mcliu

rb is right. You can't claim the small business deduction if your corporation is solely set up to hold investments. That said, it's actually not that bad to invest through an IHC due to tax integration. As long as you dividend out your gains to the individual, the tax rates are about the same whether you invest through a corporation or as an individual. However, if you plan on retaining those dividends in the corporation, they will be taxed at the highest marginal tax rate.

Does anyone know what Michael Burry has been up to recently?

Sounds like you're having one of those years. I've had them, and it sucks. What you have to wonder is: Are you having bad luck despite a good investing process, or do you need to rethink your approach? Personally, I ended up rethinking my approach. Maybe you can also see whether your YTD results are due to share price fluctuation or an actual impairment in underlying value. I mean even if you're an amazing investor you can't possibly make money every year because stock prices fluctuate a lot more than underlying values. Likewise, for the same reason, some bad investors can outperform the market in the short-run. Over time though, the good investor will prevail. Anyways, long-winded way of saying short-term price fluctuations shouldn't matter.

I do agree that the article presents too many anecdotes as evidence. On the other hand, the author probably had limitations since it was probably hard to find and aggregate data on these private firms. Plus he has to write for an audience that may not be sophisticated financial types. In the article, the author does mention that even some VC guys like Bill Gurley (that do have access to the data) express concerns at the excesses. I was hoping that maybe there's someone close to the action here that could prove/disprove some of the things in the article. I'm on the fence on this one since there seems to be a lot of genuine innovation but a lot of stupid-apps. I guess the other question is, how much is too much? Also, I do admit, "Silicon Valley" and "Bubble" are pretty vague terms. I'm not posing this as a serious question as much as a rehash of the title of the article. Just wanted to generate some discussion. (Didn't want to post a question like "Do you think the latest post-money Series B valuations are too high given historical averages?") Plus, the data on these things seems to be quite sparse. I would be happy to change the question into something more "appropriate" if you could give me some suggestions.

What's a better way of putting it?

http://www.vanityfair.com/news/2015/08/is-silicon-valley-in-another-bubble Valuations for SaaS and mobile companies seem to be very high. Are we in another bubble like the dot-com bubble? Your thoughts?

Another incredible data point, approximately 70 billion square feet of real estate currently under construction in China. "In the first seven months, the floor space under construction by the real estate development enterprises accounted for 6,541.72 million square meters, up by 3.4 percent year-on-year, dropped 0.9 percentage points over the first six months. Of which, the floor space of residential building construction area was 4,560.08 million square meters, up by 1.0 percent. The floor space started this year was 817.31 millions square meters, down by 16.8 percent, and the pace of decline expanded by 1.0 percentage points. Specifically, the floor space of residential buildings started in the year amounted to 566.84 million square meters, down by 17.9 percent. The floor space of buildings completed stood at 378.33 million square meters, went down by 13.1 percent, and the pace of decline narrowed by 0.7 percentage points. Of which, the floor space completed of residential buildings stood at 280.77 million square meters, went down by 15.6 percent." http://www.stats.gov.cn/english/PressRelease/201508/t20150813_1229936.html

My question is, if monetary policy is so powerful and printing money is so easy, why did Japan have such a hard time getting out of deflation? Japanese M2 is up almost 30% since 2007 and BOJ balance sheet has tripled, but CPI has essentially gone nowhere. Is the BOJ so incompetent that they just can't print enough money to revive inflation? and are the other central banks around the world more competent than the BOJ? Well as I said before there are certain fundamental differences between the western economies and Japan. One of them being that the Japanese are prodigious savers and not very consumerist. The Americans are about the opposite of that. This results in chronically weak domestic demand in Japan. If you want to disregards that fact go ahead. There is more to creating inflation than printing money. You need to have people that want to spend it. You have more of those in America than Japan. It's also easier to prevent an economy from going into deflation than to pull it out. Is that true though? Velocity of M2 shows a different story. https://research.stlouisfed.org/fred2/series/M2V/ I would recommend reading this piece: https://www.stlouisfed.org/On-The-Economy/2014/September/What-Does-Money-Velocity-Tell-Us-about-Low-Inflation-in-the-US So why did the monetary base increase not cause a proportionate increase in either the general price level or GDP? The answer lies in the private sector’s dramatic increase in their willingness to hoard money instead of spend it.

My question is, if monetary policy is so powerful and printing money is so easy, why did Japan have such a hard time getting out of deflation? Japanese M2 is up almost 30% since 2007 and BOJ balance sheet has tripled, but CPI has essentially gone nowhere. Is the BOJ so incompetent that they just can't print enough money to revive inflation? and are the other central banks around the world more competent than the BOJ?

I think the tax paid would be the same as any other company in that jurisdiction. What you should see is the deferred revenue balance shrinking as the amount is earned and booked into the income statement as revenue with accompanying expenses. The tax should be based on the earned income of the year adjusted for whatever tax accrual/deferrals..

Seems like maverick's the argument for equities is: Slow growth -> low rates -> higher multiples -> buy equities [because higher multiples > slower growth] High growth -> higher rates -> lower multiples -> buy equities [because higher growth > lower multiples] but it seems like you can make the same argument for: Slow growth -> low rates -> higher multiples -> sell equities [because higher multiples < slower growth] High growth -> higher rates -> lower multiples -> sell equities [because higher growth < lower multiples] Conclusion: inconclusive ::)

Given that the company is in liquidation, I think your thinking is correct. You've basically collected the $100 million upfront, but have not earned it yet. The true cash flows would be the $100 million net of the costs that would be incurred to provide the good or service to the customer. The current cash balance is likely much lower since you would be earning it over the next few years.

I think Dazel is suggesting that Biglari is a small position for Fairfax given that the company has likely unrealized gains of $500 million from Fairfax's various hedges..

I've been looking at coal business lately and I get that impression as well. It seems likely U.S. coal companies may face chronically declining demand given the availability and pricing of better substitutes.

Wouldn't the impact on domestic incomes come from domestic manufacturers? If you produce widgets in the U.S., your overseas competitors' products just got 5% cheaper, so you would need to lower your own prices causing higher unemployment, lower wages, etc.

I think the tech bubble is more evident in cloud based tech companies and software-as-a-service businesses, especially in late-stage venture and some publicly-traded firms. For example, take a look at Workday, NetSuite, ServiceNow. Investors seem to be assuming that subscription-based services have no churn, low CAC and limited competiton. The financials of those companies seem to tell a different story.

There's http://investorx.ca/ for free and CapitalIQ and Bloomberg if you're willing to pay..

By itself EBITDA is not too useful, but if you're comparing valuations or leverage across firms with different capital structure, a metric like EV/EBITDA or Net Debt/EBITDA is pretty helpful. I guess you can make the argument that EV/EBIT, EV/(EBITDA-capex) or EV/FCF is better, but at the end of the day they're all imperfect shortcuts..

Time for a Team CoBF? ;)

FFH and FRFHF has to trade in-line with the USDCAD exchange rates, or else you can make an arbitrage profit by buying FRFHF OTC and selling the shares as FFH on the TSX while shorting CAD.

Shouldn't you try to assign a probability from a to e and calculate an expected value?

Is fusion even worth building at this point? Why not spend the money making better PV and batteries? That way you can harness the sun's energy, which is a pretty powerful fusion reactor..?

I think it may also be beneficial to think of deflation in the supply context. Even if demand is growing, if capacity and supply is growing at a faster rate, you will see deflation. That's sort of what we've been seeing, for example, in the global labour market (huge supply growth as a result of globalization) and Chinese manufacturing..

I did L1 & L2. I think it covers a pretty wide-range of topics, but it won't help make you a better value investor. Unless you're planning on working in the industry, it's not that useful.

INTJ as well.