nodnub

Are we looking at the same SFK debentures? SFK.DB on TSX is at $89 now ($100 par value) and had a yield at par of 7%. So roughly a current yield of 7.8%... or have I figured this wrong somehow?

I would generally agree that the pendulum has swung too far. Disagree. Most people are way too stupid to handle their own investments. This is why we have welfare, social security, it helps protect people that need assistance. Managed pension plans are better for most people cause most people are financially illiterate. However, I am not saying that the benefits under those plans should remain at the current levels. I don't think company manages the pension per se.. it is done by a pension manager. The company only decides whether to correctly fund the pension obligations. That's why, in some other countries, they actually REGULATE AND ENFORCE the rules surrounding pensions. Right now, it is looking like the US regulators have no teeth to enforce the rules (pensions, banking, fraud, etc, etc,) And Congress continues to erode the pension rules in favor of corporations.

Warning: rant coming below I just watched this since I had time today - this is so slanted it is not even funny. I'll pick on the section on United's bankruptcy for example. The journalists never allowed that seeing United go bankrupt would have means (1) no jobs, (2) no heath benefits, and (3) no pension. This was just shoddy reporting, very socialistic (the government must provide, the company is evil) and seemingly rejects all tenets of America's founding. Yeah, it bites to see your pension go down by 30% while having to work more for less money on which you now have to also save for retirement - but life is not fair either. If uncertainty kept me alive at night like this poor flight attendant says it does, I'd try to do something about it: get a better job, try to understand more about my future needs and see what I can do to improve it, anything. Also, all these people complaining that now they'll have to work till they drop - is everyone forgetting that up until a few decades ago, retirement didn't exist? How fast people forget, how fast people feel entitled. "I want, I need, I deserve". Argh! >:( Anyway - off my soap box... I don't mind pensions; indeed, I have one. The difference is that I don't count on it anymore than I count on SS; as far as I am concerned, they are just taxes that I 'may' see a return on. My retirement will be what I make of it. hey uhuru, I did not notice a socialistic slant, but I did not actually watch the videos... I only read the articles and interviews that they linked to on the frontline site. I agree with your point about retirement as a recent development and how it has quickly become an entitlement, however, these people had defined benefit pensions that were supposedly secure, based on their contract with their employer. They were working under those assumptions for the last 45 years of their career... and then 2 years after they retire, poof.. it all goes up in smoke. If you include changes to their health care coverage costs, it was more like an 85% cut to monthly income.. If you read the articles on the site: they point out that it was leglislation introduced by US congress in the last 20 or 30 years which allowed companies to underfund pensions without making up the difference immediately. They point out that in the Netherlands the govt requires that the pensions be funded to 105% at all times which seems to prevent this problem from occurring when a company goes bankrupt (because the pensions are fully funded). If a company is going to have a defined benefit plan then that is the way it should be done!

The plumber that does house calls might be on salary for a small plumbing outfit at $50,000/year. Of the $100/hour that you pay... the Co. has to pay for and store some inventory, cover benefits, pay for reception/dispatcher, etc. They also have to pay for the plumbers van, and possibly rent space somewhere as well. The overhead costs above and beyond base salary are significant. Your house-call plumber might not be 100% utilized AND they usually don't bill for driving time. even if the plumber is self employed he still has to pay for most of these overhead costs. The billing rate can not be compared directly to the hourly rate for a regular full-time employee.

Legally I dont think they can. My advice is to move to Texas, or Florida. Cali and NY are in worse shape. This is a great documentary on retirements. Should be required watching. View it if you have time. Frontline's Can You Afford to Retire - http://www.pbs.org/wgbh/pages/frontline/retirement/view/?utm_campaign=viewpage&utm_medium=grid&utm_source=grid This is a great book on pensions and should be required reading. Roger Lowenstein - While America Aged: How Pension Debts Ruined General Motors, Stopped the NYC Subways, Bankrupted San Diego, and Loom as the Next Financial Crisis (Paperback) http://www.amazon.com/While-America-Aged-Bankrupted-Financial/dp/0143115383/ref=sr_1_5?ie=UTF8&s=books&qid=1271257512&sr=1-5 Myth, thanks for posting that Frontline piece on retirement plans. I found it extremely interesting to read the material on the frontline website about the history of the 401k. It seems that the shift from Defined Benefit pension plans toward 401k plans will have a profound effect on society in coming years, as most of those retirees did not contribute enough to their 401k. It could result in significant effects on the economy and society at large when these boomers hit retirement and lose their working income (without sufficient retirement savings).

I agree that there is a lot of entitlement and that pensions in many cases are too generous. However, I do not think pensions themselves are a bad idea. Group pensions can be an important societal tool to keep people out of the poorhouse -- particularly people without the common sense to save money throughout their working years. I think this adds financial stability to our society which is better for businesses as well (there is less social unrest).

Did you also receive stock grants or options? Or raises that exceeded the inflation rate? Neither of these would be likely for an average Joe. Once you start making 6 figures it's easy to anchor to this and forget that most people don't come close to that even after working for 20 years. http://www.simplyhired.com/a/salary/search/q-plumber/l-seattle,+wa These salary figures are for 2010... I'm not sure what your last year of employment was but if it was a while ago then the numbers might not be an apples to apples comparison due to inflation.

Perhaps bonechip's comment means that you can buy LRE on the pinksheets and hold them directly in your RRSP by virtue of the fact that the shares are also traded on a prescribed exchange (london). This would save you the higher commission fees of buying on the LSE.

I believe your conclusion is incorrect. Lancashire is traded in the London Stock Exchange. If there is any problem, you can solve this by instructing the broker that holds your RRSP account to purchase it on the LSE instead of the pink sheets. You may have to phone in your order to make a trade on an international exchange. You can expect the commissions to be higher than buying N.A. stocks. This is what valueiswhatyouget was pointing out in more general terms in the post above. http://finance.yahoo.com/q?s=LRE.L

here is a list of the "Prescribed Stock Exchanges" from CRA http://www.cra-arc.gc.ca/E/pub/tp/it320r3/it320r3-e.html#P261_44645

I think this is the right approach. If they know about the money then they will not be as motivated to "build a life" as you say. It's better when a gift comes as a surprise later in life instead of something that has been expected all along. This approach does not preclude you from helping them out with life expenses earlier on if you consider it necessary.

I think IB Canada has had that for a long time--they require minimum commission of $10 per month. If you subscribe to a data package they waive the minimum commission fee. This minimum fee is a logical requirement to filter out clients that trade very infrequently and have small amounts of capital. They can only make money from active traders or large accounts. It costs a lot to service small accounts that have small $ value (partly because those account holders are often just starting out and they call customer service a lot for help).

Scorpion, I think you stated in the past that you have a high concentration of LUK in your portfolio. I was wondering if you are a US based investor.... and if not, are you concerned about currency effects in the long term?

Sedi.ca is a disaster---it has always been like this. Even once you figure out how to navigate the site it still requires so many damn inputs and mouseclicks to accomplish anything. And they have made no appreciable improvements since I started using it around 2003. A redesign of SEDI website functionality and a National Security Regulator are on my wish list.

I'm curious whether it seemed like a no-brainer at the time, or if people were worried that long term inflation might push rates much higher for extended periods. After buying long bonds at 10 or 15% it must have been disheartening to see rates rise even further and wonder where it would stop. I was a teenager at the start of the 80s so I cant answer but I expect it was the same as always. Skilled value investors recognized it as a deviation from the mean and everyone else missed out. Exactly the same as the stock market lows of last year. Most missed it. To me it seems it may not be a question of skill. Hindsight is 20/20. Last year in February and March there was a lot of talk of a great depression type scenario. We might have entered such a scenario if the government had taken other actions that were less effective or took action that restricted trade. If we entered a great depression then the bargains of Fall 2008 and March 2009 might not have turned out to be bargains at all (i.e. no gains on these positions for the next 10-15 years). I doubled down near the lows last year and did well. But in light of all the economic uncertainty at the time I think it is realistic to view that action as a speculation---a gamble that the US government would get the situation in hand and restore confidence in the banking system.

I'm curious whether it seemed like a no-brainer at the time, or if people were worried that long term inflation might push rates much higher for extended periods. After buying long bonds at 10 or 15% it must have been disheartening to see rates rise even further and wonder where it would stop.

I see that Francis' comments above are from the 2009 semi-annual report. However, his 2009 annual report states that his funds did not purchase any of these Constant Maturity Swaps in 2009. I would be interested to hear more.

bookie, do you mean this software? http://www.timevalue.com/tvalue.aspx You can also use the XIRR function in Excel. You have to enable the "Analysis Toolpak" add-in. I think it installs normally with Office 2003 -- you just have to enable it. XIRR will provide correct rate of return (taking into account any capital additions and withdrawals).

This is really interesting headline, but I don't feel this article is up to snuff. I have a feeling there is a lot more to this story. I see "principal forebearance" mentioned but not principal reduction or forgiveness. Tanta @ Calculated Risk wrote an article about the distinction a couple years ago. Until now, modification programs have focused on lowering interest rates. If you have an underwater mortgage, it might still make sense for you to walk away -- even from a reduced rate. Especially if you started out with a 2 year teaser rate and just recently got hit with high rates in the last year or so. The "new" lowered rate under the mortgage modification might still be higher than the teaser rate (which might have been all you could really afford). If the incentives in the system are wrong, then it will not function as designed.

your acquaintance sounds like a real dunce -- I can't handle people that insist they are correct, contrary to rock-solid facts and logic. I would probably have to stop hanging out with them.

Sorry, I am a bit confused. Would the following be true? If you buy a mutual fund on Dec 31 after a really bad year... are you likely to be assigned some capital losses that you did not actually suffer from?

One might have formed a similar confidence level when Fairfax as well as Marty Whitman and other well-known investors were purchasing large chunks of SFK Pulp at prices >$4.00 in 2006. SFK had a high yield then if i recall correctly. Here is the chart if you want to take a look at how that worked out over a 2-3 year period: http://finance.yahoo.com/q/bc?s=SFK-UN.TO&t=my&l=on&z=m&q=l&c=

I don't understand. I don't see anyone in this thread betting or suggesting that rates are going lower. Can you clarify what you are referring to?

Maybe your request was too vague to be accurately translated. Is your question answered by reading 10-K and Qs?

According to this bloomberg article http://www.bloomberg.com/apps/news?pid=20601009&sid=al8OOPZn_wAE the case is Third Avenue Trust v. MBIA Insurance Corp., 4486, Delaware Chancery Court (Wilmington).