no_free_lunch

The stock or the product? ;)

My experience is the average person really isn't thinking too much about bubbles. This includes some very smart and successful people. They just want to invest, they see something is moving up, they are aware that they might get killed on the position but there is a sense that everything is a bit of a gamble so what the hell. It is not really what you are after but fundamentally I just find that most investors aren't interested in applying valuation frameworks to their investments. Housing is probably an exception but then when I think of Vancouver, maybe it isn't an exception.

Anyone follow OHI? I am new to them myself and no position. The basic thesis is a health care REIT which has ran into problems with some of it's hospital operators. There was a small pullback in ffo, I think around 10%. As a result the stock has pulled way back and it is now yielding over 10%. They do have a history of raising their dividends, think they quadrupled the dividend over the past 15 years. However, they are not without issues as in the late 90's they ran into some type of stress and the stock and dividend got hit. Overall I still have a lot to learn about management and the history. The payout ratio to ffo is around 83% so the dividend is reasonably safe. Some of the complaints are around it being dead money but then you are getting paid 10%. I think it's fair compensation. The industry seems like a mixed bag with positive demographics but then the government trying to lower costs. Still just something I am thinking about.

I would probably reference Buffets hedge fund bet. I find many investors have this belief that the stock market is for amateurs but the real investors are making mint via hedge funds. http://www.businessinsider.com/warren-buffett-wins-million-dollar-bet-against-hedge-funds-2018-1

Thanks for the replies. My brokerage is a IIROC member so it appears I do have some insurance against fraud. Not a big 5 bank either (they charge too high fees). I agree with Richard, in spite of the insurance it is probably best to diversify.

I currently use one of the larger Canadian discount online brokers for my trading. I am just wondering if people think that there is a need to diversify across brokers? Is it possible that due to some type of fraud whether at the company at large or by disenfranchised employee I could find I don't actually own what I think I own? Are they audited or is there some type of government oversight that reduces this risk? I know that any cash sitting around is covered by the government up to a limit but I am not sure about the securities. I do so much work against the various stocks I invest in but put almost no thought into the company actually holding my investments.

The problem is those jobs you are replacing actually pay considerably more, on average, than service jobs. Even tech jobs. Maybe less so in lumber/steel, I am not as familiar with those sectors, but O&G has $150-200k jobs available or did.

If pipelines are a no go then maybe rail is a good investment? This is a really complicated issue but I don't think the problem is attracting capital. Just look at our housing markets for instance, Canada is taking protectionist steps to slow down capital in that area. In my opinion, Canada is a safe haven and yes so is Belgium, Switzerland, etc but there are only so many safe haven countries out there. I am hoping that the weakness in the canadian dollar, stagnant local wages and boom in the US will cause enough of a wage imbalance to kick start our non commodity businesses.

It should show up eventually in shareholder equity per share, more or less. How has that performed? Higher than S&P over past 10 years, lower over past 5 years. That's my rough gauge of their culture value.

Sure BVPS is up 24% or whatever this year but it dipped down last year. Here is the BVPS values for past few years: 2017: $449 2016: $367 2015: $403 2014: $394 Very sluggish results against 2015 or 2014 numbers.

You really nailed it. What seems to have changed is their diversification efforts, the sale of some of their financial service businesses and the former CEO retiring/passing control to his kids. I am not sure this is the same company it once was.

Traded some S&P500 etf's in and bought DIS. It has a PE of 17 and a forward PE of 15 which seems ridiculously cheap compared to the S&P valuation. I think the term "brand" gets overused in investment circles but I think it applies here and you are getting that brand for free.

Knight therapeutics (gud.to). Taking on huge piles of cash when the stock is high and then just sitting on it due to a dearth of opportunities is long-term in my mind. Certainly the market hates it. The company has only been around a few years but the CEO has a track record from his prior gig at paladin labs. EDIT: +1 to Costco, Disney, Danaher, MKL, BAM. There are some other great idea in here, I will be doing digging on FRP / LAACZ

All I know is there are people much smarter than me who can't come to agreement on what it's intrinsic value is. I think it's proportional to the network of users but what does that even mean? The floor is something that you can establish, it's 0. It's just software running on a bunch of computers. If a better version comes along, it's worthless.

Major buy signal for crypto came out today. :) Still no position. https://www.bloomberg.com/news/articles/2018-02-07/get-ready-for-most-cryptocurrencies-to-hit-zero-goldman-says

Does the bitcoin ATM accept cash or only dispense? I see this is a good idea honestly, from a customer perspective. Might not be a great investment but it does increase the bitcoin network and given that bitcoins value is the strength of it's network this is a positive.

We are kind of on the same page here. I just don't think a 30% drop would be an issue so long as the economy is solid. The only time I was scared in my investing career was 08/09 and it was fear of the economic situation not the huge losses in my portfolio.

No, I haven't taken advantage of it, it's beautiful to watch though. I had a really good look at my watchlist and everything was so high that even now I don't find anything too compelling. S&P500 is printing $110 in earnings so we are still at 23-24 PE, it's tough. cherzeca, I agree that political deadlock is a great thing. I'm a bit libertarian so government unable to function seems okay. Not sure what that will mean for fannie but that's another thread. Much as I would like it to be otherwise, this whole crash feels artificial. The economy is doing just fine, global economies are recovering and there must be huge pent up demand outside of the US. I feel it's just the valuation was ahead of itself.

This bubble popping is like a shot of adrenaline to my investor instincts. Still no great opportunities but some things are crashing more than others so at least now there is hope. Still need another 5% drop or so before I will be able to buy.

That makes sense for some crypto's but for bitcoin it is mostly ASIC. Haven't ever actually mined but that is what they say. I don't think you can do ether with ASIC so your thesis might hold up if ether takes over.

I thought you first entry point was $7000 for bitcoin, why $500-1000? Why not $100 or $10? While I agree that a lot of money can be made playing the rallies or the busts, the lack of intrinsic value for any crypto currencies makes it hard to get entry or exit pointe for three tokens. I have to agree with you on this. Bitcoin is either worth an awful lot or perhaps very little. It's value is roughly proportional (exponentially / log proportional even) to the number of miners. If something replaces it and the miner community gets sharply reduced I am not sure if it would have that much value. The big issue that is talked about and never addressed is all this electricity that gets wasted on the mining. I don't see why that can't be resolved. I think the only solution is some type of proof of work / stake where that mining isn't completely useless as bitcoin's is. I don't see why the mining couldn't actually be for a purpose. Much harder to architect but then you aren't wasting the electricity. Some of the newer coins are trying to address this, I could see them taking over. If that happens, and the miners start going to new coins, the bitcoin network could fall apart.

This comes up a lot. Basically you cannot make more true bitcoin unless the majority of miners agree to it. I think it is unlikely they would agree to increase the supply as it would likely crash the value of bitcoin. Historically the miners can't even agree to make changes which are widely considered improvements such as increasing the size of the blocks. I think what Munger is saying is that you can make different versions of bitcoin, which obviously has happened. Ethereum, Ripple (sort of), ADA, bitcoin forks, etc. However, these things are only as secure as the number of miners. The more miners the harder it is to corner the market. Given this, I see it coming down to a small number of crypto's with the largest user networks. Who knows with technology but I think bitcoin will remain one of the dominant crypto's and the 21M bitcoin limit will remain intact if for no other reason than the stubborn behavior of the community.

This is great, so much information embedded in your post. I have been looking for a good set of shorts so I will do some dd on your put names. Curious what you mean with your japanese netnet, do you have a fixed period of time you will wait before selling?

This is what I was thinking. However, I spent some time looking for this just now and I wonder if it isn't a resource company. Some of these companies have mineral rights to properties that could be worth billions, *IF* everything pans out. The only one I found that kind of fit the bill is Chatham Rock Phosphate. They have a decent amount of insider buying lately. They are talking $90m earnings if they can get their operations going vs a $5m market cap. That would certainly justify the billions valuation. I just don't see any new material press releases.

If I may jump in to this. I think that this doesn't necessarily hold up, beyond a very theoretical sense. In practice there are bitcoin apps that pool transactions together and make it effectively impossible to trace who did what. Imagine that you are going to give someone we will call A $1k. I am going to give someone called B $2k. There are tools that will make a single transaction such that deepsouth contributes $1k, no_free_lunch contributes $2k, then a gets $1k and b gets $2k. You can't really tell who gave the money to A versus who gave the money to B. Multiply that by a dozen or more people and then do that a couple of times and you can't ever know who was really giving the money to who. They would have to pass laws to ban transaction pooling to get around this.