SharperDingaan

Look at it a different way - what is it that you are really trying to do for this person? 'Cause it would seem that it's really about the relationship this person has with what money is. ie: it's simply a tool. Offer to split an ongoing charitable donation with him/her, conditional on it being something that you both actively participate in. You will both be 'equals', there will be no 'perception' issues, you will do good things, and over time you can assume a growing portion of his/her contribution. If something more comes out of it, great. Guarantees are a really bad idea, and put both you and your family at significant risk. Different strokes. SD

For many people, Canada is the 'safe' place. You may be rich in your home country, but if it could all be taken way from you in the night, you aren't secure. You solve the problem by buying something in a Canada and paying in full; if you have to run you have a place to go, and can immediately mortgage the property for money. If you subsequently need to change passports, or educate your kids, Canada is a very safe and neutral place to be. Most migrant labour will get a much better deal in Canada, than elsewhere. It'll still be a hard and shit life, but you'll often be allowed to achieve citizenship, and there will be less systematic discrimination that there might be elsewhere. There are not that many Canadians, society is a lot less 'rigid' as a result, and if you at least try to integrate - a lot more open. Even in Quebec! The first house they own my be a shite box, but it is theirs, and the family will work very hard across the generations to upgrade it. It's just a different approach. SD

It just becomes the same as any other major international city. GTA prices simply move with the total net money flow (excess demand). While net inflow grows faster than demand, prices continue rising. As net flow includes inflation, prices continue to rise for some time, If the working class want to live in the city they rent, if they want to own - they buy a place outside the city and commute. Either take the commuter train to work or WFH, whichever is best for your situation. Montreal and Toronto have net migration at present. SD

"If interest rates were higher after 5 years, many Canadian that are starting out owning houses now would have no choice but default, because they can't afford the higher payment any more. You can run the math using incomes but many canadians buying houses now need to spent 40-50% of their income on housing." Not true. 5 yrs out the mortgage will be lower by the amount or principal repaid, and the property value higher by the cumulative inflation over the 5 years - all of which is additional equity. No different to gentrification, individuals who cant afford it are forced to sell, and the property goes to stronger hands. Furthermore, all banks have an incentive not to flood the supply, keep prices high, and use the equity build to either de-risk or make an incremental loan. SD

It's just a different approach. Borrowers can get a fixed rate mortgage amortizing over 25, or even 30 years. However the outstanding balance becomes due every 5 years, and would be refinanced at that time as either a floating rate or another fixed rate mortgage with a term of the borrowers choosing. Borrowers expect to have paid the mortgage off in full by retirement, following which they may remortgage up to 55% of the house value in retirement via a reverse mortgage (CHIP). Not a lot of risk. A great many in SD houses simply knock them down in 30-40 years, and replace with a monster home in the now fully serviced lot in a desirable location . Keeps new supply off the market, raises prices, and raises the value of the property by 3-5x in most cases. More if the monster home is multi generational. Smart. There are fixed rate 'locked in' 25-30 year mortgages, but they are rarities, not portable, and almost exclusively public housing. You buy your unit when built, then stay in it 'forever', sell before the mortgage is due and you lose it. Cursed by the real estate community as it crimps movement up the property ladder. Few transactions, equal less economic activity. SD

Thing to keep in mind is that CBDC is guaranteed by the central bank of the nation, and that if both buyer/seller are domestic - there are no fees to use it. Everyone has their own wallet at the central bank, and the CBDC has exactly the same functionality as the fiat equivalent. Sure you could still pay for things using some other currency or token, but why would you do so ? with CBDC there are no debit/credit card transaction fees, no commissions, and settlement is instant. A Stablecoin being used for payment purposes, simply prices at the NAV of the collateral supporting 1 unit of CBDC - or the FX rate. Same as the Yuan/USD FX rate, we now just have multiple Yuan/Stablecoin X rates - or digital currency FX rates as well as fiat currency FX rates. Stablecoin doesn't die, it just replaces the existing collateral with something better (mortgages, bonds, etc.), and becomes a 'back door' securitization or mutual fund. - little different to a SALT or BITGOLD. The problem for many of the existing Stablecoin, is that there is no buyer for the existing collateral. Opportunity SD

Most payments are going to be done with CBDC, not BTC. Minimal value to the BTC rails. Difficult to recognize if you live in NA, but very obvious if you live in a China, or Asia. Digital Currency Electronic Payment (Digital Yuan) has trialed in major centers for quite some time, and is scheduled for rollout at the Beijing Olympics. Question is why is it that a China can do this, yet the US cannot? This is retail CBDC. Wholesale CBDC replaces payment rails, and when on steroids - it replaces reserve currency. Change is here, and the writing is on the wall for both sh1te coin and stable coin being used for payment. SD Implications of Digital Yuan.pdf

Depends on the warrant, and the market liquidity. Example CVE. Pick an option market call, plug in the market price and the BS greek's, get the Vega value. Plug the greek's and the warrant strike price into BS, to get the theoretical value. Compare to the current price of the warrant. Most often the warrant will be cheaper than it should be, when everyone hates the name, the reverse when the name is a darling. Primarily a market specific demand/supply thing, amplified by level of liquidity. The more frequent the trading in the warrant, the less price difference relative to the names option market. As the dog shit names typically don't have the liquidity or the option market, they always suffer a sellers market until there's some kind of 'event'. Little different to being in a distressed security. Typically if/when that 'event' actually shows up, the 'squid' and its cousins aren't far behind! Agency matters, and they will be pretty true to form. SD

Dig around in the company (high quality only) issued warrants, NOT the market options/warrants. There are quite a few of them, and they are largely ignored as most folks look only at the stock price. Until the day the tide comes in ... then the stock price goes through the roof, and that lovely warrant looks cheap. Alternatively, play the convertibles. Sell at the conversion price when the tide comes in, buy back when the central bank raises rates, higher & sooner to combat inflation; help yourself as the market panics. Just be aware that your counterparty may well be a GS - and that their teeth are a lot bigger than yours! SD

Lot of folks in health care are privately saying Omicron comes down as fast as it went up, and that it is largely done by end of Feb. Omicron is also a major blessing, as it has brought forward the endemic (herd immunity) stage of Covid by months, and way more reliably than could have been done by vaccination. Immediate mass infection/immunization of un-vaccinated protestors, vs slow drip. Authorities responsible for ongoing operation of the health care system are in a bind. To mitigate collapse they can only publicly advise caution, and try to minimize hospital visits while 20-30% of staff are down with it. Hence, restrictions and curfews until staff are returning faster than than new ICU admissions grow. Cant yet tell Joe Public to get infected, as there just aren't the beds. However its purely a volume - and not a severity thing driving the bus. Very temporary. Once the 1st world starts waking up (All at the same time, and in Mar-Apr?), most would expect rapid change. Runups in economic activity and supply chain, offset by sooner/higher bumps in interest rates and energy prices. The more the recovery becomes evident, the more rapidly public sentiment changes, and the higher/sooner the euphoria spend (VE day effects). Historic asset bubbles start looking like zits. All around the 1st world the messaging has been subtly changing. It's no longer we're fighting Covid, it's we're living with it. Endemic stage. Once in a lifetime opportunity coming up SD

It is not just whether it is 15-60x, it is also how long it takes to get there. If your ROE (CAGR) is 12%, it takes 6 years to double, and four (1->2, 2->4, 4->8, 8->16x) doublings to get to 16x - about 24 YEARS! (4x6 yrs). If you think a decade is a more reasonable timeframe, you are doubling every 2.5 yrs (10/4 doublings), and compounding at 28%/yr (72/2.5). Most would not see that as unreasonable ....... yet HW and WEB have CAGR's in the 15-20% range (17.5% average) - and you think you can do 1.6x that (28/17.5) ??? There is a reason for the disconnect BTC is currently at USD 42K, at 16x it needs to be USD 672K in year 10. Or 1 Satoshi at 6.7 tenths of a cent - at a time when buyer/seller are splitting the cost of an update between them. A mind-set thing, not a valuation thing - and the younger you are the better. Different PoV. SD

We take a similar view. AliPay and WePay are getting hit because DCEP is gaining traction and breaking up the oligopoly - yet very few investors in these two stocks seem to recognize that. In China the receiver pays the payment transaction fee, and both payer/receiver rely on the credit of the payment providers. With DCEP there are no fees and PBOC is the guarantor. With less fee income coming in as DCEP adoption accelerates, what do you think happens to AliPay and WePay SD

Validation is essentially the same process as in any food processing plant - how do you actually know' that what is in the box, is what the label says it is? There is a validation process and you are trusting the validators/vendor selling it to you - a blockchain just gives greater transparency. The individual medical record is just stored on a genesis block, and called up as needed. Every procedure, prescription, etc. thereafter - just chained onto the block. Medics (anywhere in the world) simply access it via an injected dog tag referencing the genesis block - whether you're dead or alive. If you're found wandering, or dead in a ditch somewhere, you are identifiable and your family can retrieve you. SD

You don't - and that is the major limitation of blockchain. The blockchain is just an incomplete digital record 'purporting' to represent a real asset - it generally just tracks the 'box', not what is in the box. We get around the problem by issuing an assignable blockchain proof to accompany the physical product. A 1oz gold wafer produced entirely with 'ethical' gold, generates a 1oz proof. Thereafter, any 1oz gold wafer plus that 1oz proof, represents an ethically sourced 1oz wafer. Buy a gold ring for your significant other, and you buy both the ring and the certificate - otherwise accept that some of the ring is blood gold. SD

OBE is currently up 21%YTD net of the sell off down to CAD 6.29. Right now it's primarily o/g FOMO driving activity, but the change in attitude is just beginning .., As Gregmal says: Psychology is often predictable. And what’s interesting, is look at energy. Outside the US, most of the world is still hiding in their bunkers. Wait til they flip the lights back on. Crude futures still look highly attractive. As do many other commodities. "Lot of folks still see OBE as the old Penn West, and divide by the pre split 7:1. The attitude is 'come on .. this POS is < USD 1.00/share, it's a goddam penny stock!', and that isn't going to change. The flip side is that at USD 2.00/share pre-split 'PWE' is still very cheap to these folks - but it's a USD 14.00 OBE price for you and I, or CAD 17.75 after FX conversion; all largely because of changing perception." Should OBE make the CAD 17.75 by year end ..., the 2022 YTD return is 340% Covid easing, and the world waking up earlier - all bonus. SD

"This dramatically underplays the limitations of renewables, especially if when you talk about renewables you mean wind and solar. Also seems to dismiss or downplay the externalities of energy sources other than nuclear." It's just a different perception .... Over time, technical limitations get resolved. Batteries/storage get better/cheaper, generation/delivery efficiencies get better, cap cost/iKw declines as scale ramps up. Relative to most other power generation, decommissioned (& removed) green tech equipment is pretty benign. There IS a need for power stations to add resiliency, but the preference is clearly gas over coal, and they are for standby - not base load. Again, decommissioned (& removed) gas fueled power generation equipment is pretty benign ... coal not so much. Hence, if you can afford it, the standby fuel is gas, hydrogen, methane, methyl hydrates, etc.. There is also a need for nukes, and updated power grids to feed the rapidly growing base-load EV requirement. New designs, improved safety, lower cost/kw, etc. are handicapped by the legacy of large numbers of old plant/design. Decommissioning is expensive, and is that old site really safe 'forever' (what did you the waste buildings, handling equipment?), if 50-100 yrs out nobody is monitoring it any more? If there is no social license, those new nukes aren't going to be built. Hence the best nuke is a NEW high-capacity nuke, someplace where there AREN'T any others. Ultimately, local societies decide what they think works best for them, and different societies will have different solutions. SD

View of the ESG crowd. A toxic screw-up (melt-down, contamination, etc.) is still toxic - no matter how remote the probability. Hence the best nuke is the one that is never built, the best O/G is that left in the ground, 100% renewables is better than 50%. While it is understood that 100% renewables is not practical (when the sun don't shine, or the wind blow), the non-renewable still has to be minimally toxic. Safety/KW generated is meaningless, as every survivor who lived next to Fukushima or Chernobyl knows. It is just a population choosing to live and get its energy a different way. Alien by many NA standards, but a quite practical PoV to the many Europeans who live there, and their younger generations. SD

European solar is typically urban rooftop application; the European 'solar farm' just has people living under the solar panels. Power generated/used at source, offsetting line-loss from a central farm (US approach). Windmills in the rural areas are an increasingly common sight, and they often double as cell phone towers. Unit costs are dramatically falling as manufacturing scales up, & it is still early stages. In the ESG world, nukes are right up there with dirty oil. Oil harms when you process and burn it. Nukes harm when you dispose of the waste. In both cases if something goes wrong people die - but with nukes the pollution lives on for multiple lifetimes. Obviously, the more alternative clean energy you can generate (and the less oil/nuke) the better. SD

There are a great many cheaper and cleaner options than nuclear and coal. Windmill and solar backed up with battery, gas, hydrogen, methane/hydrates, is a far more practical choice. The clean tech is cheap/unit and can be put up most anywhere, fuel burn doesn't happen until you really need it and it is typically for weeks only - not months. Reprocessing methane from local garbage dumps is also a job generator, materially cheaper than nukes, much more benign, and far easier to staff. The Europeans aren't stupid, they just have a different approach. Europe/Russia are currently 'negotiating' Nord Stream 2. The Russians need the export money, and turn the screws to hear 'how much you love me'. Europe (Germany) refuses to take, and turns the screw on 'how much do you want to stay in power'. Lot of drama, but eventually there's a deal. Until then higher prices for gas (US/ME benefit). Clean tech crossed the tipping point (Gladwell) when ESG reporting came into widespread effect. Adoption is accelerating throughout the world whether we like it or not. The angry shouting is from the industries being gored. It is just industry disruption. Different process, but not that dissimilar to the disruption of fintech. SD

Viking, great job! We also both owe a big thanks to Dazel for highlighting the 2021 FFH opportunity, when nobody wanted to hear it. We were in FFH as a safe place to park repatriation capital - just wasn't expecting to make double digits on it! SD

Consolidated equity > 100%. Capital for repatriation > 65%. It has been a great year and should be the start of a consecutive string of them over the next 4-5 years. Key assumption being an annual material capital carve-out to remove excess capital. Wins across all our o/g stocks, crypto, etc. ; even on our capital carve-outs (FFH). Losses &/or overpayments on the equity positions being built for years 3-5 (as expected). Minimal reduction in share quantities, ensuring maximum dividends going forward. We were lucky, but a lot of it was strategic planning and expertise as well. Continuous carve-outs to keep reducing risk and keep us within our circle of competence. Seasonal roundtrips as opportunity presents. Crypto trading off of ongoing technical developments, via ETF’s. Over time, accumulating capital carve-outs will fund capital repatriation as an annual dividend; the corpus essentially being a private version of Norway’s Sovereign Wealth Fund. When we inevitably bust as commodity investors, our gains over the cycle will live on. As the bumper sticker says … “Please God, give me one more oil boom. I promise not to piss it all away next time.” SD

Happy New Year! .... with a little kickstart from the Great Big Sea. https://www.youtube.com/watch?v=f-oC-kNtPTs Fortune and glory to all! SD

Not factored in here are the severance savings in relocating the office. It used to be that if you acquired a company, resulting in staff having to travel > an additional 40km to get to work, you had constructively dismissed them. You had to give the acquired staff a severance (whether you wanted to or not), and the total amount could get very big, very quickly. If the acquired staff chose to move, you had to hire them as new employees as well as give them credit for their prior service in the acquired company. Today we don't have this issue, if you have a virtual office, or work from home 3 days or more per week. You are little different to the travelling salesperson responsible for a sales territory - as long as the 'new' office is primarily 'on the road' and your are still responsible for the same territory, there has not been enough change to warrant 'constructive dismissal'. Similarly, if you work from home 2 days/week ... as the office moved to you. If you're looking for savings, and have a large footprint .... WFH has a lot of advantages. If you want to sell me office space, I want a multiple of these severance savings off the rent, and I want them sooner vs later. I also want compensation for the spend of my returned employees in your food-court, from which you are charging local vendors a higher rent. On a new lease ... very low near term rents, subject to long-term rent escalators, and a minor termination penalty for early release. Not good for office REITs. SD

Not a investment solicitation, but look at the Purpose funds https://www.purposeinvest.com/funds/purpose-bitcoin-etf There are probably either similar things in Demark, or soon will be. Todays kids are going to grow up with this technology - as well as the climate change solutions. A decade from now you are going to look very far sighted, and your kids will be incorporating this approach as naturally as breathing. Even our nephews, are pressing the family 25% of all o/g gains/losses from Jan 01, 2022 onwards. SD

Just to expand on this ..... What if you were willing to go long on a dividend paying XYZ, at 50% margin? i.e. Two shares of XYZ, one share paid for in full, one share entirely on margin; dividends on the two shares owned > interest on the margin debt incurred. At a leverage ratio of 2:1, a double in 6 yrs only requires a ROE of 6% (72/doubling period/leverage ratio), and this is a great many dividend paying companies. FFH has a ROE > 6%. Closed at CAD 623 and a CAD/USD FX rate of 1.2705 yesterday. USD 10/yr dividend. Assume a margin cost of 4% Annual interest cost would be CAD 623 x 4%; CAD 24.92. Annual dividend would be 2 x USD 10 x 1.2705; CAD 25.41. Net positive carry. If you believe the current ROE (>6%) will continue for at least 6 yrs, and that FFH will trade at roughly 1.0X BV, you will more than double your money. Your margin of safety is also the current ((ROE-6%)/ROE x100%. If you think the historic CAGR holds up, and assumed 10%; the MOS is roughly 67%. And .... this is the baseline expectation. Higher dividends, trading round-trip gains/losses, better pricing metrics ... and the margin debt declines. Improving expectations. Obviously there is risk here, as FFH is not a Sched-A (DSIB) issued Guaranteed Investment Certificate (GIC) However. substitute FFH for any one of those Sched-A Banks, and would get multiple times the GIC return; on the same risk Happy New Year! SD