shalab

Thanks guys - then the only adjustment is for KHC. 283 + 13 = 296B. So the IV is anywhere from 430B - 475B on 31st Dec 2016. Current market cap 419B. Another 20-24 B will hit the books by end of this year. (if there is no major cat issue or stock market crash). So we are looking at a book value of 315 - 320 B by end of the year. Using the usual multiples - the IV will be anywhere from 470B - 505B without considering acquisition of other businesses, appreciation of stock price in 2017 etc. One can look at 10-20% gains for this year. If there is corporate tax reform or other changes - things should get even better.

In the annual report - it mentions: shareholder equity: 283,001 Billions class A equivalent: 172,108 $/share If including KHC 13.1 Billion and BAC Warrant Gains 10 Billion, the shareholder equity will be 306 B. The current price including these two looks undervalued to me. Question: is the BAC gain reflected in book value/share or not?

http://www.stuff.co.nz/life-style/home-property/89647665/Warren-Buffett-puts-Laguna-Beach-property-on-the-market-for-15-3m

There is another half a billion dollar of unrealized losses with CPI derivatives sitting on the balance sheet. After the upcoming dividend, the P/B is about 1.35 or so...

I don't know why the crowd comparison is headline news ( 2009 inauguration to 2017 inauguration ) unless you want to discredit the new President. One should also remember that papers sell to their audience and all major cities in the coasts are democrat oriented. Also some of the mainstream media painted his inauguration speech in negative terms. I didn't feel it was negative but was combative. It felt he called out Obama (all talk, no action) and there wasn't a need to do it. That said, the response of his team presenting "alternative truth" doesn't make sense. Since everyone likes to put these discussions in an investing framework: Imagine listening to a conference call where the CEO states that revenues increased by 25% YOY whereas a simple calculation shows there was actually a decline of 10%. The CEO not only stands by his numbers when challenged, but is pissed that analysts are questioning him. Then, in response further queries, the company's general counsel (or VP investor relations) states that the 25% increase is an "alternative fact". I just don't get how any rational person/investor could not be alarmed by this behaviour. Yes, there's always spin. But generally in the world's respected democracies the spin is not with regards to readily established facts. All this said, my biggest fear is that Trump's narcissism makes him very manipulable. He is clearly preoccupied with his own grandeur to a degree incomprehensible to the average person. Fortunately there are some smart people around him to help guide the ship. Bump.

Looks like NAFTA will be first up on the agenda: https://www.nytimes.com/2017/01/18/us/politics/wilbur-ross-commerce-secretary-trump-trade-nafta.html http://www.nationalpost.com/canada+should+worry+trump+nominates+nafta+critic+handle+commerce+post/12461221/story.html Here is the full paper by the new secretary of commerce: https://assets.donaldjtrump.com/Trump_Economic_Plan.pdf

I guess Ben Watsa and family will own controlling stock. They will also be on the board. Company will be run by professional managers I think the Hambin Watsa investment council will continue as they hire a lot of young people to manage their money. Could you educate me? I missed this. Thanks! Well Prem runs Fairfax and will until he no longer can...be it physically or spiritually. But it looks pretty obvious who would run Fairfax if Prem could no longer do so. If you don't really know, time to do some legwork and figure it out. :) Incidentally, no one has ever said anything to me. But after watching it for all these years, I kind of have a pretty good idea of changes at Fairfax that may not seem like much, but are monumental shifts in planning or thinking. Cheers! Ha - OK! I also have a fair idea, although I am nowhere near as well informed as you. However I read your comment to mean that an announcement had been made, hence the question. Pete, It really is obvious! Sanjeev is going to merge FFH with PDH and he is the one who will be running the show!! Cheers, Gio You got it! I'll do a reverse merger...$10M corp buys out $10B corp. Cheers!

Looks like we have a Canadian version of Biglari with a tremendous record as well. http://nymag.com/news/business/boom-brands/sam-adrangi-kerrisdale-capital-2013-10/

Let us see how the board stacks up this year compared to last here

Average canadian debt in 2015: $93K Average US debt in 2016: 132.5K http://news.buzzbuzzhome.com/2015/08/bmo-canadian-debt-2015-good-debt.html http://news.buzzbuzzhome.com/2015/08/bmo-canadian-debt-2015-good-debt.html I have a home loan, car loan (at low interest rates) and put all my expenses on my credit card that I pay off monthly. I get 2% back for using my credit card. However, an average Canadian is wealthier than an average American and has less debt. uccmal - you are right that U.S has more assets and also U.S can't export its way out. I just read what Howard Marks said about cycles of loose credit & that very waste of capital. Are their any significant parrallels in history (US or foreign) which eventually came to an unavoidable end? I'd love to read more about this... Canada: 1990-1996: Government debt had exploded exactly like the US is now, perhaps with less assets. Interest rates were high. So, the consumer was squeezed at the same time as the government. To get it in order the government had to downsize at all levels aggravating the recession in the private sector. And oil was very low. It took a few years and alot of export assisted growth to get things back on track. It was during this period when I entered the workforce after school. I worked from 89 to late 1992, got laid off, went back to school in 1994 for a year and a half, graduated and didn't work full time until 1998. I read Lowensteins book and decided I never wanted to depend on having a job again. In 1992/93 I knew almost no young person who had a job. The difference for Canada versus the US is that we could export our way out. The US has no such option. This period also set the stage for 2008, when Canada, and Canadian banks were still in the careful stage, and as a result didn't suffer much. I am afraid it has degenerated since then. How quickly we forget.

Makes a lot of sense: http://finance.yahoo.com/news/trumps-commerce-nominee-wilbur-ross-there-arent-going-to-be-trade-wars-154945061.html

We have a large % of the people who have taken the poll who can retire when they want - 63.5% with assets > 500K which is nice.

We have had a bull market from 2009 till now without a major correction. Let us do a poll to see how things are looking like for our board members at the tag end of 2016.

I have never understood the deflation bet. As far as I can see: 1. Canadian economy has not shrunk despite the drop in commodity prices and people don't expect Canadian economy to tank in the next five years 2. Inflation in China/India etc. is high despite the drop in commodity prices 3. Wages/salaries are going up in the U.S 4. If the Euro/pound drops against the USD, there will be inflation pressure in the E.U 5. The U.S is a major economic power still ( > 18 trillion USD in GDP in 2016 and ~20% of world GDP ) - China has 350B trade surplus with the US, Germany has 75B surplus with the US. These economies will be impacted heavily if the US trade is disrupted.

What about deflation hedges? - looks like there is going to be inflation not deflation. I like PW as well but I think the 15% return goal in the AR is a bit disingenuous.

The pension tax is pretty reasonable - it is higher in the U.S (with higher salary cap of close to 120K) and our social security system is about to break down. Hopefully there will be some reforms will be made so it remains solvent for the needy. Specifically to this. Health care is paid out of income tax. Pension is paid for through payroll taxes. The rate is 4.95% of salary up to 54k income and 0 above 54k. This deduction is matched 1:1 by the employer. After reforms in the late 90s the pension system is very well run. I'm not sure how generous it is. Everyone gets a fixed amount based on years or residence then the rest is determined by how much you paid into the system. I think it maxes out around $1,600 per month if you've paid the max into it. Most people get less. Regarding the disparity between Europe and Canada there are several factors ate work. Yes there's more inherited wealth it Europe. There are some countries in Europe with really high savings rate (Germany, France, Italy), more organized labor in Europe, more income inequality in Canada. Also Canada is a country with high immigration (about 0.8% per year), more than 20% of the population was not born here and were quite poor when they came. So they didn't really have the time to build that wealth.

Thanks guys for sharing all the info - very informational and educational

Another advantage for Canada is the money spent on military - it spent 1% of GDP which is nothing as its security is pretty much guaranteed by the U.S. So it is free to spend the cash on other things - the U.S spends 3.3% of GDP on the military. http://news.nationalpost.com/news/canada/trumps-win-will-increase-pressure-on-canada-to-ramp-up-defence-spending-military-analysts-predict

I have found that everything is more expensive in Canada compared to U.S - especially after 2007 or so. Everything costs more starting from orange juice, hotel rates, pizza etc. Also, I was surprised they started charging for parking at Whistler/Backcomb - this wasn't the case before the Olympics. Not sure why there isn't adequate competition in Canada - is this the tax structure or something else? (difficulty of doing business) I have heard Canada has very generous pension/health care scheme - how much does one pay into it? What is even more surprising is that the median net worth in Europe is much higher - is this because of inheritance of wealth?

Good point - locked the poll, and let us continue the discussion.

We had a heated debate on US presidential race, now time for a discussion on Canada as we have so many board members who are very familiar with Canada. Here are some factors to consider: Housing prices in Canada are more expensive than the U.S. where the average is around 189K per Zillow. http://www.livingin-canada.com/house-prices-canada.html http://www.zillow.com/home-values/ Consumer taxes in Canada are higher than the U.S. Average wages are higher in Canada than the U.S http://www.livingin-canada.com/work-salaries-wages-canada.html http://www.tradingeconomics.com/united-states/wages Finally, the US trade deficit with Canada is dropping - it is expected to be the lowest this year since 1992 (pre NAFTA). While this can be partially attributed to drop in commodity prices, likely this is due to the strength in Canadian economy and the wealth of citizens. http://www.freedomthirtyfiveblog.com/resources/median-and-average-net-worth The median net worth of a Canadian household is much higher than that of a median American house hold. Canadian GDP is at 1.8 trillion, the U.S Trade (export+import) is about a third of the economy. Inspite of the commodity crash, the GDP has continued to grow - building on the wealth from last decade. The questions are as follows: Canadian GDP and wealth will grow in the next five years Candian GDP and wealth will stagnate/decline in the next five years Canadian currency will decline further in the next five years Canadian currency will appreciate against the U.S dollar in the next five years Canadian govt offers better(and more) services to its citizens compared to US

Well said...

No hedging (expected Hilary as president and dem senate and pub house - turns out pub President, pub senate with pub house). Bank stocks went up as they like the new environment as did my portfolio ;D

The odds of a Trump win is very small to be non-existent. I am yet to see a poll that shows Trump winning the electoral college. I think he is going to carry Ohio and Iowa which is better than what Romney did last time around. Trump has no path without winning one or all three of these states - Florida, North Carolina and New Hampshire. The real fight though is going to be for the senate control. A democratic president and democratic control of senate and the republican control of the house, should be a good path forward under the circumstances. https://www.bing.com/search?q=Election+2016+Predictions+By+State Anyway, it should be obvious tomorrow evening ;D They are preparing for a market crash regardless of the outcome. They are freeing up cash to deploy elsewhere. I am using a very simple metric: Trump wins: instant market crash. Clinton wins: market rally followed by market crash. Simply because we are due for one. I cant even begin to quantify how much this election has juiced the economy in the US. Also, When this distraction is past other non US issues will start to weigh on markets. EU, China, et al. This reminds me of the long build up to the 2008 Olympics in China, and what followed after.

Comparison with some other (more popular) stocks: MSFT Quarterly earnings: Income before income taxes: 5,325 million Market cap: 457 billion Google Quarterly earnings Income before income taxes: 6,045 million Market cap: 531 billion Facebook quarterly earnings Income before income taxes: 3,169 million Market cap: 347 billion Amazon quarterly earnings Income before income taxes: 491 million Market cap: 357 billion Netflix quarterly earnings Income before income taxes: 51 million Market cap: 52 billion Berkshire Hathaway quarterly earnings Income before income taxes: 10,525 million Market cap: 353 billion