Spekulatius

Owning a house is “safer” with a 30 year fixed rate debt in a sense. If rates go up, the value of your house may go down, but the value of your fixed rate mortgage will go down even more, so it hedges in this situation. Cash flow wise, you are better of, if the higher rates are caused by higher inflation, compared to renting where you likely would have to pay higher rents. If rates go down, you just refinance and lower the cost of your mortgage. Your house will likely go up in value unless the lower rates go hand in hand with a recession. There won’t be a problem as long as you can service your mortgage. In both cases, you have somewhat of a hedge against changes in the value of your asset caused by interest rate changes, due to the optionality provided by the fixed rate mortgage. If you are in a nonrecourse state, you also have the put option to hand the key to your house to the mortgage owner, which is particular appealing if you loaded your house under the roof with debt before the house values tank.

if I were a client of Bridgewater, I would worry more about their performance than the change in world order.

I looked at both S-1 and I can come to terms with CPNG but what is really OSCR business model, is it like LMND for health insurance. Their numbers look atrocious. Both GOOG health care IPO‘s AMWL and OSCR look underwhelming to me.

Human bias: Imagine two different scenarios and determine which one make people feel better 1) 2% inflation and you get a 2% raise 2) 2% deflation and you get a 2% payout. I bet that people will accept 1) and go in arms over 2). The preference of inflation over deflation is just human bias/ how the brain works.

^ I don’t think this is correct. If this were correct, Robinhood would be truly a bucket shop.

VNT looks interestingly GARP-y. Well we have a thread about this. it is currently overearning due to the upgrade cycle for gas stations coming to an conclusion, but I think it will transform over time. It got the DHR heritage and that means they are likely good operators and capital allocators. I am expecting them to exercise the right to buy out Tritium, the manufacturer of EV chargers. https://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/vnt-vontier/msg433727/#msg433727

My recent adds were BABA and spin-off VNT.

To put in sanity checks like this, you don’t need a blockchain at all.

Any insight into what caused that momentary spike in MMAC share price today? I have no idea. It is a thinly traded stock and there were some sellers just a few days ago when a leadership change was announced, but the stock since has bounced back. The 10-k is supposed to get filed soon. Perhaps someone knows something, perhaps not. Anyways, I cashed my few shekels from the short term trade and moved on.

MMAC and CRBBF (Corby).

I agree that Rocket Labs looks great compared to Virgin Galactic, but that’s not a high hurdle. Rocket Labs is an interesting company to watch for sure.

I own NOC, LHX, LMT and GD (in that order). I was initially overweight GD (actually bought some as low as $100 and change) but reduced in favor over the others. The risk that is Common with all of them is cuts in defense spending. air is possibility, but with MMT now making the rounds and threats from China and to a lesser extend Russia increasing in their sophistication it seems like a bad idea right now. If cuts in defense spending were going to happen, I expect another round of rationalization and consolidation and massive share buybacks just like what happened from 2010-2013. Consolidation will perhaps not amongst the prime contractors but all those secondary ones underneath. Those mostly are not pure play defense, they will just move resources to other areas. I work for what is one of the secondary ones (supplying the big ones with components so to speak) and I know for sure that if the business gets subscale, the effort is just going to be moved into commercial activities.

The F-35 is imo wrongly accused of being a failure but it is commissioned and works despite some deficiencies. It also can’t really fail because it is the only fighter platform there is and those platforms are almost like SAAS, they live for ~40 years (the F-35‘s projected life is until 2055). The F-15 is still around and still getting Development contracts for upgrades for situation where stealth doesn’t matter as much. It was developed in the 1970‘s. LHX is a Great Outfit. They don’t own large programs, but they are involved in every one of them. I love their Proxy Statement 40% EBIT, 40% FCF and 20% Revenue growth. Plain and simple and shareholder friendly.

At some point it is inevitable that China‘s Yuan becomes a reserve currency. The Chinese don’t want this yet and that’s why they essentially have pegged their currency to the USD. about think about this, if the their Economy become larger and larger and exceeds the US economy, it really can’t be avoided due to sheer amount of economic activity in Yuan and trade. The reason the Chinese government doesn’t want it is yet is that it will cause dislocations in their economy and probably a higher exchange rate and loss of control. As far as inflation is concerned it seems that the price action in gold indicates that it is going to be short lived. Gold is weak on days when interest rates go up for example. There is no speculative run towards gold as this money goes into crypto etc it seems. As far as QE and reserves are concerned, I don’t think any of this matters really. What matters however is spending and that spending is going up financed by federal deficits. At some point we will see the limits of what can be done without penalties, but it does not seem we are there yet. As for now, you got to dance as long as the music is playing.

^KJP, yes I put in the wrong link - here is the correct one: https://www.barrons.com/articles/how-boeings-problems-play-out-and-five-stocks-for-an-aerospace-recovery-51615589491

Pretty good article in Barron’s about aerospace and defense: https://www.barrons.com/articles/these-8-value-stocks-will-benefit-from-an-economic-recovery-51614337206 Touches upon BA, LMT, NOC, RTX

Agreed. However, there are some years when Fairfax will grow BV by 15%. There are 2 key drivers to Fairfax being able to hit 15%: 1.) insurance underwriting 2.) investment results - especially equities Given the hard market in insurance and how they are positioned today with their equity holdings i think they can hit BV growth of 15% in 2021 :-) I'll add a third key 3.) They will not blow a billion on some risky venture That is the main key for me. They showed us that they are able to do this. Sanjeev answer vigorously to my post but he says the same thing than me. I bought at 465 in january and waited the annual report to decide if it was a short term investment or for the longterm. Reading the report where everything positive where explain in great detail but the negative was hard to come by convince me to be a short term holder for this time just like Sanjeev position. By the way I have a very long story with Fairfax. It is probably responsible for half of my net worth. First buy in 1993 and sold at 3x BV for a ten bagger. I was one of the first to discuss about FFH with Sanjeev on MSN. Was lucky enough to buy back in 2003 in the exact day of the bottom at 70 and sold at about 8x that price. I run a concentrate portfolio of 8 to 10 stocks. I had a couple of in and out since that for a wash. Now i'm in for the ride back to BV. Awesome! That's the way to do it. #SellattheRightTime beats #neversell at least in this case.

hyper elitist education for the win. Palm Beach Day just ain't gonna cut it. Dalton or Bust!* https://www.bloomberg.com/news/articles/2021-03-10/wall-street-a-listers-fled-to-florida-many-are-eyeing-a-return *for the record, pupil went to a poseur south florida prep school, not in NYC/Northeast Arn't public schools in Florida total crap? That's what my wife heard from folks that moved there from Long Island. LI school were excellent when we lived there.

how you buying Shinoken ? This is not listed in US Through Interactive Brokers with trading permission for Japan. I've heard it's also available through Fidelity as ADR but have not confirmed. I am on H1B work visa. I am eligible do open account with IBKR to buy other countries stock ? , it was asking lot many questions was confused what to fill. I opened brokerage accounts when I was on H1B, no problem. I can’t speak for IB specifically, but why should it make any difference?

LOL: https://www.cnbc.com/2021/03/05/detroit-mayor-rejects-initial-jj-vaccine-shipment-saying-pfizer-and-moderna-are-the-best.html

Can someone explain how Chamath getting rich with SPAC vehicles has anything to do with climate change? I don’t even see a remote connection between the two issues.

^ Yes, I think This makes sense. We had excess death last year which lowered the life expectancy but only last year, going forward this should revert to its LT trend. I do agree that on the long run, the drug related death are more important. In 2019 we had about 70k and about half of those were from opioids. Those 70k are mostly younger folks, so the impact is much larger than the COVID-19 death hitting mostly older folks. Anyways, the epidemic will turn into an endemic by early summer in the US, so we are almost done here. On the drug abuse issue, I wondering legalization of marijuana might have a positive impact on mortality. My thinking is that people will use one drugs or another and marijuana is less likely lethal than opioids and alcohol, so crowding out these drugs with a healthier one could have a positive impact on mortality. I recall seeing stats that the introduction of marijuana in a state has reduced alcohol consumption for example (I forgot about the source). There is now a natural experiment going on with some states in the US legalizing marijuana and others not yet. Do it should be possible to get some interesting data from consumption trends of various drugs upon introduction marijuana. Longer term, I think alcoholic beverages may suffer from increased competition.

Well, I was a kid in the 70‘s, but I sometimes think the 70‘s now get a worse reputation than they deserve. I grew up in Germany where the inflation was significant, but not as bad as in the US, so that may be a factor. Yes, there were oil price shocks, but those lasted maybe 12 month. In this decade we have an epidemic, which are comparable. The real economic growth was higher than it was today. Interest rates and inflation were higher and asset prices were lower. If you owned a house back than that was worth $100k (adjusted for inflations since then) and now a similar house is worth 500k - are we really 5x richer?

The letter is a joke. When you read it, you would think that FFH is crushing it, yet book value went down and the earnings are a black zero. Leverage on a Holding level is up. They have underperformed virtually any other insurance company follow in terms business performance. Unless they perform better, I don’t see why this would rerate higher.