uncommonprofits

I agree -- you definitely cannot go by one or two years of performance to judge. Take the 73 + 74 period: Bill Ruane (Sequoia) was down 44% Charlie Munger was down 73% Rick Guerin (Pacific Partners) was down 90% Yet, these individuals all had successful long term track records --- better than most you can find. Walter Schloss was only down about 15% in that period -- did it make him any better? No -- but he was in an elite group that included the other 3 .... and a select few others including WEB, Peter Cundill, etc. I can't say much about Sprott as I also do not follow him either. But I can say that in 2008 Tim McElvaine was down about 50% and in 2007 he barely broke even. The market got very out of whack in it's pricing of things in 2008 --- Prem did very well in timing the fall. But if you think the market had wrong valuations on the way up --- it is more than likely it had a lot wrong on the way down too. Judging an individuals record as being superior for a short time such as a huge fall is just as wrong as judging an individuals short term record after a huge bubble. UCP / DD

Carvel46, The information you seek can be found at: http://www.sedar.com/ https://www.sedi.ca/ http://www.canadianinsider.com/ also has insider info but it is not as complete -- but set up in a better format than Sedi. I would suggest caution if you are considering KFS though. I bought into it about 8 years ago when it 'appeared' very cheap -- but a while after I spotted a very peculiar oddity on the balance sheet. I got out. The skeletons have finally come out of the closet. You don't know what is left lurking though. This one's been swimming naked for a while. An option you might consider is EGI Financial (EFH) --- very well managed with very disciplined underwriting. They could 'possibly' benefit from some of KFS's Ontario business as it dribbles out (a result of their downgrading status). But even if it doesn't EFH is very cheap. UCP / DD

Print and deliver $1 million cash to each and every family in America -- and I can assure you the system will inflate (no doubt big time!!). Of course this is an overblown/exaggerated example -- but if inflation is preferable to deflation it should be obvious that the only thing standing in the way is political will. And that political will works a lot quicker in America than it does in most other parts of the world (here in Canada there is arguably a lot of envy over the American system). Finding the right balance at the current moment is the trick. If it is too much the system will certainly inflate. If it's not enough then deflation may become a problem in the short term but one can be assured that more (stimulus) will come. Prior to the crisis in Japan --- unemployment was typically close to zero percent. Had it reached 5% very quickly (rather than taking a decade) --- there would no doubt been a lot swifter action and deflation would have not been a long term issue. The culture may be changing a bit in Japan now --- but that was the way it worked back then. As for the current stimulus and interest rate action in the States --- finding the right balance is obviously key. To some it seems that they are overdoing it and inflation is going to be huge going forward. Others like yourself worry that it will take forever to work through this and deflation is going to be a persisting problem. Perhaps the right balance is being struck? In the end --- I don't see the stimulus being such that will enable people to pay off their houses (and other debt obligations) in any dramtic fashion. If that's the case then mortgage rates won't be rising much any time soon (perhaps for the next decade or two). Higher rates simply are not affordable without pushing the system back into recession. So could it be possible that mid and long term bonds trade in the current range of 2-4% (or lower) for the next several years? If so -- that would seem to bode well for common stocks which are currently yielding much higher. If it bodes well for common stocks as a whole --- it would seem to be the most opportune time in quite a while to seek out of favour bargain situations of good quality. One other point is that a lot of emphasis has been on the financial and housing crisis being the sole cause of this global recession. But what about high oil (and other commodity) prices? High oil prices have been the prelude to many recessions in the past. An increase in oil price (first Gulf War) also helped push things into the brink for Japan -- but the rise was not nearly as dramtic as it was in the current situation. I think the role that high energy and commodity prices played in helping ignite the current situation has been under-estimated to a great degree. UCP / DD

Phil Fisher's comments are based on the American system and what has become politically acceptable and not after the dark days of the Great Depression (which not a lot has changed in that regard). Japan's employee/employer culture is completely different. 5 years into their crisis, the unemployment rate was only at 3%. 10 years into it --- unemployment peaked at 5%. Compare that to the U.S. situation where unemployment will perhaps hit 10% or more in very short order. The labour/corporate culture in Japan meant that as a loyal employee you agreed to take a cut in wages now and then to keep yourself and fellow workers employed. While this might exist to a certain degree in the American system it is not nearly to the massive long-lived scale as it is in Japan. If your employer is to keep cutting back your wages in America you eventually seek a new employer or move on to a new line of work or maybe self-employment, etc --- that is not the way it is in Japan. In Japan you are loyal to your employer until retirement and that tradition is passed down to your children (as it has been for generations). But it is again a mutual system and in tough times as they were -- the Japanese employer was also obliged to cut back on margins. Think about it --- employees taking pay cuts + employers purposely lowering margins = deflation. It might be a good system when it comes to employment security -- but when it comes to creativity in growing an economy not so good compared to the American one. Furthermore, it took about 12 years for Japan to lower interest rates from about 8% to near zero. Compare that to the swift action of the Fed. Two completely different situations. UCP / DD