Spooky

My BAM dividend was automatically reinvested for 1 more share... awww yaaaa

Seems like every pundit and podcast is talking about holding cash / a further crash from here. Don't see any optimism out there. Probably means its a good time to buy...

LOL

Does anyone have good resources to study moats?

The problem is that 8% figure is backwards looking, what happens when we get to the start of 2023 and the comparable figure changes? People will be talking about deflation soon lol.

Highly recommend Thinking in Bets by Annie Duke.

“People have always had this craving to have someone tell them the future. Long ago, kings would hire people to read sheep guts. There’s always been a market for people who pretend to know the future. Listening to today’s forecasters is just as crazy as when the king hired the guy to look at the sheep guts. It happens over and over and over.” - Charlie Munger “I’ve never been able to predict accurately. I don’t make money predicting accurately. We just tend to get into good businesses and stay there.” -Charlie Munger

Curious about where the people who have retired early are living. I'm in Toronto and don't see any possibility of being able to own a property here with no mortgage and retire early.

Beautiful! I just got back from another trip to Lake Superior Provincial Park camping at Agawa bay for a week and it was once again stunning. One of the most beautiful places I've been to in the world and the sunsets over the bay are legendary. Doesn't feel like you are in Ontario at all, driving up the coast of the lake feels like being out on the West Coast. I've hiked the full coastal trail at Pukaskwa (roughly 60 km), it was intense but extremely beautiful and the campsites and beaches are amazing. Some of the best beaches in the world and no one is there. The trail is very isolated since you can only enter from the North end or via a boat. The water is very cold but you get used to it over time, nice and refreshing!

Looks like Bridgewater is predicting a period of stagflation ahead: https://www.bridgewater.com/research-and-insights/an-update-from-our-cios-transitioning-to-stagflation

I agree and hope Xi doesn't get a third term - his sharp pivot towards Marxism and nationalism and away from Deng Xiaoping's reforms is bad for China's economic growth long term and the world. Real estate is a huge part of China's GDP (~30%) and it involves significant amounts of leverage. Average people boycotting their mortgage payments leading to government censorship. Seems like a huge meltdown in the works to me. The narrative that China can handle it no problem seems odd to me and I haven't seen any good evidence to this effect - similar to the GFC we don't know the extent of the contagion to the different banks from this fallout and real estate is a much higher percentage of GDP than it was in the US at the time. Combined with most average citizens' wealth being tied up predominantly in real estate and there is a big problem there. Add on top of that zero covid and like 20% youth unemployment and things could get ugly quick. Also, they have crushed what was a vibrant VC ecosystem and replaced it with central / state directed investments in certain industries.

Started reading this book and have been really enjoying it so far. Very informative and clearly written, having a hard time putting it down.

That line jumped out to me as strange as well. I think BHE is more fragmented comprising lots of different business units some of which might have very strong moats but others not so much. I do think BHE being able to deploy more capital from the mother ship into renewables earlier that the competition gives them a huge first mover advantage and allows them to strengthen their moat entrench themselves - for instance, the transmission line project that was recently approved, once it is built they will essentially collect royalties on critical infrastructure for years and there won't be a competing project to displace them.

No vacation home but looking into potentially buying a cottage somewhere in Ontario (if anyone has any advice / locations I'd love to hear it). Favourite vacation spots: Tokyo / Kyoto - I've been to Japan a couple of times now and I miss it there. The food is amazing and the contrast between the ultra modern Tokyo and Kyoto with ancient temples is surreal (my favourite place in Tokyo is Meiji Jingu shrine - feels like you are transported to another realm when you walk through the Torii gates). Other favourite places: Berlin, Amsterdam, Mexico City (a hidden gem), San Sebastian in Spain, Utah, Detroit (for Movement festival), Tofino / Long Beach. Must see places: Really want to go to Vietnam, Hawaii, South America, Yellowstone / Montana. Next adventure: Going on a camping trip to Lake Superior Provincial Park which is a really beautiful part of Ontario, the drive along the coast is stunning and there are some of the most beautiful beaches I've been to in the world with almost no one there. Also going to a destination wedding in Dominican.

I tend to agree that the giant divergence between home prices and incomes / inflation since the early 2000s is the sign of a structural issue in society (primarily in Canada). As a relatively young Canadian, the cost of housing is a huge concern, even with a higher than average salary. I don't know how the average family will get by. Combined with higher taxes, it is a double whammy. Unless we figure out how to make the cost of housing / living more affordable there will be societal unrest or many young people will leave the country.

Amen

Kind of a disappointing article to be honest. Give me the full interview video / transcript!

Anyone got a PDF

The Most Important Thing is great - so much wisdom crammed into a small package.

Some really good points above. Something that has really helped me is to take a long term view. Check out this chart below (from Li Lu's paper on value investing in China). If you invested 1 US dollar in the stock market in 1802, after discounting for inflation, you would have experienced an appreciation of 1 million times the original value over the past 200 years (as of 2011)! Stocks significantly outperformed the other asset classes below. Because of this, my age and my time horizon, my portfolio is basically 100% equities and some real estate securities with the goal to just keep compounding over time. I also have a small reserve fund for emergencies and so that I never have to be a forced seller at a bad time. I recognize that my wealth / portfolio could be very volatile but I don't view the volatility as a problem as long as I just keep my cool and stick to my strategy - the real risk is not having enough funds in retirement. If a big 50% drop comes I will ride it out and view it as a great opportunity to deploy more capital. I just make sure for the individual stocks that I buy they are bomb proof - 60% of my portfolio is in Constellation Software and Berkshire which are nearly unkillable and will do well in any macro environment, I don't have to stress, worry or even check what they are doing in the short term.

More BRK

Agree, just ignore the noise, buy great individual companies with a margin of safety if they become available and hold for 2-3 years.

To me the last year and a half has been such an interesting lesson in market psychology, momentum and reflexivity - Mr. Market has shown the full range of his manic depressive tendencies. When the market was going up people were pouring more capital into the fire leading to an obvious speculative frenzy. All it took was for a shift in investor psychology and prices to start declining and all the rats jumped off the sinking ship leading to huge swing in downwards momentum. Now people have been talking about a recession so much it is almost being willed into existence. I think the reasons are less important than the psychology at play.

I find it hard to buy the savers got screwed narrative - they are generally older and have assets which were all significantly inflated due to the fed action (including bonds). Boomers made out like bandits. It's really the young people / poor people with no financial assets that got screwed. Also, we need to look at the alternative - if the Fed had let the financial system collapse and didn't recapitalize the banks we would probably have been looking at a second depression. Was just watching this interview with Munger and he talks about the Fed's actions since the GFC and he thinks the Fed's actions worked and they didn't have much else that would work:

Interesting topic, something I often think about a lot is what is "value" and if GDP is the right metric / north star to continuously focus on. My view is the correct answer to this question is both yes and no. Clearly, some of the billionaires in the world (past and present) have created tremendous value for society and this is easily measured by dollars in the bank. Think of Henry Ford, the invention of the modern assembly line, Model T, etc... revolutionary. In the mid-1920s, his net worth was estimated around $1.2 billion. On the other hand I think a lot of value created in the world is not measurable in dollars or the creator of that value does not necessarily reap the financial rewards. For instance, look at Adam Smith and some of the other Scottish academics that created the intellectual framework underpinning the modern world. Did Adam Smith's wealth equal his contribution / value to the world? Definitely not, even though his ideas help create trillions in value that we see today. Lastly, there are so many "intangibles" in society that have value but are not measurable - like art. Look at Leonardo Da Vinci and the works of genius he bestowed on mankind. As far as I understand Da Vinci was not personally wealthy and was actually quite poor. Same with Van Gogh - he was basically destitute his whole life. Or look to philosophy - many of the great thinkers of the past were not wealthy. Socrates was a stone-cutter / mason. And what about civil service? Surely that has value but civil servants don't (usually) acquire much material wealth. Finally, works of charity - Ian Flemming is revered not just because of his discovery of penicillin – which has saved millions of lives – but also due to his efforts to ensure that it was freely available to as much of the world's population as possible. The full financial benefit of his contribution to society did not accrue to himself personally.