SharperDingaan

The reality is that the reputational damage to the Watsa family, is far more damaging than the $ lost. Good intentions are great, but they are well out of their depth in these 2nd/3rd world ventures. If this is truly going to be a long-term thing - at least one family member needs to apprentice on site, under skilled expertise, for an extended period of time. A great opportunity! We wish them luck. SD

It is useful to think in stages. During Covid, Covid Recovery, Post Recovery. Africa doesn't have the medical infrastructure that a NA or Europe has. Hence, most would estimate how long until there is a working vaccine in wide distribution within a NA/Europe, and triple it for Africa (3rd world will be last in line). The reality is that Africa will be achieving herd immunity primarily by contracting Covid, and surviving it - a very difficult business environment for quite some time. If the average devaluation over the next 5 years, is 8%/yr (conservative), a $ invested today is worth 68c. CB's in NA/Europe are dong 'whatever it takes', with current/forecast spending at war time levels in many places. The traditional hedge against unavoidable currency devaluation is precious metals; either bullion itself, or the miners producing it. Africa is home to some of the most productive gold/platinum mines in the world - and the shares of all the bigger miners trade on unrestricted global exchanges, outside of Africa (liquid, enforceable rights, no capital controls). Pretty clear where a foreign investor, wishing to invest in Africa, needs to be. The equation changes if the investor intends to consume the production, as either a tourist, or to make/distribute some other product. Buy that second property in Cape Town ;) not Florida, and visit for 3-4 weeks every year. Use the minerals (China), or resell to others (Glencore, etc.). Point is - there has to be a flexible and intelligent LONG TERM plan If you had a $ today, to put into either a FAH or an ABX, where would you put it? Then, do you really see that changing? while Covid does its thing, around the world? Hence, maybe it's time to rethink the execution. WEB did it with the airline stocks. Africa is a tough place to invest, and we wish them the best of luck. SD

Just to give an indication of the FX headwind. 07/09/2019 the ZAR/CAD FX rate was 10.791:1. One year later, 07/09/2020 the ZAR/CAD FX rate was 12.4363:1. ZAR had devalued by 15.25% ((12.4363-10.7910)/10.7910) x 100. The Atlas Mara and CIG investments were made when the ZAR/CAD was stronger. Their cumulative FX devaluation is a lot worse. The FAH books are denominated in USD. Balance Sheet revalues every quarter-end, reducing equity. To maintain the BS ratio's requires fresh capital every year, in addition to the maintenance capex. Not a problem while they are rolling in the investments, but after it's done? Not to say that it cannot work, but it's a lot of work - just to break even. Hopefully, it works out for them. SD https://www.bankofcanada.ca/rates/exchange/daily-exchange-rates-lookup/?series%5B%5D=FXZARCAD&lookupPage=lookup_daily_exchange_rates_2017.php&startRange=2010-07-09&rangeType=range&rangeValue=1.y&dFrom=&dTo=&submit_button=Submit

Behavioural conditioning requires both rewards and penalties. It can't be one side of the coin only. It is also a simple task to add 'circuit breakers' into the conditioning process, as already occurs on the major exchanges. Sure, it is not libertarian - but neither is the 'real world. It's just an alternative approach, that also solves some practical problems. An echo-chamber is of no value - to anybody. Game in/out friends/undesirables, and you just destroy the value of your time and reputation invested. Self correction. Different strokes. SD

Just to add to this ... Consider upvoting/downvoting + an algorithm as the self-regulating mechanism - by which to move people between tiers. 3 tiers at a different annual subscription rate/year - Tier 1 at zero cost, Tier 2 at $$, Tier 3 at $$$$. You can buy access to a tier, but if behave like an asshole the algorithm bounces you down to a lower tier. Do quality posts, and the algorithm bounces you up a tier (& free of charge for however long you remain in that elevated tier). Incentive driven behaviour, and costs covered. Consider a similar override algorithm for the controversial. A NYC is what it is, because their ain't no shrinking violets, it is very 'grounded', and they ain't above telling anybody off - directly, and with panache :) It is the antidote to echo-chambers. SD

Nice to see. Congratulations! SD

Most long-timers have just evolved over time. At one time they were utter sh1te, and the board was a valuable asset. Over time, the value-add of the board declined as they got better. Eventually, ongoing participation just wasn't worth the upkeep. No dispute that the tone has declined quite a bit over time. I flatly will not post on our positions any more, other than for disclosure or time-capsule purposes. Lots of time for informed enquiry/criticism - but peanut gallery comment? PFO. My own view is that the tone reflects ongoing deterioration in US business leadership/civility. When tolerance of Trump antics are the 'new norm', a decline in tone is pretty much inevitable. SD

He's not wrong - but the timing of all this is the mystery. Reserve status loss is also a LOT more routine than most recognize; everytime a nation's economy reverts to 'dollarization' - versus its own currency. Zimbabwe, South America (multiple times/places), EU member switches to the EU, etc. Most often not 'planned', more a gradual build-up to a tipping-point - and sudden change, expressed as a 'market discontinuity'. Folks don't want to hear it, but the recent technological ability to use CBDC, as a global reserve currency replacement - fundamentally alters everything. The limitation is not the technology, but the thinking/mind-set. Reserve status confers power, but it's a limited term (long-term) engagement, and inherently disruptive (unstable). CBDC offers shared power, no time horizon, and is inherently stabilizing (high volume trade/capital flows settle via the CBDC, low volume trade/tourism flow settle via local currency exchange) Game theory suggests a once-only advantage to the first nation, that converts its reserve currency status to the CBDC A China never gets reserve currency status, and each of the USD, EU, Yuan, etc lose their regional currency status. Unlikely to occur under a Trump - more likely under someone else. The more global disruption/bad community behaviour, the closer the tipping point. SD .

There's is little doubt that over time, FAH could build a solid business in Africa. But it is wealth in an isolated gilded cage, and only local - try to convert that wealth into hard currency, and most often - investors will be disappointed. Always a devaluation + liquidity discount, the size of which will vary according to money flow in/out of the MCSI index. Colonialism has been much maligned across Africa, but the reality is that the business model was very successful. Colonialism 2.0, is even more effective - let the natives control the domestic assets (saving on upkeep), and control distribution/sale of the output instead (minerals, food, exports, etc.). China's Belt & Road initiative, in various african nations, a more recent example. We may decry Colonialism 2.0 as a business model - but if you own a cottage/holiday property, you are practicing exactly that. The municipality services the area as it sees fit, sets the taxes, you pay them. You take the benefits of the property/area, and sell/use them for as much you can get. If you don't believe - look at the seasonal towns, swamped by large numbers of long weekend 'outsiders' - some bearing covid-19. Who is doing the protesting? Point is, this might be an opportune time to rethink the approach. Hopefully, they do well, no matter the decision. SD

Depends on what's a "reasonable time frame". The time frame I see most often in the media is 12-18 months. It's hard not to be doubtful of that claim. From what I at this point we have the knowledge and capability to pretty much make any (most?) vaccine in 12-18 months. So I'm not so worried about the time frame. What I'm worried when it comes to the vaccine is: 1. Will it be any good? 2. Will the moron internet people actually get vaccinated? I am by no means an anti vaccination individual. Get your vaccines and trust science. That being said, I don’t get the flu vaccine every year, and a vaccine produced for a virus we don’t truly understand does give me a bit of pause. I’m pretty much extremely low risk for covid to begin with. I probably would get it anyways, but seeing a vaccine rushed to market without any significant length of testing/long term effect analysis does make me think twice. There are people on here saying that hydroxychloroquine hasn’t been tested enough and verified with long term effects. Wouldn’t it make logical sense to be just as hesitant regarding a vaccine? An accelerated covid-19 vaccine is not going to be rapidly accepted, until the public sees whether large numbers of the high-profile 'volunteers', get the virus or or not. Nice if they don't die (for social media clips), but no different to the tried and true poison testers of old. Show me, don't tell me :) SD

Hate to say it, but FFH really needs to rethink this entire thing. After FX devaluation, the investments will have to be stellar performers - just to break even. Until Covid-19 has run its course -simply put the cash into more robust entities (Barrick, Anglo-American, etc) doing acquisitions in the space. They will be the first to recover, and their shares are liquid - allowing easy exit at any time. Reassess later once the survivors are evident, and everyone is looking for recapitalization investment. Africa is not a place where the wealth is made by owning the capital stock. It is made by selling the annual production at a profit abroad, and returning only enough capital for maintenance capex & modest growth. Capital assets routinely get nationalized, and African countries routinely devalue. SD

Envy isn't unlearnt. The antidote, is all about subtly 're-setting' game decision matrices. Many a shepherd/women knows that's all that's required to break up a 'bromance', is to parade an attractive/available women in front of them. Competition will do the rest, cause both bro's to become available, and put both women first in line. Everybody wins. Of course - the trick is to recognize when YOU are being gamed! Talk to your significant other - you'll soon discover that you haven't a clue :) SD

Without envy, it would be very hard to motivate your sales force. If they aren't hungry, they aren't selling - and you're the evil bastard game-setting by putting the 'standards/expectations' in their heads. SD

I have used play accounts for much the same reason as LC. Primarily to train in the mechanics of the asset class, and the associated emotional highs/lows. The bad times typically more valuable than the good. I have also used them to side-car long-term positions that I did not wish to sell - to prevent them from influencing the main portfolio. Given your purpose, and location, the obvious choice is SPY puts. Simply because the changing election prospects are already part of the daily index. Make money, as long as the election result is likely to produce significant change, good or bad. Just be mindful that if you end up keeping the 'funny money', while those around you lost their shirts, you will be resented. Not a lot of fun, should the economy settle somewhere between the Great Recession, and the Great Depression, for a time. SD

On food production.. A very large % of existing production is extremely wasteful, and just goes to landfill, particularly in the US - the limitations are water availability, and production volumes at the expense of quality, and wastage. The 'solution' is increasingly being seen as integrated, drip-fed vertical greenhouses and fish/shrimp farms, in run-down urban centres - processing waste water. The poorest neighbourhoods eating the freshest, and highest quality, fish/veggies - because they are the cheapest food available, grown in the neighbourhood, and the largest local employer. The 'farm' now in the city itself - not hundreds of km away. And yes - fish/veggies are not the only tings that are grown in these. Gotta maintain a cash flow :) .... SD

How the words are strung, how they are expressed, and which words/phrases are used. Partially accent as well. Main point being that you will not 'sound' American (which is much harsher), which you will do if if you learn Spanish in the US. The Lima experience is to add harshness, and fluency in the local slang. Dilute your use of American slang as much as possible. To use a Canadian example, there is Quebecois, and there is Parisienne French - both are French, but each are instantly recognizable. There's no mistaking where the French guy muttering Tabarnac! comes from. Similar thing with Spanish. SD

Probably my biggest take-away from traveling was exactly this: I met several people with 1/100 of the assets/salaries of us here in the west, but they were 100x happier. Puts our first-world problems in perspective and frankly how unnecessarily we grind so hard and become so unhappy. Been to ~50 countries and agree with both of these big time. Once we get past the pandemic, I'm going to look heavily into digital nomading/slow travel. It's not that expansive in most places in the third world. You just need to find a place to rent monthly. In places like Mexico my cost has been between 500 to 1000 dollars per month. Yeah, was mainly saying that due to my US passport and the virus outbreak, I'm persona non grata for most places in the world currently. I think I'd target SE Asia starting out, Vietnam or Thailand. Really liked Da Nang when I was there in November. Though eventually would like to try Buenos Aires, Santiago, and Medellin. I'm absolutely not a warm weather person so would have to migrate in the summers (or get closer to the poles where it'd be cooler). With US citizenship, you might want to confine your traveling (until AFTER the elections) to just the major centres. In a great many places, a US citizen is a ATM machine. Each one worth a lifetime's earnings, if grabbed for K&R, and sold up the chain. Grab &/or early release, typically a function of how you/your government are perceived. South America is a great place, with great people - but it will help you tremendously if you can speak Spanish, and eat local. A few months in Quito (Ecuador) at Spanish School, then Lima (Peru) to polish it up. Why Quito? Dialect matters, and it will affect how you are perceived. Why Lima? It's cheap (by NA standards), and the jump-off point to the Galapagos, Manchu Picchu, and the Nazca Lines. Highly recommend a 3-4 month stay in Buenos Aires. It really is the Paris of South America. A 2-3 month stay in Rio de Janeiro, straddling Carnival, is also something that you will never forget! Enjoy! SD

Oh, I love this.. especially Marlon Brando's #3 "Try not to enjoy yourself too much" LOL Man's got to know his limitations ... https://video.search.yahoo.com/yhs/search?fr=yhs-symantec-ext_onb&hsimp=yhs-ext_onb&hspart=symantec&p=a+man+has+no+know+his+limitations#id=3&vid=806b595af7f61ef8447fadee1c6baf01&action=click SD

Welcome back! Long ago I was advised by a very smart CEO, that I could expect to be no more than a 'so-so' investor - UNTIL I had built and run a business. Simply because running a business, is all about successfully working with people, to produce something profitable that the communities around you need. The 'investment' side is nice, but secondary to the day-to-day management. The takeaways were that (1) Being an arsehole is a short-term proposition. EQ will take you a lot further, (2) Treasury/trading is just a silo. Be good at it, but realize that you are just one of many silos, and (3) Leadership is gold. It comes with responsibility, but do it well - and you can rule the world. I would add to this, that to learn humility - you really need to travel, and see/smell the world up close. There are amazing people almost everywhere you look. SD

Have fun, and keep lurking ;) Best of luck SD

I've always found that the 'rule of 3' works very well :) 1. Sh1te happens. When somebody crosses you. accept the one-time cost - but have a friendly quiet word with them afterwards. 2. Angels tithe. When you're crossed again, accept the cost, but take precautions. Blunt discussion with the tone deaf. 3. Horse's head. Maximum recompense, no holds barred, try not to enjoy yourself too much. SD

What is optimal depends on your career plan. Whether you choose the accounting or investment route, when you start – you need to be in a Big-4, no older than 22-24, an undergrad from a top school, the right skin tone, have ‘connections’, and there to obtain the experience component of a designation. Same process whether the designation is a CPA or a CFA. Widespread abuse, par-for-the-course. Don’t meet the criteria? you will always be 2nd fiddle to those who do. Sure, you might be smarter – but if you’re too old, not the ‘right’ school, wrong colour, or no connections …. you will be 2nd fiddle for life. If this is you, play a different game. A great many CPA’s and CFA’s are also MBA’s - particularly if the plan is to become senior management at some point; a fairly high % hold all 3 designations. And almost all of them will tell you than once you grow up - you build and run companies, not trade bits of paper. Back to the plan, and is there one? Then what have you done today - to make the plan happen? SD

You were hired by a Big-4 audit firm because you are pursing a CPA - is that off the table now? What is the career plan? SD

Masks are about reducing the ability of Covid-19 to spread, NOT preventing spread. Covid-19 is a global pandemic - YOU, as one of the vast majority of people on the globe, are going to get it. Your hope is that you can either get vaccinated before contracting Covid-19, or that there is a ventilator available should you need one. Freedoms are great, but they come with responsibilities. Don't act responsibly, you die. Bar owners, restaurants, etc. COLLECTIVELY pushed for early re-opening, reduced social distancing, and no masks - so that they could avoid bankruptcy. Patron, and staff deaths, are just another cost of doing business. Easily replaced. The real fear to Covid-19 is that 'wealth/status doesn't save you'. Whether that be the size of your bank account, your 'class', or the colour of your skin. Sure, you can buy the best care, but once on the ventilator - the family has incentive to pull the plug. You are either spending the family inheritance, or splitting the inheritance too many ways .... better for all if you don't 'linger'. SD

Same thing in Ontario (Canada). Part on-line/in-class being pushed as it also addresses child care (assumes a parent/guardian) is at home on the on-line days. SD