Uccmal

Thanks Cloud, Oh, the mistakes I have made investing. I wouldn't even know where to start. A few: 1) Selling puts - on anything 2) Buying calls on the Montreal exchange 3) buying blackberry days before it started to crash, and buying it on the way down - got out just below the price FFh started buying. Selling puts on RIM as well, and having to buy them out. 4) SFK/fbk 5) Buying Caribou Natural resources because it looked cheap and the CEO bought it up to the day in bankrupted - nothing to do with oil prices. 6) Income trusts 7) probably two dozen others. Fortunately my successes outweigh my goofups by a large margin, somehow.

Yea - I'm excited too. I could definitely be wrong, but multiple massive down days with extreme volatility and low volume don't seem to be "normal" occurrences. I am biased, but I am thinking this may be the beginning of the long-awaited for correction. My portfolio has taken a massive beating since it's been very focused on Europe (down to flat due to Euro depreciation) and EM/commodity companies for the last two years. I am happy to see that my recent efforts to lower leverage, hedge U.S. equity downside, and sell call options against a lot of positions appears to be paying off some and am looking to build positions at even more attractive prices. I don't have much cash since I just liquidated 10% of my portfolio to cover some expenses, but I've got puts at about 35-40% notional value of the portfolio along with 5% in cash and another 5% in bonds so I'll be alright if it continues to dump. Most of my portfolio isn't all that correlated with U.S. equities and so I'm hoping for something idiosyncratic to drive returns to FNMA, Fairfax, FCAU, etc. to drive up returns so I can rotate profits into new positions at better prices. Some U.S. equities like Whole Foods and Outerwall are looking mighty attractive to be adding to... The stock market and the economy don't have to move in the same direction. At these valuations, stocks could easily take a large correction/bear market even as the economy recovers. I believe that valuation is the #1 driver of forward looking returns. Studies have pretty much proven that on a generalized level across all stocks. If valuations aren't attractive (they're not), then it's possible for equities to do terrible regardless of the economy and trend in profits. It's an easier sell if you have a recessionary thesis, but it's certainly not necessary. Of course. There are, and have been great values around since April/May, especially in companies peripheral to oil, and now in financials. Its not like April 2009, and I am really doubtful it gets remotely that bad.

This correction is all a bunch of reactionary BS. Nothing in the greater economy has changed except a lower oil price which is generally good, or at least economically neutral for the biggest economies. Everybody is over reacting to the Asian sell off. Big companies in the US, EU, Korea, Japan, etc. are all making the same amount they did yesterday, and a week ago. Profits outside of oil are going to go somewhere. 2 Trillion less expenditures from the lower oil price alone, per year as compared to 2013/14.

BAC 2017 $17 Leaps JPM Leaps 2017 $65 Some SSW Some WCP - T SSW is at a 4 year low. The dividend will go up 8-10% this year. They have commissioned 5 of the biggest container ships on the Ocean for 10 year leases in the last 8 months. My portfolio is stuffed with great companies that are nearly all trading well into bear market values. The only way up the quality curve is to sell JPM, WFC, RY, to buy BRK.

So, is anyone ready to call a bottom on oil, yet. Cardboard? The WTM price today is about where we were in the 2008/09 crash, inflation adjusted, and a few dollars above where we were in the 90s, again, inflation adjusted. I bought some more ARX today. And... right before the S. hit the fan today, I bought a small dollar value (big number of shares) position in PWT. As Bmichaud suggested, I will sell some of these on up days, if we have them. Crescent Point may be interesting now that they have rationalized the dividend - I will need to look at the debt levels. Peyto - I have never looked at.

Cardboard, your getting bipolar: From the PWT thread - two weeks ago: "Other things that you have ignored Al on the net debt issue is a large reduction in acccounts payable. Then there is the large move in the exchange rate from 1.16 at Dec 31 to 1.25 on Jun 30. That is pretty significant on over $1.5 billion of notes denominated in USD with only $400 million or so hedged against currency movement. I also understand it has gotten worst in July. As oil returns to more normal levels, the CAD should appreciate substantially and become a tailwind on the debt front. On that one, over $200 billion of projects have been cancelled globally. This week, we have finally seen the first large drop in U.S. oil production or down 151,000 barrels per day for Lower 48 States. Rig count reduction is and will have an effect. Stripper wells operator are also likely on their last leg. 2015 will be the highest consumption year ever for oil and 2016 should be even higher. Each year, 5 to 7% of global oil production disappears due to the decline rate. Negativity around natural resources has reached a crescendo with 3 months of unabatted selling and bad news. I would not be surprised to see a stealth bull market emerge from here. Cardboard" Which is it? Boom or bust. In a recession PWT will go bust. Next question: Have you ever made money betting on the market direction. I know I haven't and lord knows I tried enough times. Maybe we are just in a lull.

I bought some Arc Resources ARX, and Whitecap - WCP, in the past few days. Both announced solid Q2 results and are well financed to last a good long while at these prices. Arc is an old one for me - pretty well managed. Wcp - I have been watching since the fall. I am in the getting to know you phase. I wouldn't say I am bullish on oil prices. I think we are starting to see the sorting of the survivors from the non-survivors. Both of the above will make it through the lower price regimen and still get by. Any increase in prices, especially gas will be gravy. There is no way i would go all in on oil stocks. These are small positions.

I like your new profile....

Excellent book. John Neff has been vastly underrated. His record was awesome. First read it shortly after he published it.

My wife had purchased some stuff for the house the other day and I noticed a Sunbeam product. This immediately made me think - Why would she buy a Sunbeam - That's the company that hired that prick "chainsaw" Al Dunlap to fire everyone indiscriminately, and fix operations. I dont want anything from a company like that. It occurred to me that Sunbeam did near permanent damage to its brand in a very short period of time in the mid 1990s at least where my mind share was concerned. I then started thinking about others. Firestone closed a plant in my hometown of Hamilton. That I have no problem with - business is business. They then proceeded to "steal" 14 million dollars of equipment financed a year earlier by the Ontario Gov't to keep the plant in Canada. To this day I wont buy Firestone products and I suspect very few in that area of southern Ontario would buy their tires despite the fact they have been under other ownership in the last 20 years. I have similar feelings about Sears Canada, and Sears Home. The damage done to the company by ESL was so severe as to make the shopping experience torturous. My whole family boycotts Sears and Sears Home due to being screwed by the company's credit and gift card departments. I only shop at Canadian Tire when it is something I cant get elsewhere.... Just decades of customer neglect and staff stupidity. These are examples of near- permanent brand damage and a turnaround in peoples mindshare is near impossible. Explains why K-mart sued the producers of Rainman. Anyone else have any examples, I have forgot or dont know about?

I think the fed is very concerned about putting too much upward pressure on the USD. Tourism, and US exports are going to get killed if they raise rates too much. By example:'Canada has had two interest rate cuts this year and its killing our currency (along with oil) I think the BOC is stupid for dropping the rates. By killing the currency our companies and governments cant afford to upgrade machines and tech which comes from EU, Asia, and of course the US. I think were all stuck with Near zero rates for a long, long time. I think the drug of ZIRP works initially, but becomes an addiction that is impossible to break. I dont think there is any time in history that I know of when borrowing was so cheap for so long. There is no way a single government can get out of it by itself in the global context. Everything is backwards from the way people have been schooled to handle money for most of the last few hundred years. It pays more to borrow to invest than to save.

The big 9 or so mortgage lenders in Canada: Ry, Bmo, TD, Bns, Cibc, National, Laurentian, FN, and HCO, are unlikely to suffer too adversely under a "housing crash". They generally only lend prime, and it is difficult to get a mortgage in Canada, as compared to US circa 2003-2008. When they lend at more than 80% LTV the Canadian Mortgage and Housing Authority requires lenders who cant make the 20 % downpayment to buy their insurance or private insurance (Genworth is the major alternative player here). So here is my take: 1) Most mortgages are already in process and being paid down, while house prices rise. 2) Only new mortgages are originated at the present prices. 3) Underwriting standards are strict at the big lenders mentioned above: a) you need proof of income - there is no way around this except fraud b) the banks have their own individual fleet of home assessors each. They wont take assessments done by anyone else. I both renewed my mortgage and opened a Heloc with two of the above lenders. When renewing my mortgage the old Heloc was discharged first. My house was assessed last fall and this spring for $950 k. If I sold it today it would be in the neighbourhood of 1.1 Million. The lender would only give us a Mortgage plus Heloc < 80% of the assessed value: That would be 80% of 950 not 1.1 Million c) Credit scores matter - big time. Mine and my wife's credit scores are very high and we still needed proof of income and the assessment of value. If there is a "housing crash" the big banks/lenders stocks may go on sale but they will not suffer huge losses. There is alot different between Canada and the US. The market is tiny and the degree of bad lending is nothing like the Ninja era in the US. IMHO, the bulk of a price adjustment will be borne by non bank sub prime mortgage lenders not in tje above list. I dont know the names but a simply Google search of "buy a house in Toronto with bad credit" should reveal a good slug of advertisements. Actually, the allegedly imminent housing crash has already put downward pressure on the major lenders. Home Capital, and First National ( a major personal holding) are at multi year lows. The others are bouncing around 52 week lows. A bit of history: Virtually all of the 5-7 big banks have paid dividends continuously for a century. There have been years without increases such as 2008, 2009 but no outright eliminations and they have done some stupid stuff along the way. Long way of saying there will be no need for bailouts.

Now we know why Eric stopped managing some of his money, anyway. Its the ole booze problem rearing its ugly head. This article is interesting: http://paleofuture.gizmodo.com/no-tech-adoption-is-not-speeding-up-1565326373 Some of the comments are really thoughtful as well. I used a motorola phone in 1989 in a work truck. I recall some Tv show from the mid 70s where someone had car phones - Charlie's Angles or Vegas (robert Urich) maybe. Driverless Vehicles - 30-50 years to mass adoption, if ever. Things change, as in, the entire idea may get supplanted with other ideas such as the Hyperloop or some equivalent of people moving. And, Jurgis, I aint gonna be downloaded to any computer where some a-hole will create dozens of duplicates of me, and screw up my code. Id rather be dead than suffer that fate.

Schwab, I agree with most of this. Folks who work in technology which are the majority on the board vastly overestimate the difficulty of implementation, and the reliability of a driverless car system. Before I ever use a driverless car I want to see an entire fleet operate 90 days in Rome Italy, and Kathmandu, Nepal without a single collision of any kind. Since I have yet to meet a computer system that doesn't crash, or a connectivity system that doesn't get blocked from time to time I think we are looking out at least 50 years. Call me a skeptic, but I have yet to see an infallible technology of any kind, or even nearly infallible. A handful,of ugly incidents will put this idea on ice for decades. And we know how companies and governments and people like to cut corners. There is no reason to suggest this wont be done in the driverless car business as well. Finally, the world never unfolds as we expect. Nuclear Fusion anyone.

RUS.TO - Russell Metals - Wholesaler MTL.TO Mullen Group - Evergy/Transport - An amazing story I hold both now, and have held both at various times in the last 10 years.

Shanghai's still up 70% TTM, so I guess the gains are in the trillions too. No idea how it'll all end... Badly one might guess... The whole thing is ludicrous. It seems very similar to 96-01 in the US only alot dumber.

I often hear VIs comment on being too early into a situation. Maybe that is the wrong way of thinking about it. Maybe VIs are early because they see opportunities for a turn around or reversion to the mean more easily than others - due to practice or obstinance? I dont think diversification is important either way. Graham and Schloss were successful and diversified. Bruce B. is concentrated. All three had a high threshold for pain. Buffett is... different - his biggest hits have been in the "influence" category.

I dont hold any shares in FFh anymore. Its not particularly relevant why. Last month Canadian Business Magazine, if I recall correctly, had a listing of the pay for the CEOs of the TSX 100 group of companies. They included bonus, share awards, and everything else the CEOs got. The list was in the order of dollar value, top to bottom. At the very bottom of the list by a wide margin was Prem W. FWIW.

If Newton were alive today he would be making millions somewhere as a researcher, or at least a high level University Salary and wouldn't need to invest. Sensible contrarian investing is very hard to do. I could just be contrary and short Apple, Twitter, and Google, and go long Bbry. That would be contrarian, but not sensible. One has to be contrarian to a point, but not totally obstinate about everything. More often than not the crowd is right.

Bump

Hi all, My Wife's mom just sold her house. In the process it worked out that she has very high 6 digits of net worth, with pension, OAS, dividends providing her with more income then she needs to live. She is 82, in reasonable health. We are trying to determine how to best disperse a portion of the money to her 4 kids, and 5 Gc. Our concern is that if she goes into long term care at some point all of the assets will end up in the hands of the long term care system. This is in Ontario. Does anyone have experience with this? Can anyone recommend a good estate specialist who works for fee only in the GTA? I know a run of the mill financial advisor will do this but we are not keen on the sales pitch - we need some honest tax/estate advice. An aside - my Wife's grandfather worked at Imperial Oil, and gave his daughter some shares in the 70s that have grown from 100 + shares to 5049 shares paying dividends along the way. If one of you out there is a board member who does this kind of work locally that would also be awesome.

This is too rich. If Einstein was sort of average he would have put out 25000 to 30000 turds in his lifetime. You could set it up and have a limited edition 3d print of Einstein turds. Would DNA analysis figure out if it was legit? I for one would be in line to get a fecal transplant from an Einstienian turd. Better yet, Steve Hawking is still alive, although I wouldn't care to get the disorder he has lived with. Steve Cohen makes me like Buffett more every day.

I recommend this blog: http://www.ndir.com assuming internet access. I read Wild - Cheryl Strayed - liked it. Along the same vein - Bill Bryson - In A sunburned Country; A Walk in the Woods - both hilarious Sci fi: Stephen Baxter: Manifold Time; Manifold Space; Coalesence; Transcedence; Exultant A.

Easy to say, hard to do I would think... Last I looked he was invested in insurance, newspapers, utilities, railroads, a million kinds of manufacturing, another million kinds of junk food, and another 40 or 50 assorted service and retail businesses.

Thanks for the hat tip Bmichaud. I for one have moved to a vastly more conservative stance. Part of this is due to my need for steady income and part is due to no blockbuster ideas in North America. One caveat to this is oil. I hold about 20% of my portfolio related to the oil market: MTL, ARX, and PWE - say 10% directly in ARX and PWE. I am down to 2% in Leaps half PWE and half BAC. It is not that I am particularly bearish. As the dividends come in I am redeploying the cash in the same holdings. At some point there will be a market pullback. Every blog or discussion forum I go on these days, newspaper articles, etc., are all pushing people to go into ETFs. Of course these ETFs have all performed well for a few years, and people want to believe that markets always go up at 10% or so, every year. This money is going to panic at some point, and there will be carnage. Even active mangers are buying ETFs because they dont know what else to do. I also think the US has forgotten the value of Canada as a safe energy source, just as the mideast is set t blow up with social unrest. The noise on the board is just reflecting the lack of real opportunities locally (NA).