Jaygo

Hey appreciate that. The more I learn, the more I realize how much I have to learn.

Others will know better but according to the S&P literature the index inclusion doesn't happen until the 3rd Friday of the review month, so that would be around December 20th. Would the inclusion news be expected to be released before that? Its odd since that's one of the last trading days until Christmas so generally really low volume around then.

Yes that's right. I would say at that time you anticipated it but with lower odds. When a few months ago you were talking about it with much better idea of the inevitability with Algonquin falling and FFH growing so rapidly, that was the correct time to add leverage. Bet on the horse that's winning the race already, as long as he doesn't fall its money good. My point is that many on this board have been telegraphing a likely scenario that has more or less come to fruition, not based on hopes and dreams like many of my BS picks but based on rational expected outcomes. Outcomes that one could place a little leverage on and still sleep soundly.

^^^ rational optimism is a necessity in life. Personal risk is based on who you are, The example of the Eastern Europe is good but also flawed. A rational optimist would look at history and say life is improving but we are on the boundaries of regional conflicts that dates to the middle ages. I may just keep a little bolt hole in the west. I feel as a NA person the future lies here. No regional conflicts in its history, the War of independence, civil war and Indian wars are not blood feuds scorched into the psyche) We have large defensible borders with so much abundance there is very little reason to fight regionally. So the rational optimist would keep his investments here with a bolt hole to Patagonia in case of the big one.

Dumb is dumb though. The above situation is plainly dumb. If a not so brilliant but hard working guy wants to borrow from his future wages to take a 5K trip he's in trouble. If he borrows from his future wages to buy into the NA economy I feel that's a wise decision at this stage. I did mine without debt until my first mortgage but had I layered on some debt to invest in the markets and stuck it out I could be much further ahead. I started this journey a few years ago via a Smith Manouver and its frankly the biggest Bonanza I could have hoped for. Luck and this forum have been on my side. Tax breaks on interest, low taxes on dividends and 108% return thus far. It beats real estate and it beats lump sums on an RRSP. You guys on this forum have been discussing Fairfax and the index inclusion for how long? 3 months ago I think @SafetyinNumbers mentioned it. @Viking has been by our side, holding our hands and saying Jaygo its cheap, its going to be ok. Buying more Fairfax a few months ago was a calculated risk. Not too much downside with far higher odds of upside. A largely bright future discounting any cataclysms. So I doubled down and borrowed more to buy it. I dont see that as inherently risky. I see it as taking next years earnings today tax free. Buying into a high odds probability and waiting a few months to let that play out. If FFH goes to zero I will have wasted 1 year of my working life to pay that back (less after tax) If FFH doubles I will have gained one year of working life (more after tax) Please explain @Parsad how that is not a good bet at this stage of my life? Also just to make everyone comfortable I am in no way putting a potential loss on anyone. I'm a big boy who makes his own decisions.

Total thread derail so sorry to all. He would likely just be shocked by it all. The waste especially, It made him sick. His was a mentality based on fear of going back, to going hungry again. All the while as his kids we lived very well here, not spoiled but pretty damn close to it. He had a depression era mindset that he couldn't shake and its really strange how these things get passed down through generations. My grandfather Aurelio spent 18mths in a concentration camp in on the border of France. Our side lost to the Franco fascists. They survived off watery gatchas and if lucky vermin they trapped. So later in life he is part of a rapidly rising fortune of Spain but would not waste anything. Food, paper, clothing, metal cans from beans. Everything was saved. Everything that is garbage in today's society. Ill never forget him coming over to Canada for a visit in the 1995. we go out for chicken wings and he would be polishing the bones, not a morsel left, cartilage and all. My dad too and as kids it became a thing make sure that chicken bone is spotless. Now my kids do it too and they even say "look dad, just like great grampa"

I think you may be underestimating how difficult it is to gather assets for young people today. I see it in my employees who are basically spending every cent they earn just to pay for gas, insurance, rent etc. Maybe the smart ones can save enough to max their TFSA In the past 4 years we have had a 40 % increase in the money supply on about 10% economic growth. That is a 30% devaluation imo. Lets say 4 years ago one of these guys borrowed 100K or 2 years of pre tax income. They buy the XIU or VOO or whatever. They would receive a decent tax refund for the interest expense of about 2000 a year, they would be up to about 150k portfolio value and would be getting about 5k in yearly dividends. The interest would be about 6k per year or 24K in total. Roughly equal to the tax savings and dividends. I think we, Parsad you in your 50's and me in my late 30's are a little blind to how out of hand things have become. My first house was 300k that same house just sold for 1.4M 3 months ago. (Not by me sadly)

Thank you for pointing this out, If it sounded harsh towards his influence it certainly was not intended. My dad was about the kindest, smartest and most reasonable person you could imagine, He was my hero and north star but he was shaped by immense poverty as a child, growing up hungry and in the debt of others until he moved to canada. He grew up on gruel, they called it gachas in Spain. He shared a dirt floored room with his older sister, they didn't get concrete floors until he was a teenager. Two siblings died as toddlers. Basically he was forced to work around age 7, he only had 3 years of school until he started working full time. He is the definition of the Canadian dream. He came here and worked like a possessed man. But the one thing he was terrified of was losing it all and going back to poverty so his risk barometer was ultra sensitive. To him the stock market was gambling, debt was a ball and chain to escape from not an instrument to get ahead with. I feel blessed to have grown up with his influence but I have had to work outside of his guidance in many respects. In his eulogy my final parting message was this. " I think a good father is someone who is not flawless, but someone who lives so open and honestly that we could learn from his victories and his defeats. He built his life so we could stand on his shoulders to achieve new heights while avoiding the hazards that befell him" I personally feel debt today, while it can be dangerous used incorrectly is the only way to escape the velocity of currency devaluation. I wish this was not the case, I wish hard work was still the only answer because I feel society may be better off with some dirt under its fingernails.

@modiva To me safe assets need to be based on age and ability. At 20 a safe asset is some books and the balls to take calculated risks. At 80 a safe asset is probably a house, some gold for the grandkids and a friendly jurisdiction with sunny weather. My safe asset is my 39 year old frame and my mind. Getting less safe by the day btw. But i'm still in growth mode backed by the understanding I am entering the best 15 years of my earning power. Its foot to the floor on asset gathering right now. I wish, wish, wish someone told me to lever up when I was young. My father was such a play it safe guy he always advised caution but now I see the meager yearly savings of my 20's is a days swings in my portfolio now. What would have been 100k of margin on the TSX in the year 2003?, terrifying at the time but not much really. Safe would have been borrowing from my future self and buying assets to protect from inflation.

I guess it depends on what "quality" actually is. Love this Question by the way. It really gets my mind going. If I think something will stand the test of time i'm ok with it because I can see a time where Ill get my money back plus a bit more. I would buy KO or Walmart almost regardless of price. That is quality based on durability. Not regulated outsized margins like a lot of the "quality basket tends to be. Trandigm i'm looking at you!! With KO or WMT i'm not expecting homeruns because that ship has sailed but you know 20 years down the road they will still be there. Costco is a no because Costco could be disrupted easier than the other two imo. Financial Quality like fico, spg, moodys, AJG ect i wouldn't because I just dont understand it well enough. Tech is also a no because I just dont see a future with enough clarity. Resources are a big yes because quality tends to hide amongst shitcos and lately they have been relatively cheap. Retail is my favorite place to play because nobody is really "quality" but it is so easy to predict you can really get some great opportunities. Nike for example would be on many Quality lists but On a cloud and sketchers are eating their lunch. Paying up for Nike has been dumb, paying up for TJX on the other hand is wildly different. Trends and fads are the worst, single product companies are also bad. If I knew how to short I would make a fcuk ton of money on shorting fads, Yeti anyone? Long story short paying up for Quality is not my thing, I'm too active looking for reversions and dead cat bounces.

Bought some Linemar this morning at the open. $ 57.12 CAD

I bought 58 shares the day before earnings in my TFSA. The plan was to sell in December into strength from the index add. I'm pretty sure I will still do that but I do want to see how things go. If we get into the high 1400's i'm almost sure to sell. If it stays flattish Ill likely sell part, if it drops I think ill just hold on. I also hold 100 shares in a taxable account that was entirely bought on my Home Equity line of credit as part of my Smith Maneuver. I plan to hold those shares for a longer time frame and continue to pay the 700 a month interest to offset my damn taxes. With my plans in place. ill give my thoughts. I think the index add will likely add some but not much buying pressure. Canadian index buyers are a funny bunch. Many people look south of the border with awe and jealousy. I think the highest volume of new money goes to that. Lots of old people still hold the garbage funds from the major Canadian banks but those folks are not adding, many are now selling to fund their retirements. (I must add that I think this is a terrible idea and basically feel Canada and our markets are about as cheap as one could hope for and see a wonderful future ahead once we have our "trump" moment. Canada is becoming Argentina and our markets reflect that, but I believe that is temporary and with better leadership we will be back to being the envy of the world. Everything lines up in Canada's favor, think Peter Zeihan with a touque and a tims cup.) So in January when many people add to their investments I dont think as much goes into the Canadian index as historically has. As active working people send the money into US index funds primarily. All that said i think we will see about a 4-7% slow grind higher of FFH until around January 15th

Superstorm Sara anyone? The weather nerds I follow on twitter are gloomcasting another major in the basin next week.

^^^ This is great. Hard to fully grasp but thanks for the details. Do you think Buffett understands this too judging by his actions?

Yes the pipes are amazing, stable businesses but two issues I see with them for BRK. One is possible antitrust, the second is liability. If BRK is going to have a target on its back for lawsuits the pipes may be a problem. A sagd mine out in the hinterland seems less litigated.

The comment was funny. Many of these companies do have the scale to move the needle as well as inflation protection built in via incredible reserves. Some oil sands players have 40 years of proven reserves. I think the benefit to the commodities space is reserves and the value placed on them. The oil sands are extremely long life assets that are very cheap in comparison to the US players as far as I know. Suncor did 10 billion in income last year and the company trades at a 55 Billion EV Chevron did 25B income on 320 B EV rough numbers Ontario is now or soon to be the largest gold mining jurisdiction in the world and AEG is smack in the middle of it. There are decades of PM's in place plus basically every other valuable metal right in their backyard. As for the non commodity companies they are excellent operators who grow via acquisitions. Seems like BRK could use that kind of energy around and why not use the cash hoard to advantage their own businesses via cheaper dept and a financial safe haven.

Ouch!! Reds. Yes there are lots of companies that could move the needle. They could easily buy anyone in the commodities space and have access to the longest reserve lives of oil, potash, gold or nat gas. Suncor, ARC energy, Agnico Eagle, Nutrien, WFC jump out as do able and all trade cheaper than BRK Couch tarde, Dollarama, Transforce, Thompson Reuters, Waste connections are all great companies who could use the cheap capital BRK should supply to grow larger.

Unless he's looking north of the border for an acquisition he is crazy. Here in Canada we are about as shitty as we are going to get. The disaster at the top is on his way out. Millennials and gen z are stating to understand that socialism sucks. We have the worlds most resources in a "free democratic country" and the beaver buck is cheaper than TP and i would imagine we will be at parity again with a decade. USA equivalent stocks are atrociously expensive and i'm digging bargains up here daily.

Yes that was my concern but a Canadian company paying USD dividends to a Canadian tax payer should not be paying withholding taxes even if I hold the USD version right? I think that was the argument at least.

Thanks

Yes definitely a real question. And thank you for clarifying. Do you know if I did hold here and accept the dividend would there be a withholding tax since it is a USD account?

I think i messed up. Yesterday I bought 58 shares of FRFHF in US dollar side of my tfsa. Should I have bought FFH.U instead. Any help would be mucho appreciated. I should add that I did this as a trade and will not be holding until the dividend get paid. Likely hold until some time in December My long term fairfax is in a taxable account with a big fat cap gains thank to the good folks here!

Well my hope is it gets caught up in the wave of Nuclear fomo and gets bid up outside of fundamentals thus delivering a really great return. Actual fundamentals gets me a slightly better valuation than the attempted acquisition a few years out. Say in the range of 14-17 a share. When the company was involved in getting acquired last time there was a lot of interest.

Velan VLN.to Nuclear renaissance play combined with Cryo for LNG. I think we are in a industrial recession similar to 2015 era but nobody is getting dinged yet. Graco showed that today with poor results. I think Velan will push right through due to the nuclear and LNG projects then get acquired by an industrial trying to boost the sales slump. I am aware I have a major bias here, I have a very soft spot in my heart for small industrials for some reason so I could be totally out of whack here.

VVV - Valvoline has been putting up some pretty impressive numbers. Good revenue growth and about 18% buyback over the past 4 years. Also just to highlight Artis REIT again from a while back. I know office is dead and all but Samir Manji has been very consistant in buying in commons and preffered. In 2024 they have spent 48 million CAD on a 600 million market cap For commons they started the year at 112m shares out and now at 103.5 m shares out.