Rod

I'm confused about how the dividend on the Series 3 (DC.PR.D) shares is being calculated. Today the dividends on the three series of preferred shares were declared by press release. The D shares will be getting $0.30637, which is $1.225 annualized. This is a yield of 4.90% on face value of $25. The dividend is supposed to be set at the rate of the 3-month Government of Canada T-bill plus 4.10%. So why is the dividend set as if the T-bill is 0.80%? I see today that it is trading at 1.15%. Does anyone understand this? From the AIF: "The holders of Series 3 Shares are entitled to receive a quarterly floating rate dividend, as and when declared by the board of directors of the Company, equal to the then current three-month Government of Canada Treasury Bill Yield plus 4.10%."

Please elaborate a bit about your line of thinking here, Ballinvarosig Investors, It would be much appreciated, thanks. Do I really need to go there? There is just so much wrong with what Warren Buffett is saying these days. For a start, he continues to beat the very worn drum that a basket of hedge fund, fund of funds will under perform an pre-specified index of his choosing. What's worse, is that he conflates that statement with the notion that all types of active management is bad. Not only that, but he states that in all his career (60 years plus of being in the market), that a maximum of ten people he has ever met can hope to achieve the goal of out-performing the index. It seems to me that he is in complete opposition with his previous teachings, namely that an investor with a small amount of capital has a very realistic chance of out-performing the market. John Hjorth - I take it that you are an adherent of the cult of Buffett? If you are a devotee, then may I ask, have you adopted the advice of your protegé (excuse the pun) and adopted the index strategy? From the recent statements of Buffett, I think it's fairly clear that the circle of ten people that he identified as having the ability to out-perform the market are extremely unlikely to be inhabiting this particular discussion forum. It seems to me that yourself and other adherents of Warren Buffett would do much better in your present investment strategies than to sell all your holdings and adopt index weighted holdings in the likes of Tesla and Snapchat, companies that truly represent the dynamism of American business (clearly, anything that is not American is abysmal by the standards of Buffet). Maybe I'm wrong but in referring to the 10 investors, didn't Buffett say that he only has met 10 than he could predict in ADVANCE would beat the market? That is a very different statement from saying there are only 10 people that can beat the market.

I would guess that Cannabis stocks are in some sense "over-earning", more through expectation than current fact. Investors in these stocks seem to believe that Cannabis margins will be around 80% or so based on current prices. They seem to ignore the surge in supply that is coming, which will crater the price.

Perhaps Dream deserves it's own thread, but I have followed it for several years and don't understand the capital allocation, in particular the huge amount of capital they've devoted to buying shares in what ought to be the retail-oriented REITs they manage. The largest part of their shares in Dream Office were obtained in exchange for giving up the management contract. They have been more active in buying shares in Dream Alternatives. I would guess there are a few reasons why they are doing it. One, they want to increase the level of recurring income to balance the volatility of the development business. Two, they see the shares as undervalued. Three, and this applies mostly to Dream Alternatives, they want to be able to demonstrate to the market that they are large investors in their own fund. They have ambitions to grow Dream Alternatives by issuing new equity at NAV. Currently it trades well below NAV. This is a similar strategy that Brookfield uses. Reason number two has been confirmed by management, one and three are my own guesses.

Land developers active in Alberta and Saskatchewan. Residential land development is slow due to the crash in oil. The prices of the developers stocks do not reflect any expectation of recovery. Case in point: Dream Unlimited (DRM-T), also Melcor Developments (MRD-T).

I think it's just part of a plan to reduce their holdings generally. I don't think there's more to it than that.

It's worth noting that the B shares will reset next year and given the 5-year bond is at 2.15%, that would produce a 13% yield on the B's at $12.00. And would anyone be that surprised if the 5-year was 3% by next year? If we reset at 3% then the yield on the B's will be very close to 15%!

Yes, thanks, I stumbled onto that myself last night. I've downloaded the trading program and am trying it out. Do you know if an alert needs to be associated with an active order? I see you can set a "trigger method" as "bid/ask", but it's functionality seems to depend on whether you have a buy or a sell order outstanding. Ideally, I wouldn't have any order outstanding, I just want an alert when the ask falls below a set level. -------------------------- Bid/Ask For a buy (sell) order to be triggered: • A single bid (ask) price must be greater than (less than) or equal to the trigger price. -------------------------- Judging from the above description, to trigger on an ask price falling below a certain level is associated with a sell order, which is the opposite of want I would want. I want to buy when the ask falls. I see you can also set "Alarms", which can be triggered off bid and ask levels independently, but I can't see a way to have an alarm send an email/text. It appears to only notify you while you are in the software. Do you know if alarms can be set to send an email/text?

Does anyone know if there is a way to get alerts by text/email when a particular stock on the Toronto Stock Exchange has it's bid or ask cross a particular level? I know you can get alerts related to price changes, but I am trying to buy a very illiquid stock with a wide bid/ask spread and it would be helpful to know when someone is offering to sell near my price. For example the bid/ask could be $12.00/$14.00 and someone could place a sell order at $12.50 to change the bid/ask to $12.00/$12.50. If I was to get the alert I could log in and grab the shares at $12.50.

Through it's holding in Union Group, Dundee indirectly owns 16M shares of ICC Labs (ICC-X), a Cannabis producer in Uruguay. I think it's worth watching because ICC has recently moved up from $1 to $1.70 as it seems to be catching the cannabis wave. At the current price it's worth about 50 cents per Dundee share, or roughly 20% of the market cap. I guess a best case scenario would be that ICC shoots up to $5 or so on a take over or continuation of the bubble, and Union Group sells. Dundee's share of that value would be about $1.40 per share, more than half the current market cap, a not inconsiderable amount.

I don’t think it is an exaggeration to say that it was never possible before. In all the history of mankind up until Satashi published his white paper, any currency created by man would have been easily inflated and would require you to trust the issuer. So no, there is no precedent. Wait, wasn't money created out of "thin air"? Yes, technically true. But I was referring to currencies or commodities created by private entities. Governments clearly have the power to make a currency legal tender through spending, taxing, and regulation.

Creating a currency or a commodity out of thin air, which is what bitcoin is, has to my knowledge never been achieved. Does anyone have any historical examples?

I’m content to continue to hold the stock, both the common and the preferred (B shares). We should get a valuation on Parq Vancouver sometime in 2018. I’m optimistic that the value wil be $2+ per share. If that comes to pass it will be a game changer. With some more rationalization of the remaining holdings, I think we will have a solid NAV of $7 to $10 with the $2 from Parq. Much of that will be cash and near-cash. If the stock remains where it is now the oportunity to add value through share buy-backs will be immense. If the market is reluctant to reprice the stock, the buy-backs could go on indefinitely.

What specifically was the negative surprise you saw in the Q3 report?

I always wonder why should a house in Toronto cost roughly triple the price of a house in Ottawa? Average income in Ottawa is much higher too. Either Toronto is grossly overpriced, or Ottawa is a fantastic bargain.

Elon's real agenda may to be to use the media to promote himself as a visionary. He may know that most of the far out ideas he is proposing, like the hyperloop, are unworkable, but it keeps his name in the news and builds his larger-than-life persona. Why does he want to do that? Maybe because it creates demand for Tesla stock and allows it to trade at an enormous price, something that allows him to issue stock and finance the heavy losses that Tesla itself may need to sustain to gain enough scale to compete with large auto companies. Many people have pointed out that Tesla is in a tough competitive position. As the only auto company with a high priced stock that could neutralize the disadvantages he faces operationally. It gives him almost unlimited cheap financing.

I think if you look deeper into this paper you will find that 30% of stocks have lifetime returns that beat the market. Yes, that is skewed from a naive expectation of 50%. But the claim that 4% of stocks account for all returns is deceptive because it lumps all the losers with the stocks ranked below the top 4%. The top 5% through 30% beat the market when you don't lump the losers into that group. So things are not so bad.

Found this online: “April 2011, Vancouver city council agreed to relocation without expansion of the existing Paragon-owned Edgewater Casino licence. The 70-year, $6 million-a-year lease with B.C. Pavilion Corp. was renegotiated in 2013 to $3 million-a-year. Construction began in summer 2014. Under an accommodation side deal, Paragon will pay Musqueam Indian Band, instead of PavCo, $8.5 million of the first $9 million in lease payments. The project is a joint venture between Paragon, Dundee Corp. and PBC Real Estate Advisors.” Is $3M per year a good deal?

Ok but, why 6%? Why not 5% or 7%? In Buffett's time, 6% was the 30 year coupon.The idea (as I understood it) was that managers are paid in excess of the risk-free rate. Clients moving outside of t-bills are assuming risk. They can either pay themselves for that risk, or pay someone else, presumably a professional. The real question is, why are value fund managers stuck on 6%, versus payment for the intelligent assumption of risk above the risk-free rate? Note: I think his actual fee structure for the multiple partnerships varied: 33% above 6% 25% above 4% 16.6% above 3% But (1) he provided liquidity back to his clients from the fund at 6% (again, the risk-free rate), and (2) I think when he combined all the various partnerships, he adopted 6% as the rate. I think a better hurdle would be the index itself. The manager could keep, say 50% of the performance beyond that level.

I haven't been buying any D's because I already have a ton. I think this one is a no-brainer. When you calculate the future yield based on the ability to convert into the B's in 2 years and likely interest rates increases, the number starts getting silly high.

Thanks for this info sculpin. I like that GMP is using ~$200M for the Parq value. I had been optimistic it would be worth $120M.

Thanks for this. I'm curious why the sale of Dream Unlimited shares is treated as some sort of wonderful catalyst creating liquidity. Haven't the Dream Unlimited shares been liquid all along given this is a publicly traded company?

I haven't looked at them until now. But I think, at $23, the YTM is actually about 14.7% because holders have the option to redeem 17% on Jan 31, 2018 for $25. The potential catch is that there is an embedded put option that allows the company to convert to common at the higher of $2 and 95% of trading price. So if the common was below $2 at some point over the next two years, a conversion would be negative for the holder of the E's. I think the chance of a conversion at $2 is very low, however, unless things get very desperate at Dundee.

Thanks for the heads up. I picked up 200 D's. Unfortunately I'm already fully loaded so can't do more. I suspect someone has been doing a computerized arb trade between the B's and D's for some time, so the original selling pressure may have come from one class only.

I agree with the comment about retail investors. But there appears to be more institutional interest in the B's than the D's. I notice that EdgePoint (the old Trimark guys) own the B but not D. I thought perhaps liquidity had something to do with it. I've been surprised that the floaters have not reacted very quickly to the rising interest rate environment. I thought D's would move up fast. They haven't. The gap with the B's has shrunk somewhat, but that is all. I guess these are ignored securities and it is left to the retail investor who only looks at current yield like you say.