maplevalue
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Posts posted by maplevalue
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From their 2021 AIF page 3:
QuoteFairfax Financial Holdings Limited (“Fairfax”) is a holding company which, through its subsidiaries, is primarily engaged in property and casualty insurance and reinsurance and the associated investment management. Fairfax was incorporated under the Canada Corporations Act on March 13, 1951 and continued under the Canada Business Corporations Act in 1976. Our original name of Markel Service of Canada Limited was subsequently changed to Markel Financial Holdings Limited and, in May 1987, to our current name of Fairfax Financial Holdings Limited. Our registered and head office is located at 95 Wellington Street West, Suite 800, Toronto, Ontario, M5J 2N7.
So is not the holding company, which issues the shares, is a Canadian company (i.e. would be subject to a potential tax)?
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https://www.reuters.com/markets/us/canada-propose-taxing-corporate-stock-buybacks-source-2022-11-03/
Rumors Canada about to tax stock buybacks, maybe this incentivizes FFH to do another Dutch auction sooner rather than later?
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https://www.reuters.com/world/americas/canada-targets-record-500000-new-immigrants-2025-2022-11-01/
500k immigration target for 2025, and attitudes among public generally positive, so immigration a continued tailwind for residential real estate.
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Bloomberg's translation of Xi's landmark speech.
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Comments on China around 25:30
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Does anyone know where one can read the entirety of Xi's speech in English?
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2 hours ago, Xerxes said:
Can I ask why interest rate hikes seem to have a outsize impact as oppose to QT when it comes to commentator on TV.
everyone talks about the next Fed meeting but what about the $95B rolling off the b/s every month.
why is that the so-call pivot is firmly fixed on the idea of Fed slowing rate hikes and eventually pausing. But no one talks about the un-printing
1 hour ago, Parsad said:Interest rates hikes tend to have a more obvious and immediate impact, thus why they get more of the headlines. Your mortgage rates rise, your HELOC rates rise, your credit card rates rise, the rate for the new car you are buying goes up, etc. Cheers!
Nobody really knows how much QT affects interest rates so the talking heads find it easier to just discuss the overnight rate.
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The Economist had an article on Xi this week (sorry paywall https://www.economist.com/briefing/2022/09/28/an-investigation-into-what-has-shaped-xi-jinpings-thinking), and I found this part interesting
QuoteIn 2009 the American embassy in Beijing sent a classified cable to Washington (later published by Wikileaks) about the assessment of one unnamed-but clearly trusted-Chinese academic who had known Mr Xi early in the Chinese leader's career. "Our contact is convinced that Xi has a genuine sense of 'entitlement', believing that members of his generation are the 'legitimate heirs' to the revolutionary achievements of their parents and therefore 'deserve to rule China'," said the dispatch. Mr Xi was not driven by ideology, it quoted the scholar as saying, but had chosen to survive by "becoming redder than red". By cloaking himself in communism, he would be seen by the party elite as a safe pair of hands.
Makes one wonder, particularly when viewing China news through a Western lens, how 'truly' Maoist Xi is. I remember when Trump talked about waging war in the Middle East and "taking the oil". Outsized rhetoric for political purposes (nobody could claim they would be tougher on the Middle East than someone who says that). Might Xi be employing the same hyperbole/sabre rattling, in order to defend himself from rivals in order to cement power here?
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https://www.linkedin.com/pulse/starts-inflation-ray-dalio/
Dalio has been spot on since start of COVID in his evolution from 'cash is trash' -> 'cash is trash but equities are trashier'. Well worth a read. Particularly interesting is his view inflation stays elevated.
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1 hour ago, tede02 said:
One big question in my mind is whether the ultra tight labor market is going to result in the Fed having to raise rates significantly higher than concensus. Everyone is talking about 4%ish being the magic number. But what if Fed Funds has to go to 5%, 6%? Stocks could really get smashed.
The estimates of the neutral rate are exceptionally uncertain, forecasts for inflation are exceptionally uncertain, and my feeling is that people have anchored themselves to what has transpired since 2008 as to what 'usual' interest rates are.
In the 2010s many people spoke about how the Fed was 'pushing on a string' in that they struggled to increase inflation via more and more extreme monetary stimulation. Which makes sense, their policies mostly juiced up financial assets which are owned by the rich so their easing did not create that much inflation since the rich will not change their consumption patterns that much if assets appreciate. It is completely reasonable that we are in the reverse situation today, where in order to generate even a modest reduction in inflation the Fed needs to move interest rates an outsized amount.
As of today, stocks, real estate, crypto, etc. are well above their pre-COVID highs. Therefore the vast majority of people are still feeling pretty rich. My sense is the Fed needs asset prices decently lower from here (via QT/interest rate increases) to generate a response from the real economy.
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27 minutes ago, Spekulatius said:
Interesting - there are several reports out that the Ukrainians have broken through the frontline east of Kharkiv. Apparently the Russian have moved forces out of the area to reinforce the Kherson front, where the well publicized offensive in the south has taken place. Now they are apparently getting rolled in the North.
Could be an absolute rout, if some sources are to be believed, but needs more confirmation.
Buying ammunition from North Korea is not exactly an indication of strength either. Saw a pic on of a spent Russian Artillery shell dated 1964. That's older than I am.
It does seem like the tide has turned. I do wonder if there is an element similar to Afghanistan 2021 where the paltry will of the defenders leads to a swift recapture of territory.
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https://www.economist.com/business/2022/08/05/meet-chinas-new-tycoons
- Some businesses suffering, but others thriving in Xi Jinping China
- Record 58bn in IPOs in mainland China this year (19bn in America, 5bn in HK)
- By 2020 privately controlled companies were half market capitalization of China’s 100 biggest firms, versus one tenth a decade earlier
- Five years ago mood began to shift: first crackdown on conglomerates, then shadow banks shut down, then tech giants hit with regulator probes
- Next generation of entrepreneurs, Mr Xi recently urged them to “dare to start a business”
- Unwavering support for startups, as long as focused in priority areas: cloud computing, green energy, high-end manufacturing
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18 hours ago, DooDiligence said:
We'll see if that inventory build is a new Fall console or just locking in materials.
Best thing they can do is continue to delay the new console. Recent PS/XBOX console releases were a bit of a gongshow with shortages. With the Switch performing as well as it is, seems to make sense to delay the new console until you are reasonably confident you can produce enough of them, and pair it with a blockbuster game release. Possibly a 2023 Holiday release alongside the new Zelda game.
On another note NTDOY just previewed the new Pokemon game, which appears to be a shift towards the open-world format (which for that franchise appears to be a major change). Relatively positive reaction around it, with a Switch install base of 100mm and a Nov18 release date, could be 'the' holiday game.
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On 7/16/2022 at 11:34 AM, Spekulatius said:
Festivals for example are hideously expensive and over priced nowadays. Thats where I would start cutting back.
The point of me posting the episode was more about hearing the couple's justification for buying a condo. With that said I would tend to agree with the host. You have two 25ish year olds who have been locked away for two years. They are unable to save money, and at the current rate will have to dip into investment savings soon. You could either advise the couple to a) cut back on the things the couple loves doing the most (advice unlikely to be followed, and based on their life stage probably does not make sense) b) rent instead of own a condo (a rip the bandaid type solution which would require some work up front, but after that nothing...i.e. not a hard financial plan to follow). Renting seems like a good solution for these individuals.
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https://www.iwillteachyoutoberich.com/049-eric-elena-part-1/
Good podcast episode about a Toronto couple buying a condo and slowly going broke because of it. Good profile of the psychology behind Canadian real estate.
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35 minutes ago, Peregrine said:
Well, the feds just pushed the annual rental increase to 2.5% and I suspect that there will be a lot of political pushback against that number given where inflation is.
Just Ontario that has this https://toronto.citynews.ca/2022/06/29/ford-government-caps-rent-increases-2023/. Honestly I doubt there is much pushback since Ontario govt just won a majority and 2.5% is peanuts compared to what it 'should' have been (5.3%).
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With Gates how much of his wealth is from making a great product as opposed to doing a bunch of anticompetitive stuff which the government should have regulated more aggressively but did not.
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Around 6 minutes Bridgewater's Karionol-Tambour discusses how commodities a tricky inflation hedge given idiosyncratic risk, but also their sensitivity to growth https://www.youtube.com/watch?v=UhM8ETH-H3c&list=WL&index=25.
REITs an interesting asset as their cashflows are inflation protected, and in a growth slowdown scenario you still can probably get rent growth (especially if next slowdown we see more direct cash transfers to individuals). As @Gregmal has said they are like the new and improved treasury bond.
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Summary of the story is that TTC ridership in Toronto is about 50% of prepandemic levels.
With each passing day it seems like hybrid/fully remote is here to stay, in Canada in particular which has less of a hard charging business culture than the US. Toronto housing will probably be fine given there are many reasons people want to live there.
I would think Ottawa real estate might struggle given the public sector will likely keep WFH/hybrid more than private sector. Minto REIT (40% Ottawa) has struggled as of late
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18 hours ago, shhughes1116 said:
Ukraine’s problem is that they are struggling to outfit units with all the stuff needed for the front lines - helmets, boots, NVGs, etc. By the end of the Summer, Ukraine will likely have 750k mobilized troops, most of whom will already have combat experience from the Donbas.
This is very interesting. Do you have a source for this?
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10 minutes ago, Gregmal said:
But thinking the world will end or that there’s nothing worth investing in is dumb.
To many people's careers in the finance industry a indexed 60/40 portfolio producing negative real returns is the 'end of the world'
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27 minutes ago, Gregmal said:
Exactly. If you have time inflation at 8% for this year why would long term assets need to be priced as if this is occurring in perpetuity? To hold this belief you need to believe that the 8.6% is never coming down. Given how much of this is supply chain related….I don’t know how anyone holds that belief. Investors don’t need and aren’t entitled to real bond yields. They have had them in ages.
Well in fairness this is the 2nd year of 'transitory supply chain related inflation' one can forgive investors for thinking this might be persistent (especially if there is no quick solution in Ukraine).
You are correct investors are not entitled to real bond yields. With that said real yields serve as inputs into the save vs. spend decision, and the more deeply negative real yields are, the more economic actors are incentivized to pull forward consumption. So if the Fed wants to slow economic activity, it's not enough to just have a higher nominal yield, but real yields matter as well.
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