scorpioncapital

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The argument he gives is pure physics, it's like at the atomic level, you can't argue with input-output of calories. He seems like a pretty slim guy for 85. But there may be other issues besides weight such as quantity and quality of micronutrients.

https://www.mccarthy.ca/article_detail.aspx?id=7250 The banks are most certainly not going to be saved 100% in a crash. But depending on how much insurance the government housing agency insured and how much they are on the hook before the banks get hit will depend whether the banks have a big problem.

Is there a full version of the interview?

Keep in mind that there is pass-through debt. Many of these "stable" companies you leverage 2:1 are in turn leveraged 1.5 or 2 to 1 or more. So your leverage is really astronomical. I prefer to take the leverage at the corporate level as they can lock in a long-term low rate. Your IB rate may go up any time. Likewise, even stable stocks can drop 20 to 25% in a recession - depending on their own leverage ratios. I would add an extra 2 conditions. 1) That the stable company you buy is not excessively leveraged itself and 2) you are also not excessively leveraged. I would draw the line at 1.5x for both.

Not a bad book - the author actually was an investor as well. http://metaphysicspirit.com/books/How%20I%20Found%20Freedom%20in%20an%20Unfree%20World.pdf https://s3.amazonaws.com/fel/pdf/failsafeinvesting.pdf

He is fundamentally misunderstanding value if he thinks there is some period where cigar butts should somehow outshine. Cigar butts should never outshine really, there's a reason for that. Probably what he's trying to do - and what he might have come to realize a while ago is that GARP is where it's at. Growth is a fundamental component of value. What matters is how much you pay for that growth and your backup plan (that's the value part) if it doesn't materialize. Best to find something that would be ok under several scenarios. But I would say his new strategy at least has the hope of being better even if he pays up. What matters is his skill level in playing the game and how well he connects the dots. That's why great investors are rare birds.

I thought this book was pretty good - https://www.amazon.ca/Merger-Arbitrage-How-Profit-Event-Driven/dp/0470371978 But it lacks a few real world issues like Federal anti-corruption risk. The lure of arbitrage seems to be to beat bond returns in a short period of time. Yes an investment rated bond may yield 5 or 6% leveraged up but might mature in 2-5 years. If you want to hold that long without market fluctuation risk. Conversely with arbitrage you will take deal break risk but may have a return in as little as 3-6 months. Also depending on the type of deal it will be taxed as capital gains which are in some cases lower than investment income so it may be comparable to a tax-free or zero coupon bond.

Some of these photos look like parts of Eastern Europe or former soviet countries :) You can get a similar property for $30,000-50,000. You can buy 20+ houses for the price of 1!

Some countries don't even allow principal residence interest deduction - like Canada. And in fact, prices are somewhat higher than in the States.

They should look at the question of people with dual citizenship. I read an article that said that the numbers are low because of this , also there are other issues that cause foreign ownership not to be counted, such as buying in other people's names or corporations. Call me a cynic but this is pure propaganda to keep the number low to keep the housing market chugging along.

That's an interesting arbitrage spread. 14%. In today's environment, a spread like that would imply a real risk of the deal not closing. Look at AGN/PFE which had a 20% spread just before blowing up. If you had leveraged up 3:1 or higher on that you've lost 2/3 of your money. But of course the matter here is analyzing the situation. I suspect, however, that spreads were higher in those days - as were interest rates and inflation.

I was reading this by Ben Graham where he advocates using stock dividends instead of cash dividends (from what I can ascertain this is almost the same as spinoffs, or possibly a "regularly paid spinoff"). http://www.rbcpa.com/Common_Sense_Investing_The_Papers_of_Benjamin_Graham_1974.pdf He writes that corporate income tax is paid in 3 layers and one is alternative minimum tax "Earnings improperly accumulated – i.e. retained by the corporation for the purpose of evading the payment of personal income tax by shareholders – are subject to a penalty tax under Section 102 of the Internal Revenue Code." "It is an evasion of the tax law to retain earnings not needed in the business in order that stockholders may be spared personal income tax thereon. But, conversely, the purpose and provisions of the tax law are complied with then earnings are retained for expansion. " So it sounds like a little bit of what Berkshire does with putting lots of retained earnings back to work as capex to grow. BUT, Berkshire itself pays no dividend and retains everything. So I was wondering how come they don't pay AMT - is it because holding companies can retain as much earnings as they want?

Why do you have to do anything?

if you believe the panama papers, untaxed foreign wealth. When you have an extra 30% to play with and you can borrow 3:1, that's 100% higher prices you can afford to pay right there.

I would think that the "reasonable part" of GARP precludes the concept of a bargain. Otherwise it wouldn't be GARP, maybe GABP - growth at a bargain price. That would be hard to find in most environments except for the occasional market storm.

Which is more likely? Rents double to catch up with prices or prices halve to meet rents? The way prices are rising suggests hyper-inflation in Canada but this is hard to justify given a potential recession and not much wage increases.

If the wealthy are using B.C. as a bank account then I have to ask, what's wrong with a regular bank account at the local bank? To put your money into an illiquid asset with a speculative element suggests it's more than just storing wealth. Perhaps there is a cultural component to it, money goes where it's welcome and B.C. has made it so welcome that it has even turned a blind eye to crime and taxation to encourage it.

So if it rents for $24,000 per year, then at this listing price the yield (as an investment) is 1.3%. That's a little less than what you can get for cash sitting in the bank. Likewise, at the assessment price of 1.1 million, the yield is 2.1%. Also something you can probably get at the bank. I'm even wondering if the property assessment department is drinking something as well! For that money you can get something in the south of France or Spain and still have spending money left over.

Some people say Canada has recourse mortgages but if many buyers are dual citizens, they can pack up and leave the banks holding the bag without much recourse. This is a dynamic that may not existed to such a degree in the States. I wonder how a bust would affect the dollar...

Another possible scenario is flat (high) prices for a very long time. So say today's high prices with no increases for the next 10 to 15 years. Of course such precision is unlikely given human nature but it is a possibility if there is significant government intervention.

No I disagree. You can accelerate your learning of this game, usually it costs alot. ..The more you pay, the sooner you'll get there. But you have to combine it with the right teaching material. Despite what people say about Ben Graham, the best teacher and reading material that has accelerated my learning 1000% is Philip Fischer's 2 books, Common Stocks & Uncommon Profits & Paths to Wealth through Common Stocks. But here's the rub - I read the books once 15 years ago and made almost zero practical impression, I read them again just recently and now everything makes sense in a way it never did. So the knowledge has to get into your DNA, and right habits too.

It's not the crack shack it's the land. Price of a house relative to the land is kinda peanuts which is why they say real estate is about location, location, location. Of course if the location is out in the country then cost of the house as a % is going to be much higher.

Transparency usually comes after the bubble is pricked because it helps to prevent the next one, but when in the middle of the bubble, politicians want the opposite since going from opaque to transparent could very well burst it.

It's very hard to have major bubbles in a highly regulated economy (Canada may be in the middle of the socialism spectrum but it leans more that way than say the US). This is because pretty much the only thing you can do is squeeze your citizens and most times they just take it.