bizaro86

I was just over +30% in 2020. The vast majority of my alpha this year was made in late March when I went from around 75% net long to around 140% net long. Mostly with in-the-money call options on quality businesses (the calls I bought on DIS when it was less than half its current price helped quite a bit). The other big winners were a good size position in TZOO (which I still like) and a special situation trade around the Just Energy restructuring. That one was the largest absolute dollar return on a single trade of my life. My biggest loser of the year (by far!) was BRK.B. I bought some puts on various things I thought were overleveraged in Jan/Feb. That worked out well, but I closed them too soon. Around the same time, I sold some BRK.B puts (short expirations). Then when they were in the money I rolled them out, and added more to try and make it up. This process ended up with me getting put a huge BRK.B position in the 200s when it was trading considerably lower. I ended up selling most of the excess BRK at pretty low prices. I knew it was low, but wanted to put the money into higher beta names, which ended up being the right call. Still, I'm probably the only person on the board who has BRK as their largest absolute dollar losing position of all time. IMO this slightly underestimates my true return for the year, as I have a relatively large position in the debt of a firm that went through bankruptcy. The debt no longer trades and the reorg equity I got isn't trading yet, and IB has it marked at an unreasonably low price (imo). So I should get a free boost on next years numbers. @Writser- I'm sorry to hear this board hasn't been useful for you this year - I have huge respect for you as one of the best posters here. I can relate on the kids front - I made a number of unforced errors due to exhaustion when my kids were little. Mine are 5/6 now and it does get easier. **lesson learned - you don't need to make it back on the same trade. If I had just closed the BRK and taken the first loss it wouldn't have been that painful. The losses on the roll were brutal. When I finally pulled the cord and reinvested in other stuff at the bottom I made it all back and then some.

There are many remote communities. Some of those are indigenous communities and some are not. The characteristics of those communities (fly-in, fly out, hospitals quite distant) are what matters, not the genetic or cultural background of the people who happen to live there. Agreed, people are people and all should have equal rights and equal protection under law. But once governments start giving people privileges based uniquely on their ancestry, you have shifted drastically away from the principles of a pluralist society in a liberal democracy. Some of those race based (or if you prefer, ancestry based) privileges are historical artifacts created by our forebears 300 years ago and are thus entrenched in law, but to the extent possible, let's not create new ones. If you start providing preferential access to vaccination on the basis of ancestry, do you finish in a world where hospital beds, waiting lists and organ transplants are not provided to all equally, but rather preferentially to certain groups because of their genetic make-up? That's certainly not a world that I would want to live in. SJ Exactly. Remote communities should rank high on the list, although maybe not above paramedics, who I really do believe should be high on the list. As a work-from-home young-ish person I'm way down the list, which is completely fine. But I'm not sure that the people who live on the reserve near my house (the one closer to a major hospital than my house in the suburbs, the reserve that has a Costco) need to be getting first dibs based on race.

I would have ranked paramedics, who end up transporting covid patients fairly often, higher than adults in indigenous communities. I think race based decision making is generally a bad idea.

I don't think that number is accurate, especially if you're only talking labour. Calgary land isn't nearly as valuable as in Vancouver (we aren't going to run out of prairie) but labour costs here are still higher. And you can buy a new house here for under $400/sq ft. Presumably the builders aren't selling for under cost, and land isn't free here.

That seems reasonable to me. A chance to cool down. I think Cardboard added value on the investment side, and it'd be a shame to lose him permanently. Obviously this place belongs to one person, and it isn't a democracy. So that is just a suggestion not a vote.

I really like this trade idea, and considered it extensively. I think the most likely case is that it returns 10% in the next 30-40 days. I don't have it on, largely because of the potential for their undisclosed short position to be Tesla. Tesla is up 50% this quarter. If they have hundreds of millions of losses on a short in their Q4 report I think there could be meaningful downside for FFH.

That's a solid rate. Leverage to the moon! But can you get 7:1 margin on a portfolio of OTM calls on SPACs?

If Fairfax had bought Apple instead of Blackberry all those years ago, articles about WEB innthe Canadian press would start with the sentence, "the Prem Watsa of the USA." Interesting how big a difference one decision can make.

I 100% completely understand the "all shorts are a bad idea" sentiment with regard to FFH's track record... My only point is that shorting a 1000+ P/E euphoria stock is not the same thing as shorting the S&P500 in 2011..... When your bartender, barber, and Uber driver are all bragging endlessly about their TSLA gains -- now up 600% in 9 months --- and a market cap greater than BRK with hardly a crumb of real earnings, all built on absurd growth projections in a capital heavy business, now is not the time to cover the short prematurely. I'd vote to let it play out. (Assuming it's in fact Tsla -- still speculation at this point.) That being said, long term, I am generally not a fan of shorting, and clearly with Prem's commitment to ending shorts, I'll not be very disappointed to see it come to an end. It should be a healthy and sobering change for the next decade at FFH... we are in agreement on this! On the other hand, if it is TSLA short that will probably wreck what should otherwise be a good quarterly report on the investment side. TSLA is up 42% this quarter. One of the tough things about shorting is that even if you're right eventually, you can lose a great deal of money in the medium term.

Greg: Re ARKG....the July 2021 puts offer 10/1 if ARKG retraces to March re-Covid levels ($34). I own some July 21 $65's. Pretty good risk / reward for some gambling money. Thanks for the heads up. Yea I planned to take a look at the options and some of the similar loony tune ETFs over the weekend. At quick glance the options did seem quite reasonably priced. I also was surprised to see near 0 borrow cost on ARKG, which, while exciting, is currently holding an extraordinary number of stocks that have done 100%+ in a couple of weeks. This is also smack in the middle of what is seasonally a very strong stretch for biotech. Nov-Jan typically. So theres many ways this can shed 15-50% over the next quarter or two, on scenarios ranging from just a simple correction, to a full blown bubble pop...or at least I think/hope. One reason biotech has seasonal strength Nov-Jan is the JP Morgan Biotech conference in early January. Biggest conference of the year - inevitably lots of deals/partnerships/asset JVs are announced. I somehow doubt the virtual version will have quite as many catalysts for small biotechs this year.

No. Other railroads have used Precision Scheduled Railroading, which basically limits the # of trains to very specific times and is not flexable for customers. It improves operating margins by 300-400bps for several reasons - but makes customers unhappy. Buffett has said that BNSF is gaining customers b/c BNSF does not use PSR currently. It seems reasonable to me (as an admitted outsider) that trains would run on a schedule. That's how most transportation (planes, busses, etc) works. Even pipeline deliveries are scheduled (batch lines) and they have continuous flow. I agree that customers prefer extra flexibility, but there doesn't seem to be a lot of evidence that they're willing to pay for it. And if the regulatory system changes it will likely change for all the Class 1 railroads at the same time. So BRK could conceivably get none of the margin benefits of PSR and all the regulatory downside.

I think it would almost certainly re-rate if they broke it up. GEICO would be another candidate that would trade at a higher valuation than the holdco if separated.

That's not what I meant because it doesn't raise the issue that I mentioned of the shareholder not knowing how to allocate the cash. I had my head stuck in the past when I remember he had addressed the topic back when dividends were asked for. But yes, beginning the sentence the way I did was prone to confusion. My point is that the shareholders similarly wouldn't know what to do with the shares distributed. Acknowledging that WEB will never break up his life's work (and he's earned that right, imo), shareholders wouldn't have to do anything if they didn't want to. Exactly like now.

There are tons of businesses inside BRK that would be big enough to stand alone. The energy business and the railroad would both be among the largest in their fields.

Spin offs create value all the time, mostly by improving capital allocation across businesses. That hasn't been an issue under WEB. But his time is closer to the end than the start, and BRK is pretty complicated now.

Congratulations!

It could be a Total Return Swap that they're short. Those have a fixed duration/maturity and there can be a fee for exiting the position early if they can't find another buyer since the instruments are bespoke and over the counter. That being said, I'm sure whatever fee would've been owed would've been less than losses on Tesla so far so I dunno. If it is a Tesla TSR, I would imagine every time they considered exiting the fee to exit seemed like it was more than their exposure to future losses. "How much higher can this money losing, capital intensive cyclical business go?!?!" I actually think Tesl might be getting close to a top here. After the S&P inclusion, who is the new marginal buyer? I've never shorted it, because the risk reward has always seemed poor. I might buy a few way out of the money puts now.

I offered in person or virtual showings for a November 1 vacancy. Uptake on virtual showings was very low - only one person wanted that and it was because they were relocating from a distant city. They ended up taking it, so that can work, but most people want to see the place they're going to live with their own eyes before committing.

Thanks, Pete. So the total position is still deeply under water, to say nothing of the time value of money. Oh well, at least it's moving in the right direction. SJ I would strongly suggest never including the time value of money in your assessment of Fairfax's investments, unless you have a stiff drink to hand. Atlas may be an exception. Yes, a potential investor would be well advised to simultaneously initiate a position in Fairfax Financial and Corby Distilling. SJ Lol. If Prem would just have bought defensive staples like Corby for the last 10 years the mood in this thread would be a lot different.

Make sense though. Large city with many renters, large population of young and single people and high cost. But I bet Seattle suburbs are white hot. I'm throwing 700k cash offers at 3bed/1bath 1,000 sq ft houses in the east bay of San Francisco. I'm not even competitive apparently... Suburbs have largely lacked the price appreciating that Appartement or houses in the city areas had. I lived in Long Island and now in Boston area and in both cases, houses were still below ~2005 prices. I think RE in thr city core might have doubled with8b the same time frame. If this trend reverses, it could have a long way to go, but I somehow doubt that it will. Actually good bay area suburban housing has been on fire since a couple of years after the GFC. The suburban city of Burlingame (17 miles south of San Francisco) has seen a 2.5X price rise for single family homes in the last 10 years (Dec-2010 to now). That is annualized appreciation of nearly 10%. If you take last 25 years for this suburb that number comes to about 7.5% annualized which is rivaling S&P returns (without dividends reinvested of-course). https://www.zillow.com/burlingame-ca/home-values/ For comparison San Francisco (SF) has appreciated "only" 2X in the last 10 years for single family homes (7.5% annualized) and about 4X in the last 25 years (for a return of 6% annualized). SF Zillow: https://www.zillow.com/san-francisco-ca/home-values/ SF Case Shiller: https://fred.stlouisfed.org/series/SFXRSA If you bought a house with no leverage (and thus only received that unleveraged appreciation) I think its pretty likely the net cash flow from rent (or rent avoided) would have been at least comparable to the dividends received from the S&P.

I went to the top program at the best magnet high school in my Canadian city. We had 30 grads my year. All stayed in Canada and are very successful on average except the valedictorian, who went to Stanford and lives in Silicon Valley now. There are more high end Canadians moving to the US than vice versa, no matter how much people complain about your politics. But data is better than anecdotes, and Liberty's newsletter had a great graph on this a few weeks ago. https://libertyrpf.substack.com/p/44-my-thoughts-on-investment-style Basically, the US is by far the biggest net recipient of immigration by inventors, and its not even close.

The big benefit the US gets from its inequality is quality immigration. Because of the high end opportunity, many people with high end talent move to the USA, realizing that is the best place for them to monetize their talents. That generates huge spin off benefits.

The other pro of waiting for a bit to raise the inclusion rate (aside from the fairness argument) is that it would generate tons of current year tax revenue. If they up the inclusion rate I would probably sell some long-held multi-baggers to lock in the lower rate on previous gains. I would also try and sell some real estate for the same reason, although that would depend how much time they gave. Tons of people would do the same, triggering a one-year tax windfall.

I would just ask how much has Fairfax lost on shorts since this article was published?

Maybe warrants on Canadian juniors? There are few trading iirc. Fits the lottery ticket request, anyway.