's $1.7 Billion, makes it super funny. And the fact that Cubs is still complaining about Obama's money is just the funniest thing. That said, unless the Vancouver Canucks hit a perfect storm of bad luck and injuries, they are certain to win the next Stanley Cup. The team is just too good.