Rod

I agree with that. The three costs you highlighted are the hidden costs that get you. I don’t trade internationally outside the US; I move $ between the two currencies rarely (and use Norbert); I don’t use Margin debt much; and I don’t leave cash balances uninvested. So RBC isn’t getting much from me. I do quite a bit of special situation investing and for me IBKR probably isn’t as good for that if you need to call with instructions. I opened an account last year as a test. And I couldn’t even get a quote on a warrant I was interested in on the TSXV. Customer service couldn’t help either. That was the end of my brief experiment with IBKR.

What would a non-ripoff rate be?

You can get around the currency conversion fees by using what I think is called "Norbit's Gambit". Pick an interlisted stock on NYSE and TSX. Buy in the currency your trying to convert from and simultaneously sell in the currency you are converting into.

I use RBC Direct. One thing I like is you can simultaneously buy and sell an inter-listed stock between the $C and $US sides of your account and it will journal over automatically the next day. That is very handy if you want to move money between currencies using $DLR.U and $DLR for example.

I used to watch all his presentations. I stopped several years ago. So I am not up to date. But, I would be prepared to bet that a poll of the students would show what I stated. Between the way Mohnish is introduced to the students and the way he himself continually talks about market beating returns (but never discloses his actual returns which are at best ordinary), it's not surprising that the students would be mislead. I should add that I think his talks are good, that's why I liked watching them. I only stopped because it was getting repetitive. I should add that I WAS FOOLED. It was only when some enterprising people here compiled his actual returns that I realized that my impression of his abilities was wrong. And where did that impression come from? I was in the exact position as these students listening to his talks.

I’m not a Mohnish hater. The only thing that really bothers me is that in these talks he gives, usually to schools, the students are lead to believe he has been earning 20%+ annual returns. He doesn’t say that himself but it's clearly implied.

Personally, I’m seeing far, far bigger discounts today in smaller stocks than I’ve ever seen before. I suspect that Einhorn is right. People have predicted for a long time that the rise of passive would damage price discovery. That probably hasn’t happened yet in the large stocks, but seems to have in the small ones.

That's a good point. Isn't that pretty much what he did by accident in the 1990s? Took a couple yolo bets on dotcoms as a raw beginner and got lucky then used that to form the base of a "market beating" long term record. I guess after 20+ years those initial yolo gains are wearing off.

But remember if you are very concentrated you have far fewer stocks to research.

If you find that flexing a position over time works, wouldn't it be better to just go all in or all out? Why maintain any core at all? Trading around a position either works or it doesn't. Personally I don't do it. I have a pretty similar long term record to you and I've always owned 6 or 7 stocks, currently only 4. So I agree totally with the concentration idea.

One problem is that they are a fully taxable corporation. I would much prefer if they were a mutual fund corporation and could distribute their tax liability. Then you add management fees on top of that. It's definitely a drag on performance.

Imagine your wife didn't have the job in Toronto and you didn't own the house in Toronto. Would you buy that house now to give her somewhere to live so she could start the new job there instead of staying in Calgary? I doubt it.

I would just enter the dividend myself without the T5. I don't think CRA will complain if you are paying your taxes correctly.

Her process was obviously terrible, but she got very lucky and it worked. There's a high risk she learned the wrong lesson and will gamble again on a hot tip and lose most of it.

I'm convinced he's not.

I don’t disagree, but why do you think Munger has chosen to be friends with him?

Same for me. I can only get 8(!) posts on my laptop screen even in condensed mode. Why can't there be one line for a post anymore? I much prefer the old site even though it was more primitive. Being able to see what's new at a glance on one screen beats all the slick improvements unfortunately.

We should also consider that position sizing isn’t just about how much you put in at the start but how you adjust the position size over time. Many people like to trim winners because they feel it’s too risky to allow their portfolio to become more concentrated. I think this is the wrong way to look at it. I’d be interested to know what others think.

yep. One is Brookfield (actually Partners Value Fund), the others are Dream Unlimited (DRM.TO) and Brookfield Office Properties Preferred (BPO.PR.N). I could be accused of being Real Estate heavy.

Concentrated bets are not for beginners because you need to ensure your bets are all low risk and learning to do that takes experience. I like to own 3 to 5 stocks which puts me at the extreme concentration end of the spectrum. But I’ve been at this a long time and experience has shown me that I have good enough judgement of risk to do it. You have to be able to judge the durability of the business. Factors that increase risk are leverage, financial and operational and a short history. Factors that reduce risk are being in a business that is more at the core of the economy and serve basic unchanging needs. Some companies are low risk because they are more like holding companies and are highly diversified (think Berkshire). I currently own three stocks, two are highly diversified and involved in real estate and infrastructure. The third is a preferred stock in a similarly stable business.

I like the Brookfield Office Properties prefs, BPO.PR.N and BPO.PR.P specifically. They are priced about $14 up from $10 but still very cheap.

This is key. You want clients who act like passengers in an airplane. They don't go running to question the pilot if they encounter turbulence. They operate on complete trust. I have two immediate family members who's money I've managed for 20 years. And it's going extremely well for everyone involved because they are hands-off and trust me implicitly.

Ok. In your example the optimal annual return is 20%. This is 100% divided by 5 years. No other distribution of returns will exceed what you will get with 20% per year.

Maybe you are saying if you have 400 percentage points of return to allocate over a given number of years, what allocation would provide the highest total return. If you are asking that then the answer is to earn equal returns each year. Anytime you have a given amount of something and want to divide it into a fixed number of pieces and multiply those pieces together to get the highest total product, you should divide into equal sized pieces. Example: a 5x5 square has a larger area than a 6x4 rectangle or any other rectangle with adjacent sides totaling 10 units. The mathematical principle is called the “arithmetic mean/geometric mean inequality”.

I don’t understand what you mean by “the best output”. You provided number of years and total return as givens. So, what are you trying to optimize?