UK
-
Posts
1,846 -
Joined
-
Days Won
14
Content Type
Profiles
Forums
Events
Posts posted by UK
-
-
-
-
6 hours ago, ValueArb said:
More recent research, however, has found that most children learn to lie effectively between the ages of 2 and 4. The first successful lie can be pegged as a developmental achievement because it marks the child's discovery that her mind and thinking are separate from her parents'.
-
It’s 1931, and a boy and girl, both about seven years old, are playing on a swing set on N. 41st St. in Omaha. A stray dog appears and, without warning, charges. The children try to fight the dog off. Somehow, the boy is unscathed, but the dog bites the girl. She contracts rabies and, not long after, dies. The boy lives. His name? Charles Thomas Munger. Charlie Munger, the brilliant investing billionaire who died on Tuesday in a California hospital 34 days before his 100th birthday, told me that story when I interviewed him last month. I’d asked the vice chairman of Warren Buffett’s Berkshire Hathaway BRK.B -0.38%decrease; red down pointing triangle: What do you think of people who attribute their success solely to their own brilliance and hard work? “I think that’s nonsense,” Munger snapped, then told his story, which I can’t recall him ever publicly recounting. “That damn dog wasn’t 3 inches from me,” he said. “All my life I’ve wondered: Why did it bite her instead of me? It was sheer luck that I lived and she died.” He added: “The records of people and companies that are outliers are always a mix of a reasonable amount of intelligence, hard work and a lot of luck.”
-
-
9 hours ago, Viking said:
What do you think?
I think you are right!
-
Rest in peace. Gone but not forgotten.
-
1 hour ago, MMM20 said:
Does anyone here have a view on whether this should matter much to Fairfax investors?
https://lindynewsletter.beehiiv.com/p/borders-lindy
The Canada Experiment
In a bold and unprecedented move, Canada is embarking on an audacious experiment, opening its doors to millions of high-skilled immigrants in a bid to outpace the economic might of its southern neighbor, America. This strategy is anchored in the belief that an infusion of skilled talent can catalyze innovation, boost productivity, and propel Canada to new economic heights, potentially surpassing the United States in wealth and technological advancement.
In 2023, Canada is on track to welcome nearly 500,000 new permanent residents, marking a significant increase from previous years and surpassing its annual target. The plan is to keep this going, adding millions every 2 years and turning Canada into a 20-40 percent high-skilled immigrant country.
However, this gamble carries with it the risk of significant societal upheaval. If the policy fails to integrate these new immigrants smoothly, or if it inadvertently exacerbates economic disparities and cultural tensions, Canada could find itself grappling with deep internal divisions. In the worst-case scenario, such tensions could escalate into widespread civil unrest or states seceding from the union like Quebec or Alberta.
What if it’s successful?
In a successful scenario of Canada's immigration strategy, the country actively transforms into an economic superpower, surpassing even the United States. By welcoming millions of high-skilled immigrants, Canada ignites an innovation and productivity renaissance. Cities like Toronto, Vancouver, and Montreal rapidly develop into global tech hubs, challenging Silicon Valley's dominance. Canadian companies, driven by a diverse and talented workforce, lead groundbreaking advancements in fields like AI, renewable energy, and biotechnology, attracting worldwide investments.
This is a high stakes gamble. If Canada’s plan works. If you can just import high-skilled immigrants and create an economic superpower, than America may copy it. A lot of people want to move to America. Billions. We are all waiting and watching the Canadian experiment.
I think that, despite of some problems and imperfections, this immigration system and it's ability to atract and melt people quite successfully (contrary to some other situations e.g. in Europe) from all over the world is basically a secret source of US, Canada and maybe a few other, mostly English speaking, countries. And it bodes very well, especially for the future, when most of the world, including China, is starting to deal with huge demographic problems. Couple this with a deteriorating geopolitical situation elsewhere in the world and North America really stands out as a region which can defend itself and be reasonably safe, has abundant energy, water, agricultural resources etc, positive demographic, rule of law etc, and so not only people and ideas, but I think also capital will flock in a major way into this region long into the future. If you where a martian, looking at the earth from the distance, where else would you put majority of your capital:)? So of course it is not a minus for an insurer or a conglomerate with a major focus and exposure to North America:)
I was just listening to the somewhat relevant discussion about this topic: https://www.youtube.com/watch?v=u4KR5dBh5OM
If not for martians, this whole idea and attractiveness of Canada or US is sure much more understandable and obvious for some Eastern European investor:)
-
7 minutes ago, ValueArb said:
This is mostly a myth. Xerox did try to go to market with the Xerox Star, but it was way too expensive at $16,000 for a work-station let alone tens of thousands more for servers and printers. It was in many ways too complex and in other ways incomplete (still relied on command driven terminal for a lot of functions).
Apple tried something similar with a more mainstream processor to make the Lisa for about half the price, but failed utterly too for many of the same reasons. It wasn't until Jobs got booted off the Lisa project and raised the pirate flag commandeering the Macintosh project from Jeff Raskin that a reasonable cost graphical computer was created. The team compressed the GUI into 64k of ROM, able to run applications in 128k of RAM, fit on a 9 inch screen and use a $5 mouse that Jobs helped design, all which enabled Apple to release a useful $2,500 graphical computer with a full graphical user interface, no more command line, GUI applications for everything.
Microsoft released Windows mobile devices in the mid-90s, more than a decade before the iPhone started development. They had phones nearly 5 years before the iPhone was released. When the iPhone was released, Balmer famously laughed at it and took it years to pivot to build something similar with Windows 7 and Windows 8. It wasn't Antitrust, Microsoft (Balmer) fumbled this from the beginning, all their mobile devices and phones were terrible.
Thanks. Well, if main participants of events do not know what are they even talking about, everything looks even more accidental and confusing to me:)
But his is the source of a full version of the story on mobile OS, from which I copied only a few funny lines: https://stratechery.com/2023/attenuating-innovation-ai/
'This opinion is, to use a technical term favored by analysts, bullshit. Windows Mobile wasn’t three months late relative to Android; Windows Mobile launched as the Pocket PC 2000 operating system in, you guessed it, 2000, a full eight years before the first Android device hit the market.'
But my whole point was, that for whatever reasons, Microsoft missed it and it is kind of scary how accidental some important developments in tech are.
-
40 minutes ago, james22 said:
So why didn't they buy when Tech swooned last year?
They'd identified the Tech they like (Amazon, Google, etc.), they had the cash, valuations were attractive, and they could have bought in significant size.
Not a good reason:
Warren Buffett Missed The Opportunity To Invest In Amazon Early, Says 'I Blew It' And Was 'Too Dumb' — Now He Refuses To Invest Today Saying, 'I've Probably Got So Many Psychological Problems With The Fact That I Didn't Do It That It's Very Hard to Do It Now'
https://finance.yahoo.com/news/warren-buffett-missed-opportunity-invest-165456527.html
Again, my simple understanding: because they already had like half of the portfolio in tech, in Apple, they liked the best.
-
39 minutes ago, dealraker said:
In the early 2000's First Union and many other big banks were going around paying 4 times book for community banks earning 10% on equity. They'd flush both the silly price excess and future expenses in a huge one time charge. Thus for years the book value of First Union under Fast Eddie Klutzfield's "Hell, with the accounting we use I can pay 5 x book and make it work" model stayed the same and naive investors favorite metric, sold by all the analysts with obsession...that ROE thingy for these liars went to and stayed 25-28%. Celebrate...celebrate...dance to the music!
But the above? Hell, it had already gone on for 10 damn long years and more. The ending of it? Nobody knew for sure, but it was going to come.
And today not one Brookfielder will own up to the absolutely brain dead bizarre way the subs, and thus the part owners of the subs, tally up thier stuff. How long can that go? There's not one single person, even those who know it is all made up - not one can tell you within a decade of when it will stop. Same was true when the four of us thoroughly enjoyed the public thrashing and condemnation we got from our "The 12 Ways GE Misleads Investors" stuff. Even today, some 25 years after we began that my cousin CPA says with a smirk (this guy is a brilliant investor but he did lose a whopping $5 mil of family money with Enron), "You didn't prove a thing." He is 100% correct; we proved nothing...absolutely no proof of anything ever with our GE report.
And nothing will ever be proven with Brookfield either. Life....ain't it plum unfair and awful?
But angst as with Fairfax hovering around book? Can you invest there today and get a return that's almost surely above inflation and above what you'll get with safe fixed? I'd say...."Hmm...seems the probability is about 95%."
Do you have to worry about Prem's accounting? Is he out shouting shit like plan value is double of the current stock price? Is he like Welch upon retirement coming on CNBC daily to rant, "17-18 percent with GE as far as I can see" a few days before the largest one-time write down in the insurance business history...followed by 20 plus years of fake accounting coming unglued.
And the problem with Fairfax is....??? There is no problem with Fairfax except that you can buy all you want.
My morning rant! Have a great day everybody.
Thanks. You are right, angst is not necessary and I need to be more patient, because, on the other hand, how could one even complain, with FFH up like 50+ per cent YTD, after a few up years before:)
-
37 minutes ago, james22 said:
Great example.
And the story of how Xerox and it's PARC became so powerful and later failed is no less interesting:
https://www.gatesnotes.com/Business-Adventures-Free-Chapter-Download
https://www.gatesnotes.com/Business-Adventures
One of Brooks’s most instructive stories is “Xerox Xerox Xerox Xerox.” (The headline alone belongs in the Journalism Hall of Fame.) The example of Xerox is one that everyone in the tech industry should study. Starting in the early ’70s, the company funded a huge amount of R&D that wasn’t directly related to copiers, including research that led to Ethernet networks and the first graphical user interface (the look you know today as Windows or OS X). But because Xerox executives didn’t think these ideas fit their core business, they chose not to turn them into marketable products. Others stepped in and went to market with products based on the research that Xerox had done. Both Apple and Microsoft, for example, drew on Xerox’s work on graphical user interfaces. I know I’m not alone in seeing this decision as a mistake on Xerox’s part. I was certainly determined to avoid it at Microsoft. I pushed hard to make sure that we kept thinking big about the opportunities created by our research in areas like computer vision and speech recognition. Many other journalists have written about Xerox, but Brooks’s article tells an important part of the company’s early story. He shows how it was built on original, outside-the-box thinking, which makes it all the more surprising that as Xerox matured, it would miss out on unconventional ideas developed by its own researchers.
And then: https://youtu.be/_15DReQKbt8?si=Vc2bdixPvdhMnH75
There’s no doubt that the antitrust lawsuit was bad for Microsoft. We would have been more focused on creating the phone operating system so that instead of using Android today, you would be using Windows Mobile. If it hadn’t been for the antitrust case, Microsoft would have…
You’re convinced?
Oh we were so close. I was just too distracted. I screwed that up because of the distraction. We were just three months too late with a release that Motorola would have used on a phone, so yes, it’s a winner-take-all game, that is for sure. Now nobody here has ever heard of Windows Mobile, but oh well. That’s a few hundred billion here or there.
-
On 11/24/2023 at 7:02 PM, LC said:
So I guess two questions to ponder as we head into the new years:
1- What is stopping you from researching and forming a real investment opinion on technology companies? Where would you start?
2- And to make it a bit more specific, of all the Technology companies you are aware of, which do you think are the "best bets", if you had to choose?
Re 1: I think there is so much information on tech companies that it is almost to much:). Like from daily news to books dedicated to a particular company. For me the best sources were: a. books: e.g. Jobs biography / Apple, In the Plex / Google, Everything Store / Amazon etc. Not that I get any clear answers from them, on the contrary, my main take away was maybe how hard it is to predict the future and how astonishingly accidental sometimes success could be. Like when Jobs saw the idea of the graphical OS interface (invented at Xerox PARC and he did knew what to do with it, and so Apple made it into the life, but than only Gates ans Microsoft made a real money (and monopoly) from it, also by copying the idea, but additionally by opening it to others (contrary to Apple's closed system). So a lot of stories like this, really good for not to have a too firm opinion on ones ability to know all the answers etc b. I really like to hear or read what other investors I respect has to say or write about tech companies they own. c. and then there is some quite quality sources, like stratechery.com, which I like to read.
Re 2: So I did not really invested much into tech before last year (except the mistakes of following Buffett into IBM in 2012 and later trying luck with China's big tech in 2021), and it was quite a headwind not to own them like from 2015 to 2021, to say the least:), but last year I just thought it was irresistible not to buy some of these big tech companies and I ended the year with like 4 of them (and 3 in a major way) and some leverage to do this. After all reading and thinking, I came to the conclusion (and generally still think the same) that the best way for me is to go only with these really big leading tech companies which are understandable and investable for me enough not to be afraid to buy or to hold while they are not so popular, because all other/smaller/challengers or all these tech companies without profits etc are just too hard for me. This kind of rationale also really stuck with me: https://stratechery.com/2020/the-end-of-the-beginning/. So basically a universe of AAPL, MSFT, GOOG, META, AMZN, all from Magnificent 7 or 8, except for the TSLA, NFLX, NVDA. And maybe also Tencent and TSM, if I was not afraid of geopolitical and China risks (maybe someday). So any of these big 5 or 7 I am prepared to buy and own, depending on the valuation and situation, but currently I own only META (~60 per cent of original stake) and some AAPL indirectly via BRK.
Also, I am not sure if payment companies qualifies as tech in your question, but currently some of these (e.g. PYPL or STNE) looks really attractive for me, but so far I do not have enough conviction to make them into a large positions (I am not comfortable with the risk, that Google, Apple or some other big whale could eat them alive:)).
-
7 hours ago, Viking said:
Credit Risk
The one risk I have not discussed is credit risk - the risk the issuer may default on one or more payments. Fairfax’s fixed income portfolio is stuffed mostly with government bonds. High quality. Chubb? Very different.
The yield on Fairfax’s and Chubb’s fixed income portfolio might be similar. However, the credit risk (made up of the holdings in each of the two portfolios) looks very different to me. Which portfolio is more risky? Which portfolio should perform better it we see an economic slow down? This post is long enough already… I’ll let you answer those two questions on your own.
Thanks Viking!
And yet CB trades at almost 1.8 BV vs FFH at 1+ BV. I know, I know: everybody else has a better story, reputation, moat and never makes any mistakes etc...except you will not see this in their recent results or track record:)
-
28 minutes ago, SafetyinNumbers said:
The short answer is that shareholders really liked the hedges when they were on.
I didn’t own Fairfax back then but I was buying US banks in early 2016. A lot of financials were in free fall because the fears of the US and Canada going into negative rates seemed like they were at their highest point. A lot of the same PMs that now complain about the hedges owned Fairfax because of the hedges. The stock acted well when the market was down and especially when other financials were down so FFH had the effect of dampening volatility and increasing risk adjusted returns. Even now, anecdotally FFH tends underperform on big up days for the market and outperform on big down days and I think it’s partially because the historical hedges (including GFC-related hedges which worked out) still influence investor behaviour.
The market wasn’t efficient back then and it isn’t now. Valuation and expected returns are just not that important to most active managers who are trying to beat the market in the short term. If they were trying to generate high risk adjusted absolute returns over long periods of time maybe it would be a different story.
Thanks. Again, then it is quite ironic and bizzare situation. Looking forward it to be fixed:)
-
31 minutes ago, Mick92 said:
It's impossible to say definatively but I suspect a good chunk of it is based on Prem's reputation in the investment community.
From Buffett of the north, hugely successful macro bets not that far in the rear view mirror to a maybe past it guy running an insurer in Canada, to idiot Prem torching shareholders money on Blackberry and other shitcos. All culminating in the guy screaming at him on one of the conference calls that he needed to go. But, by then the ship was turning. That was probably maximum Prem pessimism, I think he is on the rehabilitation path, but probably needs another year or two of excellent returns for the market to fully price that in and maybe the Buffett of the north nonsense starts being said again.
Plus, who is buying FFH when sentiment was so low and dropping? People were bailing because of Prem maybe, but for other people looking at it, it was now an insurer, only listed in Canada, with the market mired in an apparently perpetual state of ZIRP. I dunno, it's not that surprising to me that the BV multiple just kept dropping.
Right now though, I just don't see a reason to sell, it's become by far my biggest portfolio position so you have to watch it closely but everything is humming along and I think there's at least another couple of years outperformance here to be had.
Thanks. Sure. But how did this reputation was any better in 2016 vs 2023? This makes no sense to me? So OK, maybe it is still far from perfect in the eyes of the market, maybe only halfway to being perfect, everybody is entitled to have an opinion, but it seems to me, anyway you look, reputation should be way better now, than in 2016? But valuation is not.
-
7 hours ago, Viking said:
“It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine--that is, they made no real money out of it. Men who can both be right and sit tight are uncommon.”
― Edwin Lefèvre - Reminiscences of a Stock OperatorCoincidentally, I was listening to this book (audio) for the first time and just went through this chapter another day:). Yes, I think this is just the right approach to FFH currently. Trust and verify, watch and enjoy:)
Another thing I do not understand, but maybe somebody could explain this to me is why despite all it's sins of the first ~5 years of the last ~10 years, in 2014-2017, just when or after most mistakes were made and ZIRP was a never ending new normal, FFH was yet valued by market at 1.2-1.3 BV. And now, with much more clear future (at least for the mid term), better underwriting and with almost perfect track record in investing and everything else of the last 5 years, it trades only at 1 BV? I understand most of these attempts to rationalize current valuation, being cautious or skeptical on its future, or comparing to BRK and what not, but how does FFH of 2016 at ~1.3 BV vs FFH of 2023 at ~1 BV, while at the same time most peers enjoyed increasing valuation metrics, makes any sense?
My guess would be a lot of this skepticism is because market participants just concentrate too much on the price chart and it's recent impressive gains vs valuation changes, which also improved somewhat, but not nearly as impressively (because of improving fundamentals).
-
5 minutes ago, dartmonkey said:
*Question for someone like Viking who has probably already done the calculation: what is the average underwriting performance of Fairfax, say since the year 2000, as a percentage of net premiums written for instance? I'll do the calculation at some point, but if someone's done it already, that would be quicker!
Maybe will be helpful.
-
19 minutes ago, changegonnacome said:
I think the reporting appear pretty solid on this from reputable sources - that a tentative deal was being put together in Turkey......lots of water from Turkey to a workable peace however so this woulda coulda sliding doors moments are rife with 'what ifs'.....however it appears that Boris Johnson chiefly with no doubt implicit/explicit US backing encouraged Zelensky to walk away......the hubristic math was that Ukraine's counteroffensive would be so wildly successful with the West's help that a better deal lay out in the future for Ukraine.
They (Uk/US) were probably right about that to be fair........but the West/Ukraine missed the moment of peak negotiating strength which was earlier this year when Kharkiv & Kherson were recaptured.......alas that was many many months ago now......and who needs a deal more now is much less clear.
On the other hand isn't it always the case, that those with momentum on their side are not keen to negotiate or they demand too much? And btw Ukraine did regained a lot of territory after that. The question is now what? Maybe everything settles into some Korean situation, but will this be so stable and sustainable?
On the other hand, it appears far right, with Orban like ideollogy, just won elections perhaps in the most (former) open country in Europe...it is still hard to be very optimistic and sure about the future, at least in this part of the world. But hey, at least that German brigade is coming soon:)))
-
48 minutes ago, John Hjorth said:
Thank you for sharing, @UK,
The statement by John Mearsheimer at around the 4:30 mark in the video about avoiding this war in the first first place, what is the basis for that particular statement from him? What is Mr. Mearsheimer referring to here? To me, it's not specific, as I experience and perceive the statement.
As I understand he thinks that negotiations between Russia an Ukraine at that initial stage of the conflict could have been successful and they were close to some workable agreement, but Ukraine was encouraged to walk away from it. And today chances of something similar is very low. No trust etc. Not that there is something very new in what he said and I did not listened to the whole interview yet, but find his philosophy (offensive realism?) and worldview quite interesting. Not that I agree with him on everything:), but I think he says a lot of things that makes sense, kind of how everything works etc. Also on US vs China and other issues.
-
-
Some at OpenAI believe Q* (pronounced Q-Star) could be a breakthrough in the startup's search for what's known as artificial general intelligence (AGI), one of the people told Reuters. OpenAI defines AGI as autonomous systems that surpass humans in most economically valuable tasks. Given vast computing resources, the new model was able to solve certain mathematical problems, the person said on condition of anonymity because the individual was not authorized to speak on behalf of the company. Though only performing math on the level of grade-school students, acing such tests made researchers very optimistic about Q*’s future success, the source said.
-
Black enough for me:
-
1
-
-
51 minutes ago, backtothebeach said:
Digital currency, iris scans, AI ... what could possibly go wrong?
Charlie Munger Passes at 99
in General Discussion
Posted
Thanks! Did not realised this.