John Hjorth

Ref. the starting post by DooDiligence, I would certainly add [certain] banks to the list. I remember reading a shareholder letter by Mr. Dimon for JPM about the deposits of JPM during the financial crisis, which acually stayed stable during the crisis [08' letter issued in '09 or 09' letter issued in '10]. It was basically about "the safe harbour for cash" when shit hits the fan, based on the stability and solidity of the financial institution in a downturn. I also remember listening to an interview of Mr. Buffett some years ago [Mr. Buffett in a red Allen sweather], where Mr. Buffett was asked about JPM compared to WFC, where Mr. Buffett replied, that he did consider WFC a better bank compared to JPM [at that time, naturally], based on terms of deposits [thereby meaning terms of float]. To me float is just capital, that you owe somebody, but capital that you have control of, and thereby have the opportunity to work with. For my part, I have moved a lot of capital [relatively] between Santander Consumer Bank ASA and Bank Norwegian ASA during 2016 to take advantage of marginal interest rate differences in the market over time. [A few clicks on the keyboard over a couple of days - almost work free]. The cost of float for Santander Consumer Bank ASA and Bank Norwegian ASA is negative, but their interest income on what they do with the money by far more than compensate for that [if they continue to do well with their lending and do not screw up]. - - - o 0 o - - - Several Danish banks have now implemented negative cost of float for firms and companies [not private households] with excess cash over a certain limit: Danske Bank, Nordea, Spar Nord.

It's called the dynamics of life! Congrats on the family extension! Happy to see you back posting.

Isen't this the first time BHF is issuing notes in EUR? Ballinvarosig Investors, if you are in Rome right now, enjoy!

Same thing for me, with the notable exception of my parents. I know how bad they are with their money, so I made a deal with them that I would add on $100 for every $1000 they shove in their investment savings account with the caveats that they don't have the right to touch any of it until retirement (working on honor system) and I manage it for them. Doesnt stop them from running up credit/debt to buy junk in true blue collar fashion, but that would happen either way, so hopefully the egg I am growing for them will soften their landing a bit. Patmo, I certainly understand your position on this. Bjørn Wahlroos, Chairman of Sampo Plc and Nordea AB, at a speach held at the Danish Pension institution PFA on 6th May 2015, article about the speach the same day at Børsen.dk with the headline : Europe is in deep shit and people are idiots. It's actually my favorite definition of a bank! For my part: 1. My father gave me the opportunity to get an education, thereby getting a much better life than my parents. Now, I'm there for him, because he need my assistance, advice and work. In short, it's a moral & family obligation for me. And he appreciates it. That's "fee" enough for me. 2. My brothers appreciate also what I do. 3. The Lady of the House appreciates also what I do with this for her and for her - now late - mother. During the last few years she has got an understanding of how important this is for our common future. 4. To various degrees, it has created postive changes for all family members within three generations in both families. - - - o 0 o - - - All in all, it's all about if what you do makes sense or not. As a CPA I know I'm not here to handle every problem/issue out there. It does make sense to me, otherwise I would not spend time and Kjoules on it.

Thanks, Jurgis, The processing of the MIL estate going forward in the coming months is now: 1. Stopping all running costs including the rent - already done, not much. 2. Payment for the funeral of the funds set aside for that. 3. Creating the nessesary statements for probate court and the Danish IRS. 4. Payment of the inheritance tax to the Danish IRS when statements are approved by the Danish IRS of the funds set aside for that. 5. The Lady of the House will get the note with her self as debtor as inheritance outlay, together with MIL stock portfolio, thereby eliminating the liability of the balance of the interest free note in the balance sheet of the Lady of the House. 6. The cash held by the Lady of the House coming from the proceeds of the note has so far been "not to invest - allways hold as cash"-money, they will now be investable going forward, after some plan decided by the Lady of the House.

Question: How do you make money on the day you die? Answer: You die on a day, when the markets are in a short term [on the day] upward trend. [Other feasible answers may be right]. - - - o 0 o - - - Back in July 2012, when we were on vacation in Rome, we got a call from the nice neighbour of the "MIL" ["MIL" then living in her own house north of Copenhagen, called "MIL" because I'm not married to the Lady of the House]. The neighbour had found her on her patio, collapsed because of the severe heat at that time, and she had not been drinking enough.] After beeing stabilized over a longer hopital period, the Lady of the House decided it was time for "MIL" to move to a nursing home in the area, at least just for a period. Time went on, and over time it became clear, that "MIL" was actually fading in a way, that it would not be the right solution for her to move back to her own house again. In the late spring of 2013 I presented a calculation for the Lady of the House, that her mother would go broke [run out of cash] within three years, because of double housing costs, if not her house was sold. The house was put on the market in the middle of 2013, and was sold late in 2013. After backing out of some mutual funds positions and a small stock positions, and redeeming "frozen" real etate taxes in the house - for I don't know how many years - it was many - "MIL" ended up with a quite large cash pile, and no debt, in a rented small appartment at the nursing home. The Lady of the House has been managing the finances of her mother for quite some years under a general power of attorney, which contained some conditions to be complied with all time the power of attorney beeing in effect. Maximun capital allocation to securities 50 percent - blue chip stocks and bonds only. In the process of liquidating the assets of "MIL" the Lady of the House started to asking me questions about what to do with all this cash, and I intentionally posponed my answer with "one hurdle at a time". When all the cash finally was in "MIL"'s account with Danske Bank, I asked for a couple a weeks to think things trough. One evening [in December 2013, if I remember correctly] I finally "opened the ball" with a short discussion ... - and she [the Lady of the House] was totally apalled by my overall explanation: " I will strip her - rip her off - for nearly about everything, except her clothes, her jewelery, and furniture and paintings at the nursing home, beside a certain sum, which she will keep, and the most part of that you will invest in stocks." It turned out not to be the right way to start this proposal - short term, but over some time the Lady of the House left me space for some elaboration : [Please note: Here in Denmark, we have an inheritance tax of 15 percent of net worth above about DKK 0.5 M for a married couple - when the first spouse desease, you can defer the inheritance tax for the first spouse deseased. The husband of the "MIL" deseased about 22 years ago.] Here is what has happened since the end of 2013: 1. Some money was send to the two kids of the Lady of the House [or more precisely: directly to the creditors of the two kids of the Lady of the House, with one condition attached to each kid: "Don't ever indebt your self again in this way - always ask here first [, or...]" [Thereby skipping one generational haircut of 15 percent].[ Here in Denmark, you can give about DKK 60 K pr. year to the next generations without tax implications.] 2. A lawyer was asked in the end of 2013 to set up an interest free on demand note between the Lady of the House and "MIL", and material part of the cash of "MIL" was transferred to the Lady of House, and it was put as high interest rate deposit at the Danish branch of Santander Consumer Bank AS, the Danish branch of the Norwegian SAN SCF sub - later also some of those funds placed at Bank Norwegian AS [banking sub of NOFI.OS]. [Thereby avoidning 15 percent inheritance tax on the return of these funds]. 3. Based on the balance sheet of "MIL" I have calculated net worth of "MIL" at the end of 2013, and have set aside the figure in DKK for inheritance tax for her on a separate high interest account at Santander Consumer Bank AS. 4. A percentace of the net worth of "MIL" after inheritance tax was allocated to stock investment by the Lady of the House, ref, the geral power of attorney [max. 50 percent] - it ended up about 35%, which was placed at a high interest account at the SAN SCF sub, and was gradually invested in stocks over a three year average in at her brokerage account. 4. These calculations left me with a liquidity stub, to cover her crisis fund and costs connected to her death [liquidating the small rest of her assets] and funeral. The surplus above the calculation went to an on demand account at the Norwegian SAN SCF sub and Bank Norwegian. 5. All interests at the accounts of the Lady of House and "MIL" have been allocated into stock investments at the end of every year. - - - o 0 o - - - My "MIL" passed away in the morning of 2nd January, at the age of 99 years - 26th February she would have turned the corner of 100 years. This - if you think about it - very conservative - arrangement - has turned out well - the net worth of my "MIL" declining year by year well below tax free gifts to decendants, and adjusted for Danish inflation. - - - o 0 o - - - The Lady of the House is the only decendant after her parents. This is what makes this situation quite simple to navigate, based on the existing general power of attorney. - - - o 0 o - - - The "funny" thing is [here without going into details], at that time exactly the same proces took place over time with regard to my own father - with a totally parallel proces, running over the same time time span - the difference only beeing that I have three siblings instead of zero, thereby giving the opportunity reduce Danish inheritance taxes 4 four times faster compared to if there is only one descendant. What I did in the end of 2013 was to "drum" for a family meeting for discussion [and desicion] - unamiously - about what to do with my fathers cash, thereby obtaining a clear and manageable mandate. None of my 3 brothers now have bank debt [i'm the third in the row], and only one have a morgage, based on what has been done after that. [The difference here beeing my father is making the descisions himself, well aware, that physically disabled and old, he will kill himself, if he try to spend his money on "Wein, Weib und Gesang". [90 years old]. - - - o 0 o - - - To me - all in all - this MIL investing thing - is all about thinking in actual terms of permanent capital.

VRX

DooDiligence, It's explained on overall, non technical level in the 2014 "Berkshire - Past, Present and Future" Letter by Mr. Buffett, p.7, under the "stars"-break in the paragraphs about the conglomerate structure of Berkshire. It's about: 1. Taxes on dividends from wholly owned subsidiaries compared to taxes on dividends from holding fractions of listed companies in the insurance companies. There are no taxes on dividends from wholly owned subdiaries, while there are taxes on dividends from holding fractions of listed listed companies in the insurance companies, albeit the dividend tax rate on such dividends is lower than general for insurance companies in the US. 2. Joint taxation. Each wholly owned Berkshire sub does file its own tax return to the IRS, only one tax return for Berkshire as a whole is filed, for the holding company it self and all the wholly owned subs, where the taxable income is the sum of the taxable income for all those companies. The tax payable is then allocated among all those companies, based on each companys contribution to the aggregate taxable income. For example, that gives BHE an advantage with regard to solar and wind projects while applying maximum taxable depreciations, generating tax losses in the beginning of projects operational phase, with an immediate tax refund after year end on tax losses, while as a stand alone project such project would be left with a tax loss to carry forward to net out in future positive taxable incomes. At some point at the 2015 AGM, Mr. Buffett mentioned that. I don't know the exact time stamp in the video clip on YouTube from the AGM, but it is there. - - - o 0 o - - - Off topic: The only tax regime that I know of [there might be others, though] where it is actually - in reality - possible to avoid paying dividend taxes [there are some requirements for that] on dividends from listed investments is the Swedish, where tax regulations about "investment companies" includes such a set of rules, as mentioned under certain conditions. Examples of such Swedish companies applying that set of rules are: Investor AB Industrivärden AB LE Lundbergföretagen AB Investment AB Öresund - Now back to topic.

Merry Christmas to all fellow board members!

It seems like Banca Monte dei Paschi dei Siena is now a sitting duck, waiting for either a bank run, or Italian State intervention. Any comments from gio here? - It seems like all the serious business meetings in Italy - not to mention the shooting and killing of today - takes place at your location.

RILBA.CPH - Ringkjøbing Landbobank A/S [which translated into English would be something like : "Ringkjøbing Rural Bank A/S". But it's not a bank for farmers etc, or for the region. It's a bank with speciality in dentists and GP doctors [= high income & self employed individuals, the elder of them affluent, the younger ones owing the bank money from buying elder or retired partners goodwill] and wind turbine financing. A Danish bank in "redneck/hillbilly land" - In Denmark that's an east/west-thing, not north/south-thing. [Actually, they really speak strange Danish in that part of Denmark ...] Headquarter in the small town Ringkøbing in the Western Denmark at the coast of the North Sea in Jutland. The most efficient Danish bank, and basically no losses on the loan book for years [absolutely not typical for a Danish bank], and at the same time the ability to grow the loan book quite a lot every year. Link for English speaking board members here. Link for Scandinavian board members here.

Thank you to all participants in this topic. It's really food for thought.

Thanks, max, Your last question certainly qualify to me. Long, out or short this stock, reading Mr. Watsa's next Shareholder Letter will be interesting. Personally, I actually posted sell orders last night for all FFH.TO owned by my family and I. When I got up this morning after a nights sleep, I deleted the orders. I will study this in the coming hollidays. Certainly the game with this stock has changed a lot within a short time span. ~4.5% position right now. I have this CAD/EUR multiplier [EUR closely related to DKK, - +/-2.25%] as part the decision basis also, to the contrary of the majority of the fellow board members here.

max, To me, talking about Mr. Watsa lying to his co-shareholders seems far fetched. It has been said over and over again, that work at FFH is based on teamwork among no-egos. That implies discussions among sensible and skilled people possesing sceptical critisism in discussions, to get to the right decisions. Please also do not forget that Mr. Watsa has a lot of skin in the game - together with his family - via the family holding company holding FFH. Off topic: Eric, there is a cake slice in your board profile in your age field [today only?] ... I also want some! - Birthday today, Eric?

Duly noted, longinvestor. Certainly worth some consideration, as both a BRK and FFH investor.

A bit more SCHO.CPH.

Yes, it is actually striking. P/E ~26 for NSRGY, P/E ~38 for KHC. [Not sure I have got it right with KHC though].

Nah, you don't need a thread. It's a very simple. Do not invest money for your mother-in-law! More gray with the sister-in-law but maybe best to stay away from that as well. rb, Hah! - Then you'll get the honor to open the new topic, in stead of Uccmal? [For my part, I can assure you, it will be a bit entertaining].

Uccmal, Time for a separate topic about Mother-in-law-investing, Sister-in-law-investing etc. in the general discussion forum? - This could be interesting.

TwoCitiesCapital, I'm not sure how to correctly understand the qouted part of your last post in this topic. As always, your input is highly appreciated for my part. Is this comment from you about an expectation of earnings are supposed to decline for US multinational companies - measured in USD, - that is, because of the USD going up relatively to other currencies? Yes. Corporate earnings in the U.S. have already been in their longest, unbroken downtrend in history...but no one has been concerned because it's been a pretty shallow earnings recession. I expect that a strengthening dollar, and higher rates, will BOTH contribute to a continuous reduction in corporate profitability. Foreign revenues will be worth less, we'll export less, and rates will cut into profits as companies roll into higher coupon debt. Eventually, a bunch of shallow reductions in corporate profits aggregate to a meaningful reduction. I would have thought we were already there, but I guess not. That being said, the trend of a stronger U.S. dollar doesn't look to end anytime soon - at least not while U.S. rates offer such an attractive spread to any other developed countries'. The only thing I'm concerned about is the actuality of meaningful corporate tax reform which has the potential to have a large impact on bottom line earnings, which is why I initially covered my shorts when Trump was elected. (Glad I did!) That being said, I don't think corporate tax reform is a given, even with a Republican Congress, and so I'm growing more comfortable shorting again based on my view that U.S. equities are grossly overvalued relative to historical norms and other opportunities present. Thank you for your reply here, TwoCitiesCapital, At least to me, it makes sense. In the portfolios that I manage for family members and myself, BRK was grown within a relative short time span from beeing a ~20% position to beeing a ~25% position. For me, that's not only about BRK has run up quite a bit lately, but also about BRK beeing a company - still - primarily doing business in the US, and the USD/EUR exchange rate has surged quite a bit lately. My functional currency - also related to investment performance - is DKK, closely related to EUR [+/-2.25%]. I have posted questions about the definition of "your investment universe" in another topic on this board lately to my fellow board members. I think I really need to do some kind of work on this going forward - in the beginning of 2017, to get some kind of overview - for my part.

TwoCitiesCapital, I'm not sure how to correctly understand the qouted part of your last post in this topic. As always, your input is highly appreciated for my part. Is this comment from you about an expectation of earnings are supposed to decline for US multinational companies - measured in USD, - that is, because of the USD going up relatively to other currencies?

Honestly, - about time! Since the beginning of 2014: 2014: Up some, 2015: Down some, 2016: Up some [so far]. Since the beginning of 2014: Net cash flow from operations: USD 88.672 B Cash flow from investing activities [negative]: USD 70.289 B, Both, a lot! ... so, about time.

It seems that there have been some kind of leak at the top level at ECB Friday. MPS Press Release of yesterday 18:45 CET. It's turning into a parody.

tengen, Italy's banking crisis is nearly upon us. I've got an idea for some rough calculations based on content in the article above, and I will post them in this topic when done. As already mentioned, the calculations will be rough, and without any kind of validation of data/basis for all numbers of importance for the calculations. - - - o 0 o - - - Also: The Economist : The Italian Job BBC: Italy bank rescue marred by suicide and lost savings [old background information, from December 2015]. - - - o 0 o - - - On a more personal note, this suicide thing makes me baffled. I mean: How can the loss of money trigger you to decide to end your own life, by hanging yourself? How is Italy treating their retired part of the population, that has done their part for moving for the country forward [lately - without much success]? Perhaps this person was already suffering from the loss of the spouse, -I don't know. [note to self/to do]Adding Italian banking related suicide to the endless and ever expanding list of things that John do not understand[/note to self/to do].

I really like the humor here - to me, it is like Danish humor! - Please remember the humor also when everything is tanking! [, which it eventually will - at some time in the future - perhaps already on monday.]