ICUMD

You've had a change of heart on Valentine's. LoL

Perhaps a good part of that $260 B in real estate is in unfinished homes. Seems like Evergrande faced a liquidity crisis. Not sure the partially finished homes in ghost towns have any residual value. These ghost towns have likely been deteriorating over years, likely becoming negative equity (liabilities) so to speak. I don't think money was intentionally stolen from bond holders and risk getting black listed on the bond market permanently.

The wager here is that if the CCP wants to get the donkey (economy) to move, they will now need to dangle more than a single carrot. It's not just a 'want' anymore, but a need. They have no alternative. Countries like China cannot progress without FDI. They are getting desperate. Let's see what treats they have in store. Things are bound to get worse before they get better.

Modi commands a crowd today that no other leader can. He's basically inspiring the country and millions of diaspora around the world to achieve what was previously impossible. Under his leadership, India is that economic snowball lifting people out of poverty and inspiring them on an individual level. You don't have to understand what he says, you just have to listen and see the reaction of the crowds.

@dartmonkey Thanks for writing this detailed explanation. Your rationale and explanation make sense. However, we can't be certain that is how they are actually calculating the fee, as there are slight discrepancies. I wonder if it would be reasonable to submit your assumption to Fairfax India investor relations for confirmation or clarification. Really, they should offer an appendix showing their calculation to the annual report, at the end of each 3 yr period.

Thanks for the above posts. I certainly understand the rebalancing and exposure rationale for indexing. For discussion, I note the PE ratio of the S&P 500 to be averaging around 25. The tech sector is arguably loftily valued currently and the index is heavily weighted in this sector. PE of 25 doesn't seem like a value proposition currently. As a value investor, how does one seek value in an ETF? Or do you just average in?

@MMM20 Unable to access the file. Are you able to summarize the punch line? Thx!

@Parsad for sure. I was referring of the psychology of using debt to purchase assets. Most people can have a mortgage, but are hesitant to use debt to invest.

Agreed. The big question is where are interest rates going. I think they will be going down. So I continue to add. Once interest rates come down, these equities will take off.

Important rules I follow when using margin: 1. Quality, quality, quality 2. Attractive valuation 3. Must generate dividends that cover the margin interest payments. (On the whole) My margin has also collateralized some fixed property assets. So taking this into account, the chance of a margin call is much less. Big market drawdowns allow me to add to quality companies, esp ones paying generous dividends.

Mortgages are leverage. What's the difference leveraging stocks?

A great example. High volatility and heavily discounted to BV.

1.4 Leverage. Mainly a way to reduce taxes against dividend income. Also allows flexibility to invest at favorable valuations.

I've reflected on some equities and investments with this scenario. I think they are better left alone. You end up tieing up capital with no forseable exit strategy. Exit occurs only if: Owner buys you out.. but why would they when they can use your capital for free? Dividends - in piecemeal (but no guarantee if principles take salary or special dividends) 3rd party buyout. Share price trading OTC never results in meaningful price discovery in low volumes. Usually a marginal holder dumping shares because they are frustrated. If you are willing to tie up capital for a long time, the chances of one of the three above scenarios improves, but still not guaranteed.

Seems like a lot of the Mexican drug trade entering the US is a result of the smuggling of American firearms into Mexico, arming the drug cartels. Apparently there is only one legal gun shop in all of Mexico, under military control. Now that's irony! https://www.marketplace.org/2023/10/19/how-a-booming-gun-business-in-the-u-s-arms-mexicos-cartels/

@Luca re Chinese Capitalism Chinese Capitalism is different than American style Capitalism is an important way: they mix socialist tendencies like 'common prosperity'. No body really knows what the implications are, but clearly their interference can be heavy handed as was the case with BABA. (Ironically, their policies have essentially confiscated the money of Chinese through RE promotion. So additionally, they suddenly have an unhappy populace to deal with, now that the music has stopped.) I suspect this has undermined trust of FDI and Chinese companies. The shadow that foreign money will be confiscated through investment in the country has contributed to this rout. This is the opposite of capitalism. Personally, I think the CCP will need to back track heavily to make amends and rebuild trust. Why? Because they have no choice economically. It is their only play. Stimulus is therefore just the first step. Therin lies the value play in Chinese stocks.

China (CCP) has really undermined confidence in their financial system. Ironically, taking out Jack Ma at the knees has brought their whole economy to their knees. I suspect it will take way more than 300 billion to resurrect. It will be costly for the CCP. However, if they don't, the risk is revolt by Chinese citizens whom they have really screwed. CCP is running scared at this prospect. Second prospect that will cause distress would be a Trump win. Fixing their economic troubles is their #1 priority. I doubt invading Taiwan is a consideration with this financial backdrop.

Ultimately, capitalism is the only model that works to bring prosperity. India has now realized it. China will need to get back to it if they want to resurrect their economy. Outside this model, there is only 'uncommon prosperity'. China will need to resort to stimulus and open their markets if they want any hope of making economic progress. Maybe they will take another year or two, but I don't see any way out. Also, they will need to be more open and friendly to FDI. I doubt they will want to be left behind as it's neighbors rise economically around them.

Definitely liking how the airport area is developing. Looks like Boeing campus is in good proximity to KFC!

My 30 yr portfolio is a high quality dividend portfolio generating increasing amounts of cash year over year. I add at lower PE and when dividend yields spike. I figure that sticking by this approach will generate a tremendous cash flow machine with the tincture of time. So far, my strategy is already, shall we say, paying dividends.

@Parsad @james22 Its original as it was purchased from a reputable dealer with box and papers. Seems to hold value better than time so I'll keep it for now!

On the topic of watches: My father bought a Rolex in 1994. A GMT Master. I asked him why he spent so much money on a watch, since he had a fairly modest paying government job - 'he told me: well son, it's because I value time.' I followed in his footsteps and bought a lightly used Rolex Seadweller in 2014. New ones being exceptionally difficult to find. Off course it stopped working and now requires servicing at a cost of $800-900. And I have to mail it to Toronto. Further, I was constantly worried about breaking it out losing it at work. It would also gain a few minutes every week or two, needing adjustment or winding when not in my wrist. I have put the Rolex away in storage and now wear a Timex Ironman given to me by my brother. No worries. No adjustments. And the Indiglow is far better than the Lume on Rolex. Two time zones and virtually indestructible & replaceable. As I get older, status for me is not giving a care what anyone else thinks.

I think all excesses, follow the rule of diminishing returns and escalating costs. Personally, I can't be bothered with that size of home. I have enough keeping up with mine. I think his goal was to flip it and bank a few million in tax free capital gains (Canada) which would make sense. Assuming markets cooperate and your cash flow can support your intent. My home home has without fail had at least 10k of repairs or refreshes done per year. Adding in taxes, insurance and utilities that's another 12-15k. I'm sure that 15,000 sq ft home would be in the neighborhood of 100-150k per yr carrying costs, excluding mortgage.

Everyone has their own cup of tea. Was recently reconnecting with an old colleague telling him how I escaped Toronto for more space in the country with 2700 sq ft, lots of garage space and waterfront. He then tells me after 10 min of my bragging how he lives in a 15,000 sq ft home in North Toronto with an indoor swimming pool.

Lots of variables that make a suitable house a home, size only being one of them. Location, quality of construction, proximity to work, crime, upkeep to name a few etc. Generally speaking, larger = more frictional costs of running it = more headaches. For example, have heard that in exclusive neighborhoods, trades people charge a fortune for basic things like painting, just because they can. I was plenty happy just renting back in the day. Job allowing, you can rent anywhere in the world. Having a family was main reason for me to buy.