Cigarbutt

The venture is shaping up. I understand that the recently posted "data scientist" position may have something to do with the adventure. https://www.amazon.jobs/en/jobs/715945/data-scientist-healthcare-benefits FWIW, I think there is a huge talent basin for this position. The profile requires to be data driven, transformative and multi-disciplinary. The #1 candidate on my list is Mr. Andrew Bartley. https://itpeernetwork.intel.com/lean-startup-approach-predictive-clinical-analytics-healthcare-part-ii/ https://www.intel.com/content/www/us/en/healthcare-it/solutions/documents/predictive-analytics-in-healthcare.html Was looking recently at work being done on workers injuring themselves at work and ending in the downard spiral of an opioid addiction problem. Big issue, huge costs (human and financial) and...mostly preventable. All you need is a relatively intelligent tool that would spot the risk factors early on, provide alternatives and remedial actions before it's too late. And it would cost less too. An unrecognized concept is that the approach that the data scientist will apply is very similar to what clinicians do on the field. They will: -observe and collect data (listen, ask, examine and read test results) -try to answer a question (diagnosis) -finds way to predict what will happen based on the above two (risk factors and natural history) -try to prescribe a solution in order to obtain a positive change in outcome Hippocrates would be proud and advanced analytics is closer than you think.

^Interesting. Would add the following for constructive purposes. The two most relevant and interesting studies I've come across about this specific topic (causality in Alzheimer's) are: https://smjournals.com/ebooks/Neurobiology/chapters/NB-16-01.pdf https://pdfs.semanticscholar.org/4aad/4949528f570dad23d0d2c7cbb3398e5fb914.pdf The field of nanotoxicology remains relatively controversial. At this point, genetic factors are felt to be major contributors and prevalence increases exponentially with age. It seems that, essentially, the rising prevalence of dementia is related to population cohorts living longer. A word on the article. I possibly spent not enough time on it and on the premises supporting the conclusions but the Toronto article mentioned is a retrospective study of exposures. These are labeled as observational and are very weak indicators of causality. But they form the basis of further studies. This is because the conclusions are based on statistical calculations using odds ratios and relative risks associated with attempts to retrospectively "control" for other potential exposures or causes. These studies are notorious for suggesting spurious correlations or correlations with no material meaning with reality ie breast cancer risk related to the number of bathrooms in the house. Historical tidbit: In the old days, people suffering from tuberculosis were sent to sanatoriums for the fresh air. At some point, many of these places were transformed into fancy touristic resorts. https://en.wikipedia.org/wiki/Sanatorium Alzheimer's disease is a nasty disease and hopefully explanations and treatments will be forth coming.

Hi Shane, My long term goal is to switch to passive investing and am actively working on achieving that goal. Some ideas: https://research-doc.credit-suisse.com/docView?language=ENG&format=PDF&sourceid=em&document_id=x745112&serialid=knrGGNw%2Bo620toTTx96qBQ%3D%3D https://www.bostonfed.org/publications/risk-and-policy-analysis/2018/the-shift-from-active-to-passive-investing.aspx FWIW, apart from some pockets of potential illiquidity-induced departures from NAV in the levered/synthetic categories of ETFs, I think a lot of people are overreading the phenomenon especially as a timing tool. In theory, passivity consequences may show up in times of duress. Interesting study showing that stress can help to show your true colors. https://www.eurekalert.org/pub_releases/2018-09/osu-sfy090418.php I think Mr. Soros calls this reflexivity. https://www.opensocietyfoundations.org/sites/default/files/george-soros-general-theory-of-reflexivity-transcript.pdf

Still early especially for H. Micheal but I come up with lower estimates. H. Micheal may proportionally cost more to FFH due to the wind over rain factor and increased related burden on reinsurers. Last year, each of Harvey, Irma and Maria came to about 30B of insured losses and FFH picked up a bill (net of reinstatements) of about 300M for each on average with Allied World's share at about 45% of total FFH exposure. I assume AW's catastrophe exposure has been decreased (going to higher layers?) but we'll see.

Is the insurance expensive? Does it include emergency evacuation etc.? I know that when expats, from any country, living abroad (e.g. a French expat in Vietnam) wanting to buy an international health insurance they are often introduced to two types: 1. global including the U.S.A 2. global excluding the U.S.A. That by itself shows just how bad the situation is with the health system. Travel insurance for medical emergencies, from my perspective, has not been expensive (+ or - about 2 to 3$ per person per day of travel, sometimes much less with "promotions") whether the US is part of the itinerary or not. The process is fast and convenient and, if underwriting is of any interest to you, they tend to focus on a few key questions (inclusion and exclusion criteria) with some criteria of doubtful value and with other important criteria not even being considered if you succeed going through the basic screening. Worth trying a few competitors because criteria and resulting premiums can vary wildly (not an efficient market, it seems). This is the commodity product. No personal experience with utilization of the product but know of people who had to use it with no problems concerning access, payments (no need for upfront fees, deductibles or co-pays) and evacuation if necessary once the medical condition stabilizes. I have a feeling that the companies make decent underwriting profits on this even if premiums are low (low expense ratio, relatively rare claims). However, I hear that the insurance premiums shoot up very fast when certain criteria are met which define your risk of being sick "suddenly" (age, certain pre-existing conditions, recent medical visit, medication change etc). In these cases, you have to go through a customized process and, if the US is part of your travel plans, premiums shoot up exponentially. BTW, we take this type of insurance on international trips only for catastrophic medical events but when we go to the US, even a simple visit or a simple ailment can result in a catastrophic bill as care is more expensive and visitors are typically charged the highest margin multiple of the basic Medicare fee but the care received is usually excellent.

For those interested: Was just looking at my old "Brascan" file and was able to recuperate this: https://www.theglobeandmail.com/news/national/how-flatt-is-reforging-brascan/article18273692/ Not terribly informative if you are in an investigative mood but the 2004 article gives perspective on the "transition" and the "partners". Interesting also, thinking of the recent "discount" discussion about BAM, because then, as the article describes, Brascan was trading at a discount, using a sum-of-the-parts calculation. One could say that the discount has closed, at least when referring to what the author meant in 2004.

Micheal Lewis is a uniquely gifted writer, which does not rule out insufficient objectivity. When he writes: "It’s what you fail to imagine which kills you", he may suffer from excessive imagination and he may even suffer from what he described in 1996 about Bob Woodward: https://www.nytimes.com/1996/07/28/books/politics-1996-bill-and-bob-s-excellent-adventure.html when referring to the commercial bind and the confirmation bias trap, but Mr. Lewis has shown, over time, a very unusual knack to spot and explain human misbehavior. His outsider take adds to the always elusive reality. After reading his works, I've always come out with the impression that the view may have been seen through a particular prism but never felt being trapped into an ideological quagmire. Conclusions may vary. That's the idea.

This post is for American "friends" who are reflecting on ways to improve their system based on factual analysis. This post is not about which system is better. https://www.msn.com/en-ca/news/canada/trump-calls-out-canadians-travelling-to-us-for-health-care-at-kentucky-rally/ar-BBOlip9?ocid=spartanntp From data, Canadians do spend on US-based healthcare but most of the money spent results from unpredictably becoming sick in the US while being in the US for other reasons (tourism, business etc). There is a small segment of the population who chooses to go to the US for medical care and some of these cases can involve celebrities and political figures. The main reasons to go abroad: certain heart surgeries, substance abuse centers and experimental cancer treatments. Estimates vary but, overall, between 1 and 3% of expenditures incurred by Canadians are spent in the US. There are huge line-ups at the USA-Canada border (both directions) but it's not because Canadians are fleeing en masse to access US healthcare. Personally, the main reason I go to the US (frequent) is because I like to meet people there. :) But when we go, we always buy complementary health insurance. Just in case.

^Mammography is controversial and poor incentives may result in poor results. OK. Interesting to note though that in Singapore, there are guidelines for mammographies that are comparable to Canada or the US and, on a recurrent basis, like in most places in the world, they aim to periodically improve their guidelines with best evidence. So the way that services are paid for seems to have little to do with prevention guidelines. Here's what seems to be their latest version for mammographies: http://www.smj.org.sg/sites/default/files/5102/5102cpg1.pdf I would tend to agree with most of what you describe but don't tend to agree on the black and white thinking and on the implicit assumptions that healthcare actors are intrinsically bad. There are poor performers but, in the main, people simply respond to incentives. To err is human and what one may realize with relevant experience and practical involvement is that, mostly, medical errors are not made by bad people, but rather by good people working in bad systems. I may be biased though because healthcare saved my life and significantly extended the life of several significant persons around me.

From the 1961 partnership letter: "I have consistently told partners that it is my expectation and hope (it's always hard to tell which is which) that we will do relatively well compared to the general market in down or static markets, but that we may not look so good in advancing markets. In strongly advancing markets I expect to have real difficulty keeping up with the general market." Given the historical record, would say that hope and expectations have tended to converge with reality, with a premium. Reasonable to expect more of the same.

Hi DocSnowball, I have followed this thread intermittently and some aspects are fascinating. Here and now, just want to make a few comments about the bolded part above. Context: I've always found US public involvement in housing finance and private home ownership to be highly unusual. Opinion: This is work in progress through Congress but most of the involvement is a relic of reforms from the Great Depression and should be curtailed. The marvelling and potentially noble aspects have been mired in a growing web of moral hazard. I thought the following to be useful for historical perspective: https://files.stlouisfed.org/files/htdocs/publications/review/94/07/Structure_Jul_Aug1994.pdf https://www.huduser.gov/publications/pdf/us_evolution.pdf https://www.mercatus.org/system/files/House_of_Cards_March_2012.pdf -Comments about the bolded part of your post The idea is to maintain cheap financing. Most of the financial backing is domestic but, since the early 2000's, a significant part of the financial backing comes from countries that show a positive current account balance and with whom trade skirmishes are forming. So, in substance, the US buys cheap goods and then recycle USD through the capital account in order to maintain cheap affordable housing. :o Here are some numbers (not audited!) which show the percentage of the current account balance that has been "financed" through net changes in foreign holdings of agency MBS. 2004 4,3% 2009 (5,5%) 2014 3,0% 2005 11,8% 2010 (9,0%) 2015 18,2% 2006 15,1% 2011 0,1% 2016 20,7% 2007 25,9% 2012 0,8% 2017 12,8% 2008 29,8% 2013 (17,4%) Reference: https://www.ginniemae.gov/newsroom/publications/Documents/foreign_ownership_mbs.pdf All I'm saying is that the unsustainable trade imbalance will/should be dealt with and that adjustments will need to be made of both side of the equations and that the outcome with agencies may have to take into account less efficient entry of foreign capital.

The following is: -anecdotal -regional in nature and worries about vulnerability have been voiced for many years. Still. https://www.msn.com/en-ca/video/news/is-toronto-the-new-manhattan/vi-BBOc41p?ocid=spartanntp checked for reference: https://www.kijiji.ca/v-1-bedroom-apartments-condos/city-of-toronto/1-bedroom-we-pay-your-utilities-lawrence-ave-e/1376748826?enableSearchNavigationFlag=true Anecdotally, just renewed the lease on an apartment used by two of my children in Montreal (typical student sector). The rent was increased by 1,5% and when compared to what I was paying for a similar arrangement in the 80's, rent rise has slightly decoupled from inflation but not that much. I inquired to the owner if the building was for sale. I end up with the conclusion that the price asked is quite high but can be rationalized to some degree with long term optimism and if you believe that interest rates will stay low for a very long time. I find the situation in Toronto puzzling and the short video underlines some concerns about fundamentals. It's always hard to gauge "sentiment" but I wonder if the tone used and complacency shown by the two entertainers may not represent an underlying current (with timmies in our coffees and with sunshine on our faces). It seems to me that market participants assume that prices can move away from fundamentals forever. Who are the buyers? With stocks at least, one could always hope to sell rapidly to the next buyer if things get tight. I'm afraid some Toronto real estate owners may not have this luxury when prices eventually come back to earth (net worth=market value of assets-debt). Like Ben Rabidoux says, there are "strange risk dynamics".

Delicate topic, but agree. In an era where opportunity costs are estimated and where potentially positive NPVs are discounted in the longevity escape velocity projects, perhaps some consideration should be given to the potential fact that the hospital should be a last resort solution, if quality of life is high on your list. https://accessh.org/wp-content/uploads/2017/01/Bruce-Leff-April-4.pdf https://www.commonwealthfund.org/sites/default/files/2018-09/1895_Klein_hospital_at_home_case_study_v2b.pdf I would say huge opportunities for those putting customers first, single payer or not.

^Interesting. Few thoughts. -International comparisons can be helpful but domestic concepts cannot be simply imported, there are no perfect systems and some systems are more broken than others. -IMO healthcare delivery brings value but the recent trend (last 20-40 years) is based on gradually smaller incremental value gains and gradually larger costs. -Agree that the challenge is significant but remain optimistic. -Compounding can be slow but can be wonderful when incentives are better aligned (in the right direction). -Value-based care is basically a capital allocation decision and we can do better (a lot better). Recently read the following and thought it was useful: https://www.amazon.ca/Better-Now-Improve-Health-Canadians/dp/0735232598/ref=sr_1_1?ie=UTF8&qid=1539345551&sr=8-1&keywords=danielle+martin+healthcare Thought provoking, a lot to disagree with, but constructive grounds for progress.

Looking at this now. Could you please, in a few words, explain why you bought these two, in the context of buying them at the same time?

Would add another minor point. Mr. Buffett has described that, for some time, his bids are not competitive in this environment. Looking at Bloomberg this AM, the spectrum of treasuries yields from 3 months to 2 years have increased by 115 to 138 basis points over the last 12 months. Nothing earth shattering but, using the gravity argument, higher interest rates would tend to put downward pressure on deal valuation from Mr. Buffett's perspective and the cash optionality value has increased a little as he is getting paid slightly more in order to wait for the fat pitches. I see this aspect as another factor contributing to higher cash balance and, by consequence, to increased pressure into the buyback default option.

Interesting speculation. Need the following assumptions: -limited outside re-investment opportunities -cooperating market -capital deployment discipline Unusual scenario but not unheard of: https://brianlangis.files.wordpress.com/2017/07/grants-article-1148.pdf

"The discounts, however, are meaningless if the underlying charges aren’t capped. When Bartlett looked at a common knee replacement, with no complications and a one-night hospital stay, she saw that one hospital had charged the plan $25,000, then applied a 7 percent discount. So, the plan paid $23,250. A different hospital gave a better discount, 10 percent, but on a sticker price of $115,000. So, the plan got billed $103,500 — more than four times the amount it paid the other hospital for the same operation. Bartlett recalled wondering why anyone would think this was okay." Hospitals’ negotiated transaction prices for the privately insured typically vary by a factor of +/- 8 or more across the nation and by a factor of about 3 within a region (for equivalent services). Hospital market structure (degree of competition) appears to be a major factor but the relative absence of determined negotiators also plays a role. Marilyn Bartlett "was a potent combination of irreverent and nerdy, a certified public accountant whose Smart car’s license plate reads DR CR, the Latin abbreviations for debit and credit." Never underestimate an irreverent nerd.

A part of it is also about learning about ourselves, right? [ : - ) ] So much to learn and so little time. I guess you could call this work in progress but this short term stuff is mostly noise. Ideally, it would be nice (and the right thing?) to be able to think like this gentleman, whom you may have heard of: http://csinvesting.org/wp-content/uploads/2016/02/Nick-Train-The-King-of-Buy-and-Hold.pdf For still an undefined period, will continue to have in mind St-Augustine's prayer who had his own way of formulating the paradigm between excellence and finish lines: "Lord make me pure, but not yet". I'm also looking forward to your comments (especially concerning what's written between the lines) about Mr. Marks' latest book.

Sold about half of BRK.b holdings today. Could be a relative mistake as the other Buyer may have a particular sense of intrinsic value. Bought recently after Mr. Buffett "signalled" a message which I thought was inefficently picked up by Mr. Market and made it about a 27% position. Would be happy to hold BRK.b forever and it has been used as an opportunity cost reference. However, I felt I needed to bring the position down to size within my portfolios. Interesting also because I have been selling another relatively illiquid security (small position) over a few days and was able to sell BRK.b in 11 separate accounts during the last 8 minutes of trading.

Maybe the quote needs context but speaking of cheerleading and potential errors in interpretation, interesting to note what Mr. Timothy Geithner, who plays on the same team, said under similar circumstances. In his memoirs, referring to the "mood" of the times around 2003 or 2004, he said: "There was growing confidence that {what "we" had done} had made devastating crises a thing of the past.”... His memoirs are an interesting read and, at times, he appears to be unusually candid about his own responsibilities. And I happen to think that he did quite a good job, once in the crisis, to navigate through the tough times. However, I find that, even retrospectively, he could not even consider that things could have turned out differently which is kind of scary. A comment made in a review of his memoirs summarizes this well: "There are two big worrying things here. The first is that Geithner didn’t see the crisis coming at all, and indeed was something of a cheerleader for all of the dangerous activities that the banks were getting up to. The second, which is just as bad, is that with hindsight, Geithner sees this speech as being prescient and heroic — that it’s something to be proud of, rather than sheepishly ashamed of." (my bold)

The trend has indeed moved towards larger players and more milk produced per animal with the US leading the way but the trend is international. In theory, this should translate into a more affordable product. The gains from increased productivity, whether or not in deregulated markets, seem to have been "milked" mostly, in descending order by the retailer, the processor, then the producer and finally the consumer. In an ideal world the US and Canada should integrate their dairy markets, but this would require a dialogue and it is difficult for one player to lower its guard if confidence in the other is limited. I guess Canada could unilaterally get rid of its supply management but, under present circumstances, it would need to compensate somehow those affected during the transition (especially smaller players and those in "remote" areas) and would need to set up a permanent subsidy system. Mostly, in countries that went through a similar process, consumers have not benefitted. Like on many other fronts, I think we can do better...together. https://www.wilsoncenter.org/sites/default/files/1i2v%20i17%20Supply%20Management%20-%20FINAL_0.pdf

Because Buffett and Soros have been bankrolling the Illuminati who are controlling the fed behind the scenes. BRK was "looked" at and had a pass. There are supposedly objective criteria but "character" evaluation may weigh in the balance. The fact that BH was providing funds at a time when AIG needed some during stress is kind of a strong argument although the process is certainly less than transparent. Diversification from diamonds to underwear may have been positive factor also. Bank bailouts remain, to this day, difficult to reconcile with free markets and wonder if some people who still remember were somehow forgotten. https://www.insurancejournal.com/news/national/2014/01/23/318114.htm https://www.americanbanker.com/opinion/fsoc-is-too-political-to-be-taken-seriously

Complementary information. Hard to get a clear picture on prices but the following is a reasonable source of information and methodology is interesting but conclusions are incomplete (more on that at the end of the post): http://fieldagentcanada.com/wp-content/uploads/2018/06/Canadian-Fluid-Milk-Report-2018.pdf Take-home messages: 1-milk prices vary ++ between regions in Canada 2-milk prices vary ++ even within regions in Canada 3-Canadian milk prices appear to be higher than US prices but the methodology on the US side is different and based on a smaller sample On 1-, I would say that the net return to the producer is quite stable across the country given the principles behind supply management which is basically a national policy. In Atlantic Canada, higher prices at the consumer level can be explained by higher input costs and lower economies of scale at the farm level and higher transportation costs compared to farms in Ontario and Quebec. I know less about dairy farms in Alberta and BC. On 1-, the difference in price between Quebec and Ontario does not lie at the producer level but has to do, as rb explains, with a different philosophy. Milk prices are set similarly to gas prices with a minimum and a maximum. In Quebec, the range is relatively small. In Ontario, the range is larger, especially down, because retailers have historically and typically used milk as a "loss leader", so consumers who save on milk will tend to pay more for other products because, in the main, the net margin for groceries is similar between Quebec and Ontario. On 3-, If you look at historical evolution of prices, often US prices for milk have been lower and, for some periods, by a lot. However, one needs to compare apples to apples. The difference in subsidies directly to the producer can explain some of the differences. Also, if you look for the price of milk that is free of growth hormone, which is banned in Canada, the price differential tends to disappear. And, if you look at some work that's been done, in the US, it's been shown that a significant portion of workers on dairy farms are immigrants, frequently undocumented (up to 50% of workers in some reports) which seems to also explain a significant part of the price differential. So, overall, there doesn't seem to be much left for true productivity enhancing economies of scale in terms of a price advantage for the consumer. One of the problems is that both the US and the CDN dairy systems are relatively broken (seems to be a pattern, doesn't it?) and the tendency, on both sides, has not been to fundamentally reconsider the policies put in place a long time ago but has been to try adding adjustments on top of it all resulting in a relatively inefficient patchwork. I just realized that I wrote this post eating ice cream with milk products (diafiltered milk) probably imported from the US. Am I a traitor?

Their profiles have converged to some degree and the return correlation should increase. Assuming BRK and FRFHF are core holdings, how would go about scaling up or down relative positions? Also, assuming your "bet" is not a pure and whole company statistical bet, of the 10-12% CAGR, what do you think will come from 1-underwriting, 2-investments and 3-capital structure decisions (opportunistic share buyback or issue) or do you just assume that component future returns will just revert back to historical means?