benhacker

~2.5 years. Avg. cost about 2.25 CAD... I think.

What Nate said. The history of this rule is to reduce competition for US fund companies. Basically PFICs are funds (of course, all foreign funds are PFICs, but not all (but most) PFICs are funds). I think the OP probably cares about: - companies that turn into PFICs - companies that are non-traditional PFICs - (1) or (2) + companies w/ lots of US based investors Otherwise, it's like asking how stocks perform with tickers starting with "G". It's kind of not-relevant.

A good link to share. This was one of the two I was referencing above BTW... I agree that using these kinds of short guys as a sort of screening tool is helpful... screen for both longs and shorts! Thanks Liberty and Frank for the discussion.

Hey former HCG.T short here. Still think it's a good short BTW (no position). I personally think Cohodes is lame, and is just a mouthpiece for someone(s) else's research. Listen to his interviews and all the BS he spews... and actually ask what he is saying exactly? Yeah, HCG.T got caught a while back in some bad broker relationships, and then they hired / fired a CEO on short notice, and talked about it poorly to markets. Oh yea, and RE is on fire, and HCG.T is struggling (probably shorting on that last point is all you need to know). But you listen to him talk in interviews (I've only listened to 2 I think - so maybe I'm missing something) and he takes 15 minutes to say that, and then provides a bunch of stories about how he's out for the little guy, and how companies are after him all the time. I think HCG.T is a good short, but Cohodes doesn't make the case well / succinctly. The Twitter-verse is all beared up because HCG.T has been "overdue" for a while - and CAD RE is totally bonkers. Shorts like to come in with vague sounding hype once the bell seems to be tolling.... and the timing is really ripe for HCG.T, and I would say 50/50 they don't make through to the other side.... *but* very little of what Cohodes says is needed to deduce that. HCG.T is probably crappy, maybe even as crappy as Cohodes implies. His reasoning / justification as I've heard it said though, doesn't explain why that is. Borrow is >20% last I checked... which is too bad. Cohodes and Left are a cut of the same cloth IMO. They are willing (through either compensation, or intestinal fortitude) to be the delivers of very bad news (a not-popular skill in stock markets), so they get fed a lot of short ideas. When *they* are right, I think the *they* is someone else behind the scenes. I agree with Liberty also that Longs / Shorts should be held to the same standard. And I also think that *as a long* you need to understand how exposed your longs are to short campaigns even if you think the company is good. The truth always has two sides, and you should know both if you own anything. HCG.T is really exposed to markets right now, and they are dangerously leveraged at-nowhere-close-to-start of CAD RE economic cycle. Good luck to anyone long this or CAD financial assets. CA doesn't need a US 2008 style blow up for investors to get hurt. Ben

Don't have exact numbers handy: - held WFC since mid / late 2008. Returns from first purchase probably ~7% annually, weighted average much better. - held NICK since 2007. Returns from first purchase about ~8% annually, weighted average much better. - held (until Dec '16) FFH.T since 2006. Returns from first purchase ~20% annually, a bit worse I think. - held BRK.b since '05 (I haven't held continuously outside of an investment club, but pretty close). Returns the same as others. ;-) - held BAC since late '11. Roughly 20%+ annually I think... weighted average is probably similar, maybe a bit better due to measuring now. - held IBKR since '11 as well. Roughly 15%+ annually... weighted average is probably better. All from my best recollection.

Yup. The best bubbles are built with a lot of truth mixed in with insanity.

Packer: I agree with you here generally. I think certainly some folks are more put off by Prem's actions because they blindly hate Trump (some may sightedly hate him too...)... and those same people may not look at / care about the favorability data from small biz's or consumer confidence etc, which tend to be real data points leaning toward more economic growth. Well... yes, directionally this is consistent. I think where perhaps some disagreement is cropping up by those on these boards (myself included) is more the magnitude of the change, vs. the directionality. In May 2014, being bullish on Modi and buying a few more Indian shares, and launching a CEF where you charge hedge fund like fees to invest other folks (and some of your own) money in India... well that seems pretty decent to me. In Nov 2016, buying in a net nearly $10B in US stocks? Not sure I follow the logic the same way - but directionally, yes, Prem and team are being "consistent". I will note since Modi's been elected (just under 3 years ago), that the total return of Indian indices is <15%, or about 5% annualized. I get that Prem isn't saying this will make stocks great again, but more that biz friendly leaders reduce the downside risks for stock selection, but still, I think this is mostly an excuse. I say this all as someone who, while not a supporter of Trump, is generally supportive of many of the policies highlighted by Prem / You / Others being positive for economic growth in general...

Given he has been having major down years during the market run up, he is clearly not *hedging*, his fund moves like it's a bear fund, not a market neutral fund. His commentary on this is not honest in my opinion. I often enjoy some data he shares, but it's bonkers how he manages his fund...

Liberty, I am not anti-science... at all. Question though, did you read all these articles that you state are iffy?

Thanks for sharing... has something for everyone to disagree with and feel uncomfortable about. :) Good read.

Market micro-structure is crazy complicated. But yes, some situations, when providing liquidity you can get paid to trade at the exchange level. I've read a few text books on this to understand market making and internalizers / HFTs a bit better... honestly, it's still pretty hard to grock, mostly because US market structure and regulations are idiotic. Note some stocks are moving to $0.05 spreads on US exchanges (but of course some folks... cough ... Citadel... cough) can trade intra-spread. I would actually not be surprised that this round of brokerage commission cuts is partially related to this "pilot" being extended to more shares, as it increases (or should) order flow payments to brokers. Just a side note, but trading in these shares it notably more challenging and exposes some of the issues we addressed above.... It's crazy to think how backwards US markets have become when $0.05 spreads exist (for retail) on a $3.50 stock.

Some people appreciate determinism. It's a bit off putting when you put in a large trade and IB reports your commission as "-$0.55 - $4.17" which is what they do. Some folks would rather it just say "$3.75". Agree. IB measures it and brokers do report this number (in aggregate). IB is the only one who publicizes it though... for obvious reasons. I think you get better executions (weighted for price received, and execution success) for a $200k trade by not placing a single price limit for all $200k and instead breaking it into (even a simple) algo or time weighted trade. it's probably not possible for us/me to prove one way or another to ourselves, but it is self evident to me, and while many would argue the different would be small, I think to make $50 make sense on a $200k trade, it doesn't take much. Again, for large, liquid names, that you want to do a market order on, I think a fixed structure for pricing is superior in terms of commission and (likely) execution... but even in that case, I'm not 100% sure. Machines aren't reducing order size for no reason, there is a market impact (I see markets move away from me on even moderately sized limits)... there is a lot of information content in a $200k non-hidden limit order, and I think you may have more market impact than you realize, esp. since fidelity just hands it to Citadel... My 2 cent. Every year, the same discussions end up going on re: IB vs. Fido, and the commentary is always the same... I think perhaps I should just write up a document that captures the pros / cons. :) thanks for the thoughts, I hope the tiered commish saves you some $$$!

Race, you should use variable / tiered pricing at IB... cost is 30-40% less than you are quoting for their "fixed" pricing structure (rough number, on average). I think execution improvements at IB honestly probably make my commission there zero. If you do market order, I think the retail guys will do better, because internalizers will execute you more / faster cause they think you are dumb money, but I think with limits (adding liquidity) through IB with tiered commission structure you come out ahead no matter what. I think for the vast majority of stocks, you can't execute >50-100k trades at a single execution price anyway, so unless you are trading only ultra liquid shares, I think your example(s) aren't really valid because SCHW / Fido would break those orders in two, or you are doing a market order and you have market impacts to measure. As a side note, just traded (with tiered commission structure) $46k worth of BAC in a single trade yesterday. Commission was $7.14. (EDIT: and this was a marketable limit order, taking liquidity... )

To me, I think this is net positive overall (slightly), but short term negative for sure in terms of IB's financials. Lower brokerage revenues near term for competitors, lower growth in accounts for IB near term, but I think much less competition overseas by US comps, and less staying power of US comps in the US long term. They (US comps) should focus on their support and website and outsource to IB their trading / brokerage infrastructure. After the cuts in commissions, I think they will begin thinking about this, at least the smaller guys.... win-win in the near term; long term IB scales and wins. I think long term, this is an oligopoly market, so SCHW / Fido / IB are probably the ones to make it here. I would suggest that this doesn't erode IB's "cost" advantage... this erodes IB's "price" advantage, which will surely slow their growth in the coming year. Again, I'm not wringing my hands with greed, but I don't think this is a negative long term. Fidelity's weighted average commission was already near $4.95... for even moderately large accounts, they negotiated down a long way from $7.95 already. I do think it's indicative of a commoditizing market, and I think in commodity markets a few differentiators and low cost producers win.

AIG deal...

Always was a cat person growing up (we had no dogs), but my wife turned me. Rescue Giant Rat Terrier...

wisdom, my comment wasn't criticizing their investment in ICICI... I think that was clear.

? Raising more capital for a deal they shouldn't have needed to raise capital for, that they already are raising capital for by paying at least partially in equity and selling minority interests in the acquisition. I find Fairfax's capital allocation continuing down a path that leads me to raise an eyebrow... Understand of course the above is rumor only (and of course we don't know the magnitude of what part of the Lombard sale goes toward AWH...) but still... I like Fairfax, but with the complexity of their business and the recent actions, trading at ~1.5x TBV, I think they are inviting negative press.

Valuesource. You are of course correct. Meant to say follow on offering...

They can just do a secondary to issue new shares... so it's like a company doing a secondary. interesting fact that ETFs are actually "closed ends" with just a very explicit and fast exchange / redeem feature...

I'll reminisce a bit too... I didn't think after early '09 the situation was that dire, but in late '08 it was real scary when it felt like legal boundaries and legislation was shifting daily. I sent clients a note in early march asking for funds and highlighting some ideas (WFC common / pfds being one), and I had a sophisticated client say that they had another fund manager who told them they wouldn't be a buyer of Wells until it got to $3 (or maybe $2) / share. I responded nicely that if this manager wasn't buying at $10, they wouldn't be buying at $2 either, regardless of what they said as clearly they didn't know how to value a bank, or they were scared shitless and didn't want to just say the truth (like many at the time) that banks were too scary. :) Wells Preferreds were probably the most crazy idea during the time for me as I thought after the Treasuries early '09 announcements, permanent loss was probably <1% chance. WNA.p and WFC.pL both got briefly under 30% of par if I recall. I don't think the real puke lows during crisis' like this are so much about fear, as it is about liquidations, and the fact that market makers can only absorb so much (as well as new investors). It takes a while for folks to rotate from names they know to names that are new (to them) but really cheap, so sometimes the pukes get just totally out of hand beyond all "reasonable" valuation criteria. The strange thing about '08 - '09 was how divergent valuations were, and not always necessarily correlated to risks (many preferred and exchange trade bonds went to hell but only due to liquidity I think)... some investors ran out of money and were liquidated, and others didn't/weren't. Small example, at the very end of '08 I swapped PGR shares for NICK shares and I just remember thinking that the risk tolerance and circle of competence for holders of NICK and PGR must simply have no overlap since the valuations (for albeit very different businesses) were so different. But then I had to admit that I hadn't swapped PGR to NICK until that point, so what was *I* waiting for (I owned both)? I think it was like 1.5-2x book for PGR to 0.3x book for NICK... both were profitable during '08 and NICK was riskier, but still, bonkers differences. I also don't think the '08 crisis in the market was really that much different in scale in the '73-4 situation. Both saw >50% real market declines (worse than the Great Depression in real terms), and newspaper coverage at the time was similarly apoplectic. The fact of the matter is, that when stocks drop 40-50% in real terms, people think the world is going to end... by definition. '08 was "different" but it always is (and will be) "different". If you care to disagree with my last point that's great, but I'd love to hear someone disagree who had serious dollars in the market in '73-74... I don't think they would say it was so much different... I think the relative youth of individual investors, their short tenure, and the demographics of this board, as well as recent (3-4 decade) market behaviors has given folks an improper scale of what a market crisis really is and what it looks like. My 2 cents.

Interesting Ben. I came to this conclusion a while ago as you know. I dont understand why more insurance? To get more float? Why not just invest the float in really good companies, and increase it through cash flow? Prems economic comments scare me. Is he just trying to justify selling off the hedges? I dont believe it, for one second. US markets, and the world at large have gone this long without a bear market, precisely once, before. When Trump takes over and the markets realize he cant deliver on his promises, and that his economic advisors are incapable of operating in government this is going to get really bad. It scares me when everyone thinks sunny days are here again. And Prems economic comments just scare me more. Sorry Al, I thought I responded here but I didn't. Several things kind of led me to sell, and it's similar to your line of thinking. I may rejoin the fray again, as I do like the management team. 1) The poor logic (my opinion) by those claiming a new era has arrived. I find the logic humous because ideologically, I'm very closely aligned with the free market folks... just don't think that helps the stock market (I think it does help the economy and many issues we see... but those issues weren't holding back markets, so it's strange to think even a partial fixing would make the market even better!) 2) The complexity of Fairfax as an investment. Perhaps for some, a reasonable multiple to book and Prem's stamp is enough, but for me when they are multiplying their asset base by buying huge companies, it makes the work needed to understand the business much harder. 3) The financing of their deals doesn't make sense to me. They use *way* too much equity / JV funding (as well as debt!), and it either means something nefarious or that Prem and team are so conservative that I need to assume $2-4B in assets will just always be making $0 which changes my math on the name. Also, I would extend this to them continuing to carry large debt while simultaneously carrying multi-year huge cash balances.... 4) Fairfax's explanation of many of their actions have been lacking for a long time and I lost patience. 5) At this stage, Fairfax's equity investments have been utter dogs, and if you think they haven't lost it, then it's a way better deal to buy some their holdings as if you believe they are still good, then FFH has more $$$ to chase those stocks with. You can also buy these holdings at 1x "book" Don't mean to malign anyone who owns, just stating my logic. When the S&P trades for 25x+ TTM GAAP EPS though, and I see some of the logic recently displayed on this and other boards, I know which way to take my chips....

Oh, i think it's far from expensive, so you will likely be rewarded. You now have a lot of investments working for you sans hedge. So far in Q4, mostly that hasn't helped a ton, but I like the heavy international focus. Don't take my selling as that I'm now shorting. I just think the thesis has changed. Need some time away to see if and how much I want to own.

Well guys, have to say, kind of seems real strange to me. Fairfax is on a rollup spree in insurance... but unlike a rollup they aren't doing anything strategic to get synergies. They are running a decentralized rollup and paying prices that don't seem great, and funding from sources where they also don't have a cost advantage (debt or equity). I think there are few charitable explanations of their recent actions, but there are a few bad explanations. Hate to reign on the parade, but doesn't seem right to me. I'm out of my position here. Will revisit and decide whether to re-enter. Been an interesting >10 year hold for me... but I think the thesis has changed too much, and the negatives have accumulated too much for me to continue to hold. Cheers,

Yes, this is your issue.