bizaro86

Are you talking about Air Transat here? I thought that deal was cancelled?

Anecdotally, I think the pandemic and work-from-home are starting to blunt the need for real estate in Toronto/Vancouver. I've turned over 3 rental condos in Calgary in the last year, and 2 of the tenants are people who moved from the Lower Mainland. Only one the prior year, which was also from the lower mainland. Stated reasons for all 3 were the cost of housing* - in all cases they paid me large rental rate hikes over what I was charging the previous tenant, but are paying much less than they were paying previously in BC (previous rent/landlord is on my application form, and I verify it). If real estate in Calgary becomes a substitute for real estate in Vancouver even at the margins that has the potential to hurt that market, as it's a LOT cheaper here. We also just had some friends move here from Abbotsford. They are from the UK originally and immigrated to Vancouver, and cashed out their gains on a townhouse to buy a large detached house here for cash. They have 3 kids, so the change from a 1500 square foot townhouse to 2500 square foot detached will be welcome I suspect. *one also mentioned that she thought Calgary was safer than Vancouver as an equal factor to the cost savings.

Funny (to me anyway) that it rebounds when there are big fires you can smell from NYC, even when (objectively) they're relatively small compared to past fires in the west.

Start a DG thread with your thoughts! I'd be super interested in reading it. Took a quick look and think it looks potentially excellent, cheap/quality. Big recent drop.

FRPH

My prediction is that in 10 years people will be saying fusion is 10 years away. Just like what they're saying now, and what they were saying 10 years ago.

I think if you're considering regional bank prefs you need to go way up the quality scale. I learned this lesson in the GFC, when I investigated the baby bonds issued by the car makers. Chrysler was observably in the worst shape and its bonds were the cheapest, then GM, then Ford's were the most expensive. I split the difference and bought GM baby bonds. Chrysler's were a zero in bankruptcy, GM's were restructured into some common that gave me an equity-like but not spectacular return, while Ford didn't restructure and their baby bonds were a multi-bagger. Even though they were the most expensive by far they turned out the best because they didn't file. I think banks this is even more important, because there won't be a "restructure and get common in the new bank" option, they'll just be a donut.

I'm an engineer not an accountant, but I have done O&G acquisitions as part of a team at a taxable producer. My understanding is that after an acquisition the tax pools can only be applied to the assets that the company got as part of the acquisition. So if someone like Suncor or Imperial bought PPR they could only use those tax pools on PPR's assets. But definitely not an accountant...

He wasn't saying Ukraine is run by Azov. He was saying that the Russian propaganda machine also uses the Nazis as a bogeyman, with their press claiming that Kiev is run by the Azov battalion.

The US is a huge exporter of black market guns. The vast majority of the guns the cartels are using in Mexico come from the USA. Mexico has extremely restrictive gun laws, but the cartels smuggle guns across the border. See: https://news.harvard.edu/gazette/story/2022/02/stopping-toxic-flow-of-gun-traffic-from-u-s-to-mexico/

Nintendo

I don't think profits are described as per unit of revenue, rather total profits. Obviously margins (and especially capital efficiency) matter for investors but I don't think you can generalize that this says anything about margins, except that when profits grow margin expansion is one of the more likely ways for that to happen. I also don't think (since its economy wide) it says anything about which businesses will earn those profits. As an example, the "investments" made by VC backed firms in the last few years would increase the amount of profits in the economy. However, those profits are probably not mostly earned by the VC owned startups, they were probably mostly earned by people selling fancy office furniture, Silicon Valley real estate, and (especially!) online advertising. Of course, in the long run misallocation of capital is a bad thing, mostly because it will tend to depress future investments once the misallocated capital is written off. Whereas successful investments into productive capital goods are likely to increase future investments. Anyway, like I said I appreciate you sharing this. The scientific part of my brain likes the "identity" part of it, and simplifying assumptions are OK with me - it's usually more important to understand the assumptions than the conclusion so you don't try and stretch something to where it doesn't apply.

These groups are not necessarily wiped out together. In fact I think governments backing the latter makes them more likely to throw the former under the bus earlier.

@Cigarbuttthanks for posting the Kalecki piece. That was very interesting. It isn't really intuitive but does math out when you think about it - which likely means I learned something!

True. He's also unlikely to be around making or keeping promises for many more decades. Nobody thinks it will be broken up in his lifetime. 10-15 years down the road after his A shares have been converted to Bs it's more possible.

I think it could be done with concentration, but you'd have to pick your spots and the patience required to stay in tbills or something when there weren't opportunities would be difficult. I've had 3 distressed credit ten baggers over a 15 year period, and none of them overlapped time wise. If I had concentrated more in those ideas I'd be considerably wealthier. The first one was a 5% position on a 30k portfolio when I first started investing, so made very little actual difference in terms of $$ - in retrospect that one should have been a 50% position, that would have made it like 1 year of savings if went to zero (which was possible) but would have been way more meaningful if it had hit. Of course, it's risky though, as I've had distressed credit positions go to zero as well, including one that was my largest position at one point.

I know this is a bit outdated, but I'd be a bit careful with that. Most Canadian mortgage bonds are guaranteed wholly (or in parts on the underlying) by CMHC, a crown corp. My understanding is that (unlike Fannie/Freddie) it has a full faith/credit guarantee from the government. So if the the entity that prints CAD guarantees a CAD obligation...

Potash has similar cartel characteristics imo.

Ah, gotcha, I would agree.

I think if you're not a w2 type employee you probably need a bigger cash buffer than w2 types. Contractors are often the first cuts in big organizations, and self employment is intrinsically more exposed to macro. Eg I own a travel business - March 2020 I had negative cash flow approx equal to 1 years income as things shut down. Obviously that's an extreme case, but even the "retired living off investments" types are at least as exposed to macro as the average w2. Isnt great to sell during a downturn, so makes sense to keep a cash buffer for living expenses.

I bought the Jan 2024s ($20 strike) when two cities made his original post. They've ~tripled. Luckily I sold >90% of the position for an average ~30% gain before the rip. Should help me stay humble in the future. Binary stuff like this I think it makes sense to go way out of the money because you get a better return if it really works and it's probably a zero otherwise anyway. And then the other big lesson is to let the winners run...

Congrats Gregmal! Hopefully 1000 of your new neighbours buy this year as well!

Also, it isn't obvious to me these will be qualified investments for a TFSA/RRSP. I've paid penalty tax on holding CVRs in my RRSP in the past. If they put it in your account as a security and it doesn't trade on an exchange, it isn't an allowable investment. If that happens, I recommend not ignoring the situation (which is what I did) and transferring the CVR to a non-reg account at some deemed value (which is what I did eventually).

I sold some naked calls on BBBY today. Nothing extreme size wise, and they're well OTM. I think this short squeeze gets capped off because they'll issue ATM shares into it as soon as they are able, which will keep boosting supply of shares. It's a bit of a hedge on my position in the unsecured (which is underwater). Ideally they take in enough cash on the ATM that they make the upcoming coupon payment without filing. Also @TwoCitiesCapitalthanks for the note on SI. I followed you into that one - so far so good, obviously.

Mortgages in Alberta are only non-recourse if they don't have mortgage insurance, which requires 20% down.