Jaygo

I'm hoping the expected poor winter results combined with a general softness allow for better entry prices for myself as well as the corporate buybacks. The one caveat is that as interest rates drop (if they doo) then sales may pick up again and the opportunity could disappear quickly. Their main competitor Polaris has been dead money for quite a long time and that could easily happen here too. Polaris simply does not have the buybacks running near as hot so it has stagnated.

I think the fiduciary duty is for the stewardship of the business long term and that includes keeping relationships healthy by sometimes letting out a little line in fishing parlance. In my own business ive had many opportunities to take advantage of desperate situations to maximise my dollars but generally do not as i dont think it is moral or long term business friendly. I would say trying to maximise every penny is short term thinking and not responsible to the shareholders who can take no action on their own short of selling and moving on.

This has defiantly been on my radar as a possibility. It is a 7 billion dollar company so not a small privatization by Canadian standards and surely there would be a premium. One could argue what is the point of being public anyway if you dont use your shares as currency and dont go to the markets issuing new equity.

Lol no i'm from Ontario. Just playing. I love Quebec (Old Quebec city and the Laurentians are awesome) and my portfolio is deep with Quebec companies like BRP, Couche -tard, CN and TFII

Sorry but my understanding of accounting is pretty basic so your question leaves me baffled. If i can dumb it down I would say a cycle average net income would be $ 500-600 million on around $6-7 billion in sales. The margins have historically been around 8% and that is where they are now. I would imagine that with softer sales that margin will compress. 2023 had revenues of 10 billion CAD but that is an outlier year. I would say that we are just on the other side of an huge boost in demand from 2020 to current. 2023 was a big year for deliveries that were holdovers from 2022 supply chain issues and now they are experiencing a situation similar to other outdoor gear makers as demand has softened for most products. I understand competitive advantage more than anything and DOO is the market leader by far in both technology and reputation. They enter a segment and dominate it and end up with the superior economics vs competitors. What is tough to forecast is the end demand and revenue over the next few years. Their innovation is really amazing so if they have a blockbuster like the SXS or the switch pontoon boats then maybe the $ 10 billion in sales is something that will continue.

In about 10 Days DOO.to or BRP will report earnings and id suspect another huge reduction in shares outstanding. The results are sure to be terrible as the covid bump is dead and dusted and they are experiencing slower than normal sales since dept financing is critical for these toys to be sold. Who has 20 k for a damn ATV laying around They are on a pace of 3.5 million shares per year for a 76 million share outstanding company. They were a major benefactor of covid then a major loser of supply chains troubles as they had a boom in sales and bust in supply of critical chips for their instrument panels. The last 4 years have been a real difficult time for them and guess what. They bought back over 25% of shares outstanding, entered the motorcycle market with the tesla of 2 wheels (see reviews) and released the most incredible offroad racing machine ever in the Can AM Maverick R SXS https://www.youtube.com/watch?v=c_zY_QYKIYE You wont find better capital allocation of a high tech R&D powerhouse than this. Id put them up with General Dynamics of the era that Buffett was a buyer. But and a big but is they are cyclical, they are Canadian and even worse they are Quebecois and nobody seems to give a shit so they trade at 6-10 times earnings. I think we are going to run into a cyclical low now and for the next 18 months ( PE could rise to 30 from TTM 7 PE ) and these guys are going gobble up millions of shares at a cyclical low and come out on the other side stronger and more profitable than ever. I wont be shocked to see the share count in the 50 million range in a few years.

I do feel the same actually. I'm in the position of a double over the IPO price in a taxable account so I dont want to pay the taxes to switch over to WM or WCN again. The red flags are rampant for GFL and the owner ( giant yacht, 75 million Aspen ski chalet being a couple )but I must say they have done what they projected a few years out. Do they talk about the share price too much? yeah but at the same time they have backed it up with the performance so who am I to say. I think with GFL you are either going to look back and say that the writing was on the wall and who couldn't see a bankruptcy or you'll say the writing was on the wall and who couldn't see them growing to become #1. From my vantage point in southern Ontario they have become absolutely dominate in the home market. I had a hydraulic spill recently and they are the call to make for environmental cleanup through Accuworx, everyone uses their bins, the trucks are literally everywhere and anyone who is in industry knows them well. I know for a fact their soil remediation facilities are absolutely printing money as they are the only game in town. In Ontario GFL is a mixture of Waste Management, Clean Harbours and Badger and now through the Aecon and coco paving acquisitions they are huge in road infrastructure. They are unlikely to replicate this dominance throughout North America but who knows. There is a playbook that worked here.

I own GFL. I bought the ipo and have been moderately impressed with the industry. There is an incredible economy of scale because of landfill locations. Somewhat similar to concrete and asphalt plants. You basically have an oligopoly in every market. You rarely see all the big players in a single market. It is 2 big boys and some independent feeder fish in major markets so the pricing seems rational. I owned wcn before and moved my shares into gfl looking for more upside. I originally bought wcn because of Michael Larson who manages bill gates money. That guy seems to identify industry economic improvements early and has owned republic for a long time. A new avenue for GFL has been collecting biogas from the landfills and it may well prove to be an excellent bump to revenues from what was a waste byproduct previously. I don’t expect any grand slams out of it but could definitely see the industry doing better than the market average.

I just finished the letter. I won’t add much to the more sophisticated diagnosis above but man what a way to encourage the people who work under you. Prem is pumping his people up and at the same time he is putting their names out there to ensure accountability. I felt the letter was directed more for his people than for the shareholders as it just exudes his pride in the people and their individual organizations. If I worked there and read the letter I would see a bright future and clear path to moving to bigger roles just by how he talks about people and their independent org structure. It gives me the impression that Prem recognizes that he is not the goat and a great team can replicate a great individuals performance. Top notch letter Prem!

What about just borrowing from a line of credit?. Possibly not worth it at the current rates or the expected performance of brk.

I am starting to see the benefit of bitcoin more and more being a way of temporarily storing wealth to transfer to a different location or sidestep a legal issue like forced receivership or an ugly divorce. gold still has the long term storage power but lacks in the easy transferability. I guess I don’t see them competing as much as complimenting each other. Bitcoin if you live under authoritarian rule and plan to escape and gold for long term storage once you get to your new home. I have about 10 oz of gold and even with such a small nominal value it would be really difficult to smuggle. And I wouldn’t burry a bitcoin key in my backyard that’s for sure.

I really like this framework. I do the same type of thing by putting my long termers in taxable accounts so i'm less likely to sell to early. My riskiest stuff goes in the rrsp as I might as well take the gov down with me. The RRSP also holds dividend paying US equities. My TFSA is full of the middle ground made up mostly of Canadian equities and reits. If I see a company where i want to hold for a long time and but am still sorting out the valuation its a taxable account thing. If i get a loss over a few years I can bank the loss and buy back lower for the long term. It doesn't always work as i sold SSD, GGG and builders first Source seemingly too early. Maybe i need a new account where i forget the password.

lol. I saw a boat last summer named Bre xtravagance thought it was awesome. One guy made out good at least.

Thanks for posting this, really interesting guy. I have a small investment in Mako as my only gold miner exposure. Rare to see a seemingly competent and good communicator running a mine. Akiba is pretty forward with the operations and that is what i like to see. Keep the investors in the know. I am a gold as money guy myself but see the benefit in gold bars and less so in mining as the two are not the same. A company that produces gold is like a company that makes anything else. Gold as a physical holding of value is more similar to real estate or scrap metal sitting in the back yard. In my mind it will simply inverse the fall in purchasing power in our currencies plus a bit for sunk energy. If real inflation is 5% over 100 years id expect gold to be a similar return plus what ever the energy is required to extract it from the ground. I would love to see the webinar you mentioned as i guess i missed it.

No split for me. I just wish they would get down to 1 million shares so I could do some easy math lol. My math skills are even worse than our friend gfp Its certainly is not holding back csu or autozone or the brk. A shares so who cares about per share price. The b shares will likely be over 1000 in ten years, are we going to split again there?

I was replying to ValueArbs comment of Bezos girlfriend. I referring to breast size of wives or girlfriends as the true measure of wealth but i'm immature, sorry.

^^^ Ah yes, the true measure of wealth.

I totally agree. I dont expect tons of unemployment just changes in employment, probably a lot more standing around. I do expect that Capital will do very well as the owners of the machines and tech. I think the working man will feel hard done by because there will be considerable shifts in labour and they may struggle to keep up. Long term we will all benefit and our living standards are likely to be improved but as you should well know we dont see our lives getting better or worse, what we do is compare what we have to our contemporaries. I am richer than Jacob the rich of the 15th century because of advancements I had no part in but i'm poorer than Jeff Bezos therefor i'm am relatively poor. This relative lifestyle vs the owners of Capital is likely to widen even if everyone's lifestyle actually improves.

I'm sure the Chinese are plenty inventive and innovative but i would imagine most would try and get to more open societies in Asia or elsewhere before unveiling their IP. Having the fear of pissing off the CCP must push away a lot of their best and brightest. And yes the letter has lots of humour, some of it lands and some of it doesn't but he certainly tries.

The China section is mind boggling. I have no clue how it all plays out but a halving of population in 50 years is certainly going to cause some havoc. My e it works out like for the Japanese or maybe it doesn’t. I really enjoyed the letter this year. The detail on brk is so valuable to me, you can really get a grasp of the business and potential valuation.

This is basically Canadians and our housing market too. How many bought just to try and keep up. If your job is shit you have to find some other way to make money. Tough times

I think we are in the very early days of this. Candle wick straitening may be tough because of dexterity but the amount of real world productivity improvements are pretty vast. The loom was not perfect at first and the luddites made a mockery of it until the French loom arrived and they realized its efficiency so they tried to burn them down to save their jobs. Take a super rudimentary thing like splitting firewood. The average guy could split a face cord and feel good about himself in one or two hrs with already cut up trees. A super simple and very inexpensive firewood processer can cut to exact length and split about 3 cords or 15 times that amount each hour. so spend 6 grand and 15x your speed safer with better quality. Sure this example is really off the beaten path but if our entire ecosystem sees productivity improvements we will have a major jump in freed labour. Ive been researching building supply companies and the housing industry is ripe for robotics in the supply and finishing side. With Fanuc robotics and the touches of a Florida tech company Builders First Source is providing entirely pre-cut house framing packages that are accurate within 1/8 of an inch using nothing but robotic saws and the architectural drawings. This project is in its infancy and only available in Florida but they discuss it in their investor day so i'm thinking its working. Another one. The roadway reflective cats eyes are now starting to be installed at roughly 18 miles per hr by an automated epoxy and robotic stamp on a truck. This process takes roughly 2-3 hours per mile today with the most widely used practice. Our current way of doing most things is changing fast and smart machines combined with AI will be truly revolutionary. Now i'm pretty sure that the spoils of this is going to fall to corporate America and Capital in general. He who owns the machines... The working man better get ready to stand around and watch robots, maybe cigarettes will make a comeback just out of boredom.

I’m guessing Viking was wondering if we are going to become rich off of Fairfax. Is buying ffh today like buying brk in the 70’s. I honestly can’t say, if the structure is similar it may work out but I think WB has an edge on capital allocation that is almost unrepeatable for others. I really hope for all of our sakes ffh performs as well, so 20 years from now I could say I was part of that great run. I don’t feel as comfortable with ffh like I do with brk but that is some very biased thinking with hindsight. I have purposely put my long term holds into my taxable accounts so I’m less likely to trade and that group now sits with 78 shares of Fairfax. Here’s hoping we all do well.

I'm 39 now, my first glimpse in to BRK was as a 11 or 12 year old roughly, my Uncle Gerry would wax on about Ted turner and Warren Buffett and all the other big money guys down in America. You want to get rich move to Texas he would always tell me. He was an in demand hot work mason who would travel around North America bricking up active refractories and boilers. As far as I know he never bought a single share of anything, he was always afraid of the big collapse or the next scam. Anyway Uncle Gerry bought me a book about WB (Buffettology) when I was about 18. A shares were probably in the 50-70k range. I could barely understand it and didn't buy any shares until about 2014. I didn't get rich because I didn't know much then and probably still dont know much now. I, like my Uncle Gerry am always afraid of the next big collapse but to a lesser extent than him so I take profits too early or go to safety and quality when the opposite is probably warranted.

Well you could certainly give some examples.