SharperDingaan

Margin is just a tool. The result depends on how good/bad the workman is. When we use it, we're typically doing something similar to LC. Temporarily mortgaging in pounds sterling and reinvesting in CAD, in anticipation of a pound sterling devaluation. Temporarily stumping up to cover a short sale, prior to covering the short with a convertible debenture. SD

You might want to re-familiarise yourself with how the Greek Government Debt Crisis was resolved. The EU already has a template, and Italy is little different to Greece. https://en.wikipedia.org/wiki/Greek_government-debt_crisis Like it or not, the EU experiment is breaking up. The UK exit will be followed by others, and there is little the EU can do beyond jawbone loudly. Re outstanding debt, all a sovereign need do is declare a debt moratorium, and announce the new repayment terms. Iceland and Greece are just the more recent examples. SD

Your train station example evidences that even Detroit recognizes that the future is electric, not ICE. And the Jefferson plant evidences what you do over transition. Build huge & new; then transfer work from all the less efficient, higher cost and smaller plants, to pay for it. OK for maintaining profit, not so hot for the laid off workforce. SD

Vehicle manufacturing, and workforce re-training. What we are starting to see in vehicle making, resembles what occurred when cars displaced the horse and buggy; today's auto-manufacturer being yesterday's buggy maker. Bet against NA auto, and its ability to adapt rapidly enough. An electric vs an ICE vehicle requires materially fewer parts, and they are easily replaceable modules; you don't fix, you swap out the module. What do you think happens when 40-50% of the NA vehicle-making workforce becomes obsolete? And do you really think that today's GM or Ford will look anything like it might look like, under an 'all electric' line-up? - even if a GM or Ford still exist? Workforce retraining becomes a growth opportunity. SD

I noticed the same thing. It shows how people are starting think about it, even though it obviously has no value because it isn't printed on green paper with pictures of good (i.e. dead) politicians on it. It’s gold for millennials. It’s also a solution if you need to launder money, live in Country with Capital controls and a crappy currency (which typically go hand in hand) and want to transfer you wealth. It might have its limitations, but if you need to move money under the nose from a government, than its the way to go. It's just hype. The price change is not unusual, and just happened to coincide with the ME news this time around. Hard to make the case that ME tension was the cause. SD

Given that you're a value investor - and cheaper than sin! Might I recommend a humble bicycle ..... with a detachable motor on the back, for the hills !! Buy vintage, buy quality, and it could well even appreciate over time. No gas or insurance, maintenance is already paid for. And all that exercise is going to ensure that you live a lot longer - and cashing many more pension cheques. ... making the whole thing a positive cash flow, positive NPV choice ;D SD

Merry Xmas, and the best of the season to all. SD

PPP is a long term measure, and ASSUMES no further changes. Brexit is a continuous application with extreme change. A more practical independent measure is the 'Big Mac' Index, which is often closer to current FX values. https://www.bigmacindexconverter.com/ Plug in the numbers for GBP and Euro. GBP is at a premium to the Euro of ((100/91.26)-1)x100, or 9.6% About the same as the current GBP/Euro FX rate. SD

One month after Brexit, would you expect GBP to continue trading at a premium to the Euro?, as it does now, Or is it more likely that GBP trades at a discount to the Euro? - to promote badly needed trade, and the jobs that go with them. The current premium is approximately 9%. If it swings to an equal but opposite discount, it implies an 18% devaluation in GBP Devaluations typically occur over time, the populace often doesn't realize the significance, and 18% is relatively mild. If you have the ability, they should be taken advantage of. About once/decade the CAD/US FX rate becomes < 1.0000, versus the more 'normal' 1.3200 -1.3500 range; routine periodic trade based appreciation/devaluation of roughly 32-35%. Just a different POV. SD

You might want to temporarily just sell the GBP, for US/CAD - and have the currency sent out of the UK. Park the proceeds in US/CAD treasuries, Canada's, GIC's, etc for a year. On maturity, convert back into GBP - and send the currency back into the UK. The expectation being that Brexit devalues GBP, and that the disruption lowers the market values of most UK companies. You get more GBP upon repatriation, and the opportunity to buy the targets for less. And while you are waiting, the funds are not at risk in the UK - and not temporarily subject to any kind of capital control. SD

https://possector.com/management/restaurant-failure https://possector.com/management/restaurant-failure "Watch the video to hear the hosts of “Restaurant Startup” discuss why restaurants fail." If someone suggested a 'buy and hold' investment to you that could make a lot of money, but which also might well result in a capital wipe-out within a 3 year holding period, they would be scoffed at. An example being OBE ... ;) But 'package' that same risk of capital loss as 'owning a restaurant' - and suddenly it's a great idea! There is nothing wrong in taking a risk - but be very clear on if/how you are going to mitigate that risk, and whether the expected return is ultimately worth the effort. One can swing-trade a stock; with the objectives of either recovering capital, or averaging down the cost base. Sometimes it works, sometimes not so much, but you have the ability. Don't have that with a restaurant. Every publicly listed equity comes with a professional board of directors and management, that know their business. You may think them idiots, but they are paid to 'run' the business, and they do it professionally all day, every day of the week - so that you don't have to. You can own the business, and at the same time - make as much as you wish, someplace else. Can't do that with a restaurant. Just a different POV. SD

You might want to consider a different approach. In all these businesses, YOU'RE the guy who does everything. You absorb all the business risk, contract out as needs be, and make all the decisions. The reality of course is that you do NOT 'know' everything, and cannot be everywhere, ALL the time. When do you go on vacation? what happens when you're sick? how are you handling the 'control' thing? Most of us will bring specific skill-sets to the application (time, expertise, IT, $, etc.) but know little about the 'nuts and bolts' of actually running the business in question. We all 'know' they we can run a restaurant/hire the right guy, buy/rent/sell real-estate; yet the business statistics tell us otherwise. So DON'T try to do everything. Who's makes most of the return in RE?, and when? I would suggest that on a risk-adjusted basis, over the short-medium term it is the broker - taking a cut, up front, on every buy/sell. So if the rental business is your game, why are you NOT the RE agent on your OWN transactions? If your contribution is just equity - would you not be better off syndicating with a broker who 'buys what he cant sell'; & being in the house flipping business, with a team of related contractors; that don't get paid unless the upgraded house resells for a profit? Long time ago I used to do rolling 5-month partnerships with local cheese vendors in Toronto's prominent 'foodie' markets. Inject '70K' into the purchase and import of specialty cheese for sale over the christmas period, through 2-3 market vendors. At the end of the period; get your capital back + borrow costs + 1/3 of the collective profit. Never lost a dime, made a great many friends, and the total profit was almost always material. Typically, we collectively just donated it to our local sick kids hospital. Point is, do what you do best - and do not try to do everything. It's often a lot happier experience. SD

Agreed, re the Scottish Nationals, but it's early days yet - and not a lot dissimilar to our own Quebec. Until the Brexit details are settled, they can make a lot of noise with little threat of actually having to deliver - so assume they will. Per the investment POV; headline driven and persistent downward pressure on the pound. Opportunity. SD

Most would expect a Scottish referendum at some point, that results in something similar to Northern Ireland (EU) and the Republic of Ireland (Non EU). Re Northern Ireland, the EU 'divorce' already has a negotiated 'back-stop' arrangement, and this would just be an addition. Given that Scotland is already in the EU, the scots have to either leave voluntarily or get kicked out. The EU also has to front the costs of the required new 'borders' and customs apparatus (new money's), and the scotland/england border has always been notoriously 'porous'. Trust the scots to recognize an opportunity when they see it ;) SD

There's a difference between the night after the election - and a month after the election. It will take a while to execute hedge strategies - especially over Xmas. The nature of the win will emerge over the next few weeks, but to us - it looks pretty good. An obvious EU trade solution is Scotland/Ireland remaining in the EU, and the rest of England leaving. Most EU/England trade 'arbitrage' (& benefits thereof) taking place on UK soil, and the 'UK' retaining Scotland, Ireland, Wales, and England in a version of federalism. Edinburgh and Aberdeen rising in prominence, at the expense of London. They've made a big decision, good on them Now it is the time to grab the bull by the horns, and push the opportunities. SD

Are you sure that you've captured all the damages the world would suffer if temperatures rose, say 3 degrees Celsius? Or are even in the ballpark? Doesn't include the cost of flood protecting some of the worlds major cities. Screws up the numbers too much ;) Miami, New Orleans, New York, Boston, Mumbai, Guangzhao, Shenzhen https://www.thoughtco.com/global-warming-most-vulnerable-cities-1203883 Venice is already sunk .. so not on the list! SD

The reality is that the climate is slowly warming. Why, really doesn't matter; it is the consequences that do, and who it occurs to. Damage in rich areas gets the grease ... damage in poor areas, is just nature doing her thing. Is climate change enough of a disrupter, and now far enough along (tipping point) - that it has become investable? Most would say yes - look at each industry, determine the winning/losing directions, and invest accordingly. Arguably, it is the opportunity of the century - IF you can accommodate CHANGE. And there's the rub. Work in the Tar Sands, and you have to explain to your young kids every day - 'why you are killing the environment'. A difficult, and very resented conversation; that most often cannot be answered satisfactorily. The solution of course - is to COLLECTIVELY change the framing. And that is why your mom/dad are working very hard everyday, to change that - and make Tar Sands one of the cleanest energy sources in the world, that children everywhere can enjoy. That means we don't create garbage, we recycle and reuse, etc, etc. It is the things done to CHANGE THE COLLECTIVE FRAMING that are 'investable'. Nothing 'profound' here .. but it means that going forward, we're not doing things the same old way anymore. And isn't 'resistance to change' what the climate change debate is really about? SD

His only crime is that he is very good at what he does, he dances to his own tune ... and 'eff off the rest of you! Being from society he's supposed to 'behave' as such, and be controllable; NOT an unpredictable, disruptive black swan! The 'beserker' rugby reference is very telling. You may think him an idiot, but often people like this really do change things. They easily do what others fear to, the risks don't bother them, and there's often a strong sense of right/wrong - it just might not be everyone else's idea of right/wrong! The societal resistance is just fear of change. My kind of scum! https://www.starwars.com/video/my-kind-of-scum SD

Different business models - most hard asset businesses have inventory, higher obsolesce, and distribution costs - that a soft asset business does not. Physical inventory has a monthly working capital cost, & loss to 'shrinkage'. B2B physical movement costs to/from premises, and B2C costs (Amazon delivery), are additional. If I didn't have these costs - I'd look great too! SD

Have partners .. to spread the financial risk, and time involvement over. You cannot be everywhere at once, you need a variety of things to do, and you need to hear different POV's. Think the trade guilds - welding, brewing, bread making, cheese making, etc. Get the masters certificate, buy out someone who wants to semi-retire & reduce their workload, and use industry/grant funded apprentices for much of your labour. I hold a Master Brewers Certificate, own a part interest in a craft brewery, and occasionally contract brew for others ;) Some folks learn to play guitar or drums ... and some are just utter sh1te at it! But brewing beer ... now that's something I KNOW how to do!! Think block-chain/smart-contract technology. Take an existing business, gut/automate its processes using this tech, consolidate an industry sector, and get bought out as the lowest cost provider. Needless to say - don't wake anybody up until you're the gorilla in the room. Good luck! SD

Credit agreements just spell out the contractual terms of the lending While the stated terms were 'negotiated' (at time of agreement), the 'tone' of the agreement is equally important. 'Tone' being specific language, the frequency and nature of the ongoing loan review process, etc. Citing the term: 'going concern' in a trigger point, indicates termination of discussion. The lender either gets repaid the loan in full within the 'cure' period (typically 5 business days), or forecloses and begins a liquidation. The external auditor has pronounced the business is no longer viable, and the banker is just acting accordingly. The struggling business makes its case to an independent 3rd party (external auditor), familiar with the business. There's no 'negotiation'; management spends its energies delivering results, and evidences the business is a viable going concern. Harsh, but a very practical solution. SD

The day a 'going concern' qualification appears, the outstanding loan immediately becomes due. SD

You need to re-read your source material. You are receiving a mandatory buy-out offer at a 30% premium to the market (the $1 you paid), and it is not a dividend. SD

Think of it as a 'fleecing' exercise .... 1) IPO a portion at a good price. Collect for the state, lots of fee's, 'opportunities', etc .... 2) Spike oil prices (Iran), Inflate the share price and create an exit opportunity. 3) Let the reporting do its work. This thing is sh1te!, the reserves aren't what you thought, price falls like a brick. 4) Hail the saviour. Mandatory buy-back ... off the now 'very low' share-price 5) Negotiate new drilling deals at dirt-cheap prices. And per the Global Corruption Index ... https://risk-indexes.com/global-corruption-index/ The level of corruption in KSA is very close to that of Russia and China, only marginally less than it is in Nigeria, and about double that of the US/Europe. ;) Kind of like WeWork ... but this time they actually manage to get an IPO off. SD

Exactly. Then the question becomes: what enables high interest rates. And the answer there is, scarcity of capital. Now, I would argue that human capital is cheap. Financial capital is cheap. Material capital is cheap. So, what will cause a contraction in capital availability? That is the question. The excess capital (human. financial, material) is not what it seems; and assumes ongoing continuous external intervention, to maintain 'near perfect' conditions. Continuously keep dosing with a drug, and after a while - the intervention becomes toxic. Ultimately, the patient collapses. We are in the land of negative interest rates - how long do you really think that can be maintained? We have the addiction to QE - even a mild reduction in the doses now causes economic fits. And widespread automation, with nowhere for the displaced to go. Value investing relies on stable environments. Per the metrics, today's ABC stock is cheap/expensive relative to its history - which isn't much different from today. But if today is a very different place ..... are those comps still relevant? Hence Taleb's bar-bell keep coming to mind. Find time-tested safe places to keep the majority of your wealth in - and bet the rest in asymmetric bets on market failure. The what's in your head, the gold bars/bitcoin, bolt-holes in various places, etc. SD