Dinar

Please explain why Assad's fall was good for the Christians of Syria and the West? Thank you. As for Putin's compassion, are you serious? You expect a man who voluntarily joined an organization that massacred tens of million of their own people to be a normal human being?

For those worried about tariffs on Mexico, interesting interview with Jared Kushner. He seems to be very bullish on Mexico manufacturing and exporting to the US. So he clearly is not expecting his father in law to kill trade with Mexico.

Here is the math on 9% 2028 FCF yield: a) 2023 pro-forma revenue = CAD 13.9bn, and 38% adjusted EBIT margin. b) At 3% inflation = 2028 EBIT CAD 6.123bn, assuming 38% adjusted EBIT margin. Assuming pricing is 0.5% above inflation every year increases 2028 EBIT by CAD 395MM. b) I am assuming 7% annual volume growth for the 5 year period (which is at the high end of company guidance from 2023 investor day, and the company historically under-promised and over-delivered). This should result in a 40.26% volume growth. I am assuming 70% EBIT incremental margins, which should increase EBIT by CAD 4.652bn c) Cap ex to exceed depreciation by CAD 700MM per annum (Cap ex = CAD 2.7bn per annum and d&a around CAD 2bn) d) Cumulative free cash flow = CAD 15.3bn CAD over a 3 year period 2025-2028, which will be used to buy-back 144 of shares o/s at CAD 100 each e) 2028 free cash flow: CAD 11.17bn EBIT - CAD 800MM interest - CAD 700MM (Cap ex - D&A) - CAD 2418MM (tax) = CAD 7.25bn CAD or divided by 795MM shares = CAD 9.14 per share vs CAD 105.33 = 8.7%. Time will tell on self-driving trucks. I think that before you get self-driving trucks, you will get self-driving trains. I think there will be pressure from environmental groups to switch freight to rail, and also highway congestion is getting worse. I would not be surprised if there is a tax on trucks that gets implemented to make them pay for highway damage.

I have a while ago, I did not like it. I do not know European assets well enough (for Heidelberg the value of the US assets = 125% of EV + you get the rest for free. Assuming the rest is worth a 16x net income, the stock is a two and a half bagger) and I hate dilution and lack of insider ownership. Heidelberg benefits from a 25% shareholder, big enough to care, not big enough to do something stupid and not be overturned.

I bought quite a bit of Heidelberg Materials, made it a 4.5% position

According to analysts' forecasts, which I think are too low, the stock is trading at a 6.9% free cash flow yield on 2028 numbers. For a business that should be able to raise price ahead of inflation and grow volumes, that is way too low. Every year that the company hikes price at inflation + 0.5%, it's EBIT grows at inflation + 1%, and free cash flow by around inflation + 1.2-1.3%. Every time volumes go up by 1%, EBIT should grow by roughly 1.4-1.7%, given that incremental volumes come with very high EBIT margins, closer to 70%. Every time EBIT grows by 1.4-1.7%, free cash flow to the equity grows by around 2%. So if you assume that pricing = inflation + 0.5% per annum, and volume growth = 0.5% per annum, starting in 2029, then you have EBIT growing at inflation + 1.7%, and free cash flow at inflation + 2%+ per annum. So assuming analysts' forecasts for 2028 are correct, and the company can grow volumes at 0.5% per annum, and pricing at inflation + 0.5% per annum, your forward rate of return should be inflation + 8.6% per annum. In my opinion, the company will meaningfully outperform analysts' forecasts, and the stock is probably trading at a 9%-9.5%+ free cash flow yield to the equity on 2029 numbers, and will probably grow free cash flow after that at inflation + 2-3% per annum. You are also getting potential environmental tailwinds for free, and upside from increase in highway taxes.

CP, JOE, MSGE

I would be very careful in comparing budget deficit as a % of GDP and debt/GDP across countries. In some countries (Italy, Israel, Russia, Ukraine, most of Africa, Egypt, etc) there is a very high cash economy as a % of GDP that is not recorded. In other places such as Germany/Switzerland/Netherlands/Sweden/Finland, I would assume much less tax evasion.

Munich RE was up 4.1% after announcing 2025 earnings forecast, including forecasting a 79 combined ratio in the reinsurance business.

No, it is not. It only works if the asset is included in your taxable estate. If it is not pat of your taxable estate (say in a non-revocable trust that is not drafted specifically to be included in your taxable estate) then there is no step up in basis.

Doctors without Borders tend to help those who would gladly kill us - Syrians, Afghans, Gazans, Shiites in Lebanon, so I will pass.

What is the pitch on A&W food services? Thank you.

I think Heidelberg materials which I mentioned before will do very well.

I am not a tax lawyer/accountant, but my guess is that the headline price is roughly 20% lower due to tax savings, I am sure that it was a section 382 transaction with asset step-up.

A friend's mother works for the NIH. She says that she cannot fire poor performers. So what is the incentives for federal employees to work well? Name one program/thing that the Federal government does efficiently? I don't care for how many hours they work, the question is what is the output! Biden hired tens of thousands of Federal employees, what are they doing? NASA spent over $100bn over the past decade or two, what have they accomplished with that money? Medicare advantage for veterans is a real good use of taxpayer funds, eh?

Turkey's interests are in having a fundamentalist government in Syria, which is not in the interest of the West.

Assad was never an enemy of the West. Had Obama & Co not betrayed and killed Quadaffi, there was a chance to turn Assad into an asset. In any case, in my book, a sybarite is usually less dangerous than fanatics.

I am not sure that the collapse of Assad's regime is good for the West, or the Christians in Syria.

a) It is not a 40% EBITDA margin, it is a 40% EBIT margin (albeit overstated since D&A is less than maintenance cap ex) b) Historically CP was in the mid 40s EBIT margin and KCS was in the 80s. It was widely acknowledged that material operating improvements could be made at KCS. c) Incremental volumes are extraordinarily profitable. Look historically at any railroad, how say a 5% volume increase impacted profits. d) Yes, it is a NAFTA play.

Charlie, CP claimed in its 2023 investor day that they would be able to squeeze out USD 5bn in revenue synergies from the merger thanks to higher volumes. I would guess that these volumes would come at 70% EBIT margin, vs 40-45% for the pre-merger business. There were also obviously cost synergies which they tried to downplay (CEO, CFO, CTO, COO, board of directors, treasurer, and hundreds of other corporate staff. I think the KCS board + executives consumed $20MM per annum.) They are finishing the 2nd bridge at Laredo which should cut 6 hours from the train journey from/to Mexico one way, so 12 hours round trip - massive savings. I am getting to a 9%+ free cash flow yield to the equity in 2028, assuming maintenance cap ex is CAD 900MM higher per annum than D&A.

Heilderberg materials

I am not sure. Unless there are massive tariffs on Mexico, there should be no impact. In the case of no impact, stock is trading at 9% free cash flow yield to the equity based on my 2028 estimates.

US gov't does national defense well? You are funny, take a look at all of the cost over-runs on every military program to start. O'k, $3.034 trillion, how would you raise that? That is 15 percentage points of GDP. What kind of tax increase would that require and what would be the incentives to work after that? Marginal tax rates are already 55% in California, NJ and NYC. If you get to 70% marginal tax rates, you are going to get a very steep decline in GDP. The only way to do it without impacting incentives would be VAT.

@thepupil, what is the investment thesis on Tetragon and is it a PFIC? Thank you.

Again, what will be the cost of the single payer system and how will you pay for it and what will be the impact of the way you pay for it? NHS is very badly run and so is Canada.