no_free_lunch

Banking is too complex and risky for me. There are a lot of variables, interest rates, government involvement, legal issues. I only like US banks. I think the construction industry is the way to play. I have no investments in that area but I am looking.

This is a great discussion and unfortunately politically charged when it shouldn't be so much. I think all parties want enough housing. The consensus I have, is that there is a huge shortage of supply. I tend to read the same set of sources, generally right leaning, so it's good to see others perspective. Just one link on the structural shortage of homes we are looking at. Not sure that there are enough vacant homes out there to address this. Canada Mortgage and Housing Corporation estimated in June that an additional 3.5 million housing units needed to be built by 2030 to achieve affordable housing for everyone living in Canada. That’s on top of the 2.3 million units it expected to be built by that time at current rates of construction. .. “Canada’s approach to housing supply needs to be rethought and done differently,” CMHC deputy chief economist Aled ab Iorwerth said in the report. “There must be a drastic transformation of the housing sector, including government policies and processes, and an ‘all-hands-on-deck’ approach to increasing the supply of housing to meet demand.” .. CIBC deputy chief economist Benjamin Tal suggests in a recent report that Canada’s actual increase in housing demand is far higher than official estimates. Ottawa is aiming to increase the number of new immigrants by 75 per cent over pre-pandemic levels by 2025. But saying 465,000 new immigrants in 2023 does not mean net population growth due to immigration and thus demand for housing will rise by 465,000, he said. Tal argues that it’s not the number of new immigrants that should be used to calculate housing demand, but the number of new people coming into the country from abroad. And these numbers, he says, have been vastly underestimated .. Altogether, permanent and non-permanent residents arriving from outside the country in 2022 approached 955,000 which represents “an unprecedented swing in housing demand in a single year that is currently not fully reflected in official figures,” said Tal. .. “It’s not a stretch to suggest that the number of new international arrivals in 2023 might reach one million,” said Tal. “This kind of inflow suggests that existing policy tools could easily fall short of addressing the current and further increase in housing demand.” https://financialpost.com/executive/executive-summary/housing-demand-stronger-than-expected

There are so many other countries that are relatively stable. People are selecting the west for it's wealth and rule of law. I don't buy what you are saying. The proof is in where people are moving to.

People like to criticize the west but sure like the progress and security of the west.

I never said as a sovereign. Always under different yokes. Poland and Russia in particular. However, they were always independent culturally and this is what led to the creation of the country, like so many others, post Soviet breakup. The US will support Ukraine, I believe, not because man on the street wants it to too but because the politicians know there is no real choice. It really comes down to fighting your enemy for a fraction of the cost. The US knows Russia is their enemy, Russia constantly reminds us of this when they threaten nuclear holocaust. So to counteract them for $25B, is really nothing. It's about 3% of the US defense budget. Contain Russia so the US is free to fight China, if needed, that is I think the US thought process.

Bought a small 1% position in LHX. Will like to add as I learn more. Not without some minor issues but as usual, the issues feel priced in. Trading at 15x analysts estimates for the year. It's a compounder and a cannibal.

Oh well, actually it has existed for centuries and in fact, it's now a sovereign country. If Russia wants it in it's sphere better ways to do it than at gun point but I know that's how Russia rolls. Here they even made a wikipedia page to help clear things up for you. https://en.wikipedia.org/wiki/Ukraine

Probably some combination of Ukraine, US, EU. It's really peanuts compared to alternatives such as handing over the region to RF. Keep in mind the US is spending somewhere around $800B per year on their military and I don't think that includes everything either. Spending on the Iraq wars, I have seen that pegged at over $1T (off top of my head). These are in fact sustainable numbers but of course it would be better to just have some kind of peace agreement.

It's not so black and white. There are options for escalation between current support and some type of direct NATO-RU conflict. That is what we are witnessing in fact. Increased supply and more sophisticated weapons can be delivered to Ukraine. Some type of private military, a parallel to Wagner could be employed, it already is to a very limited extent by virtue of volunteers. Drones play a significant role and can be upscaled by western donors.

No sir, I was referring to AutoNation, mentioned earlier in the thread. I can see how without a reference that would be confusing. With $DFS, similar story though to AutoNation in that you have to worry about an over leveraged consumer in a high interest rate environment. I guess this is where the cannibal factor really helps out.

I believe there are concerns that car prices peaked and will fall due to higher interest rates. Car loans are now 8-9% and people are already levered up. That said, it seems priced in and the company's record speaks for itself.

The current sitiation does not stand out to me. It has been confusing and uncertain from day one. There were maybe a few times during crashes where I saw sufficient margin of safety that I wasn't stressed but otherwise I've never known what would happen next and it always feels I'm paying top dollar. With interest rates reverting the current period feels actually a lot saner than the past decade. At least there's a bond alternative.

You could do an awful lot worse than LHX although I think NSC is the real winner here. Some good picks, simple to understand, reasonably safe, moat. I have tried this industry laggard strategy you mention without as much success but I wonder if you are leaving out some type of qualitative filter. It seems, now that I have a bit of a record to look back on, that it's almost always the high quality names, when bought beaten down, that turn out ok. Neither LHX or NSC are low quality, these are gems you are picking out.

Cargojet (CJT.TO) - Canadian company, air transport of goods. Likely this is known to Canadian investors on the board so always happy to hear their opinion, good or bad. They have an excellent track record, around 20% EPS growth over the past decade and yet are not very promotional. Low debt (2.5x EBITDA), good management, near monopoly. I like that management issued a large share block (I think ~20-30% of additional stock) when the share price got to it's peak last year at close to double the current price, looks brilliant in hind-sight. They are in the dog house after increased COVID linked business has started to wind down but I trust the management and they will find new business and/or cut costs to make up for it. Not without risks, it's a fairly shallow moat and so you are really trusting in management but then so far they have consistently delivered.

The real cheat code would be to ignore Ukraine and focus on problems at home. Build up the economy, education systems, reduce corruption, so much more. With its energy and other resources they could be very wealthy.

Defacto. The proof is in the arms delivery and training.

PLC.to a funeral home business. They are down near 50% from all time highs, and are basically a broken GARP acquirer story. I view the earnings as a bit cyclical and suspect they can bounce back. If you look at their historic results, it's just lumpy from time to time and that is where we are now.

This is good. It provides additional leverage for negotiations. Reading the coverage, I feel that when Russia gets attacked it's always spun as though they have been cheated. "The UK is supplying weapons..." Yes, they are. All predictable responses for attacking a country with which defense alliances exist. Russia can stop this immediately by simply removing themselves from Ukrainian territory. I have no sympathy for their position.

Interesting article. I mean I have no idea but I go back and forth on these arguments. I am still not convinced growth will translate to profits. I mean, what about AMD and Intel, are they just going to sit on their hands? As I understand it, AMD is close and Intel behind but still a lot of smart people there. NVIDIA's profits have to be drawing interest, I know they are. Then you have Apple, are they designing their own chips now? I don't think we can simply take the growth of the industry and apply it to potentially high earnings of a particular company. Desktop computers have been getting more and more powerful for the last 20 years and it hasn't translated to profits for Intel/AMD. For now, NVIDIA is so far ahead and the demand so substantial that they are killing it but I question if that's long term sustainable.

I have seen some studies that the superiority of spinoffs, in general, is no more. Perhaps over exploited by CEOs and priced in by the market. However, perhaps in Canada and other smaller markets there might be alpha here, I have seen it.

I thought the delivery was excellent.

China HAS developed over the past decades. The issue is investors haven't been getting wealthy there, at least not from index funds. Not worth the risk. I have to worry a out corruption plus investment risk.

Apologies. This is certainly a nuanced and balanced approach. It gives me hope. It is important that the west maintain some sort of moral consistency and the events of the last couple years really shook my belief in that. However, I do see more and more questioning the politicians and their motives and as long as that is the approach I hope things will turn out ok in the end.

Richard, I recall a police state or martial law being imposed, in Canada, within the past couple years. All to silence some blue collar workers. Not so democratic, not so liberal. You probably scoff at this but then Luca thinks lightly of our opinion on China human rights abuses too. From my perspective, it's similar, just different degrees of authoritarianism. China might kill you, in Canada the most they will do is take your job if you oppose them. For the average joe either option is catastrophic.

Since we are investors, I just look at things from that perspective. Is there really a history of profits made in China by investors? If I look at something like the ETF FXI, I have to go prior to 2005 to get to a profitable investment. This, in spite of huge growth of the Chinese economy during that period. If economic growth doesn't translate through to shareholders, why bother. Is there a real argument for profitably investing in China? I haven't run the numbers, is it just that the PE is much more compressed?