Xerxes

Thanks for the explanation DeepSouth. Unrelated, MSTR said on a SEC filing that its expects at least $284.5 million impairment on its position by close of June 30. Perhaps similar picture will unfold for Tesla, whereby providing an opportunity for those that are interested in Tesla and its actual business (that is if Elon Musk has not been purchasing more BTC through Tesla, after causing a price depression via his tweets)

Amazingly BB has been holding up for almost a week now. LOL... This is unlike the short-term price spike in January.

I actually consider Saylor to be a visionary of a sort. But considering the fact that his company had a flat stock price for 15 years and then boom, i need to also add that he is a very good marketer. But I believe he genuinely believes what he says, I guess that's what it takes to be maximalist. During a Bloomberg interview last week, the host had to ask him twice "why should investors bet on a company' specific capital structure (i.e. MSTR) vs. buying a business that has a growing competitive business that compounds". He couldn't answer. He kept talking about his line about treasuries losing value 20% per year till infinite. 5 years from now, we will look back and see late 2020- early 2021 as "peak liquidity", when baseball cards, limited edition toys, crypto, SPACs all soar, with their proponent painting a future that is set in stone and that was unchangeable. Bitcoin has a future, but in the short term, it is stuck with the "too much liquidity" narrative, and will behave as such. It needs to raise above that.

Wouldn't a large 4X oversubscription push the 6% yield to something much lower ?

My bad, Saylor just threw in $500 million more. He is putting in his last dollars now ! I am unsure if I am mixing the data, but it looks to be junk-bond +6% yield, while the big chunk of debt he issued early 2021, had a very low yield.

If BTC was in up-trend, the news about US Gov recovering the stash from the fraudster would have been seen as positive, in some weird way and the media would be building a narrative around that as to why. In a down market, everything (good or bad) is seen as bad news or at best neutral. Bottom line the news-feed is irrelevant. The maximalist are all in, they put their last major buy in 2020 and early 2021. Saylor is in with his $2B+ exposure, but going forward he can only contribute marginally ($10-15 million at a time ... and not billions). Therefore, that marginal demand that will pull BTC out of the hole has to be new fresh money. I am thinking this will take a good six months before working itself out of the hole. On Mass Mutual, Paul Tudor Jones, Stanley Druckenmiller, etc., all I remember was Saylor pumping BTC back in the fall of 2020, keep using these names. I got so use to see his face on TV with that ship-model behind him. Druckenmiller had himself said on record that, his exposure to Bitcoin was taken out of context. If institutional investor brought legitimacy to bitcoin, they also brought with them trader-mentality en masse. Interestingly, it is the retail that is largely buy-and-hold with institutional investors being the "swing-trader". But no worries, I think, the "swing-trader" will be back in 2022. Over the long term, this will be another test that i think Bitcoin will pass and re-bound higher from here. A super interesting video to watch on YouTube is the debate between Saylor and a gold mining executive. It is on YouTube and is called Bitcoin vs. Gold. I highly recommend and was filmed at the height of Bitcoin peak. My respect for gold actually went up after watching it. (2) Bitcoin vs Gold: The Great Debate with Michael Saylor and Frank Giustra - YouTube

hahaha Cheers !

Come one, Blackstone, give me a chance again, this time I promise I will buy !! I will not be stupid this time around.

All great points, however, it goes back to => "sell what you want to sell" vs. "sell what you can sell". In an upmarket, one can do both. Sadly, in a down market, you can only sell what you can sell (best of breed), and wished you had sold what you wanted to sell (but the liquidity is gone now). I wouldn't be so pushy, if the portfolio was not so maxed out on the equity allocation.

Agreed Folks shouldn't be in FFH or for that matter any other "asset manager", if they expect the "asset allocator" to be on the same wave length as them. If folks want a conglomerate-like entity with large exposure to large technology cap, the S&P500 fits the bill with a 25% exposure to those names and 75% exposure to 495 companies. I own ONEX, and like them to do whatever they do, in their own weird way. Same as my ownership of IAC or FFH or BRK or BAM. The only one I am missing is BX. I am ok with FFH changing their 'investment philosophy' but they have to get to that conclusion on their own, not because I wanted to be. For instance, i don't like Markel's broad equity exposure, so I am not in it. That said, we allowed to be uber-critical. LOL

Great episode Ep. 37: Commonalities of All-Time Great Investments | Being Polarizing | MOI Global

ok but I see it more as building leverage as you compound that initial seed money, with that leverage always being equal to 25% of the unrealized gain (i.e. yr tax rate on capital gain). Same example, if you sell at 80, so 8,000 on the asset side, that means 2,000 deferred tax liability + the rest ($6,000) being equity; with the deferred tax liability now being 2x my initial seed money. That is all well and good, but how is knowing that is going to help me retire early or stop government from picking my pockets, in a more practical sense. On a different note, I guess adding to the winners (i.e. raising average cost) is one way to lower tax, but maybe not, need to do the math.

SD, Can you elaborate on the bolden part a bit more, i lost it when i got to that part. Are you saying => it is good not to realize gain in a non-registered account as far as you can (by holding) vs. realizing gain and paying the taxman, if you have more/or/less than 5 bagger. I guess it depends all long term rate of return vs. alternative. Not sure I follow ... i am not bright on Fridays "In Canada, an individual currently pays tax on 50% of their gain; to simplify, assume a 50% tax rate. If you bought XYZ at CAD 10/share and sold for CAD 50/share, you would owe CAD 10/share in tax [(50-10)*.5*.5). Invert this - and you quickly realise that the CAD 10/share tax saved by NOT selling, is now financing your CAD 10 purchase at an interest rate of 0%. God bless our tax system! However, you need a 5 bagger+. Sh1te coys, that were ideally just fallen 'angels' covered in mud!"

Not sure how long is the blackout period and/if suppose to be a month long. Last year's Q1 results were released on June 24th. Assuming same date for this year, that is very long blackout. Seems to be odd that insiders cannot trade the stock for full 4 month in a given year.

Parsad, I am a Prem W. fan and own it specifically to have a different point of view than my own. But while it is true that they couldn't capitalize in Jan, BB should have capitalize on it. It wasn't too fast for the mediocre management of Viacom, that capitalize on Archeaos bidding up their share price, by pulling an equity issuance into the rally right before the plunge. Ok maybe it was too fast back in January, but if AMC could be ready for this second round and issue stock, so should BB (assuming FFH is luck-ed out again).

Charley Ellis - The Magic of David Swensen (EP.197) - Ted Seides (capitalallocators.com) new episode

I will just add, i am not looking at position sizing in isolation. I am personally very much in favor of concentrated portfolio, that is why i am in FFH and i think i made it clear over the past year or so. It is the overall story when it comes to the names they had classified as "bad investment", Again ... if not selling now those bad apples then when. If 45% illiquid position is a reason why they cannot liquidate partially at least Resolute now, well guess what, that reason will always be there. It was there in 2018 when the price spiked. But you wont always have a once-in-a-hundred-years event that brings up the tide on these bad apples. If they want to ramp up their investment in Atlas, all good for me. Resolute and BB are relics of the past. FFH 2.0 doesn't need them, but they are more than welcome to keep a small liquid exposure on them going forward. PS: And btw, a concentrated portfolio for FFH may or may not mean a large % holding of the underlying equity. One can have a very concentrated portfolio but have very large liquid investment (i.e. Berkshire and Apple; Pershing Square and its 10-stock portfolio). To say that FFH needs to have large illiquid position because it wants concentration is not correct, IMHO.

Thanks Greg Nothing to do, but just fits a pattern. For a company that prides itself as nimble investor with low overhead and that they can take advantage of opportunities, their inability to monetize their list of unwanted holdings speaks volume. I understand the technicality surrounding the January, (we ll give them a pass) but if they are not doing anything now, this is truly fits a pattern. On Resolute, I might add there was also a price spike in 2018, they just didnt do anything about it. You are not going to hear me complain about Atlas or Stelco, even as their share price spikes, because I believe they believe in them. All good for me. But for the two properties (BB and RFP) that they have gone on record in saying that they thought it was a mistake/bad-investment, for god's sake monetize it or find it away to capture that gain. If not now, then when ,,,,, Even he himself has said on record that they have made mistakes on in terms of position sizing in their FAH Africa.

Excerpt from Q4 2020 conference call. Anyone remember the Rude Gentleman making the comment below. Well guess what, he is going to be there on Q2 2021 conference call I think. The guy was completely off, but he was right about Blackberry. "Unidentified Analyst I believe that it is time that you step down from having primary investments, responsibilities. I know that Jamie manages some capital, Wade manages some capital. We all know that those are very small portions of the capital base. And I think you are always quoting your long-term track record, but I can -- I know when the man is out of tune with the markets and I also think that it was a huge mistake if you did not take the BlackBerry gift that was given to you by the market. And I also don't think that you're doing deep analysis on your holdings. I suspect that you probably don't do a lot of diving into the financials, the statements. You probably don't understand the microeconomics of the businesses you're buying. You probably are not talking to customers, suppliers, competitors, former employees. The investment business is a very competitive business. It's not like it used to be. I am not saying that, you should go out and buy technology stocks, but a sense when the man is not competitive in the field and is not working hard. And I think it's time that you step down from primary investing and I'm sure many of your associates agree with you but because they're Canadian, and tend to be nicer than Americans they don't say anything. And the banks don't ask you any difficult questions, because there's so few good companies in Canada, and they get financing fees from you. So they ask cowardly questions. Thank you. Prem Watsa Good points. You're entitled to your opinion, and we will let time decide that, okay? So thank you very much for your comment."

Funny, how finally it has become plain and clear that the cost of a large illiquid position + >10% far outweigh the benefit of it. What benefit did Prem had by being a director on BB' board or for that matter a major holder of RFP. Nothing. With the warrior-trader-priests of WSB Forums creating waives on GameStop, AMC and Blackberry, overturning CAPM and everything else that was normal, ... this is truly a right-tail event for FFH to take advantage, .... TWICE at that.

I get a feeling that come August, during the Q2 conference call, Prem still hasn't done anything on Resolute and Blackberry. And then few quarters later, he sell both at the loss, which he couldn't do before because [insert list of reasons] Maybe i am just a pessimist when it comes to FFH ability to at least partially monetize at the right time. Don't expect miracles here.

Exchange between Bloomstran and Chamath on twitter (mostly one-sided) Christopher Bloomstran on Twitter: "If you can maintain anywhere near the 19% advantage over the index & allocate your way around the inevitable purchases of terrible businesses then another two decades hence you can crown yourself the new Buffett. In the meantime the comparison is a thoroughbred to a jackass. 22/" / Twitter

Indeed, Excerpt from the 2012 letter "Long treasuries have outperformed common stocks over the last 20 years as rates have declined from 7.4% in 1991 to 2.9% in 2011. This will not be repeated in the next ten years. The game is over for long treasuries (almost!). Even if the rates go to zero, long treasuries can provide a compound annual return of only 6% in the next ten years compared to twice that by stocks, if we assume no change in P/E multiples and historical earnings growth. If P/E ratios revert back to their mean, shares of companies like Johnson & Johnson can provide compound growth rates of 20%+ in the next decade. We have already sold half our long treasury position at a yield to maturity of 3.0% (realizing a gain of $271 million) and we expect to sell the remaining soon. In time, we will remove our equity hedges as the risks that we see get discounted in common stock prices. The major risks we see are in the next three years, as we expect common stocks to do very well in the next decade" My conspiracy theory is that, in 2012-2013, they had no choice but to sell out their Four Horsemen (Wells Fargo, J&J, Bancorp and a fourth one if there is one) to fund closing the losing shorts. Kind of like a long-short position that was unwound. It is possible that if they were not constrained by the losing shorts, they would have kept those higher quality entities, instead of climbing down the quality ladder. Excerpt from the 2013 letter " A summary of our 2013 realized and unrealized gains (losses) is shown in the table below: Realized Unrealized Gains Gains Net Gains (Losses) 1,324.2 (Losses) (Losses) Equity and equity-related investments (1,350.7) The table above shows the realized gains (losses) for the year and, separately, the unrealized fluctuations in common stock, bond and CPI-linked derivative prices. With IFRS accounting, these fluctuations, although unrealized, flow into the income statement and balance sheet, necessarily producing lumpy results (the real results can only be seen over the long term). This table is updated for you in every quarterly report and we discuss it every year in our Annual Report. In 2013, with common stock prices going up significantly, we sold over $2 billion of our common stock holdings, realizing $1.3 billion in gains, offset by the realized loss on our hedges as we reduced our hedges proportionately. Net net, we realized $29 million in gains from the sale of common stocks and bonds and we had unrealized investment losses of $1,593 million (including almost $1 billion from bonds and $0.5 billion from common stocks), for a net loss of $1,564 million on our investments. Our defensive hedges of our common stock portfolio cost us approximately $2 billion in 2013 because of rising markets – a significant portion unrealized of course, in the sense that we continue to be hedged. Given our concern about financial markets and the excellent returns we achieved on our long term investments, we reluctantly decided to sell our long term holdings of Wells Fargo (a gain of 125%), Johnson & Johnson (a gain of 47%) and U.S. Bancorp (a gain of 135%)."

Pedro, FFH is a right-hand-side-balance sheet investor. (i.e. financial investor) when it comes to most of its non-insurance subsidiaries or holdings. Don't count on any strategic synergies. Resolute is not a Buffett-like investment where one can take a high-note and declare oneself long-term investor with infinite horizon and then sleep on it for a decade.

Thanks. I am actually finishing the 2014 book. Here is an interview the author on his second book on Bloomberg Front Row "Amazon Unbound" Author Brad Stone on the Rise of Jeff Bezos - YouTube