Uccmal

Okay, Much better this year: 2016: 36.8% 2015: -20.1 2014: -2.9 2013: 59 12 yr. average: 32.4% All after tax: Pay taxes directly out of my brokerage account. The contributions this year were diverse but all Canadian: Enb, Fn, RY, Mtl, Rus, pwt, wcp, bep.un The major drag, and only loser, was SSW which was a big position.

I was going to ask the same thing. It has always been my contention that the US benefits disproportionately in this world. When/if Trump starts trade wars an awful lot of Americans are going to be put out of work. This disproportionate benefit accruing to the US has allowed the standard of living in the US to be higher for many than it should be. If you want a race to the bottom Packer, then protectionism, and trying to rip off Canada, and Mexico in trade wars should accomplish it. All those great automotive jobs in Michigan may disappear. All those great jobs in silicon valley may go away, when other countries start to tax Netflix, Amazon, Apple, Microsoft at huge rates.

On interest rates. I think they have probably peaked.

Of relevance: "Only twice has the market stayed higher for longer and both times it crashed. http://business.financialpost.com/investing/global-investor/only-twice-has-the-market-stayed-higher-for-longer-and-both-times-it-crashed?__lsa=862f-fe1c

I dont think Trump, Wilbur Ross, or anyone else is going to be able to do anything to boost the US economy. We are so far along in a bull market, with high employment, low oil prices (until now), excessive government spending everywhere, and excessive corporate debt, and a worldwide demographic drag. It gets very bad before it gets better. Within two years Trump is sidelined, or completely out, and the Republican party gets back to its traditional squabbling while Rome burns. Sometime in the next two years a third party gets formed by Bloomberg and his pals, and gets some seats in the Senate and House. And, if someone pulls up this post to prove me wrong, I will deny writing it, even though its in writing.

how do you lose money working as an attorney? ;- ) I should have said that I lost more money in the market than I made working as an attorney. The net result was that I poorer at the end of the year than at the beginning, DESPITE working hard as an attorney! I would have done better financially by liquidating my positions...goofing off, and delivering pizza a couple of nights a week. I had one of those when I was still working. Last yr. I had -20% return and paid 22,000 in capital gains taxes. If it weren't so irritating, it would be like funny, sort of.... Not ready to post yet. I am away from my detailed records until Tues.

I am not sure if this relates but central Canada and the northern US states (PQ, Ont., ohio, penn, NY etc.) have an interconnected grid. We got to see this first hand when an overload in ohio plunged the whole region into a multiday summer blackout in 2005/2006. My son was getting an indoctrination into green energy at school. I had to burst his bubble a bit. Ontario allegedly uses no coal fired power anymore, but I explained to him that we buy power from Ohio, depending on needs, that is coal produced. I also explained to him that we should be thinking of energy supply in a more holistic manner. It makes more sense for northern climes to use gas for heating than trying to rely on solar. We discussed this as we drove past a couple of snow covered solar panels. Those were interesting articles you posted. Since solar is already getting cheaper than any alternatives (in some places) the next piece of the puzzle is storage. Explicitly, the price of storage. This will be the big game changer. Plants such as Tesla's Nev. operation will go a long way toward commoditizing storage. Huge storage facilities would allow utilities, and individuals, to smooth their operations. They then become less reliant on when the sun is out. Since many of the places where solar can be produced are mostly vacant, space for storage is not a constraint. Battery and transmission efficiency is not all that important if you can easily produce and store as mich as you need. Only price. I am not sure what this means for BHE, except that they already have their foot in the door in alt. energy. No one has ever accused Buffett of being stupid or short sighted. Why would he continue to allow alt. energy developmemt for BHE in the face of short term losses from subsidy expiries?

Ben, BP6, I dont want to be seen as maligning those who choose to hold FFH. I do think that critical thinking is in order though. And you both have summarized the issues quite well. My history with FFh goes back to 1997 when I first bought shares around 350-375 cdn (cant quite remember and dont want to look it up). Not exactly a value investment at the time. I learned an enormous amount from FFH, and by holding the stock. It also led me to this message boards predecessor, where like minded, value investors in training, were hanging out. We picked apart FFh and tried to understand everything about it, during the near death experience, and ultimately did very well. Like any investment, those who invest in FFH get anchored to a certain way of thinking. None of us is immune to it. What I see on the FFh thread is a constant reset in what people seem to be willing to accept. As follows: A few years ago the narrative was that the investment results were good, but the insurance results were poor. Now, the investment results are weak, but insurance results are great. There is alot of "if only they did this, or did that" returns would be better. Another narrative common on FFH threads recently has been the: "they will do well in a market crash because they are hedged". But, this has changed. Another common narrative is that over the long term FFH stock will do well. The long term, is long gone, and the returns are acceptable but not stellar. There are a multitued of Cdn firms with better long term returns over the last 12-13 years, and many more in other countries. I just think people are too forgiving of FFH's foibles. Its not that I hate the company or Prem (or that he even cares either way). I actually admire him, and the great company he has built, and am somewhat envious (in a minor non-negative way). I could never have accomplished such an incredible feat. I really wish they do well. Whenever, we hear about the hollowing out of Canada's business sector, because companies like Stelco, Dofasco, or,Rona get bought out, I love to point to FFH, BAM, and a few others who are buying elsewhere at dollar multiples above what Canadians think they are losing. But I am a good passive investor, so far, and FFH doesn't meet my needs for returns, and isn't likely too, as best I can tell.

Paul its obvious. Americans have evolved alot...... So, the consensus might be that markets will go up, or they could be cut in half, or something else.

But there haven't been any actions. Some of the above is going to get snarled in congress, and have long lag times. I am sticking my neck out but I figure we get a full on bear market soon. All of the above will keep the US afloat but it will become a matter of minimizing damage rather than future growth forever more. No one is using any data points, because there aren't any. Fairfax is operating on a feeling. Corporate tax cuts would do a certain amount but where is the money coming from. For most corps. it wont be a huge difference since their marginal tax rates are lower than the suggested new rates, anyway. The infrastructure program is not alive yet, and I fail to see how it would be different than subsidizing solar and alternate energy is now. Again, government has to pony up at least some of the money. Tax repatriation holidays have happened before and their effect has been unexpectedly mild. So, for the incumbent government, pulling out all the stops right away will get them quick growth, perhaps. But it will kick the can down the road, and the added deficits and deregulation will get us back to eight years ago. And they will get unelected if there is a bear market too close to the next fed. election.

1) It depends. If the combined ratio is kept below 100%, everything works fine. In a rising interest rate environment they can invest in bonds that pay more, but we have to consider after tax returns on these bonds and inflation. We have not had a significant rising interest rate environment since the 1970s, early 80s. If policy payouts rise more rapidly than interest rates then the combined ratio will turn negative. There is also the effect of rising interest rates on competition. Prem himself had a chart where he showed that combined ratios in the industry improved when interest rates where low. Now, your guess is as good as mine as to what the actual level of rates needs to be at which competition heats up, and combined ratios drop. And then there is the aspect of a major claims event, which seem to come in waves, and are generally unpredictable. Granted FFH has worldwide diversity which they didn't have when Katrina and the Twin towers hit. Buffett has had periods with his insurers when he would rather have not heard the numbers, for years at a stretch. 2) Prem has never admitted his mistakes. He is an incredibly good salesman. Had I invested according to FFHs doctrine of the last 6 years I would have had an investment return of zero, or less. I simply dont believe that we are going to get all the tail winds everyone expects, without a major hitch along the way. We dont know what the achilles heel is yet but its somewhere. Markets, and popular sentiment indicate that everyone is 'happy' right now. The wall of worry is suddenly gone. There is a con man who will be running the US shortly. We dont really know how this is going to play out. I dont get why everyone is suddenly so optimistic right now. And I have never been a perma bear, in fact, more the other way around.

Interesting Ben. I came to this conclusion a while ago as you know. I dont understand why more insurance? To get more float? Why not just invest the float in really good companies, and increase it through cash flow? Prems economic comments scare me. Is he just trying to justify selling off the hedges? I dont believe it, for one second. US markets, and the world at large have gone this long without a bear market, precisely once, before. When Trump takes over and the markets realize he cant deliver on his promises, and that his economic advisors are incapable of operating in government this is going to get really bad. It scares me when everyone thinks sunny days are here again. And Prems economic comments just scare me more.

I was asked to invest my MILs money just about a year ago (shes 83 now). I gave it alot of thought and decided not to. They are 4 siblings, and none of them gets investing to the level I need them to understand. I did intervene and not let them reinvest it in GICs and CSBs. They (she) chose to disburse a good chunk to the siblings and grand children. The problem is that all that cash sitting in bank accounts makes her a sitting duck for the bank sales people. And they are aggressive. They call her up, after we gave them explicit instructions to back off. Talk about a conflict of interest. I hold RY stock.

I'm not that old so by design I wouldn't have a lot of stocks that I've held for 15 years. But TD is coming up on 15 years for me. Uh, none. I would have kept FFH but by 2011 I realized they had handicapped their results for years. Have BMO, Sunlife, and RY in my kids RESP for 12 years but not by design. Speaking of MILs, mine inherited what I estimate to be 18,000 dollars worth of Imperial Oil around 1980, from her dad. He had worked there. Now worth 240,000. She has received the dividends as cash all along the way. But again, not by design.

Inverting a bit: What companies, industries are not a good 15 year investment: I would suggest: 1) Deep cyclicals of any kind: Banks, Commodities, Automotive except perhaps Tesla (which may not turn out to be automotive in the end). Mosty in 15 years you dont know where you sit in the cycle. 2) Many tech companies - hard to itemize and pick winners and losers. 3) Big Pharma - i.e. Merck, Eli Lily, Pfizer, GSK: At some point I think they are going to finally get their Big tobacco moment, particularly those that market SSRIs, Cholesterol drugs, -and an assortment of Opiods. Specifically those that have invented illnesses, and then sold drugs that allegedly cure the invented illness such as Lipitor, or Crestor. I noticed that Buffett seems to stay clear of these. He has never said why. When you get right down to it, there isn't much that isn't already listed by others. I am not sure how I feel about owner operators, when the prime decision maker is no longer there. We have seen companies continue to excel, and others flail. How do you know FFh will do well if Prem gets sidelined? BAM has a longer runway, and a more manageable profile than the insurance industry. Difficult.

Buffett: The Making of an American Capitalist, And the Intelligent Investor, and Security Analysis, and then David Dremans book. etc. off piste here.

I just read what Howard Marks said about cycles of loose credit & that very waste of capital. Are their any significant parrallels in history (US or foreign) which eventually came to an unavoidable end? I'd love to read more about this... Canada: 1990-1996: Government debt had exploded exactly like the US is now, perhaps with less assets. Interest rates were high. So, the consumer was squeezed at the same time as the government. To get it in order the government had to downsize at all levels aggravating the recession in the private sector. And oil was very low. It took a few years and alot of export assisted growth to get things back on track. It was during this period when I entered the workforce after school. I worked from 89 to late 1992, got laid off, went back to school in 1994 for a year and a half, graduated and didn't work full time until 1998. I read Lowensteins book and decided I never wanted to depend on having a job again. In 1992/93 I knew almost no young person who had a job. The difference for Canada versus the US is that we could export our way out. The US has no such option. This period also set the stage for 2008, when Canada, and Canadian banks were still in the careful stage, and as a result didn't suffer much. I am afraid it has degenerated since then. How quickly we forget.

Temperment, at least when it comes to investing :-). I have no industry edge and no info edge. The best I can do is a general assessment on an industry, and determine if a soecific company will stay solvent long enough to make money. To quote Kenny Rogers "ya gotta know when to hold them, and when to fold them...".

Not much insight. The premise and idea are bad. We cannot predict the future that far out. It sounds like what he has is just fine. If pressed: In Canada: Enbridge and BCE.

Well said. I have been caught once or twice or three or four times..... These days I hold about 15 stocks. By industry: 20% financial: FN, RY 25% energy providers/transmitters: ENB, AQN, BEP.un 20% oil and gas: BTE, WCP, PWT 20% service/suppliers: Rus; MTL Other: BCE, a couple of prefs. Notice its almost all Canadian at least where they are listed. Since I live on this income I need to keep reasonably diversified. I had SSW blowup this year and that reminded me why I diverisfy. In the old days when a complete blowup would only cost me a years pay I would be much more concentrated. As per Bearprowlers comments alot depends on situation.

2001 BAC $31/share 2006 BAC $54/share 2009 BAC $4/share Yep! The old rules worked out great for shareholders. We should totally revert back to that full speed. And in 2006 BAC had no problem because the share price was high. My LPs are grateful you guys are looking out though. The same LP's who are forced to pay a GP who angrily rants about politics for several hours a day on an anonymous message board. I know your not speaking to me Onyx but I couldn't resist. The only reason I am bothering with any of this political stuff right now, is to distract myself from trading. The markets, everwhere, are going higher by the day, and I want to stay as far away from buying anything in the US as I can. Aside from a handful of my Cdn. oils everything I hold is fair value, or better. Were are rapidly heading for for a market top based entirely on assumptions, not fundamentals. I say the president is impeached and you have a third, centrist party in power in 2020. Okay, thats far out but a good old nasty recession, and a one or a couple of 'Vietnams' should do it. Us citizens appear to be sick to death of both parties and Trump's appointments are only going to make it worse.

A good thing for what. Not believing science or the scientific method, definitely Pruitt, as in putting the fox in the hen house!! Well basically yes. In an evil genius/tough love kind of way. You have tons of people crapping on the EPA but they've been enjoying the benefits of the EPA like clean air and water. So if Pruitt dismantles the EPA and you get a whole bunch of crap in the water, then people will actually get a very good view what the EPA is good for and we can move past that debate. Yes, people will get hurt. But this is what they wanted right? Now they can have it. On a side-note they're all ideologues. If you didn't get Pruitt you'd get some other guy with the same beliefs who would do the same thing but quietly. Pruitt is loud and in your face so now people can connect the dots. They may they may try to defang the EPA for awhile. But the moment we get another Flint that will be the end of that. And then the dumb prick will have to resign and Trump will blame him for everything. I dont see corporations in the US suddenly rolling back their pollution control plans just because they can. A few might, and they will face the huge cost of playing catchup in four years when you have a democrat president, democrat senate, and democrat house, for the next twelve years because the republicans at all levels created such a fckup. . Or, My sense is that Republicans in Congress want to get reelected. They are going to block the scumbag PE everytime he does something that hampers their chances. Remember, this fckhead got elected by a minority. The republicans have a real mess on their hands. Be careful what you wish for. The dems can sit tight and vote any way they like, that suits their constituents, and and then blame the reps, for all the screwups. For the Dems, this is a sweet spot to be sitting in. Take the time and renew the party without the Clinton baggage. Maybe but I think you're wrong. Firstly yes there seem to be new rules of the road. The US population is actually becoming more liberal. Especially the ones with money to spend. Some companies seem to be attuned to that and don't want to piss off their customers needlessly. See the bathroom clusterfuck in NC. Some companies pushed back on that. Trump won NC but the Republican governor lost. On the other hand there's a different game in DC. I don't think the many GOP members are concerned about being reelected. Most of their seats are very safe. Democrats keep winning the popular votes and loose the house by large margins. Plus, most of the people voting for them are A-OK with things like blowing up the EPA. I know it's still early innings or maybe the game hasn't even begun but even the anti-trump Republicans seem to be in lockstep now behind their guy. We'll see what actually happens but i don't expect a lot of opposition to Trump. Coming back to companies. Yes, they will pollute if rules are relaxes because it's cheaper. They pollute even under current threat of severe punishment (see VW). Maybe they'll behave better now than in the past because of the afore mentioned new rules of the road. But it doesn't take a lot of bad actors to have an environmental disaster. rb, your getting deep into conjecture and assuming you know how people think. I worked for GE over 20 years ago in the EH&S department. I had friends who worked in the same departments at other big companies. I can assure you that by the mid 90s these corporations were taking environment very seriously and were in the early stages of looking at climate change before the governments were. They could see that it was going to be good for business on multiple levels: dont piss off your customers; and make money on env. technology, and energy efficiency. Dont get hauled through the courts by big governments. Of course, lower end crap companies, and sometimes big ones will break the rules but to what end. VW has been tortured, and it is nowhere near over. And to say that any house seats are safe is naive. We just saw how that worked out for Clinton in supposedly safe states, didn't we. We just saw Alberta elect an NDP government. No ones seat is safe, amd they all know it. The first sign of Trump going down the tubes and the House of Reprentatives will start rumbling about impeachment. This situation is primed amd ready for the long knives to come out.

A good thing for what. Not believing science or the scientific method, definitely Pruitt, as in putting the fox in the hen house!! Well basically yes. In an evil genius/tough love kind of way. You have tons of people crapping on the EPA but they've been enjoying the benefits of the EPA like clean air and water. So if Pruitt dismantles the EPA and you get a whole bunch of crap in the water, then people will actually get a very good view what the EPA is good for and we can move past that debate. Yes, people will get hurt. But this is what they wanted right? Now they can have it. On a side-note they're all ideologues. If you didn't get Pruitt you'd get some other guy with the same beliefs who would do the same thing but quietly. Pruitt is loud and in your face so now people can connect the dots. They may they may try to defang the EPA for awhile. But the moment we get another Flint that will be the end of that. And then the dumb prick will have to resign and Trump will blame him for everything. I dont see corporations in the US suddenly rolling back their pollution control plans just because they can. A few might, and they will face the huge cost of playing catchup in four years when you have a democrat president, democrat senate, and democrat house, for the next twelve years because the republicans at all levels created such a fckup. . Or, My sense is that Republicans in Congress want to get reelected. They are going to block the scumbag PE everytime he does something that hampers their chances. Remember, this fckhead got elected by a minority. The republicans have a real mess on their hands. Be careful what you wish for. The dems can sit tight and vote any way they like, that suits their constituents, and and then blame the reps, for all the screwups. For the Dems, this is a sweet spot to be sitting in. Take the time and renew the party without the Clinton baggage.

Indeed. Christmas time makes me think of Amazon alot as they steal more and more marketshare and mind share.

Good article. Of course, had 1 trillion not been invested in the FANGs (if they were kept private), it would be available to go elsewhere. As to Reid Hastings, FB, or Google. They could stop making quarterly conference calls, and giving earnings projections, and instead focus on running their companies the best way they can. It's not like all that noise is doing any more than causing stocks to gyrate unnecessarily. Its not like alot of these companies need to kowtow to the markets to raise money. These companies are being run by their founders for the long term much like Virgin, Koch Industries, Ikea, or Brk subs are run. Buffett has the right formula. No conference calls. Wait for my annual letter and AGM. And if you dont like my method then sell the stock. Of course the problem comes when you need to issue equity (ffh - 2000s) or raise funds in the debt markets. Then you are beholden to the rule makers. Or if your company is crappy, and you constantly need to jawbone the stock up.