RichardGibbons

I live in Canada. I don't know much about health insurance in the USA, but I think if I were there, I certainly would've worked until my kids were off my health insurance. And, I probably would've waited until my net worth was twice as high before retiring. (Which seems like a lot, but if you get 10% returns, it's only an extra seven years. It's likely the kids requiring health insurance would've been the gating factor, not the net worth.)

I actually posted about the one post-retirement success here on the "What are you buying today?" thread. It was call options on UAN that, when the unit price was low, I kept rolling up and out. It's hard to figure out exactly how much I made because I've also bought a few shares, and, when it went over $80, I started converting some of the options to shares. Plus, it pays pretty massive dividends (e.g. my initial options were purchased a year and a half ago when the stock was at $22. The Q2 dividend we just got was just over $10, and that's only one of four dividends, albeit for the best quarter.) However, I think the initial options of $10K probably has grown into something close to seven digits, though this month is a bad expiry for me.

Well, the Black Swan idea is that they're small positions that can go to zero without affecting your portfolio in a big negative way, but have potentially big upside. So, basically every position size was small when put on, and either ended up as a zero (or close to it), or ended up being a lot of money relative to the typical salary. Think of them as lottery tickets, but with a bit higher upfront investment and a bigger chance of winning. So, it was never close to the majority of my portfolio--actually never more than about 2%--except when the Black Swan paid off and became a large amount of the portfolio. Examples of things that offer this skewed risk/reward include exchange-traded options, options and restricted shares from work compensation, and entrepreneurial ventures with a low upfront cost. Often, it's expending sweat-equity (but not much cash) in a venture until there's evidence whether it will pay off or not. Also, it's noteworthy to say that I've lost on probably 75% of the times I've tried stuff like this. That's just intrinsic to the strategy.

I retired about seven years ago when I was 43. I did it by having a job that would pay for my living expenses, while repeatedly doing Taleb's black swan strategy (though I was doing it about a decade before The Black Swan explained what I was doing.) The strategy is to look for asymmetric bets, moonshot investments that you can buy for small amounts, and could amount to nothing or to a very large amount. I kept doing this until I had three winners, and that was enough to retire with a 2.5% annual withdrawal rate. I have a wide variety of investments, both high and low risk, but have some fairly conservative preferreds and dividend-producing stocks to stabilize things and provide a bit of income, though only a fraction of our expenses. We have a friend as a tenant who pays rent. We also have the ability to cut back expenses should that be required, and a house that could be liquidated if necessary. The combination of these things gives me some confidence that we can recover from most disasters. I do continue to try for low-cost positive black swans, and I've identified one since retirement. For withdrawals, I tend to convert large chunks of the portfolio to cash, like enough for a year or two of expenses. I do this when it's convenient in the market, convenient for my portfolio, or convenient from a USD/CAD exchange rate perspective. I agree that the sequence of returns for your portfolio matters a great deal--if you get nuked in the first decade or so, you can run into trouble.

It's worth noting that the VIX options are European exercise, not American exercise. That makes it much harder to bet on a 3-sigma event and get the value you hope for. e.g. if you own the $60 strike calls and the VIX is trading at $80 two weeks before expiration, those options will be bid at much less than $20.

Correct. In Canada, as far as I know, the cost basis is always the average purchase price of all shares owned.

UAN is pretty easy to understand--it converts natural gas and petroleum coke into fertilizer. Follow corn, wheat, natural gas, and fertilizer prices, and you'll know where the business is going. It's pretty easy to build a simple model for how the company will perform based on the inputs, particularly since the vast majority of sales are executed six months or more before they appear on an income statement. And then you collect distributable cash. The company-specific risks are also easy to understand: explosions, weather-related shutdowns, transportation problems, and unexpected downtime. The broader risks are a bit more complicated--basically anything that affects the price of corn, wheat, natural gas, or fertilizers. Plus, the unit price doesn't tend to be forward looking, at least on the way up. e.g. shares are at $155, but my model suggests that Q2 will result in distributable cash in the $18 range, and $50 for the next 12 months. But the market only seems to recognized what's happened a month or so after the results come out.

Interesting--there's few people today who will say that they sincerely believe that Hitler did nothing wrong. It's neat to hear from such a person, and gain an understanding of how they've come to adopt such a worldview.

I'm curious what you mean by "better business". In 2004, I feel like there were far fewer cheap Chinese brands, and so competition is harder today. On the other hand, they're bigger now and have Craftsman. (I'm not skeptical of your "better business" statement. I'm just trying to figure out in my head how their positioning and competitive has evolved with the changing market, so was hoping you'd have some insight that would give me a shortcut to understanding what's going on.)

Or as Munger would say, "Another thing I think should be avoided is extremely intense ideology because it cabbages up one's mind."

Not to mention the other rest of the story where anther one of Trump's actions was to attempt to extort Ukraine, refusing to deliver the military aid approved by the American government unless Ukraine agreed to lie to help Trump win re-election.

The funny thing about this article is that the author doesn't realize that Munger was being critical of Bernie Sanders, not complimentary. Munger is basically saying, "They've managed to screw up the country in a big way. As a result, it's way harder to become rich and create the innovations and efficiencies that raise the standard of living of everyone. So now everyone gets to be equally poor, scrambling simply to get the basics. So Bernie got what he wanted."

Ukraine is a democracy. Surely if it's massively pro-Russia, the people would vote to join Russia and be done with it, rather than have a bunch of tank roll in, killing their people, destroying their infrastructure, and smashing their economy. So what am I missing? Ukraine isn't a democracy? People in Ukraine aren't massively pro-Russia? People in Ukraine are too stupid to vote for something a massive number want and would prefer to have their lives and livelihoods crushed instead through a violent annexation? That said, the outcome of this is completely out of my control. So, I think you're 100% right that people on this board should focus efforts on making money off it. For my part, that's through fertilizer. I still own UAN and UAN calls, and a bit of CF. It's hard to imagine that one of the key grain producers in the world can be annexed without it impacting worldwide grain supplies. And higher grain justifies higher fertilizer use and prices. Plus, this conflict could potentially lead to a further reduction of natural gas shipments in Europe, boosting NG prices. This could make their fertilizer production non-economic, which would advantage North American fertilizer producers where NG is cheaper.

I think this is right, and that a pretty significant portion of people think that the way to increase real estate affordability in Canada is through punitive taxes on landlords. The general idea seems to be that greedy landlords are inflating the price of housing by buying homes to rent out. If there weren't any landlords, those homes would be available at a cheaper price to buy. And if you ask, "without landlords, where are the renters supposed to live?" the answer generally seems to be "the government should supply affordable housing." (I think this is one of the biggest problems of the Canadian housing bubble--it makes people start to think about discarding the systems that have made the western world prosperous to replace them with systems that have made parts of the eastern world poverty-stricken.) So, I think you're right that real estate investments in Canada have substantial political risk.

My understanding is that Canada has regulations in place where people can get out of their mortgage without penalties after five years. So, the bank bears 100% of the risk after five years. As a result, any mortgage over five years has high interest rates, and I don't think you can find big-bank mortgages with terms over ten years. It's also worth noting that Canada's banking system is an oligopoly, so there's less incentive for banks to compete with innovative longer-than-five-year mortgages.

It's pretty clear that the reason this is happening is because you keep posting, I suspect because you really want to have the last word. If you stop saying stuff to stahleyp in this thread, it's pretty unlikely he'll keep responding to you here because then there will be nothing to respond to.

It would kind of amuse me if the investigation was honest, and came back with the response that rent-control and other artificial barriers means rentals require a massive risk-premium. Consequently, there's few who would sign up to be a landlord, and that scarcity results in rentals being twice as expensive as they would be in a less regulated market. In Vancouver, there's a city councilor who is a socialist or even a communist (I'm not one to use that word lightly). But she's the biggest boon for landlords, because she attempts to block almost all attempts to build rental housing because the new housing wouldn't be affordable to the poor. And she's literally said in council meetings that if middle-class people move into these new buildings, freeing up their old spaces for the poor, that would also be a bad thing. Her reasoning is that when people move, rental controls reset. So, the average rent would go up, which is a bad thing. It's such amazing "logic", considering that nobody in this 4-person transaction loses. The middle class renter gets a better space, their landlord has a tenant and income, the poor person gets an older apartment to live in (instead of a tent), and their landlord makes money too. Everyone involved in the transaction wins. But in her eyes, it's still a bad thing.

I think one reason buybacks might be better is because as businesses get too big, they can get diseconomies of scale. Like, if you're trying to deploy $N of insurance capital, you might be able to be pickier about who you insure than if you have to deploy $10N worth of insurance capital. Similarly, if you have a Berkshire-sized portfolio to deploy, it sharply limits the number of potential investments relative to a portfolio a hundredth that size. Essentially, if you get too big, you can no longer deploy your capital in great investment, but have to settle for good investments. If you buy back shares, you can keep yourself in the sweet spot where the economies of scale benefit you, but the diseconomies of scale don't yet have a major impact.

The main reason you're wrong about this is because businesses can have huge amounts of leverage to the price of the commodity so that a 50% increase in a commodity can lead to a 500% increase in the value of the business. e.g. if you take a different timeframe of Resolute, it's gone from the low $2 range to $16 as lumber moved from $300 to $700.

Well, kind of everyone defines it that way, economists, accountants, pretty well everyone. If you google "income" you'll find the term is pretty standard.

Income does not imply in any way a working relationship. It just implies money coming in. e.g. gambling profits, capital gains, insurance payouts, and gifts are all income.

Hmm, I think this violates Hanlon's razor (never attribute to malice that which is adequately explained by stupidity).

Yeah, this theory makes sense to me. At this point in North America, people are either: vaccinated, so they don't really need to worry much about major problems so can revert to normal behavior non-vaccinated, but are unvaccinated because they have little fear of COVID, so can continue to behave normally There will be deaths among the non-vaccinated, but most will be akin to someone dying as a result of not wearing a seatbelt--unfortunate, but a natural consequence of a decision that that person was entitled to make.

It was a chart created by someone on reddit, but it looked reasonable based on my in-my-head estimates. I imagine they got the data here.

I'm no expert on pandemics, but if the description of ADE is correct, then I struggle to see how it's consistent with this data from Ontario. Of people 12 and older, Ontario has 73% fully vaccinated and 82% with at least one vaccine dose, and Delta is the most common variant.