Wfearful_Bgreedy

How long can OPEC and Russia survive lower oil prices? The Russians have an incentive to shut down fracking in the US because a byproduct of fracking is Natural Gas / LNG which competes with Russia’s main export. They are willing to lose more on oil if they can gain on NG via shocks to the system. ————————— What percentage of corporate debt do US Shale operations comprise? Correct me if I’m wrong but I think this impacts all US oil majors not just small time frackers. Per FT: Energy companies account for the bulk of debt in the broader high-yield bond market and comprise 13 per cent of bonds rated triple C, the very bottom tier. https://www.ft.com/content/55f74150-4225-11ea-a047-eae9bd51ceba ————————— Do you really think total comp for public employees corresponds to their free market value, i.e. that any took less income in exchange for those lucrative pensions? I don’t think future teachers, fire fighters, and policemen will be dissuaded from applying due to pension underfunding. I do think the consumption habits of millions of people will have to change though to adapt to smaller pension plans. ————————— What percentage of homes were purchased for 1M with 5% down? 1/100th of 1%? It looks like as of 2018 non-conventional FHFA made 11% of loans. The down payment can go as low as 3.5%. http://www.mortgagenewsdaily.com/10182019_new_home_sales.asp ————————— If millennials don't want to live 40 minutes away from the city who is buying all those homes? I would argue in many regions we are already seeing decreased demand and prices reflect that. “ In March, The Journal's Candace Taylor reported that millennials are shunning the large, elaborate houses baby boomers built 15 years ago in Sunbelt states like Florida, Arizona, and the Carolinas. Homes constructed before 2012 are being sold at a hefty price cut — sometimes by nearly half — and owners aren't making a profit.” https://www.businessinsider.com/millennials-not-buying-big-houses-mcmansions-real-estate-2019-8 ————————— Lastly, how can an investor to win the guess the Macro-economics game? You are absolutely right that individual security analysis and price discovery is more likely to get you rich compared to macro analysis. I think of macro as Defense and getting the numerator in risk/reward more accurate. Also when central banks start messing with the market I think the argument that macro is irrelevant to Buffett style value investors starts to diminish. My question to you is should one just ignore macro completely? I think these volatility events create even more opportunities for value investors to do security analysis but even more scrutiny should be applied when doing DCF based on past assumptions. For example with ESG many institutional investors won’t be allowed to invest in Oil and Gas. I would argue that these intangibles should be priced in to your analysis.

https://finance.yahoo.com/news/saudis-plan-big-oil-output-225511711.html BBB Downgrade: I think this is the biggest news no one is talking about. If oil prices keep going down US Shale operations becomes unprofitable and defaults on debt start occurring. Shale needs at least $46/barrel to break even. Russia and OPEC are going to starve shale out by increasing production simultaneously. Shale Boom or Bust?: There are a lot of US jobs, cities, and loans depending on the success of shale. When prices of oil drop further there will be a cascade effect starting with the downgrade of BBB shale and oil bonds AKA “investment grade” and forced selling by institutional investors, because pension funds are not allowed to invest below a rating of BBB as per their charter. Source: https://www.ft.com/content/c048d870-6138-11ea-a6cd-df28cc3c6a68 Pension Forced Selling = Losses on the Book: The downgrades will end up hurting underfunded pension funds that are 40% below where they need to be not even accounting for the recent corona virus dip. Teachers, Firefighters, Policemen made less income in exchange for a promise that they would be taken care of. City and muni underfunding will lead to less spending and increased fundraising in the form of higher property taxes which will hurt property values. Source: https://www.wsj.com/articles/the-stealth-pension-mortgage-on-your-house-1533496243 No equity in the Mortgage: Many mortgages have a second mortgage or cash out refinances, so not much cushion if property values go down. So take an early 30+ millennial that had to buy a home at ~1M with 5% down using a FHFA loan. Suddenly they will be servicing 2% of 1M instead of 1% to pay for boomer underfunded pensions (property values and tax percentages vary widely by location). The boomers who bought their homes at 350K find they owe 750K still because of the cash out Refis they did while their property value was increasing in order to pay for their kids 150K archaeology and psychology online degree. https://www.wsj.com/articles/americans-are-taking-cash-out-of-their-homesand-it-is-costing-them-11577529000?reflink=share_mobilewebshare Your Move Boomer: It was once the case that near retirement one was allocated 80/20 in stocks/bonds, that has since reversed. They can’t find safety in Treasuries or bonds because yields are so low. Their last asset of value is their property which is starting to look like a liability due to property taxes. Also turns out Millennials don’t want a 5 bedroom mansion with a pool and sauna 40 minutes away from the city. I honestly don’t know how this plays out, probably region dependent. https://www.businessinsider.com/millennials-not-buying-big-houses-mcmansions-real-estate-2019-8 Help us FED: FED will respond by lowering interest rates even more and might even try buying other types of assets with printed money such as securities in the same way the Japanese government has. Folks who have no real assets such as property, stocks, or bonds don’t get to participate in the asset inflation produced by the FED leading to a furthering of the divide between FED beneficiaries and non-beneficiaries. https://www.nytimes.com/2020/03/06/business/economy/fed-coronavirus-rate-cut-limited-ammunition.html Psychology: If you are in or near retirement and your 80/20 allocation in stocks/bonds is taking a volatility hit, your pension agreement is being restructured, medical costs are going up, your 4 bedroom home has one room occupied, your friends are leaving for Arizona, Jim Cramer is telling you to sell, your non-fiduciary financial analyst is telling you to use an S&P index and give them a 1% fee through their preferred broker, what do you do?

Step 1: Print Money, Buy Bonds (EU, US, Japan) Dampen 2008 financial crisis by creating money and use created money to buy bonds on the free market to “invigorate the economy” Step 2: Boomers overweight Stocks Interest rates drop and bonds no longer look appealing to savers/publicly run pensions in their portfolio. At the late stage of age 50-60 most future retirees used to be 20% stocks and 80% bonds to avoid risk. That stat has flipped now that bonds do not earn a meaningful amount of interest. Step 3: Indexes are the New Hot Dog All working age adults are enrolled in Defined Benefits Plans that are all index based. Indexes are buy at any price machines where any company of decent size or market cap is sliced up and ground into a USDA certified piece of the US economy. Most couldn’t tell you all the ingredients that went into it, but the price keeps going up and looks stable so why ask what it’s made of. Step 4: The Everything Bubble The money that used to flow into bonds flows into remaining asset classes like real estate, private equity, venture capital, and stocks lifting all ships with the rising tide of new flowing capital. Step 5: Buybacks = Bigger Yachts Corporate executives take advantage of low interest and issue debt in the form of corporate bonds. They use the capital raised from issuing bonds to repurchase their own shares and increase their own bonuses as the share price goes up. They don’t invest the capital in R&D, new facilities, or growth. Coincidentally Yacht Builders have quadrupled in head count over the past ten years. ——— ——Around the Corner ———— Step 6: RMDs not WMDS The majority of invested capital is from the older generation. While pensions used to be the plat de jour corporations switched over to defined benefits plans or 401ks. Most retirees don’t know about “Required Minimum Distributions” or RMDs. Starting at age 70.5 you will be forced to sell a percentage of your retirement fund every year or be penalized 50% of the RMD you failed to sell. In other words I have a cookie jar and I will be forced to start eating some of my cookies every year or the IRS will take them away. Step 7: Lightning in a Dry Forest Take your pick of market shocks 1. China Recession and/or Credit Crisis 2. Impeachment Standoff 3. Pension Crisis Standoff 4. Venture IPOs Flat, Think WeWork 5. Corporate Debt Re-Rated BBB 6. Private Equity Over Leveraged 7. RMDs 8. Trillion $ Student Loans and or Forgiveness 9. Auto Manufacturing Layoffs Really Start Step 8: Boomers Play Musical Chairs With Stocks The problem with Pensions and Individual retirement accounts being overweight stocks this late in the game is a large risk exposure for just a marginal increase in earnings. A Millennial can buy and hold and watch their S&P Index take a dive, a Boomer on the other hand has to make their savings last maybe another 30 or 40 years. Step 9: A Home Buyers Market At Fair Price - To make up for city, Police, Firemen, Teachers pensions underfunded, property taxes go up. - Million dollar plain looking homes now pay $15K in property taxes - Home Values Drop - Boomers forced to sell 4 BR home at much lower price to recoup stock losses and avoid high property taxes eating their income - Increased Defaults for Late Buyers Step 10: The USD Loses It’s Shine - Oil can now be bought in a variety of global currencies - Dollar Reserves and Treasuries aren’t needed as much on a relative basis - One Belt One Road means less need for USD Final Step: Under-Performers Become Over-Performers - Emerging Markets look more appealing - Precious Metals and Crypto get Reappraised compared to “Risk Free” assets - Commodities do well - Balance Sheets, Loan Performance, Value Investing become sexy and new

Wanted to get ideas from the crowd on what you think the most undervalued assett class/sector is today and examples. Some primer or thoughts I had include healthcare, agriculture, volatility, productive low CAPE indexed countries (e.g. Russia). -Concrete examples: Agriculture (Out of favor) CORN LAND FPI Russia (sold on fear) SBRCY

News Form 8-K: "On April 6, 2018, Steven M. Jones, President of Credit Acceptance Corporation (the 'Company'), announced his decision to retire as an officer and employee of the Company, effective June 30, 2018."

- Holding Off I am holding off on buying puts although based on that article by Antonio there might be a catalyst or event driven thesis. I think this will be a long developing story and unfortunately I wasn't having much luck finding public data on auto loan modifications or even which dealers use CACC out of the population of dealers. Was hoping to correlate census income demographics surrounding current used auto dealers using CACC vs. the remaining used auto dealers to estimate runway left and the extra resources needed to gain only marginal dealer presence. - Future Catalyst With regards to the bad write off policy per Antonio's article: "The implementation of the new Financial Accounting Standards Board (FASB) Current Expected Credit Loss (CECL) model due before Dec-19 puts a theoretical hard stop date to this practice. In 2018, analysts are likely to question management regarding the impact of implementing such accounting standards." I'm not an expert on credit loss modeling standards and what the new standards will mean. - Public Data and Analysis The current situation just seems odd for any new growth investors in an environment where the dealer market is saturated, competition is high, interest rates are rising, defaults are increasing, unemployment at all time low, consumer debt is tapped, used auto indexes point to lower residuals, and new accounting standards that appear to me more rigorous are coming in 2018. While I like the macro case I really wish there was more public data available at the loan level. I think one interesting data option might actually be lending club. Although they don't service "sub-prime" 600 or lower they go down to 640. Also I think their loans cover auto refinancing at the moment so not sure how this piece adds value yet to the puzzle. Their accepted and rejected loan data is available at: https://www.lendingclub.com/info/download-data.action Will most likely need to open this in python or import into a database as the row size will crash most spreadsheet software.

This is probably my own naïveté on LEAPs I saw options on CACC that go out to the end of 2018 and considered those leaps. SC on the other hand has options two years out.

I was curious about purchasing Put LEAPs in publicly traded sub-prime auto lenders like Credit Acceptance Corp and Santander Consumer USA, CACC and SC respectively. I’m usually too early and I don’t claim to be able to time the market, that’s why long term expiration puts are the only instrument I would consider and it would be a tiny portion of my portfolio. It would be too expensive to short outright so LEAPs look better. My only concern is that there is not a specific event or date driven thesis which would make the payout more rewarding and make volatility not follow a normal distribution like a court ruling on a specific date. I have a couple main reasons: - Defaults are increasing https://www.bloomberg.com/amp/news/articles/2018-02-02/never-mind-defaults-debt-backed-by-subprime-auto-loans-is-hot Both SC and CACC are increasing their provisioning for these defaults and analysts asked why they were provisioning at a higher tick without a clear answer. - The used auto index is decreasing http://www.nada.com/b2b/NADAOutlook/Guidelines.aspx This matters a lot because folks purchasing a new car depend on the trade in value of their used car. If they can’t trade in for value then new car dealers get desperate and offer more discounts which pushes down used car value more. When subprime lenders repossess autos they depend on the value of those vehicles to make themselves whole and if you look at CACC’s portfolio from 2015 to today based on their 10K they are owning more and more of these loans outright rather than handing off the risk to the dealer due to competitive pressure. When borrowers finish their lease and the remaining payments are more than the market value of their vehicle they will return the car leading to more used cars on the market. https://www.kbb.com/car-news/all-the-latest/this-week-in-car-buying-inventories-grow-used-cars-flood-market/2100004210/amp/ - Interest rates are increasing If the spread between the Fed rate and high interest sub prime auto bonds decrease then lenders will have to increase interest rates to entice bond purchasers or take a margin hit. - The quality of new dealers is likely decreasing If you look at Credit Acceptance 10K they are increasing dealership footprint but are seeing some market saturation. I believe there are 35000 used car dealerships in the US and they are in 9000. So what you see is that their per dealer deals are decreasing per year. Also if you see the analyst questions from their last quarterly it appears that their new dealers are not meeting the minimum 100 deal quota in order to gain access to up front lending. I am speculating that it is their new dealers responsible for the downtrend in loan rates and that they are pushing into new territory where subprime isn’t as viable in the hopes for the same growth. Companies like CACC have had amazing compounding growth but I think maintaining that growth will be very difficult given their size now. You can see the analysts inquiring about new dealer performance and a non-answer on page 4. https://seekingalpha.com/article/4141501-credit-acceptances-cacc-ceo-brett-roberts-q4-2017-results-earnings-call-transcript?page=4 - Business Model Shift I applaud Credit Acceptance in their early days for crafting a business model that shared the underwriting risk with the dealers. In their original business model the dealers would get an up-front loan from Credit Acceptance that was short of the full purchase price. The dealer would then recoup the difference over time as the loan continued to perform. This would incentivize dealers to practice good underwriting. Now however for the past few years CA has shifted from sharing the risk to owning more of the loans, see the chart on percentage growth from "Dealer" loans to "Purchased" loans. https://globenewswire.com/news-release/2018/01/30/1314630/0/en/Credit-Acceptance-Announces-Fourth-Quarter-and-Full-Year-2017-Earnings.html I imagine this is because dealers would rather take more upfront and use that to cycle through more inventory rather than wait a few years to collect payments. This is a misalignment of incentives and risk where dealers are offloading the default risk to the lender without any fear of losing their source of cash because they have multiple online options to choose from. - Unemployment at all time low How can defaults be increasing when unemployment in the US is at an all time low. Imagine if that unemployment regressed to the mean. Since there is so much competition now between subprime lenders and dealers have the pick of the litter often the fastest pre-approval wins. So the lenders are incentivized to decrease underwriting standards and beat out the next lender. The question is who is the fastest and worst underwriter? I don’t think I know that answer yet, I think historically Credit Acceptance has been more prudent and outlived the competition but the business model is changing. - Loan duration is increasing The average duration of these auto loans are at all time highs of 65 months and max of 85 to 94 months. If used car prices continue to decrease then these vehicles are more likely to be underwater compared to a scenario where they had been on a traditional payment term. I am curious as to the correlation between longer loan periods in a downward vehicle price environment and defaults. My hypothesis is that if the vehicle is underwater and I can no longer make payments then I will just let the lender repossess the vehicle. - What are consumers actually buying? Right now the market leader in the US is without a doubt luxury SUVs and pickup trucks. https://mobile.nytimes.com/2018/02/15/automobiles/wheels/luxury-trucks-suv.html?referer=https://www.google.com/ These are vehicles with higher maintenance and gas costs. Pick any street in your area and count how many lifted trucks or SUVs with a new dealer tag on the plate that weren’t there a few months ago. I’m not sure your neighbor will keep that Ford Raptor if times get tough. My calculations in excel were showing me a 1.6X Payoff for Santander Consumer USA using a two year out of the money strike price 40 percent lower than market. I would hope for at least a 2X payout, this was one of the rules Cornwall Capital had for investing. CACC used to be run by owner operators who have a lot of experience surviving multiple up and down environments, however their founder has since sold a lot of his shares and their business model is shifting from sharing the risk to owning the risk. https://www.bloomberg.com/news/articles/2017-05-04/as-inventor-of-subprime-car-loans-exits-critics-smell-a-lemon Santander might be a better opportunity though they aren't as richly priced for growth. In summary I think this market has enjoyed a lot of tailwinds for the past 8 years and people made a lot of money in this industry. I think there are a lot of headwinds ahead while these companies are being priced for perfection. Because the duration of auto loans continues to increase out to 65 months or greater in an environment where the used price index is decreasing provides heightened odds of borrowers being caught in a down job market with a luxury vehicle that is underwater. While lenders are incentivized to increase loan duration to make monthly payments more palatable today they are relying on the resale value of those vehicles in the event of default in the future.

This is a general discussion sub-forum and I believe this is a pertinent topic as I discuss Buffett's allocations today and in the past at large. The message here isn't about me as I surely am no expert, am not a fiduciary with your interests in mind, nor have a track record like Buffett/Klarman. In fact I believe you have been investing much much longer than me and have seen and held positions through some incredible market conditions that I wasn't alive for. I wanted to use this post as a platform to discuss what Buffett is currently doing, the incredible valuations we are witnessing, indexation taking a hold, and gather thoughts from more experienced value investors like yourself who may be preparing for retirement with a value approach in mind. I realize as a new member that I may have made a mistake in posting in the first section I thought made sense titled "General Discussion_Feel free to talk about anything and everything on this board" . Happy to move it somewhere more relevant regarding value investing, Buffett, and retirement if you can point me there. I still have some unanswered questions above and any insights or errors I made in my sources or thoughts would still be appreciated. Cheers!

I chose this forum because I knew I would get good feedback and this certainly counts. I suppose more context is deserved. I obviously am not Klarman nor Buffett and would never want anyone to invest outside of their circle of competence. Also on the Europe example you brought up I completely agree if the U.S. undergoes a crash it would not necessary be isolated and that the ECB is mid way through their own QE. These are valid points and really any recommendations I provide of foreign stocks is not a guarantee of any sort and might be presumptuous of my abilities or foresight. My language was incorrect U.S. recessions don’t happen every 10 years my intent was to convey they happen within 10 years consistently and rarely go beyond 10 years since the last recession. Yes, no one can predict the exact when, what, and how at the same time. I’m saying the what is inevitable and we are more likely then not closer to the what based on history. That’s why cash is such a great option. At these low interest rates the risk adjusted cost of holding cash are actually at all time lows. https://www.thebalance.com/the-history-of-recessions-in-the-united-states-3306011 My relative sold right after the GFC and was very much an emotional actor. Also this relative like many retired folks feel they need to be invested heavily in the market to get reasonable returns. It used to be that bonds were a haven for retirees and now interest rates are not nearly as attractive as you know. Retirees are not efficient market actors they are emotional actors that have a shorter time horizon than working folks. If I had to live on a fixed income, was forced to weight heavily in stocks due to the Feds, and saw my highly validated shares dropping I’m not sure telling retirees to wait it out would be my 1st line of defense. If we were all rational market allocators and held through downturns the opportunities for value investing would be far fewer. Schiller PE is one way to predict the 10 year earnings of the market going forward. The current Schiller PE is 31, see Vangaurds fig 5 on expected 10 year returns going forward they are not high, 10 years is a long time for to wait for many retirees they might blink before that: https://personal.vanguard.com/pdf/s338.pdf I have a feeling, not a professional insight, that a lot of retirees see the upward slope of the S&P500 and take comfort that this means now is a good time to double down rather than the reaction that these stocks are pricey and my yields (inverse of PE) will be lower for what I’m putting in. That is certainly the reaction my relative is taking and having a close relative who is an emotional trader react this way is disheartening. The reason I recommend alternatives is because recommending safer investments like municipal bonds hasn’t worked. They enjoy being active in the market. On the topic of Buffett I am aware that he is not a “market timer”, he doesn’t look at macro at all and is interested in price relative to intrinsic value. The difficulty I’m having is my relative doesn’t take valuation relative to intrinsic value into mind at all. Buffett closed his fund in 1969 and told his limited partners this: “The results of the first ten years have absolutely no chance of being duplicated or even remotely approximated during the next decade.” That sounds a lot to me like rule 1 investing not losing your money and it sounds like market timing to me. Buffet said one thing and does another sometimes and we should question these mantras based on history. One form of market timing in my minds is day trading jumping in and out of the market incurring fees and suboptimal tax results. Buffet, Klarman, and many other value oriented investors are at all time career highs in terms of their cash positions right now waiting for value scenarios. Given my relative and my uneducated perception that most retired investors are not running screens, DCFs, or looking for margins of safety I am curious how you would recommend someone pursue value over market perceptions. I would say cloning is the best recommendation I can give without putting in the effort for this type of person. Regarding leaving retiree funds in the market and waiting for the market to go back up this is certainly possible for a someone who isn’t yet retired. I would argue that many retirees are utilizing 401Ks and once they turn 70.5 they have to undergo “forced distributions” google it for more info. But they will be forced sellers at a given percent of funds every year using that tax vehicle. In other words 401ks have a step function count down clock that I wasn’t even aware of until recently. So many baby boomers can’t actually ride out any type of prolonged correction which is why it’s a shame bonds aren’t high enough for most. Also many are historically overweight in stocks see dated ref: http://www.businessinsider.com/fidelity-says-baby-boomers-own-too-much-stock-2015-7 I understand your logic for adjusting draw down and forgoing luxuries in a downturn as a means of adjustment. I suspect you are currently working, have studied Buffett, and have a longer time horizon than most retirees. This letter is to my emotional and shorter time horizon relative who doesn’t choose to mimic Buffett by constantly evaluating intrinsic value and waiting for said opportunity. My main response is take into consideration the position of the average retirees’ time horizon, overweight in stocks, forced distributions, and few risk free alternatives. If Buffett, Klarman, etc. can’t find bargains and are in at ~50% cash can we really expect the majority of retirees in at a higher percentage are making better allocation decisions? I believe cash is used as tool by Buffett and shouldn’t be looked down upon as simply “timing the market”. Schroeder the author of Snowball characterizes Buffett’s use of cash as: “he perceives cash as a call option with no expiration date or strike price” What is wrong with shamelessly cloning the best? Why aren’t more forum members here questioning the all time high cash allocation of Buffett while at the same time he states: “Measured against interest rates, stocks actually are on the cheap side compared to historic valuations”. If that were true then why can’t he find bargains on the public markets at this moment as evidenced by his percentage of cash: https://www.valuewalk.com/2017/06/warren-buffett-berkshire-hathaway-unprecedented-100-billion-cash-heres/ Thanks for your comments and keep up the good responses . Even if markets go through a downturn I wouldn’t consider that proving me right as anyone can be right once in a random walk down Wall Street. I’m interested in high risk adjusted returns and my argument is that Mr. Market and a large portion of retirees, evidenced by their high % allocation, are not taking a risk adjusted look at the S&P 500 index which has outperformed the best value investors as of the last decade.

I wanted to bring up again the need to diversify stocks across other countries besides the U.S. It would really pain me if you lost a significant amount of your stock value set aside for retirement and I asked myself if I could have done something more. The indexation / ETF / underfunded company pension plans (GM, Exon, etc..), baby boomer demographic shift, and all time low interest rates <2% phenomena have lifted U.S. stocks to record highs. When the market hits a recession (there has been one almost every 10 years on the dot and we are almost past the 10 year mark) everyone will be rushing out the door and there will be little to no one buying e.g. it will be harder to sell or exit your position. I think instead of a 100% US portfolio there are some easy ways to still achieve a decent risk/reward on the stock market. Here are some great recommendations that I can stand behind NYSE: ABEV Ambev owns the distribution rights to coca-cola in Brazil and latin america. They also have many recognized beverage brands. Brands have lasting power just like coca-cola, pepsi, crest, etc... They are also very fairly priced. OTC: FFXDF Fairfax India is a very very great holding company. Fairfax is a well known conglomerate with management that has over 20 years of successful investment history in insurance within Canada.They provide very honest shareholder letters and follow the strategies of Warren Buffett. They are applying that same strategy in India and only buy businesses with a long history of stable and consistent earnings at a discount to their value. This stock is really a collection of extremely stable businesses in India where the demographics, interest rates, and economy have a very bright future. OTC: EBKDY Erste Bank is an excellent Austrian ran bank conglomerate with multiple banks in Eastern Europe. Eastern Europe especially Poland, Czech Republic, Hungary and others have gone through a turn-around and their respective economies, demographics, and production have all gone up. This is a stable and consistent business. Europe is expected to continue doing well in the future relative to the U.S. Cash Now is an excellent time to leave cash in your brokerage. If the market does go down and people panic you can mimic the most successful investor in the world and the world's second richest man on the planet Warren Buffett (who is sitting on 50% cash right now) and purchase stocks at a huge discount. Sorry if this is annoying I just feel like your retirement savings represents countless hours working and saving. The risk / reward is so high right now in the market given we are near the end of a 10 year bull market. Why risk a 30 - 50% correction in the effort to achieve another 5-7% gain. I think the companies I listed above are very good ways to diversify outside of the U.S. Well now I can say that I really tried to give you a heads up.

Here is that white paper on Fairfax India. It has a DCF for each holding. Just a little dated but relevant: http://ca.rbcwealthmanagement.com/delegate/services/file/617229/content

Curious what you think about the price of Fairfax India now. I was reading a white paper from a year ago with a target of $14 now it is it record highs. I really like the businesses they are buying like the airport in Bangalore and feel they all have a strong moat. I’m always thinking about waiting for the fat pitch but the US fat pitch due to a recession might be a few years from now. Thinking of parking in fairfax until a real fat pitch shows up. Not sure what the margin of safety is in Fairfax India that is all.