treasurehunt

Maybe this has already been discussed, but I have been wondering how it makes sense for ONE to buy part of ATCO, let alone the whole company. Isn't most of Seaspan's business with direct competitors of ONE? In most industries, any company would be leery of doing business with a supplier owned by a direct competitor. Is this somehow different in shipping? Also, ATCO's plan was to transform into a general infrastructure platform. ONE seems to be strictly a container shipping company. But it could be that ONE has a grander vision for itself.

There is a lot to like about Fairfax, and it is now my second largest position after Berkshire, but has anyone thought much about how the company will do if we get a sustained period of high inflation? There are some obvious positives like higher interest and dividend income, but what if they need to add substantially to reserves for existing long-tail liabilities? I am not sure how to quantify this risk, even roughly. Any thoughts?

TGH, TRTN, AMZN, GOOG, JPM. Sold some WPC to raise cash to buy these.

Even the TMC/(GDP+Fed Assets) at 152.1% is at an all time high, so how do you conclude that "Fed assets matches the overvaluation/distortion exactly"? Doesn't the chart imply extreme overvaluation even after taking Fed assets into account? Wabuffo's explanation is very sensible.

Forgot to mention - the Fidelity rep told me that they would not withhold any taxes on the deemed dividend.

Interesting. I called Fidelity yesterday as well to tender the shares in my IRA and the process only took 15 minutes or so. Maybe your call paved the way for a smoother experience for me. Thanks, MMM20!

Bought a bunch of FRFHF and tendered the shares in my Fidelity IRA. The Fidelity rep confirmed that they will not withhold any taxes on the deemed dividend.

DooDiligence, don't feel bad, I sold AAPL in 2017 for a mere double. I was pretty happy at the time, having doubled my money in AAPL in less than three years... My worst act of commission was buying a bunch of Level 3 stock some twenty years ago. The investment case was always dubious, but I was impressed by the CEO, James Crowe. Turned out that the "silicon economics" he touted so much wasn't very different from regular economics.

Housing prices will probably be affected if the 30 year fixed rate goes from 3% to 6%, but the monthly payment won't come anywhere close to doubling. The monthly P&I actually goes up by just over 42%, as you can verify using a mortgage amortization calculator. When you add in insurance and property tax, the percentage increase in the total annual expense of owning the house is even less - perhaps around 35%. If you look at interest alone, that would be close to double in the early years, but I am not sure why you would look at the interest payment in isolation.

First, $2bn of TRS on their own stock at an average price of $372 vs $1.4bn at $343 in the 4q. By my maths that means they added $600m at $460 per share. Is that how it works? I get $600m at about $440 per share. (2000*372 - 1400*343)/600 = 440.

218.62 on the B-shares 80,998 A share equivalents for $24.7 Billion. 5.2% share count reduction for calendar year 2020. December average basis was 225.73 and he was willing to pay higher average prices, continuing through the first month and a half of 2021. I get $203.30 when I do the math ($24.7 billion divided by 1,500 x 80,998)

Bumped up my FRFHF position by 15%. I think there is a decent chance that Fairfax will have a few very good years starting in 2021.

Wabuffo, Based on your posts here and DJCO's 10-Q, I calculate that as of today DJCO has total investments of about $280 million compared to a market cap of roughly $366 million. Did I get this right? I was wondering if DJCO is a cheap way to invest in that particular basket of stocks, but it doesn't look that way. I have no opinion on the value of DJCO's business, so the market cap would have to be close to total investments for me to consider it.

Sure, but part of the point in looking at all causes mortality is to sidestep such semantic questions. If you see a lot more people dying in March and April of this year compared to the same period in the last five years, you can reasonably attribute most of the excess deaths to COVID-19 (assuming you don't find some other global phenomenon that could also be a cause). I mean this in the very basic sense that these deaths would not have occurred if not for COVID-19. A few of the excess deaths -- such as a higher number of suicides? -- might be due to the reaction to COVID-19 rather than to the disease itself; and some deaths could be due to folks with other conditions receiving worse care, as Dalal pointed out. Still, I find the excess all causes mortality data to be a decent way of estimating the impact of COVID-19. disagree insofar as mistakes in public policy are being based upon this mistaken view of covid impact. using same analysis, we should shut down country because of prostate cancer, since most every elderly male dies with prostate cancer. I am missing something about your point; I can't quite make sense of the prostate cancer analogy. Just to be clear, all I am saying is that if we expect X people to die based on past experience and in fact X+Y people die, and the only significant difference between the past and the present is COVID, then we can attribute Y deaths to COVID as a first approximation. How does this imply that we can attribute a ton of deaths to prostate cancer because a lot of elderly males have prostate cancer?

Sure, but part of the point in looking at all causes mortality is to sidestep such semantic questions. If you see a lot more people dying in March and April of this year compared to the same period in the last five years, you can reasonably attribute most of the excess deaths to COVID-19 (assuming you don't find some other global phenomenon that could also be a cause). I mean this in the very basic sense that these deaths would not have occurred if not for COVID-19. A few of the excess deaths -- such as a higher number of suicides? -- might be due to the reaction to COVID-19 rather than to the disease itself; and some deaths could be due to folks with other conditions receiving worse care, as Dalal pointed out. Still, I find the excess all causes mortality data to be a decent way of estimating the impact of COVID-19.

Interesting article on excess deaths in March and April in several countries that were hit hard by COVID-19: https://www.ft.com/content/6bd88b7d-3386-4543-b2e9-0d5c6fac846c This article is not behind a paywall. The conclusion is that total fatalities from COVID-19 are likely much higher than reported deaths, even in developed countries that have good reporting systems.

We may have widespread serological tests in the developed countries soon, but I doubt they will be available worldwide. So this initiative might still be very useful for less developed countries.

Got this text early this morning from a friend of mine. He has an MD in internal medicine and is a hospitalist at Sharp Chula Vista (south San Diego). "Things are beyond stressful. This is unprecedented. I learned when we started seeing suspected COVID patients mid last week that we have been basically testing no one. Testing capacity is so incredibly low even this week that everyone showing up with covid symptoms are just sent home without testing and told to self-isolate. Testing is ONLY being done for those sick enough to be hospitalized - and the labs soon got so overwhelmed that even these tests took many, many days to result. We were getting results yesterday for tests ordered last weekend for hospitalized patients. The federal government response couldn’t have been worse. Here we are two months after they were made aware of this threat, and only scrambling to ramp up production of protective equipment and covid testing now. I really am appalled and saddened. Indeed, we are flying blind with regard to numbers. The reported numbers in no way reflect how widespread the disease is.... we have been testing hardly no one. And in the rare instance we do test asymptomatic people (NBA players!) quite a few test positive with no to minimal symptoms. And unfortunately these asymptomatic are indeed the people who are spreading it around to the unfortunate who will end up clogging the hospitals and dying from the disease. These are unprecedented times!"

Thanks for the suggestion, John, but I do not own any SHB B.STO shares, don't know enough about Handelsbanken to buy any, and still have a good amount of endorphins in my system from my recent BH trade. :-) I could do the same thing with Biglari Holdings A and B shares though. The As are trading at a discount of almost 4% to the Bs, so swapping the Bs for the As makes sense. And as it happens, I have some Biglari B shares lying around...

You need to set hard exit criteria for these kind of trades. In case of BH, I think you would need to set a date by which the position is sold. If you don’t do this, you let the botched short term trades become a long term investment, while you know they are not potatoes really. Beware of changes in the investment thesis, they rarely work out. Easy to say, but hard to do. Good point. My exit criteria for this trade aren't completely set in stone. My idea was to wait until trading volumes are back to normal levels and the impact of index selling has died down, but it's hard to know how long this will take. My estimate was two weeks, but it could be three weeks or four. The other thing I am paying attention to is whether there is some other reason for the substantial drop in BH stock. After the release of Q1 results, which were horrible, it appears that the drop reflects at least in part a real decrease in the intrinsic value of BH. So I am much less sure about the reasoning behind my trade. I will probably sell the stock this coming week. Now to think about exactly what lesson I should learn from this. :-)

Valid posts about BH from several fellow board members here - but not based on the time horizon applied by treasurehunt for this move. To me, it's more like SharperDingaan buying DB back in September 2016. Thank you, John. I don't disagree with Ballinvarosig's valuation either (except for the market cap error in his first post). But my thesis is just that the sudden drop in price was due mostly to index fund selling. Of course I am down about 7% on this trade so far, so this isn't looking like a hot idea so far. :-) But I am going to hold on for a couple of weeks unless some other reason for the drop surfaces. I don't think DanielGMask's concerns about management integrity are very meaningful to my trade (not to say that management integrity is completely irrelevant here, but it's a risk I am comfortable taking). Also, I hardly ever do any short-term trading, and I consider this an experiment where I might learn something.

I may need to duck and cover after posting this, but I bought some Biglari Holdings today. I know, Sardar is the worst partner money can buy, but this is just a short-term trade on the assumption that the 20%+ drop in the price of BH is due mostly to the company getting dumped from the Smallcap 600 index. Reading reports of the annual meeting that was held last week, it doesn't look like Sardar dropped any unexpected bombs that would explain the cratering stock price (the dual class stock structure was a foregone conclusion). Volume in the stock today was about 30 times normal volume, which is probably due to index funds selling. In any case, the next couple of weeks will either make me some money or teach me an expensive lesson.

That is an excellent foreword by Li Lu. Makes me want to re-read the Almanack. Thanks for posting the link.

I only get growth of 20.54% over the same period, using the numbers given in Berkshire Hathaway's press releases from Feb 27, 2016 and today. Book value was $155,501 per class A equivalent share on 12/31/2015 and $187,435 as of 9/30/2017.

I think NPLs and loss rate history during a period of consistently rising home prices have limited value in predicting what might happen if home prices dip significantly. Pre-crisis in the US, Golden West Financial had incredibly low charge-offs for fifteen years or more. For eight consecutive years from 1998 to 2005, they had 0% charge-offs! Wachovia acquired Golden West in 2006. Fast forward two years and Wachovia, which was one of the biggest banks in the US at the time, was destroyed by the losses in Golden West's option arm portfolio. I am not saying the Canadian lenders are like Golden West. But historical loss rates might be very bad predictors of future losses.