lessthaniv

- Metro Vancouver is expected to grow by 250k people over the next 5 yrs. - there is over 60k student visas here - there is over 300k multiple entry visas (10 yr) - Vancouver has a brutal building permit process and slow processing time - the average duration for one high rise (300 units) from conception to occupancy is about 6 years if everything goes well. The result is incredibly tight supply and constant demand.

After tax realized gain of $900m bumping book by $33/share :o

Jeffmori7, That's a great article and I appreciate you taking the time to post it. I agree. I'll add this article which is from the GVBOT discussing the need to ramp up the supply of affordable housing for 25-35 year olds by speeding up the permit processes for developers. To me, this is a choke point and the lack of affordable homes for "the missing middle" is contributing to the social issues we often hear about in the press and as mentioned in the Baskin article. But, as expressed in the Baskin article the presence of social issues due to affordablility doesn't mean the market is in a bubble. http://www.cbc.ca/news/canada/british-columbia/vancouver-must-speed-up-housing-development-process-greater-vancouver-board-of-trade-1.4073578 http://globalnews.ca/news/3386375/housing-affordability-taking-huge-swipe-at-missing-middle-report/ I also agree that interest rates are key.

Value investing is a process which itself is based on timing. Sometimes stocks trade below/above intrinsic value and you time your entries to initiate positions when you feel value is present.

A good strategy for buying a mutual fund is to identify who the top managers are based on their long term results. Then, wait for them to have a very weak period. Buy into the weakness. Poor short term results don't indicate a loss of intelligence. Chou's Associates fund has been around for a long time. Since 1987, Chou has suffered 8 negative calendar year performances - 2 of which are 2015 and 2016. Go do the math for yourself to discover the kinds of returns you'd have if you patiently acquired units in his worst years. ... then revisit where the fund currently is. I have a ton of respect for Francis. He is a great manager.

Yuuuuupppp!

Where are the Rainmaker comments? I must be completely blind but I cant find it...

Real estate is a leveraged asset in most cases. Since 1981, the cost of borrowing money in Canada has fallen from the peak. Over the same period of time, many households moved from one income earner in the household to two. So, for 37 years the cost of borrowing money has been falling while household income was increasing. It's not surprising then that leveraged assets like real estate were driven up. Especially in a city like Vancouver where land supply is tight. Mountains in the North, water to the West, a border to the South with protected farmland to the East against the backdrop of more mountains. The building in Vancouver these days is up. Vertically. Assessed values are dominated by land values. Looking forward, a change in interest rates increasing the cost of borrowing would likely create a shakeout for the overleveraged, but longer term the land will remain a valuable asset.

This benefit is targeted towards new buyers with less than $150k in income. The inventory of homes that are affordable to this segment of the market are already in tight supply. If buyers can only afford a purchase price of $350k and are then given $37,500 in "free" money those dollars will likely flow to the benefit of the sellers. Meaning, they will buy the home for $387,000. The buyers will be left with higher debt levels.

Woltac has it correct. Their common stock/paid in capital account was already reduced to zero by past repurchases. During the period the company issued new stock which served to increase the common stock/paid in capital account but that was entirely offset by the stock repurchases that occurred during the same period. In fact, the stock repurchases exceeded the issuances and therefore the balance was accounted for by a reduction in retained earnings as the common stock/paid in capital account was again, zero'd out. Your original chart cut this information off. This one shows the missing entry if you scroll to the right. ;D http://i728.photobucket.com/albums/ww289/MikeNCathy/IMG_1108_zpsij4ld8mt.jpeg

Neu?

Just be careful on the margin room..those %'s can change quickly and if one is too highly leveraged it can cause problems with margin calls. :)

Interest income is not really an operating cashflow. Because the cashflow from operations reconciliation begins with net income, they are backing out the effect of interest income received. They then account for it under the cashflows from investing where it more properly belongs. The intent would be to provide readers with a clearer picture of what the operations are doing wrt cashflow. This is a difference between US GAAP and IFRS. http://i728.photobucket.com/albums/ww289/MikeNCathy/IMG_1105_zpsgkvlka3n.png

Rate increases could have the affect of lifting the price on the preferred.

Seattle vs. New England

Lots can be gained from this thread when heading back to page 1 and re-reading it.

Interesting comments from G&M today on some potential upcoming regulatory changes. The Globe and Mail reports in its Friday edition that proposed federal government measures to cool Canada's hottest local housing markets could make it harder for borrowers in some parts of the country to qualify for affordable loans. The Globe's Tamson McMahon writes that the Department of Finance confirmed it is studying the idea of implementing a deductible on government-backed mortgage insurance to force lenders to share the risks. At the same time, the Office of the Superintendent of Financial Institutions is expected to launch new rules at the start of next year that would require mortgage lenders and insurers to hold more capital against loans in local housing markets in which prices appear to be rising too quickly. The new rules, which are still under review, would likely affect mortgages to borrowers in Toronto, Vancouver, Victoria, Calgary and Edmonton, according to analyses of OSFI's proposal. Federal regulators "haven't really contemplated that that has a big regional impact, that that will mean that one borrower in one region of the country will be treated differently," said John Webster at Bank of Nova Scotia. "I don't think they've thought that all the way through."

The growth in M2 money supply has been significant over the last 8 years. However, the velocity of M2 money supply is at very low level, historically speaking. If the velocity of M2 normalizes over time and money supply continues to grow then it's hard to not expect future inflation, no? Chou raise this concern and I think it's a good one. M2 Money Supply: http://i728.photobucket.com/albums/ww289/MikeNCathy/image_zpsafkdjzjs.jpeg Velocity of M2 : http://i728.photobucket.com/albums/ww289/MikeNCathy/image_zpstfniddz4.jpeg It would seem to me that the inflation we had from the 70s to the early 00s was primarily driven by the demand side of the equation: the baby boom generation across many of the countries that were principals in WW2. Maybe these other factors will have temporary inflative effects. I usually stay out of macro discussions but this idea is greater than macro. The lack of growth in returns from stock markets and other asset classes does not imply no profits. It just implies a much lower growth rate. Perhaps what Matjone suggests. This is a historical account of federal reserve policies during the high inflation period peaking late 70's and early 80's. When I read it, I keep in mind the current situation with respect to the growth in money supply. http://www.federalreservehistory.org/Period/Essay/13 While economists debate the relative importance of the factors that motivated and perpetuated inflation for more than a decade, there is little debate about its source. The origins of the Great Inflation were policies that allowed for an excessive growth in the supply of money—Federal Reserve policies. From the chart above you can see the velocity of money from 1965 - 1980 was trending up while the money supply was increasing swiftly.

The growth in M2 money supply has been significant over the last 8 years. However, the velocity of M2 money supply is at very low level, historically speaking. If the velocity of M2 normalizes over time and money supply continues to grow then it's hard to not expect future inflation, no? Chou raise this concern and I think it's a good one. M2 Money Supply: http://i728.photobucket.com/albums/ww289/MikeNCathy/image_zpsafkdjzjs.jpeg Velocity of M2 : http://i728.photobucket.com/albums/ww289/MikeNCathy/image_zpstfniddz4.jpeg

An old article I book marked that you may enjoy, Uccmal http://blogs.worldbank.org/futuredevelopment/rapid-slowdown-population-growth

M2 Money Supply: https://fred.stlouisfed.org/series/M2 Velocity of M2 Money Supply: https://fred.stlouisfed.org/series/M2V/ I like what Francis Chou had to say about this ..... Deflation vs Inflation In the history of mankind, we have never really been in a kind of environment where one could make an equally strong case for deflation or for inflation. The arguments for both sides are quite compelling. If you believe in deflation, these are the points one could make: 1) China, the recent locomotive of global growth, is lurching ahead at an ever slowing speed. Its economy and financial markets in 2015 went through tremendous turmoil, affecting all markets worldwide. China has been a huge success story for the last 30 years as it was responsible for taking away large amounts of manufacturing jobs from developed economies. Its economy grew annually at a double digit rate and we thought this growth would not show any signs of slowing down appreciably in the near future. Even after the Great Recession of 2008, China's economy grew at a pretty good clip. However, most of the growth occurred not because of demand but due to enormous spending by all sectors of its government on unneeded housing and infrastructure. As a result, if one were to go to China now, he would notice a tremendous number of ghost cities with empty houses, empty highways and no people; 2) As shown by the weakness in commodity prices, it will take a while for demand to absorb all the excess capacity built up over the last 20 years; 3) Some sovereign bonds carry negative interest rates; 4) The recovery of the global economy from the Great Recession of 2008 has been sluggish at best. On the flip side, one could make an equally compelling case for inflation to roar back some time in the future: 1) How low could interest rates go? At negative yields they can’t go much below zero; 2) Although the recovery has been anemic, at least in nominal terms there has been some recovery; 3) The velocity of money for M2 is at an all-time low. This can be further highlighted if we hypothesize about what would happen if M2 moved back up to the historical average. If a regression to the mean was to occur, the price levels could be 25% higher than what it is today. Carrying this logic one step further, with the current levels of money-printing growing at approximately 7.2% annualized, this could see a potential price level increase of 50%, if the velocity of money were to move back up to the historical average; 4) Normal market forces, the incessant balancing of supply and demand, will bring everything into equilibrium as the boom-bust cycle produced by artificial credit creation works itself out, but you cannot ‘un-print’ money. 95 The current situation reminds me of a story about an exchange between Winston Churchill and MP Bessie Braddock: At one time when Churchill was drunk, Bessie Braddock yelled at him, "Winston, you are drunk, and what’s more, you are disgustingly drunk." Churchill retorted, “My dear, you are ugly, and what’s more, you are disgustingly ugly. But tomorrow I shall be sober and you will still be disgustingly ugly.” That's how I feel about deflation and inflation (eventual consequences of printing too much money)

http://www.investmentexecutive.com/-/brexit-heavy-fallout-for-u-k-financial-sector?utm_source=newsletter&utm_medium=nl&utm_content=investmentexecutive&utm_campaign=INT-EN-morning Good read

Holy shit. I just tuned in and haven't followed, but how do I put on my first short ever? I live in Copenhagen and I'm pretty familiar with high real estate prices (and 2% 30 year mortgages), but that looks crazy. Are either of you familiar with Night street? Just curious if your opinion is based on observation of the Vancouver market from within or from the outside?

http://www.bnn.ca/News/2015/10/6/Canadas-real-estate-market-wont-crash-says-Riocans-CEO.aspx

It was interesting to me the tone of Prem's letter as compared to Buffett who lambasted the party-line pessimism.