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SharperDingaan

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  1. "But for me, hoping for 100-200% gains from this investment over the next 5-10 years, I would not sell because of a 10% move up or down. It is a lot easier for an investor to hang on if she knew a bit more about Fairfax, and was thus not scared off by the Muddy Waters allegations or fears about their impact." To each his own, and may it work out for you. We only point out that there is the buy/hold return on FFH itself, AND the swing trade returns from volatility. Global warming is generating bigger Super-Cat losses, and the FFH insurance business has a seasonality to it, that is just part of doing business; nothing wrong in that, but it will generate opportunities from time to time. If you able to make a success of them, you will get to your 200% a lot quicker SD
  2. You might want to rethink this; as we recently exited our swing trade at > CAD 1500, and typically swing trade around the dividend record date. We trade FFH because it's well run; but our trades themselves are just about being opportunistic, and acting on value when we see it. We act like insurance; additional buy side demand when the sh1te hits the fan, that quietly exits later when everybody is positive. SD
  3. 25-35% of cash equivalents at cost, highest when we enter the position. As we periodically repatriate capital we trim it down, as we swing trade we fine tune the weighting; cash gains/losses into Canada's. If we've done our job well; we will only have realised swing trade gains, and HODL on unrealised losses. BTC drops 25% next month; we sell down the Canada's, re-enter at the lower price, raise our cost base, and adjust our weighting. As total cash equivalents rise, so does the amount we can safely put into BTC Do this long enough and eventually there will be a year-end with a lot of BTC at a high cost base, in a much lower priced market. Sell everything, buy it back >45+ days later, reset the cost base, and harvest the tax loss. Not for everyone, but it does the job very well. SD
  4. If you are are a young person, looking to build your retirement nest egg 35 years from now (age 70); it is extremely stupid NOT to have a significant weighting to an BTC-ETF. The only real question is how much of a weighting you should have, and whether it should be maintained at cost or market value; the lower your risk tolerance, and the shorter your investment horizon, the lower the weighting. At the institutional level; providing company sponsored pension plans, at a 2% weighting for now ... that will rise over time. BTC is just a payment app that was created to demonstrate blockchain technology; if you think that blockchain technology is likely to materially change the world over the next 3-4 decades, it's hard to find a better vehicle than a regulated BTC-ETF. No need to predict who the winners/losers are; just a need to be in the game, and in a vehicle unlikely to sink. 35 years ago this might have been a Berkshire Hathaway share, and at a share price not much different to recent BTC prices. Most people (Joe Sixpack) just want to 'buy and forget'. A BTC-ETF is a fraction of the price of a BTC, and designed for those with zero experience/expertise in crypto; as far as 'Joe' is concerned, the PM is actually a value add and relatively cheap. Over time, the more 'Joe's' that add 2-5% weightings in their portfolios, the higher the demand for BTC goes, and the higher the price. Momentum, halving, etc. just taking price higher still. The adoption curve. And as price goes higher ... the more that FOMO kicks in; less than year ago BTC was at USD 32,000; today it's pushing USD 69,000. Not that long ago, we were being questioned for treating BTC as a portfolio 'cash equivalent' - as how could the value of a cash equivalent possibly rise by 50%+! Zero recognition that if you don't want a cash drag on your portfolio, some of that cash needs to be in BTC Back in the day cars not only replaced the horse and buggy, they replaced all the related infrastructure as well; at the time there was little idea as to how long this would take, similar disbelief prevailed, and then as now - few took up the opportunity. Same thing occurred when steam replaced sail, and wireless replaced landline. Inability to adapt to change. All good, and more for me! SD
  5. This keeps up, we're going to have to have a 2nd capital repatriation this year .... SD
  6. It's one thing to find methane leaks ... but expect anything that comes back from these satellites to 'disappear', near permanently. The overwhelming majority of methane emissions are natural; not from o/g, and agriculture. As permafrost melts it releases methane, and there have been multiple explosive methane releases all across the Arctic and Siberia, for quite some time. As long as the rotting biomass remained frozen, and the ice caps remained both thick/frozen (capping fossil methane egress) there wasn't a problem, but with the warmth of ice-melt, large quantities of methane have been bubbling through arctic lakes, and exploding through thinner ice-caps. Some of the releases have been continuous enough to catch fire, remain lit 24/7, and are visible at night. All of which has been going on for some time now. The Kyoto Accords were driven from climate models with predictability that have proven to be utter sh1te. While they were state-of-the-art models at the time, the implementation of corrective policy was badly botched; a common outcome when research is commercialised. The extent of record arctic methane releases, growing undersea fire-ice methane releases (warming China Sea), smoke from record global fire seasons, and geologic change/eruption was not adequately modelled; resulting in both significant and material understatement. https://theweek.com/environment/fire-ice-methane A good chunk of the 'new' economy is based on green energy, and polluter pay toll charging; plus redirection of new investment away from conventional o/g and into these 'new' areas. Materially undermine the Kyoto accords on which this is all based ..... and it all ends badly; so if you find things that burn the 'trust the data' playbook (i.e: the Kyoto models were junk), expect your findings to be suppressed (not talked about) The reality is that polluter pay is purely a rich mans problem, and that most of the world isn't rich. Coal burning power stations may be very dirty, but coal is widely available, and it enables the production of electricity that lets modernisation happen; even if for a few days/year there is a need to shut them down so that people can see/breathe again. Nations get around the problem by going directly to wind/solar; hence, there is a reason why China is so prominent in these industries. Most would expect o/g to remain the villain, and to asset strip to fund buybacks/dividends for many years to come. Polluter pay is not a bad thing, but ultimately the market will decide it over time. Today's younger generations have few issues with the principle, and in 10-15 years they will be running the place, whereas today's objecting older generations will all be in nursing homes. SD
  7. Costs more, and takes longer to build the modern nuke; but it's all base load, running 24/7, in quantity, and at a cost/MW that is pretty hard to beat. Only things that slow it down are national/local legislation, the hybrid/EV mix, and local charging from neighbourhood solar charged Tesla Walls. If JOE built out a new community where every rooftop was solar, with cheap green power fed into each unit first, then community Tesla Walls that powered resident EV's and golf carts at nominal cost/KW ... would you buy into it? 'Cause if you would ... this whole thing is a lot closer than you think ...... and it doesn't slow down nuclear, unless it takes off. Different take. SD
  8. The reality is that US shale are GAS fields, producing oil as byproduct; gas prices are local, with a floor price a little above the cost of distributing it. Higher prices the further away from tidewater you are, and most of it going to standby gas fired turbines when weather is cold. Gas is cheap but nukes are cheaper. Nukes will also increasingly supply both the growing hydro-electric shortfall (no rain), and base-load power requirement of growing numbers of EV. Gas will top up supply when its cold (for heating), when the wind ain't blowing, and when it's hot (PV less efficient). Not a lot of reason to love gas. SD
  9. Just to throw it out there ..... FFH might want to include an EV/Common Share valuation every quarter, starting with the AGM. First time out include the methodology, and drive it from the Statement of Cashflow (PAT approach). Provide the estimated maintenance capex, the WACC, and the growth rate. Refresh the estimates every 2nd quarter. Multiple of BV is just the dominant industry comparable; change the framing, and you change the valuation. Run the company as a business, versus an investment, and EV is a lot more relevant; as management makes the key decisions that influence cash flow activities, WACC, growth, maintenance capex, etc. Evaluate management on what they do. Nobody else does it .... yet. Put the EV/share out there and you'll get a lot of attention!, particularly when it is a lot higher than the multiple of BV valuation. Successfully defend it, and others will follow; the combined effort achieves critical mass, and the framing changes. It's risky .... not. If the EV/share is 20% higher than the BV multiple, to discredit the approach a naysayer has to consistently and persistently argue a discount to EV/share of > 20%. Hard to do, and if only 50% successful, EV/share is now 10% higher than the BV multiple; and it gets near impossible to do ... if EV/share becomes the industry metric. Fear is the mind killer here, not the approach itself. The bulk of the industry is a handful of players, that all know each other. Should one trial it for a year, lets the market decide, and it works out; the 'impossible' could well occur a lot quicker than everyone thought! To quote the renowned Trooper song . " If you don't like what you got, why don't you change it? If your world is all screwed up, then rearrange it?" https://www.azlyrics.com/lyrics/trooper/raisealittlehell.html SD
  10. It's way more lethal when 'institutions' are mocking you. MW has erred badly, and it has entangled them in a growing tar baby. They have a weak hand, their network is reassessing them, time is ticking, and they need a way out (Reddit). There is a much higher risk adjusted payoff to simply staying put. The smart thing would be for MW to cut bait, and fold. Question is, does their network let them? Bought the popcorn, expecting a show. SD
  11. Keep in mind that no buying doesn't mean no money waiting on the side-lines to come in. If MW round 2 doesn't happen soon it's not going to, so give them some time ; it's a small community, and the laughter is echoing. Their last success was a long time ago, and if this is the best that they can do now ...... well, the walls are closing. Somebody lend them a few shares, to buy back cheaper! SD!
  12. It's not just in the Permian. SD
  13. This is why we have the plastic bag; ain't in the playbook, and nobody grabs a slashing wolverine without getting at least a few wounds. Targets are supposed to roll over, not slash your throat! Fellow 'peers' pull back to watch the show, and place their bets! .... against MW. SD
  14. Thing is, there is little risk to it as the media assumes the bluff will not be called; and most of the time it will be right. Not going to change unless the media is systematically sued, every time it occurs. SD
  15. Most management in o/g knows their sensitivities extremely well; they will generally hedge some production at X to guarantee the funds to pay for planned capex, lock in the occasional opportunistic gain, but everything thereafter is left at market. Simply because o/g investors WANT the market exposure, as it creates share price volatility to trade against. The reality of course being that investors recognise that the intangibles are significant value creators; hedge them away and you also remove most of the investment opportunity. SD
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