SharperDingaan

Pray that you never see how soon-to-be CFA's attempt to forecast EV/share from pro-forma financials Most with fuzzy accounting knowledge, unable to deal with ambiguity (return on equity calculation methods), and unable to question (terminal value assumptions); yet everybody sure there is only one EV/share! Compounds again when the selections are plugged into portfolio optimises. Makes betting against promoted stock, a lot less risky that it initially appears; as all those DCF errors, and questionable correlations are additional margin of safety! SD

The problem with DCF is that it's used as a substitute for practical experience; those with no idea, relying on a number that the DCF model spat out ... 'cause it must be true! 'cause all the assumptions you made are reasonable! even though you know squat! Sure .... but your boss needs a number, and your job is to sell it ..... What will move the dial; is selling goods at a higher price today, selling a higher volume today, and doing it at a lower cost/unit today. Probability of success x magnitude of the change, delivered within 12 months, that Mr Market is willing today to sell at cents in the dollar. Precisely what WEB does. SD

The last time I was in a gym, was a very long time ago, and I got banned from it. Fired a 6lb steel/lead bolt from a home-built crossbow, against one of the gyms 12" thick exterior brick walls from roughly 700 ft away. Seem to recall a spectacular thunderclap, a cloud of brick dust, and a distant roar as a 3" thick hawser (in the gym) with two people hanging off it, got sliced by passing metal. About 16 at the time, and even I didn't think that I could top that Shortly thereafter I learnt brickwork repair, got banned from shop, and put into advanced physics, chemistry, and applied mathematics. SD

Each burn will turnover some supporters, he needs to demonstrate that supporters can be changed, and he needs to keep the circle of supporters as small as possible; The Dictator's Handbook. One burn at a time, and another 'to follow' ... to keep everyone in line. The 2018 term limit abolishment probably had strings; performance review every X years or so. He was 65 when the limit was abolished (a young man!); but if there is a rolling 10 year review, he only has another 4+ years over which to deliver. Most would also not expect a 10 year renewal, when you are already 75! Different cultures, different strokes. SD

Keep in mind that 'economic busts' are routine events; and the subsequent 'market clearing' is both highly disruptive and messy. The consequent recessions &/or depressions suck at the time, but they reliably clear the market, and usher in the next round of growth. The less governmental interference, the more an economy resembles the natural fire cycle; more frequent, lower temperature, less intense burns, that keep down the fuel load and pests; versus the high temperature, high intensity, uncontrollable burns that take everything in their path. Economic resiliency, and anti-fragility, by burning often, and allowing it to happen. China has made enormous strides over the last 50+ years, and the nation has a great deal to be proud of, all good. However, periodic burns didn't happen as regularly as they should have, and there is now way too much fuel on the ground. A lightning strike in the wrong place, and it could go very badly. Very bad news when social order is a primary metric, there is a material in-county 'bad-debt' problem, a material 'youth employment' problem, and a significantly worsening demographic. Suffer enough lightning strikes ... at least one of them is inevitably going to strike in the wrong place. Fixable, but not without repeated doses of short-term pain, and very carefully administered! More about reliable, competent execution, versus who is in charge at the time. SD

One of the benefits of playing chess is pattern recognition; ability to rapidly see disparate linkages/development, see patterns, and use the outcome. Play against others 'like you' and you just sharpen your wits, but play against masters who are not 'like you' .... and things happen. Back in my early days; I used to play against 'escapees' from Lebanon, Iran, the old Soviet Block, and a retired Asian academic who had reverted back to the hippy life... They all had very distinctive 'styles', and much of it was a reflection of their home culture/life experience. 'Cause everyone was short a few bucks, we'd often play 'blitz chess' in local pubs, against a simultaneous 5 players at a time, in return for a couple of beers. Ability to 'carny bark', think and act on your feet, while being a little blitzed yourself! Learnt all kinds of 'under the table' skills from some of the worlds best, and thoroughly enjoyed myself. Quickly discovered that I knew nothing, compared to the gents from Lebanon and Iran; and that there weren't any shrinking violets when it came to straight-up cunning and shrewdness! It was such a bummer to have to return to the 'above the table' life, once I started university SD

Not us, but one of those in our group, and representative. https://www.smallponybarrelworks.com/pages/club Our preference is sours; Pony also benefits from a soft water source, which further enhances the taste. You might want to try the Smuv, All the Best Hats, or Thunderscaps. Pretty much hard-to-get boutique beer, at $7-11/bottle, delivered. $10-15/pour in the brewpub, and priced against high-end Belgian imports. Drink less, drink better, keep the weight off, and save money; very 'anti-Bud' SD

The great thing with running real businesses is the continuous rubbing your nose in the 'value-add'. Execute competently, and you will do very well; the market is currently throwing up some great opportunities. Our buying group ( with the help (& grant $) of an agricultural university) has been able to execute an agreement to grow our own greenhouse hops, at cents in the dollar. Long-term off-take agreement, solar panel electrics, leased greenhouse space at a ridiculous price, and no employees. Secure source of fresh hops year round (higher potency), in multiple varieties, payback period < 2 years. Greater variety of beers, and higher margins. High volume stainless steel tanks at < 35% of new, transported and installed. Payback period < 1 year, ability to extend shelf life (shared contract brews) by weeks, and/or store soft water for high-margin speciality brews. Value add. And if you want our groups brews? Either come to our breweries or brew-pubs yourself, or we can ship it you (Ontario only) - same as any other parcel. Value add! SD

Just pick a trade journal in an industry you are interested in, and the industry news aggregator. At the broader level, add a subscription to the nations business newspaper (G&M in Canada). You are looking for the blow-ups, scandals, dividend cuts, messaging, etc. - not the journalism; and ideally, waiting for a negative 'event' in your circle of competence SD

I just simplified, and compared to the typical MER on a bond ETF or mutual fund; the portfolio manager trading bonds, your return being interest + gains - MER. If you simply bought individual bonds directly, at different maturities, and held to maturity; you would get the YTM at zero risk (treasuries, etc.), clip coupons twice/year, and eliminate the MER entirely. Comes down to how active you want to be, and if you have the skill set. You will also have multiple and complex new annual tax filings, that you will need an accountant to do. Additionally, every 2-3 years you will need to re-estimate how much tax this is saving/year, and make a decision as to whether to continue or not; all very 'fuzzy'. Comes down to the cost of annual life insurance (the simple) to pay the taxes that would be saved; if it's comparable/less than the estimated ongoing maintenance/year (the complex), walk away and enjoy a simpler life. We just recognized that we were being taken, and 'took back'. The thieves were good, but we were better SD

Canadian based; but lot's of non resident dual national's, Cdn/UK/French LLP's, and direct asset co-ownerships. Familiar with the tax-adviser experience, and know a lot more of the Gibraltar and Cayman Island opportunities that we would prefer Ultimately we had to be comfortable with the proposed solution, and we just weren't. US estate planning is mechanically different, but it will very likely be a similar experience .... there are only so many ways of legally minimizing taxes. KJP is quite right; if you choose to go this route, use a attorney, and be prepared to spend. A big slug now, and a smaller slug every year in ongoing filing/accounting fees; 25K/1M AUM to set-up (2.5%), 12.5K/1M AUM (1.25% MER) per year in maintenance. Our view was that per 1M in investable assets, a 6% return/year is largely inevitable (long term bond bought at 6% YTM, and held to maturity). Deduct 1.25% MER (bond fund), 1.25% filing/accounting, 2.5% inflation (on a good day); and your real return is down to 1% - before taxes, and reputation risk. 3.25% if you just bought the bond directly, and clipped coupons. Is that 1% real return for all this sh1te, on a good day, really worth it? Different strokes. SD

Every jurisdiction is different, and has legal/accounting/advisement costs to set it up; expect to pay 2-3% of gross assets, similar to the commission on buying/selling a house. There's a lot of ego stroking, 'showing off', and the 'tax tail' trying to wag the dog; so know your priorities, and know your requirements. Any kind of resistance to a 3rd party review, or insistence upon a NDA before discussion, and instantly walk away. Also keep in mind that were the advisors as good as claimed, the conversation would not be taking place, as they should already be rich; so why aren't they? Simplest is best, and its often cheaper (after jumping the hoops & paying the fees) to just buy life insurance to pay the taxes. There are also many better solutions to creation of living trusts via the premature transfer of assets; LLC's offer a lot of freedom, with 100% of the shares gifted upon death as part of the inheritance. Good luck! SD

Over focus on the 'big' gains; incurring more risk than necessary, by ignoring the little ones. Close off the swing trades in layers, versus waiting for the market price to fall below the weighted average sale price of the layers. Smaller and repeatable gains sooner, at the expense of bigger gains later ( ... if they occur at all.). Not adequately 'capping' the maximum tolerable unrealized loss. A 30% unrealized loss on a 500K portfolio is 150K, unpleasant but manageable; however, on a 5M portfolio it is 1.5M. Still disturbing, but not a big deal if you are willing to tolerate a maximum unrealized loss of 1.5M offset by a maximum 500K treasury holding. Increase portfolio risk, or grow the portfolio > 5M, and you need to aggressively shrink the portfolio to compensate. A 'top of mind' requirement, and a big deal, if you prefer concentrated commodity positions. Not for everyone. SD

We were referring to the well-known phenomenon that it is hard to see your own mistakes, you really need an independent set of eyes to see them; and independence doesn't get much better, when you're also looking at it from a strong and independent culture (USA). However, it is not a guarantee that you will be right!; you just have a better set of glasses!! SD

+1. With foreign stocks, your biggest asset is that you don't live there; hence, you can temporarily see what locals cannot. We have always found fertile ground amongst the German/Swiss/UK banks; betting on European culture, and bail-out . Your 'edge' will improve, if you also have family/relatives/contacts in the foreign location. Very different when you look at the Nano-caps and small/private companies in the broader 'green' space; as there are incredible things going on, with integration years ahead of the US. Were this the 1950's again many of those involved, would have been the Staten Island immigrants that went on to build their own factories in the US. SD

One of the advantages to sitting in a UBS, BTC, etc. as cash equivalents; is that it removes the cash. As the brokerage statement does not show a high cash balance, you don't feel you have to re-invest, now! ; no blue pill. It also allows you to be comfortable with trading around your cash equivalent, and only entering the new position on a predatory basis (bidding in scale only when liquidity is thin). Same as 'beaters' herding game through a trap, institutions 'herd' retail as well; maturity gives you the ability to see it, and change the game. Red pill. SD

Lot of tankers sitting in places where they shouldn't be. Have to think the Chinese were pissed, OPEC has agreed to made them whole in some fashion; and that a whole lot of adulterated Russian and Iranian crude is about to be dumped on the market. Russia's recent 500K bbl/day cut back is roughly 15M bbl/month ... not far off the current floating capacity anchored off Egypt. https://oilprice.com/Latest-Energy-News/World-News/Mysterious-Cluster-Of-Saudi-Oil-Tankers-Off-Egypt-Raises-Storage-Concerns.html https://oilprice.com/Latest-Energy-News/World-News/China-To-Release-Millions-Of-Barrels-Of-Imported-Oil-Stuck-At-Ports.html SD

We spat out the industry blue pill a long time ago, and recognize that when you have the risk tolerance; there are alternatives to the typical T-Bill/Canada cash equivalents. We are also still in the get rich phase, NOT the stay rich phase, so ...... different strokes. UBS is a GSIB, and so was CS. The combined two GSIBs are guaranteed directly by the Swiss National Bank, and indirectly via every other central bank in the world that is part of the Basel agreement; including the US Fed It isn't going to go under, it pays a dividend, and share appreciation is as near to guaranteed as you can possibly get. A cash equivalent. BTC is a direct cash alternative, the next halving is sometime in 2014, following which history suggests a double within 6-12 months. Should a Blackrock, etc. get an BTC-ETF approval, a double might occur a lot sooner. Should there subsequently be a e-USD, a e-Euro, or e-BRICK 'soft launch', a double might occur sooner still. Maintaining a significant exposure, is just prudence. GXE trades for < CAD 1.00, pays a 12% monthly dividend, with a double dependent upon future oil prices. Cheap way of obtaining an average cash yield on the 3-stock combination, comparable to a 1-year Canada. Obviously, not for everyone However if we can tolerate the volatility, and it works as hoped; our annual cash return is > 100%, for little additional risk. SD

We hold a mid 30's weighting in equity cash equivalents; ubs btc, gxe. If we did nothing, we would very likely have doubles a year out, and in the interim take home a monthly 5%+ cash yield. SD

You might want to consider the USD losing its current status as the worlds reserve currency. Lot of work going on that will replace the USD with a supra-national CBDC for use in nation-to-nation trade settlements. US/China/BRICS as roughly equals. The reality is that both the Chinese and US economies are economically about the same size. Settle the bulk of global payments independently from tourist/remittance flows, the gorillas get smaller/more manageable, and the focus shifts to global people flow. Not going to happen soon, but it will happen, and probably within the next decade. Not a bad thing. SD

Keep in mind that Alberta is also a boom & bust province, and it's young people and young migrants/immigrants who travel for work. Red Deer is only 140km up the road from Calgary, and is currently the 10th most affordable city in Canada... Red Deer: https://www.nesto.ca/real-estate/20-cheapest-cities-to-live-in-canada/ Average Monthly Expenses for a Single Person (excluding rent): $861 Average Monthly Cost of 1-Bedroom in the City: $948 Calgary is also somewhat unique; oil/gas head-office hub, university town, tourist route to/from the Rockies. A 20-30 something has a lot of incentive to make it home for a while, get an education, work the mostly local tourist jobs, meet all the traveling Australian/Nordic ski-bums on walkabout, and use the opportunity to find a significant other. Forces down the city demographics. Great place to get the family started, but once the eldest gets to kindergarten ... decisions need to be made. To escape the oil/gas 'trap', you really need to move to either Toronto or Vancouver; all good SD

Buy a place in Calgary and rent it out. First-time buyers are struggling to come up with the DP, and monthly rent costs are roughly $300 > than 30% of the average paycheck after statutory deductions. Between rising interest rates, drought, wildfires, local politics, and lower energy prices; the provincial economy is in the sh1tter. Lot of folks are hurting, lot more/better inventory available (relative to Toronto/Vancouver), and prices are lower. Energy prices will not stay at US70 forever, pipeline egress will largely be settled come Xmas, and population in-migration is likely to continue &/or accelerate as folks move for work. https://wowa.ca/calgary-housing-market https://calgaryherald.com/news/local-news/calgary-first-time-homebuyers-struggle-with-down-payments Good luck! SD

Those in their fertile years are too exhausted after their regular day, and the families cannot afford to not have both of them working at the same time. Ain't going to be no babies amongst the most educated without some kind of a major structural change; and without change, the future and smaller population rapidly gets progressively 'dumber'. The obvious solution is to pay for babies; via mortgage payment forgiveness, and a monthly stipend for the first X years of a kids life; have 3 kids with 3 year spacing, and this could go on for X+6 years; not practical in the western world, but well within the capabilities of the current China 'state'. Japan also burned its population pyramid to achieve its miracle, and like China; there were no babies 'cause everyone was both exhausted and expenses were extreme. Today, robots take care of the aged as the young have moved elsewhere, and arguably the culture itself is in danger of extinction. Lesson for China. SD

We have also put on a roll or two over the last little while Simply because a great many very good o/g companies in the WCSB have been severely sold down to ridiculous levels, and Alberta's recent election has added to the round-trip opportunities. Renting vs owning is about controlling risk; the expectation is that the underlying is rising long-term, and you are trading the price volatility of the underlying price rise not being linear. The share count is kept the same, and the gains pushed into treasuries. Done well; there is a new cash inflow, and the unrealized loss becomes less volatile. End of the day you're still long the thesis, but at time-to-time are neutral (50% long, 50% round-trip); keep tabs on the macro for your local sector, and rebalance seasonally. SD

The pro-active stance also indicates (1) modernization is high on the list, and (2) crypto segregated into two markets. Mainstream (Nasdaq, NYSE, etc.) access via segregated custodianship/pricing references (modern version of the London gold fix), experienced/knowledgeable on-ramps (Blackrock, Fidelity, etc.), KYC control, etc. - give up some privacy for the greater efficiency/effectiveness. Offshore markets (Binance) for the Alt-Coin, NFT's, innovation, low quality crypto; little different to the deliberate segregation between junior/senior exchanges, that already exists in most public markets. Market solution to a market problem. Big question is whether the existing crowdfunding market (GoDaddy, etc.), falls into the same regulatory bucket as the offshore market. Domestic crowdfund > mainstream offshore crypto innovation > mainstream Nasdaq/NYSE; or domestic crowdfund > domestic junior exchange > mainstream offshore crypto innovation > mainstream Nasdaq/NYSE. Most would argue that domestic crowdfunding and VC financing are quite different, and should be treated differently. We live in interesting times. SD