Spooky

My favourite daily news are the Real Time Economics and the 10-Point email newsletters from the WSJ.

Do we actually have evidence / data that crime is on the rise in the US and that it is worse in big cities / democratic controlled regions? Or is this just perception? Sorry I haven't been following this thread closely but some of these articles were interesting but a little dated now: https://fivethirtyeight.com/features/many-americans-are-convinced-crime-is-rising-in-the-u-s-theyre-wrong/ https://www.npr.org/2022/10/27/1131825858/us-crime-data-midterm-elections From the FBI's 2021 report it looks like the murder rate went up in significantly from 2019 to 2020 but it is still 30-40% lower than the 1990s (this is national data).

This is also just part of the story with the bank mortgage books which are higher credit quality mortgages - there is a whole private mortgage industry catering to people who didn't qualify for a mortgage from the bank.

Interesting article, thanks for sharing. Looks like roughly 30% of TD and BMO mortgages are longer than 30 years now due to negative amortization up from 0% a year ago. 20% of CIBC's Canadian mortgage portfolio fixed monthly payments are no longer covering interest. RBC doesn't allow negative amortization but 20% of their mortgage book is paying interest only. That's 4/6 of the big Canadian banks and the other two are likely in a similar situation. What happens next? People keep paying their mortgages indefinitely / in perpetuity hoping that interest rates come down? Essentially the banks are stopping distressed inventory from coming on the market and creating a floor in prices. Does this dam break eventually?

Constellation Software. Our main competition for acquisitions are PE firms but we have a much stronger value proposition for owner operators looking to sell their businesses. We also don't sell business ever so are in them for the long haul, not to chop and change them.

I think this is right and is related to the CHIPS act passing.

Damn, I better sell everything...

Started a position in JOE

What's he been up to?

This is correct - once inflation starts to get higher than 4% stocks perform poorly. However, this is an interesting discussion because I think both TwoCities and Vinod are correct - the question is really one of time horizon. Bonds / bills etc. can outperform stocks in the short term but over the long term stocks will dominate. Also, each inflationary period is slightly different, it is not a one size fits all story. For instance, if you look at gold's performance during different inflationary regimes, its performance does not necessarily line up with an inflationary hedge. There is a good analysis of this in Bernstein's book rational expectations.

To the moon!

I'm taking it right now. I'll let you know at the end. So far I don't find the pre-recorded video lectures that great. I feel like all you really need is this book (which is great): https://www.amazon.ca/Value-Investing-Graham-Buffett-Beyond/dp/0470116730/ref=sr_1_1?keywords=value+investing+greenwald&qid=1680893407&sr=8-1 Luckily I already had it since it is not technically required for the course.

This environment still seems pretty bullish for hard assets like real estate in Canada. Anyone got any Canadian listed real estate companies / REITs they like? To me it seems like the Bank of Canada is stuck between a rock and a hard place, inflation could be running too hot but they can't raise rates much more without breaking the housing market which is a higher percentage of GDP than in most other places and causing severe pain to the economy. Already seems like they blinked.

There was a recent Odd lots podcast saying that the golden age of being a landlord is over as well as some articles in bloomberg about it.

That recent FT article on horse betting was super interesting... seems to me that this is the future of investing as well given that Buffett / Munger always compare investing to a pari mutuel system. I've been envisioning a market dominated by rival AI algorithms battling it out head to head (which we already have to a large degree) to see who has the better AI. Where can humans retain an edge in this world? Is it still identifying qualitative factors like management quality / brand value? Or will AI surpass even the greats like Warren? So should we all just buy the Vanguard Total index? I've also been thinking of a side project on training a Buffett Bot... anyone want to look into it with me?

Buffett definitely saw this coming. Does anyone have any guesses why he kept BAC?

me

This is an interesting question. It seems like there is so much private capital out there now making loans that can compete with the banking industry. The banks do have an advantage in a sense they can essentially create money through their access to the Fed (but I still don't fully understand how this works in practice). I also don't think the traditional banking model really works when the yield curve is inverted (i.e. borrowing short and lending long).

Beautiful Spek

More BRK more BAC.

What's the gist of Elon's position? Seems like overall the US economy itself is still very robust despite all the noise.

A lot of the greats run a concentrated portfolio (Buffett, Joel Greenblatt, Nick Sleep). It works amazing if you're right! I read the Warren Buffett Portfolio by Hagstrom on Munger's recommendation and it talks about the concentrated portfolio, would recommend.

Are there any other companies out there that are following a similar board approach as Berkshire? It is really refreshing to read what they wrote in the proxy.

Me too

Her opinion piece in the NYT was good I thought. Also you might enjoy this piece: https://www.project-syndicate.org/commentary/predictable-silicon-valley-bank-collapse-by-joseph-e-stiglitz-2023-03