bizaro86

I would suspect there is some sort of volatility bets in there as well. Possibly way out of the money options on the VIX? They are european exercise, iirc, so you would need to own every expiry.

I think it's like anything else - mostly you should follow the accounting standards. But if you can find a place where you have a variant perception on lease accounting that makes a big difference to the value, that might be a source of under or over valuation.

I think the problem with underwriting better portfolio returns is the way they invest (distressed/cigar butts) isnt well suited to the size of their investments. Buying Toys R Us Canada out of BK would be fine if you could sell your stake once it was up and running and had a couple of good quarters. Holding it long term seems destined to fail. BlackBerry could have worked out great if they could have been more nimble getting out at the peaks. Cigar butts are one puff stocks. You need to get your returns on the one puff and then get out. That's harder to do on big huge positions in firms (eg recipe).

Doesn't seem like a good answer for when the mom of one of my kids friends is asking questions to casually figure out whether she should let her kid come over and play.

Yeah, unless you come across an actuary who is really excited to meet another one and wants to have an in depth conversation about it...

Furloughing the most junior pilots will also increase their costs, since the senior pilots make way more money. So they're cutting their lowest cost labor. I actually think a big part of the demand that will remain will be price sensitive leisure travellers attracted by good deals. There is a big cohort of young people who dont think they're at risk, and will travel. But that is a very price sensitive demographic.

This is hard. I am about 50/50 investing income and running a small online business people dont understand. I tell people I'm an engineer and I work from home. Those statements are both true, but it doesn't follow (as most assume) that I work from home as an engineer. My wife has an aunt that asks me if I have gotten a job yet every time we see them. I'm pretty sure she thinks I'm mooching off my wife. I'm always tempted to tell her how much money I made last year, but aside from being objectively crass my wife specifically forbade it. So now I just say, "no, my own stuff is going well, thanks for asking." And grit my teeth. These questions are easily the hardest part about my career choice, imo.

I believe screener.co fits your requirements. I have it and think it's great.

I think the legacy will at least partially depend on how BRK does after he passes away.

I will immediately start doing outside activities with my kids that are closed (playgrounds, the zoo, etc)

I'm wondering if one effect of this will be bigger than expected hedging gains for producers. I think it is likely that most producers had closed their May hedge book before prices went negative, but I bet someone was out there with a bunch of sold short May contracts that they closed at negative prices, while selling their physical crude production at positive spot prices.

Total deaths in Spain for March were about double the deaths expected during that month. A lot of the deaths happened in nursing homes. Deaths of sick old people that happen now are probably really bad for the death care industry though. No expensive funeral services are happening now because of mandatory isolation. And a 90 year old in LTC was probably a good bet for a customer in the near future...

I have a considerably smaller sample size, but I got 100% of my rents for April. And one tenant who hasn't paid on time for a year paid on the 1st. For tenants who have lost their jobs, the CERB is $2000/month for 4 months. For a family with 2 adults, that's $4k/month. Someone working full time 40 hours/wk at minimum wage ($15/hr) only has a gross of $2500/month. So between taxes and payroll deductions and missing a shift many/most renters are as good or better off financially than they were. Even tenants in higher end professions seem to be mostly working from home, getting full pay, and saving money on commuting, lunches out, etc. The piper will have to be paid for this eventually, but for now it seems OK. I think next spring when folks realize they need to pay income tax on their CERB could be tough, as one example. (No tax was withheld) The market for property sales has slowed considerably, and both pricing and transaction volumes are way down. I'm not sure about the leasing market, I haven't had a vacancy since this started. I suspect it's quite bad.

I can't speak to BC, but I own a number of condos in Alberta next door, and insurance rates here are up dramatically as well. The lowest building was a 30% increase in insurance. Here, a hardening market has come from firms leaving what has been a poor market for profitability for years, and the remaining options becoming much more aggressive on price. The market has been poor because claims keep rising. This is mostly claims for water damage, which go up every year. Buildings are getting older and tenants are harder on pipes than owners (put oil down the sink, stuff you shouldnt flush down the toilet). The damage from individual claims is also much higher. I spoke to the restoration guy (older) when one of my condos was damaged. He said 10 years ago most units had carpet. They would pull up the carpet, install dehumidifiers and fans to dry everything out, and re-stretch the carpet. Now many/most units have laminate floors, which are destroyed by water. So they pull out the floor, and need to pay for install of a new floor. The restoration companies have also realized they have an agency problem by the tail. They recommend how many dehumidifiers and fans are needed, and then rent them. The rentals are very expensive. Adjusters are too busy, so value a restoration firm that just deals with stuff more than one that minimizes costs.

I spent a portion of today trying to get borrow on this. The A shares didn't go with it, so no fundamental reason I dont think. At my last check IB quoted less than 1% cost of borrow with zero availability, which I thought was interesting.

The market definitely seems to be pricing in significant bankruptcies. Midstream valuations only make sense in that light. And I was able to buy CVE bonds at less than fifty cents on the dollar fairly recently. They're up to 65, but that isnt exactly a ringing endorsement.

Is it your opinion that leased self storage would trade at a 10% cap rate? Because leased industrial real estate trades way below that (say 4-5% caps). So valuing the whole thing as a self storage operation at a 9% cap means you are taking a big gain on the operations but a loss on the building portion. The terms of the existing lease are really important here, imo

If I was buying a self storage in a leased facility, I would value it by NPV of the business NOI over the remaining term of the lease. I would use a high discount rate (20%?) because effectively you're buying a small business, and they trade at low multiples. I wouldn't pay much if anything for value beyond the end of the current lease, because the landlord has huge leverage with a self-storage tenant at the end of a lease. It would be very difficult to move the operation elsewhere, as all the individual sub-tenants would need to move their stuff into new lockers. So the operator would need to pay for new lockers at the new location, then compensate everyone for moving, and then deal with the old lockers somehow. Probably it ends up being cheaper to pay significantly increased rent. Of course, if you/your family owns the property you presumably wouldn't have this risk, so buying out the tenant may make sense. You would be giving up the opportunity to raise the rent at the end of the term, however, whenever that happens to be. The other way you could calculate the value of the tenants operation would be calculate the value of the self-storage operation as a whole, and then calculate the value of the building with the current lease, and take the difference. Then make an offer that allows you to profit by buying out the business.

Bingo. The line from Ben Rickett in big short comes to mind. “For every 1% uptick in unemployment, 40,000 people die”. Or something to that effect when the kids are cheering the market crash. Let’s hope that isnt the case because this major overreaction could have been massively more costly than this super-flu with a social media following. There are all sorts of second order effects. One example: We shut down tourism, so all the rental cars get returned. There isnt enough space for them to all be returned at once, so they get parked in overflow. In Florida, that might be a field. But its dry, and the field lights on fire, burning the field, thousands of rental cars, and the adjacent lands. Respiratory damage to nearby residents and firefighters not quantified.

how about an EV? We wouldn't have bought an EV, as we want (and currently own) a 7 seater SUV. The Tesla Model X is $120k CAD for the 7 seater, and the top end Toyota Highlander is only $50k CAD. $70k buys a lot of gas, even assuming prices return to much higher levels. Not that those are identical vehicles, of course. When we replace our sedan (a 2018) in 7-12 years I think it's very likely we'll get an EV.

I would say things that wear out over time but aren't strict necessities so are currently being deferred. Things like upgrades of phones/cars are likely way down right now, but that demand is probably still there and will be filled at some point. As a personal example - we have 2008 SUV. We bought it new at the end of 2008 in a great recession sale. We were planning to buy a new one this year, but decided to hold off. So we spent some money on deferred maintenance (new tires, spark plugs, some suspension work) and will keep the old one for another couple of years. So our SUV purchase was deferred and the demand over the next few years will be higher. I suspect people are making similar decisions for electronics, appliances, and luxury goods right now.

No. An amended 13G is only filed once a year. Berkshire filed the 2020 amendment in Feb and they are not required file another until 2021. Would they need to file an amended 13g if they went below 5%?

I have Aercap and Park for the same "best house in worst neighborhood" reason. Park especially has assets that can never be re-created. It's like the old Buffet comment on how much money it would take to outcompete Coke - no amount of money builds a true comparable to Hilton Hawaiian Village. I have also bought PPL. Credit concerns as their customers are large Canadian oil cos, but their pipelines will be needed even if all the producers take a trip through BK. I'm less enthusiastic about the chemical plant, but at this price not everything needs to go right. For the USD - the benefit of being the reserve currency is a huge and persistent investment surplus that finances a huge and persistent trade deficit. So Americans as a whole can consume more than they produce because their biggest export is reserve currency status fiat money.

Thanks. These are the "hard" qualities and make sense to me. However, I cannot find any reference to this logic in Buffett's literature. In fact I have never seen the logic explained other than that "even if he invested billions of dollars to create a cola that competes with Coca Cola, he would not be able to do it." This said, if the true value of Coke lies in the distribution system, and if its executives recognize this too, then it is only logical for them to leverage this same distribution system to create other products. They could create an array of soda products, with some tweaks on the formula. But they didn't? You know they sell Sprite, fanta, diet coke, etc right?

What's your estimate for the current book value though? Yeah, I still own this (worst mistake this year) but given the shenanigans with the airport mark, makes it pretty tough to trust their mark on the other private positions. And if you can't trust the external manager in a reasonable way, then why wouldn't this trade for a 40% discount permanently? There are lots of permanent capital vehicles that do and have lower fees. Frustrating, as I think the assets are great. But trust is hard to get back, imo.