Parsad

Other way around. FFH 1% and BRK probably 6%. If a $60B loss, FFH would be hit with $600M or so and BRK would be hit with a $3.6B loss or so. Cheers!

You know we worry too much about these things in the short-term, but they really mean little over the long-run. I'm 53 and this is probably the 9th recession I've experienced in my lifetime. And there have been some doozies...1973-1975; 1980-1981; 1990-1991; 2008-2009; 2020. If you are overleveraged, carrying variable rate debt, have job insecurity, no savings...yeah you are fucked! If you are like probably most people on this message board...you tighten the belt a little, fret about the volatility of your investments and discuss it incessantly on here! But at the end of the day, you will still be in the top 5% of income earners and wealth! So that second SUV or Porsche will have to wait. You'll shop at Costco and Target instead of Whole Foods. The villa in Tuscany will be a beautiful cottage in Maine. You will have to fly premium economy instead of business. Your children won't get to upgrade from Apple iPhone 13 to Apple iPhone 14 till next year. Christmas will be a one week ski trip instead of two! I mean these are the problems people on here will be facing. The real problem is government services may be cut back with high deficits and debt. Wait times for services will be longer. More people will need the help of food banks. More kids will be hungry when they go to school...breaks my fucking heart thinking about that! More homeless, less help for those that need assistance. Higher taxes including the middle class. More class warfare. The usual negative stories in the media and partisan politics! But at the end of the day, the recession will come and go. People will again overleverage themselves in the next cycle...live paycheck to paycheck...overindulge themselves...etc. That's just life! Cheers!

Fairfax is in much better financial position to withstand hurricane losses than it was in previous large scale hurricane catastrophes like Andrew. Fairfax will incur about a 0.75-1% loss, while someone like Berkshire will probably incur a 5-8% loss. Also, as tragic as Ian will be, this will only bode well for a continued hard market in reinsurance. Premium pricing was expected to be strong through 2023, but with Ian and other potential losses this year, the hard market will likely continue into 2024 as well. Cheers!

Those frenched racks of lamb tied together would make a beautiful crown roast at Christmas! Especially if you are tired of turkey every year. Cheers!

Yes, in the short term bonds have collapsed, but that's now made for a great investment opportunity, not only for small investors, but institutions that were craving more interest income. Someone like Fairfax or a senior citizen was getting 1% if they were lucky in January...now you can easily get 3-4%...even 5% interest income. Corporate and junk bond yields also have to rise, so investors will be getting even more interest income going forward. Long-term yield from the stock market has improved with lower valuations...dividend payouts are higher. Better opportunities than just holding cash. Cheers!

Theoretically the higher rates have forced a reduction in employment demand in some sectors. It also should have reduced consumption to a certain level. But we've rarely seen governments get it just right and they've often overshot...that's the risk. That they push employers too fast in cutting staff or consumer consumption completely falls off. A strong U.S. dollar has generally bode well for the U.S. economy. Cheers!

Europe's valuation is lower because their pain is going to be significant. I would not be surprised to see 2-3 more troubled countries in Europe like the PIGS we saw in the past that could jeopardize the Euro. I would imagine China has finally seen its day of reckoning in the real estate sector...Japan will see an exodus of capital or rising rates that could jeopardize its future...and Russia still creating issues. Might see a couple of failures in South America as well. The other side of this is that global economic crisis leads to extreme political views...either right or left! As if things weren't shitty enough! Cheers!

Markets tend to correct well ahead of the earnings turn down...so much of that is baked in already. Will there be further pain...most likely. To the depths of 2002 or 2009? I don't think nearly as bad. The reason being that much of the excess overvaluation has corrected. We also aren't facing institutional failures like in 2008/2009. U.S. mid-cap/large-cap corporations are probably the healthiest they've been heading into a downturn in history. So the primary adjustment to earnings and valuation is interest rate and inflationary pressure...not poorly operating or financially unsound companies. I was 60% cash in November 2021...now I'm 90% invested in quality companies that I find are well undervalued. Cheers!

The global housing correction will be interesting to watch. You are right...the U.S. housing market will get hit, but will probably be better off than the rest of the world. U.S. banks and mortgage lenders were starting to get foolish, but not even close to the stupid things they were doing in 2007. U.S. banks are also in a much better position, have excess capital to absorb losses and will be watched by regulators that they are maintaining excess capital. Cheers!

Investors see opportunity. I don't think you'll see a hands up capitulation like we saw in February 2009. We've seen very few days where markets have dropped 7% or more in this correction (I believe only one), unlike 2008/2009...I think we saw at least 6 days of a 7% correction or more. This is a slow grinding correction like 2000-2002. You'll probably have another leg down in the next quarter. Cheers!

There's probably more pain to come. Interest rate hikes have a delayed effect, so we don't know how much the economy is slowing down in real time. We also get food inflationary pressure every September/October. But overall, I would say about 60-70% of the pain has been inflicted. And the market may tread sideways for some time until inflation is tempered. I don't think we will see a panic like 2008/2009...but a more prolonged, slow downtrend like 2000-2002. At that time, tech stocks as well as the broad market were way overpriced. While the market was overpriced this time around, the overall P/E was inflated by hugely overpriced sectors (new tech, meme stocks, crypto, SPACs, etc). Those stocks have already suffered a rapid 60-90% decline...the overall market is now at fair value or better. If it goes down another 15% or so, it will be cheap with where rates are today. I also expect some easing in rates later next year as the global economy feels the pain! Cheers!

+1! Cheers!

The United States is an import country...not an export country. You will get a recession...a global recession...but it will be much more painful for the rest of the world than the U.S. The U.S. can now import at lower cost with a stronger dollar...inflation has an impact, but it will be less painful here...although the papers will cry bloody murder! Yes, real asset prices are dropping...that's a good thing for those that were sitting on cash. There was also a lot of cash sitting on the sides held by institutions and investors. That will now be put to use as asset prices become more enticing. This is the end of a cheap credit cycle...one of the cheapest in global history. The excesses are now being wrung out of the system to make room for a much healthier system for the long-run. The patient is now on a treadmill again...steak and lobster is off the menu! Cheers!

See Judge break Ruth's record? Will it be tonight? Cheers!

That's going to at least 5.5...maybe 6-6.5 if things aren't slowing. Cheers!

If you don't have your CFA or MBA, you may be better off applying at smaller firms outside of Wall Street...there are large, quality firms in other major cities. Write letters to the head of small firms you admire. Tell them you'll work for nothing! Yes, you are going to eat ramen for a while and probably give up all material possessions, but that may be the sacrifice you need to make to make an impression and get a leg in. I've seen lots of people work their way up from small firms, apply at larger firms and start as junior analysts, and then rise to senior levels of management. Nothing happens overnight...you will have to put the work in unless you have a well-regarded family member who can network a position for you. Cheers!

Russia is bluffing. If nuclear weapons were used on Ukraine, China would step in before the U.S. to deter Russia. China is not interested in this crap. They want to keep Putin on a comfortable leash, but not stir a global calamity. China wants Russia to push Ukraine far enough so that the World understands that Taiwan could suffer the same fate...but China definitely doesn't want sanctions or to create a World crisis. Putin's position is also at risk...his generals do not want to escalate this thing much further...certainly not nuclear. This will all end some time next year...Putin will be replaced or get his piece of Ukraine and consider it a victory. Everyone else will backdown and the U.S. will bring the remaining portion of Ukraine into NATO. Cheers!

Heartbreaking story about a Quebec family making memories before 3 of their 4 children lose their eyesight. Quebec family taking world tour before children lose their vision - The Globe and Mail Make the most of the time you have in this world! Cheers!

+1! I don't see interest rates going down in an environment where budget deficits and large nation-state debt is abundant. What is going to prop up a falling yen, euro, yuan or rupee? Certainly not lower rates on future debt issuances if North American debt is offering much higher rates. We are looking at rising rates on a long-term global basis...not a return to any deflationary environment...the good times for cheap debt are over! Cheers!

Yes, Reddit did not invent meme stocks...it was Ericopoly who did nearly 20 years ago! I think like half the message board was in on that gravy train...whether they loaded up on FFH shares at $63 or bought large amounts of FFH LEAPs. Cheers!

If you are the Estate, then why should you pay estate taxes! That's for the common people! Although, they did start to pay tax on the income the Duchie's generated like 25 years ago. But a lot of it is offset by their expenses before tax is calculated. Cheers!

That was a decade for stock pickers and value investors. The indices had a very nice run for the last decade...now things turn the other way for a bit. Cheers!

Possible Berkshire bolt-on acquisition: https://www.cnn.com/2022/09/06/business/kohler-death-wisconsin/index.html The brand would fit, as would the business and revenues. Not that many 4th generation businesses that are successful. Cheers!

With shipping rates dropping like a stone due to a possible pending recession, the Atlas offer may have been a blessing in disguise! (Paywall) https://www.wsj.com/articles/ocean-shipping-rates-have-plunged-60-this-year-11662375780?siteid=yhoof2 Hopefully, ONE may back out of the deal or it doesn't pass, and we'll get to pick up Atlas around $10-$10.50 again. Long-term contracts put Atlas in a better position than the competition. Cheers!

This post does not fit in the Investment Ideas category...please do not move from the General Discussion board. Cheers!