tripleoptician

I don't believe there has been since they delisted from the NYSE Thought so. Too bad because it’s such a nice asymmetric bet to make an outsized bet on with LEAPS

I can not find any options chain for Fairfax under TSE or OTC. Does anyone know if they is a way to access Fairfax call options here?

Thanks for that perspective. It was helpful

Anyone been looking at this arbitrage opportunity. Just had Independent Board Approval for $18 CAD 100% buyout transaction in early December. Awaiting shareholder vote. Currently trades at 17.25 Buyout team = Management owns 17% Fairfax/Point North own 10.5% Fairfax warrants dilute another ~20% but exercise at $33.25 and non-voting. Largest other shareholder at 18.6% plans to vote no. https://www.just-food.com/news/biggest-agt-food-and-ingredients-investor-opposes-management-buy-out_id139748.aspx Given where this trades currently it gives a 4.3% yield if transaction goes forward. Vote should be early 2019 although date not announced. This would have a reasonable IRR if it closes within 6 months or so. https://theprovince.com/news/local-news/agt-shareholders-expected-to-vote-on-privatization-deal-next-year/wcm/705b27c3-d735-49f7-92f0-52dc2d98611a If it doesn't get approval it feels like Fairfax/Management might increase offer given where this was valued when they took initial stake on the warrants. I think I'll be buying if it dips below $16 again

Here is a link for those that dont know about the canadian insider website that tracks filings https://m.canadianinsider.com/node/7?ticker=FFH

Look like around 42,000 shares cancelled in this quarter. Prices look to be sub $640 CAD so approximate spend was $26-27 million CAD on buybacks. Not horrendous but certainly not a dramatic buyback given the dry powder.

You are generally better to journal your shares over to the US side of your account and then you get the divvy in US dollars. You can always convert it later if you want cdn. Wouldnt that convert the dividend into a US (foreigb) dividend which would have worse taxatiin than a Canadian dividend? I guess this question assumes it is held in a non- registered tax account

Wow good math. $1.1 mortgage at 2.59% fixed. $500K downs Thanks for your thoughts

My recent home purchase at the top of the Vancouver real estate cycle - please criticize freely! I have full conviction that the real estate cycle is at a top, specifically in Vancouver where I live. I have chosen to rent for the last 7 years despite easily affording to buy because of this conviction. Our family just made the decision to buy at what is likely the top of the cycle - I will provide my rationale and please criticize freely so I can stay intellectually honest. We have below market rent currently -$3000/mth for a house that would rent for around $4000/mth right now. Our landlord has told us they plan to sell which means we will be moving regardless with 2 kids and a newborn in the coming months. New rent will be $4000/mth minimum for the size of place we need/want. Vacancy rates hover around 1% here. It is common to hear of renters suddenly getting notice to vacate for renovictions or owners suddenly selling a property given the gains owners are sitting on. My purchase with a decent downpayment will leave my monthly payments as follows: Mortgage $4500 Insurance $200 Property tax $500 Maintenance $500 Total $6700/mth Approximately $2200/mth will go to principal payment or forced "savings" into the primary residence So $4500/mth cost and $2200/mth forced savings vs $4300/mth rent for the new place. Obviously interest rates will go higher and in 5 years the monthly cost will rise, but I expect rents will rise here as well given the historic low vacancy rates. Key reasons we decided to buy despite expecting near term valuations to decline and likely price stagnation afterward: 1. We dont want to have to move house every few years when owners decide to sell. This has happened to many of our friends. Full houses to yourself are quite hard to find here and we prefer not to share 2 levels of a house. 2. Proposed Corporate tax changes are going to make us push out more income personally moving forward and reduce savings benefit in a corporation. 3. The total home purchase price equates to about 55% of current net worth in investable assets and we had minimal debt (investment related) 4. We improve the quality of home we are in and ensure we can stay in a good school district for the long term. 5. We still have substantial cash flow leftover to invest from huge income earning jobs. 6. We got a relative "deal" because the owner was murdered and the wife has left to the Grand Caymans eith the house sitting on the market for almost 4 months. Got it $200K less than asking. Prices in a bit of downside. Downsides 1. We likely lose market value and may take 10+ yrs to return to purchase price value. 2. We move from financially independent with the ability to retire today with 25x yearly expenditures in net worth currently. We still planned to work anyway because we love our jobs. We wont need to increase our hours or reduce quality of life secondary to the purchase. 3. Hassle of home ownership - im not a handyman and it has been quige pleasant doing no maintenance cor the last 7 years!

Vancouver proper is hard to come by homes in a reasonable price or rental cost. In my opinion Burnaby is the nicest suburb. North Burnaby (Capitol Hill, Burnaby Heights or around SFU have some good neighbourhood feels and schools are alright. 20 min to downtown if u need to commute. Houses range from $1.2 million for a tear down to $2.5million for a reasonable size home with good level finishing. Rental costs for a house will be minimum $3000/month for a whole house but you may find some where there is a tenant in a basement suite and the main house rents for under $3000 then. I know a bit more about suburbs of Coquitlam/Port Moody if a longer commute (45-1hr) downtown is ok Not sure about rental sites - i think alot is craigslist and kijiji for rentals.

Interesting discussion - I'd like to add my two cents as a physician regarding the quotes from the two physicians that were editors of the NEJM and the general state of pharmaceutical influence in medicine. The NEJM is considered the most prestigious journal in the world of medical publications and research. Regardless of the website's clear anti-science/corruption slant, I think these quotes have significant meaning. Many doctors (including myself) far prefer the practice of medicine to the grind of rigorous scientific analysis and research. To achieve such a high posting in the most prestigious journal, the 2 editors likely had a keen interest in research and would generally have a tendency towards viewing medical research in favourable terms rather than with a significant critical lens during their career. To see them make fairly strongly worded statements against the current state of research and Dr. Angell's active lecturing and writings around the perils of medical research should speak volumes.As physicians, I believe there is a combination of lack of insight, apathy and limited alternatives to Big Pharma influence that continues to allow pharmaceutical industries to have significant influence over doctors and their prescribing practices. 1. In regards to lack of insight, many physicians are confident, Type A individuals. In the last 2 decades, we all learn in medical school that interacting with the pharmaceutical reps and the industry will likely lead to some form of bias in our prescribing practices. I think most doctors believe that the pharmaceutical industry does have the ability to bias physicians, but it just doesn't affect THEM. It is the classic example of polling a sample set about if they are above average, average or poor drivers that leads to the vast majority claiming they are above average. Most physicians believe others are less objective and that is whom the industry reaps their benefits off of, not them. On a fundamental business level, we know that capital expenditures on physician interactions wouldn't occur unless the company is seeing an objective ROI on aggregate. So my only choice as a practicing physician is to totally avoid pharmaceutical reps given that I could never be intellectually honest enough to know if I am being influenced. 2. Apathy may not be the best term to use, but it is what occurs in the current state of medicine where the growth in knowledge, research and evidence based medicine is so huge that it becomes overwhelming. I practice as an inpatient hospitalist which essentially cares for majority of medical inpatients in the hospital for infections, cancer, strokes, heart attacks, GI issues, bowel obstructions and elderly failure to cope among a thousand other potential diagnoses. It would be impossible for me to critical appraise every piece of research that came out on stroke management, let alone the other myriad of illnesses I manage. This of course also applies to family doctors/general practitioners who interact with the majority of patients at some level. I do my best to stay current on key aspects of medical care. My typical resources include: a) attending conferences that are always sponsored by pharmaceutical companies and physician presenters often have relationships with pharmaceutical companies either in a research capacity or for providing paid lectures. In Canada at least, it is very difficult to get adequate sponsorship of an event with government money in order to reduce bias at the event. The health care system is already over-burdened with cost. b) adjust my practicing behaviour to updated expert opinion of the sub-specialist doctors (cardiologist, gastroenterologist, neurologist etc) in how the practice their specialty. This assumes they are adjusting their core area of practice to current objective evidence based medicine. The difficulty here is specialists often do have some form of industry attachment as lecturers or researchers and may be suffering from a lack of insight as per point 1. c) review broad based data-systems such as UptoDate which is compiling expert opinion with panel reviews of current medical research to provide suggested approaches and evidence with a graded level of objective evidence (1A implies rigorous double blinded studies that were well powered and significant p-values). This is the closest I have to an effective resource, but it is still potentially skewed as all expert contributors have potential bias as per b) above, although it is hopefully diluted given the review is done by a panel. d) Rely on tried/tested medications that are now generic and well studied given they have been around for long periods. This means you are not benefiting from potential new wonder drugs, but the safety profile is likely higher. I lean this way in prescribing practices, but we have to acknowledge when medications like lipitor or ace inhibitors have shown clear all cause mortality benefits in certain patient populations. If I would have waited till the evidence became clearer, patients may have died by an error of omission. 3) Finally the lack of a better alternative is a huge one. The cost and time of quality medical research makes it quite prohibitive for governments or non-profit institutions to embark on independent research not skewed by drug companies. Who else can take on the R+D expense to create the drug and then independently study it to find out it is ineffective against placebo? The opportunity cost and risk is immense and significant profitability when done in a basket approach is the only way to expect drug innovation to occur. No drug company will study old drugs or generics. They won't study non-pharmaceutical treatments for the same diseases. They will always find their best ways to adjust the data set to try and squeak out a positive finding, just like companies will try to massage and adjust earnings. This discussion doesn't even take into consideration how drug recommendations rarely have an adjustment of age. The bulk of drugs are prescribed to the elderly and they are at the highest risk of polypharmacy and drug complications. Research is done on the 60 yo old and the results applied to a 90 year old - does that sound reasonable? I hope that the next wave of medical innovation is not in the medications, but in the delivery of health care via AI to reduce the error rate that is inherent in the process. I think building a better mousetrap is far superior to the small incremental improvements that drug companies are making on their previous generation drugs these days. Anyway, thanks for reading my rant on the world of medicine.

One year earlier, I was not contemplating the government intervention option. The BC government has been reaping so many benefits from foreign property purchases and rapid real estate turnover via land transfer and property tax increases in addition to economic benefits in construction and real estate related services. It seemed impossible to see why they would stop the benefits, but I suppose you can count on popular opinion only being valuable in an election year. The 15% foreign property tax won't instantly deflate the bubble, but it will remove the "middle class" Chinese foreign buyer who is in the grey zone of affordability for multi-million dollar homes. Upper class Chinese buyers will likely not be dissuaded. Some price stagnation and small drop will likely initially be viewed as a buying opportunity by many local people. A more aggressive correction may give some pause. I feel the additional BC government uncertainty (they have stated they may reserve the right to increase to 20% if conditions aren't improving) combined with any of the above natural economic forces now gives me increased faith that a long term secular Chinese money inflow will not be a secular trend. If you remove the Chinese foreign buyer, instantaneously the local Lower Mainland economic machine has no ability to sustain price increases, let alone what will happen if the real estate industry and associated economic earnings stagnates.

Thanks for that Richard. I essentially agree with everything you are saying and is why I can't pull the trigger either. I am essentially anchoring to price in my suggestion, like saying a stocks 52 week low has past so it will guaranteed revert back to the norm eventually. This of course isn't true, but we also don't have to worry the CAD will devolve into a valueless currency. Anyone with a fundamental analysis background should have trouble anchoring to price alone. Hence, at some level of the extremes, your odds will be in favour of reversion to mean. If we were at 1USD = $2CAD, would we agree it may make sense to hedge based on historical currency rates? I am essentially anchoring to random price levels in my example, but I know of no better way when it comes to currency. In regards to using expenses as a hedging concept, it is a good thought. In my circumstances, everything placed into investment accounts is for use 25+ years from now as I can easily live on my work earning streams currently.

As a Canadian, I've had about 75% of my total portfolio in USD currency and have experienced ~25% gains on the CAD/USD currency exchange since original purchase. I've generally agreed with oddball's post and read the Tweedy paper and others that made me agree it is likely a wash in the long run to attempt currency hedging. With the above in consideration, I also feel like at the extremes of historical currency spreads, it makes sense to start thinking of currency hedging. My general thoughts on the Canadian economy is that we will continue to feel some pain as the oil industry stagnates and the housing boom unwinds at some point. Combine this with a US economy with some tailwinds behind it and it seems like the spread may continue to widen. I'm considering beginning to short sell a USD currency ETF at about 25% of total exposure currently. If the spread widens, I will increase my hedging up to 75-80%. I might get to that level if we get in the 1 USD = 1.45 CAD range. I have no experience doing this in the past, so would be interested in others thoughts.

Thanks wisdom for all your insights. This knowledge does magnify the risk compared to my impression that Canadian financing would be hard to come by and therefore most purchases were primarily cash. Interest rate spreads should imply a downturn or flattening of prices. I still find it hard to evaluate on what will happen to rent vs own cost dynamics as our vacancy rates are so low. If buying for 10 years duration or greater, do you believe Vancouverites will be ahead based on overall principal payments vs savings from renting and investing the difference? I'm worried rent costs will increase once home ownership becomes less appealing....

I've lived in Vancouver for 5 years now and have been a firm believer in the unbalanced, frothiness of this market the entire time. All typical measures of inaffordability have been shown to be consistently off when comparing the local population's overall income, current debt levels and overall income growth in the recent past. My wife and I are both doctors and could "afford" to buy, but I could never rationalize the purchase despite home ownership being aggressively pushed on us from all Vancouver locals and our parents who have obviously made money in real estate over this extended bull market, albeit in Winnipeg/Ottawa markets. In the last few months however, I feel like I've been analyzing the local situation in Vancouver incorrectly..... I agree with the majority of the bearish posters on this thread who point to the national indicators such as historic low interest rates coupled with historically high debt levels, combined with a prolonged period starting in late 1990's of purposeful manipulation by CMHC to increase home ownership via longer amoritization periods and lower minimum downpayment requirements. This national trend shows this cannot go on forever based on the macro/microeconomic trends that govern our national/provincial and municipal landscape for Canadians. Eventually either a recession, higher interest rates or lack of consumer/investor confidence in real estate being the golden ticket will lead to either prolonged stagnation or decline in prices in the majority of our National markets. Coming from Manitoba, this is the viewpoint I have held consistently for Winnipeg's market, and felt Vancouver's hot market was explained by its locals unbridled enthusiasm for all things real estate. It truly is more manic than any other area in the country, because everyone knows multiple "average Joe's" who have made hundreds of thousands in this local market. It perfectly describes everything related to a speculative bubble. The problem with Vancouver real estate is there is a significant non local market force in the foreign Chinese buyer. I don't believe the rest of the country is affected by this at any similar order of magnitude, although the Toronto market may be somewhat affected. Many posters have alluded to the Chinese foreign buyer influence, but I don't think we have delved deep enough into why this money flows to the Vancouver market, and what factors would potential reverse or diminish its flow. This is the part that has me questioning whether this long term rise will actually decline. I don't want to debate if foreign buyers are truly having an effect - anecdotal and objective evidence is continuing to mount; the only question may be is it the primary driver of recent increases or secondary/tertiary contributer. I've attended some forums with Dr Ley and personally feel the link is clear http://www.theglobeandmail.com/life/home-and-garden/real-estate/some-wonder-if-its-time-vancouver-acts-to-slow-foreign-buyers/article24341903/ Now these are some commonly held beliefs as to what motivates the Chinese foreign buyer to buy million dollar homes with cash: 1. Taking capital out of China provides a possible call option/exit strategy if an individual's business gets nationalized. 2. Canada has less stringent immigration laws regarding obtaining permanent residency status relative to other Western countries including an "investor" class that eases the application process if the applicant is wealthy. This again gives an individual a call option on leaving China if political unrest or corruption/witchhunts occurs. 3. Access to Western educations for their children 4. Environmental concerns for China/Chinese desire for natural beauty of Vancouver 5. It has been very lucrative as an investment over the last several years 6. Canada appears to have the most lax laws on foreign property ownership compared to other Western countries. 7.It also appears we have lax laws on bringing large amounts of currency into our borders relative to other Western countries: http://www.vancouversun.com/news/Vancouver+airport+tops+country+seizures+undeclared+cash/8043419/story.html There are likely many other possible motivations and some of the above may be anecdotal or incorrect. I previously believed that regardless of the motivation, once the bubble "pops" in the rest of Canada which will eventually occur, the foreign buyer would immediately be dissuaded from continuing to purchase as price declines would scare them from placing capital into a possible losing investment. I now think this is probably wrong. The above border cash seizures article references that the supposed amount of capital outflow allowable to a Chinese citizen is $50,000/ year CAD equivalent. To have overall Chinese outflows in the billions/year as referenced in the article, individuals are obviously deciding the risk of keeping their cash in China is riskier than being caught taking larger sums out of the country. The Chinese foreign buyers are not utilizing local mortgages to purchase Vancouver homes. Anecdotal evidence has shown the majority are cash purchases. As noted above, even when CBSA finds undisclosed large amounts of cash at the border, the person pays a fine but keeps all their cash without further investigation. A multi million dollar cash real estate purchase by a Canadian citizen would likely send CRA on an in depth audit, but there is no concern by Canadian authoritities when it is a foreign buyer. Couple the above with this recent article that suggests Chinese policy will ease limits on foreign capital flow along with a depreciating CAD relative to the yuan, it appears capital outflows to Canada may see a sustained surge. http://www.wsj.com/articles/china-to-ease-limits-on-overseas-investments-1432841526 So to summarize, I can see many natural incentives to encourage Chinese citizens to continue to have their capital flow to Western countries and will not be abated by: 1. tougher foreign ownership laws (see Australia and Hong Kong's real estate price growth despite making foreign real estate investment harder), 2. Chinese National policy (has currently been ignored and is set to ease further) 3. Increase in interest rates (purchases are largely cash) 4. Chinese recession - I think this would continue to see higher capital outflows as there is a higher chance of nationalization of private businesses in poor economic times rather than continual economic growth So if there is potential tidal wave of external capital flow that doesn't necessary act based on fundamentals, does this not mean Vancouver prices potentially have a long term trend to rise even despite the astronomic growth thus far?

Do you think it is necessary to create guidelines in a will to act as a fiduciary from the grave or do you just plan to pass on your plan verbally to your spouse?

I've been building up more financial acumen over the last 5 years and transitioned my family finances away from a traditional financial planner/mutual fund model. After a recent high speed car accident (luckily no injury), I realized there is substantial "key man risk" for my family's wealth management. I have a will established and a Corporation/Trust model with my wife/kids structured as beneficiaries, but the lack of financial planning/investment management if I were to die is a massive area of risk. My wife has learned enough from me to understand basic savings principles, investing for the long run and not to panic with short term market volatility. Despite this, there would be a huge knowledge gap for her to continue with our current structure. I'm curious if other board members that are managing their whole family financial picture have a plan for what they would tell there spouse to do if they were to die and if they have structured this in a written will? I'm worried she would be stuck finding a financial planner that may not act in their best interest and incur substantial commissions/fees to slow portfolio growth over the years. Some of my initial thoughts and questions: 1. Investment Management - my initial instinct would be to advise her to put a substantial portion of our wealth into a few trusted Canadian funds ( Chou Funds, MPIC, Vertex) and diversified holding/ Insurance companies (Fairfax, Berkshire,Markel). Would everyone trust those companies as a 30-40 yr holding period with no available reevaluation over that whole period? The alternative would be to create a diversified passive index portfolio (especially if one of the selected holdings chooses to wind down or the manager leaves). I would create general guidelines about 3-4% drawdowns/year during retirement +\- a general rebalancing guideline as she moves from portfolio growth to portfolio preservation later in life. I figure I can't be too restrictive to prohibit any typical bad mistakes, because the number of unknown permutations are too great to cover all possible events. Any other thoughts or suggestions? 2. Financial Planning - beyond advising my wife regarding how much to save, budgeting etc , she would have no idea about tax planning, registered vehicles vs investing in the corp and paying down mortgage vs. Increasing investment portfolios dependent on current market environment/interest rates. I see the only option is to educate my wife as much as possible and advise her to pay for a fee based financial planner to help with general planning but not investment selection. I could create a financial fiduciary like a trusted friend with reasonable finance knowledge to be a final say before any change is made, but maybe this is too restrictive? 3. Tax planning - I think that my accountants have a pretty good idea how the current structure is creating an efficient tax plan and I can't see them straying far from current advice given there is no real financial incentive for them to change it drastically. Anything anyone would worry about here? Thanks in advance and I hope this sparks some interesting discussion....

A nice comparison of pre financial bubble to now and general market sentiment. http://www.oaktreecapital.com/MemoTree/The%20Race%20Is%20On_2013_11_26.pdf

I've transitioned away from mutual funds, but continue to hold Mackenzie Cundill Recovery Fund managed by James Morton who trained under Peter Cundill. MER is of course high, but the post fee CAGR is quite solid and they follow a deep value strategy. It gives me access to markets I wouldn't know how to measure government/currency risks.

Winnipeg - Montreal - Winnipeg - Victoria - Vancouver now for 4 years and loving it!

Thanks constructive, LC and jay21 Thanks for your thoughts. I also consider FFH, LRE , LUK and MKL to be reasonable to buy at this level. I would like OAK, BAM, BRK, FRMO to be somewhat better pricing, but the I think that a 5 yr CAGR for these will likely beat out my mutual funds and the balance between the different holdings will fair better than the long global equity mix that makes up 100% of my current allocation within the mutual funds. I have TPOU and GLRE at close to goal portfolio allocation already. I guess I'm saying I think I can get 6-7 out of 10 holdings at a fair price range but not a " jump in and load up" level. I do think these holdings will have a better long term performance than the mutual funds and will likely hold up better in the next down market whenever that is. I think I will transition the majority of the portfolio to what is reasonable to buy And keep the rest in the mutual funds for now. I'll keep building excess cash flow reasonably well and can either use this to add opportunistically or sell down the mutual funds further. Thanks again for the advice!

Thanks alwaysinvert! I would say I have been comfortable holding the mutual funds when I didn't know of any superior options. MER's in Canada are high and my funds are 2-2.6%. ~ 1% of this goes to the advisor for financial planning which I don't need any longer. This is equating to more than $10,000 in cost with no real benefit. I would say I think these funds are better than average but I believe that the capital allocator portfolio will produce a better long term CAGR. I understand your point regarding valuation skills being required to analyze the capital allocator holdings. I would say most are easier to value than something like Banks/telecoms because the valuation is often tied to book values or NAV that can be compared to historical premiums.

I would love to get the input from fellow board members on how to proceed with my current portfolio issues. I started investing 3 years ago with lots of excess cash flow but limited knowledge base. I knew only the basics of personal finance and had a bias towards value investing. I therefore found an advisor who has been good and my mutual funds (Third Avenue and a few other value funds) have produced a CAGR of about 12% over 3 years. My portfolio is now 7 figures and the MER fees are getting very excessive. My knowledge base has increased to the point where I am comfortable planning a largely passive portfolio similar to Giofranchi's of good capital allocators ( FFH, BRK, MKL, BAM, LUK etc) as a solid core. Over time I may have a small portion in individual securities if I can expand my circle of competence and improve my individual security analysis skills. The dilemma is some of these capital allocator holdings are somewhat above a price I would like to pay if I was just looking to buy with my dry powder. Would people just fully switch across to the capital allocator holdings at less than ideal prices knowing that at these prices they are likely better than continuing the current mutual fund holdings? Or only buy the securities that are cheap or fairly priced currently up to their portfolio % allocation and leave the rest cash until the prices improve for the other securities? This could mean I'm close 60-70% cash based on my current assessment of what is cheap enough to buy now. I'm worried I may end up sitting in cash for too long in a market that I consider fairly valued. I would likely leave myself with 20-30% cash allocation regardless for future price improvements on the desired holdings. Any advice would be greatly appreciated. Thanks in advance.

Parsad, I agree! I'm extremely happy my father instilled some basics tenants of understanding hard work and not being spoon fed. I still recognize my path in life had sustained advantages over others, but most of where I'm at today came through hard work and some luck.