Dinar

https://www.nyc.gov/office-of-the-mayor/news/583-23/as-city-nears-arrival-100-000-asylum-seekers-since-last-spring-mayor-adams-lays-out-updated#/0 Free food, lodging, medical care, schools, et cetera.

Actually it depends on what Trump does. If he does everything that you say, but guts social programs and eliminates income tax for singles with income under say $50K, $100K if single+kids, and say $100K for married couple, and $200K for married couple with kids, then you will have massive increase in the labor force keeping a lid on wages, and much lower budget deficit as social spending plummets while GDP grows sharply, and federal income taxes increase. Keep in mind, immigration is a massive drag on the economy right now. Look how much NYC is spending on illegal immigrants - billions a year.

I am sorry, but I do not get the attraction. Let's assume normalized revenues = $14bn, let's assume that (EBITDA - cap ex) / sales can = 40%, which would imply a 50% operating ratio, I doubt that the company can achieve it but let me dream... Then, let's assume annual EBITDA - cap ex can grow at 1% + inflation per annum purely driven by pricing, then, using a real r = 6%, value: 20 * 14bn * 0.4 = $112bn before debt and tax, or $100bn post debt and $75bn post tax, using 226mM s/o, that is $331 per share. What am I missing? @dealraker?

I just violated it - I sold my HCA

This guy doesn't know his history. Last time USSR attacked Finland, it was clobbered. Finns will give the Russian army a bloody nose. Post Ukraine invasion, Russia will not invade anyone - its army isn't capable of winning a war.

There is a tax angle that is not being discussed. When a dividend gets paid and you own shares, in the US, it can be a qualified dividend, which puts you either into a 15% or 20% federal tax bracket on dividends + 3.8% Obama tax. If you had lent out your shares, then it is NOT a qualified dividend, but instead payment in lieu of dividend, and can be taxed as high 37.8% + Obama tax.

You guys do not take into account taxes. Paying 3-4% interest that is not deductible to receive 5-6% that is taxable depending on your tax bracket could be a negative cash flow event.

Charlie, if you provide the purchase date and price, I will run the return for you on bloomberg

I have seen it many times. I never enrolled for regular accounts because of adverse tax treatment, but may make sense for IRAs. IBKR tried to get me enrolled, but they promised 5 basis points a year in lending income, so I passed

If you mark to market their investments particularly the investment in Fairfax India, and private investments held through Fairfax india, including the airport, the tangible book value is closer to $1100 per share. Also, AJG Gallagher was very bullish on the call yesterday regarding insurance pricing for the next several years.

In my opinion, the purchase of Gen Re by Buffett was brilliant.

There is another way to look at this. Let's look at the price to book multiples of other reinsurers - Everest, RNR, et all. I think that they are trading at a price / book = 1.45 for Everest, 1.57 for RNR, so clearly markets expect good times to last. I have not by the way checked if it is accurate book, in other words were bonds marked to market? If we mark Fairfax's investments to market - airport, etc..., then price to book is 0.9, may be 0.8? So clearly cheap vs the rest of the reinsurance space?

@Viking, why do you think underwriting and reinsurance profits will be done in 2024 from 2023? Thank you.

I do not think that is correct. Bloomberg shows 923.08 low but no trades below 940. Lowest trade it shows is 945.4043

All I am saying is that the importance of the country is not measured by its GDP. I am NOT saying that we should what a KGB operative or a terrorist or a dictator wants us to do.

You hear but you do not listen. Nowhere did I say that we should do what Putin or Kim want us to do. You said it does not matter what Russia wants because it is a tiny % of the world's GDP, I stated why % of the world's GDP is the wrong metric to use. Muslims have killed 3,000 Americans on 9/11, what % of world's GDP was Afghanistan at that point? Yet it mattered because Muslims based in Afghanistan hatched a plot that killed 3,000 Americans.

@ValueArb, you need to care about what North Korea thinks because it has nukes and can wipe out South Korea, Taiwan, Japan, and parts of the US. Looking at Russia through a GDP prism is a mistake. If Russia stops trading with the rest of the world, what will happen to oil, gas, uranium, titanium and other commodities? When Russia is 30% of the titanium supply for aircraft, that surely matters.

There is a write-up on VIC from December 13th pitching Fairfax India. The India based writer states that in his opinion, the value of the airport is more than $4.2bn not counting the land (probably worth several billion more in my uneducated opinion) vs $2.7bn valuation by Fairfax India. If the writer is correct and land is say worth $3bn, then value to Fairfax India is higher by $2.7bn or so and to Fairfax by billion to billion and a half. At an extreme, could be another $100 per share, if land is worth $6bn+ and airport is worth north of $5-6bn. (The writer uses a 12% discount rate.)

You are 100% correct, it's a philosophical discussion. I think clearly one has to adjust for health for instance, skills/intangibles - a college professor may have no measurable wealth, but if he can enjoy and stay at his job till say 80, that is clearly wealth that a mover or a ditch digger does not have. I think Seneca may have said it best - be content with what you have. I am content with what I have. I will never fly on a private jet, but I will also not be upset over it.

Of course I don't understand scarcity, you are the only one who understands anything. Yes, I do not understand why someone would want to live in Manhattan and go to the opera & Carnegie Hall, jazz clubs and ballet. Why expose kids to Metropolitan Museum of Art and incredible educational opportunities when one can live in Mobile Alabama for a fraction of the cost. Who the hell needs to show kids Europe when you can play a video game. When I see my friend's immigrant parents from China work here for 40 years (retiring at 70) as a janitor and a seamstress barely speaking English, and thanks to a lifetime of hard work and thrift buy a million dollar condo in Flushing for cash and have another million in the bank, I do not understand why people who are healthy and born in this country complain of having no money. If people you continually cite in your clearly wrong government statistics worked like my friend's parents, and saved, they would all be millionaires several times over, again barring health issues. You feel wealthy? I am happy for you. There is a difference between being happy and content with life and being wealthy.

As I said before, you and I have a different definition of what it means to be wealthy. How can one one be wealthy if one cannot live where one wants? As for why the average person in the US is not wealthy (per your definition) it is quite simple. Excluding people who got very unlucky health-wise themselves or in their family, it is really a function of not willing to work hard, acquire useful skills, and live below their means and invest the savings. Most people who have no savings have chosen to work less than 35 hours a week, spend their money on $300 sneakers and $800+ apple watches and $1500 iPhones. I consistently meet people who complain that they have no savings, yet have never met an expense they did not like, and always turn down the opportunity to work beyond 30-35 hours per week, even at $25+ per hour wage. You have clearly not had a family in Manhattan. When I was single, I thought just like you. Again, wealth means freedom, and first and foremost ability to live where one wants. Using your definition of freedom, anyone who can retire to rural Alabama is wealthy. I beg to differ.

You pay $10MM for a property that generates $400K per year in cash flow on an unleveraged basis. You can depreciate most of the $10MM, excluding the value assigned to the land, which cannot be depreciated, unless it is an agricultural property, in which case part of the value of the land can be assigned to minerals in the soil and can be depreciated. The part that you can depreciate is in theory can be written off against taxes over 39.5 years. However, iif you run cost segregation study, you can depreciate over shorter periods (windows I think 15 years, roof - 25 years, boiler - 10, etc). So say $8MM of the 10MM can be depreciated, and on average over 20 years. Then for the first 20 years of ownership, you have a $400K per annum depreciation tax shield. In addition, most people borrow when buying real estate. Say you use 50% leverage. Then, assuming $5MM of debt at say 4% interest rate, you get a $200K annual interest bill. So in year one, your taxable income = -200k (400K - 200K depreciation - 200K interest.) In year 2, assuming 3% inflation, your unlevered cash flow = $412K, your taxable income = -$212K. In addition, there are other interesting tricks. I am sure @Gregmalcan explain better, but if I am not mistaken, when you refinance a property with a larger debt balance, you can increase your taxable basis in the property and get another depreciation tax shield. Lastly, most people who do this tend to use appreciation in one property to borrow additional funds to invest in other properties and effectively keep getting bigger and getting more and more tax shields. I think President Trump was a good example with less than $500K in taxable income.

100%. I am not good at fixing things and finding high quality tradesmen and judging people - prospective tenants, so I am long NEN and AIV at 10-11% cap rates, but I do not get the tax shield.

You clearly take nothing into account, since you accept government statistics that have nothing to do with reality at face value. You lived in Manhattan (in the past 5 years) with four kids and you spent less than $350K per year in a nice apartment, kids in good schools, nice travel, etc? Care to share the budget? I know a lot of people in my kids' public school who would like to know your secret. I know people who live in Manhattan with four kids on $100K post-tax, but they sure as hell don't describe their lifestyle as luxurious (6 people in a 700 sq foot 2 bdr apartment.) Again, you are telling me that making 10% year in year out in investment returns is not working? What % of the population actually achieves that? One other thing, since there are drawdowns, and sequence of returns matters, clearly your investment returns need to be higher than 10%. Again, how do you achieve that by literally doing nothing? Again, I'd like to know how I can make a guaranteed 10% per year not working, thank you.

You are not offending anyone. It is a very good question, and yes, 100% my fault, and nobody else's.