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B.C. backing down and they should lose in Court since they have no authority. Although, Notley should have kept and even raised the pressure by restricting some B.C. produced gas from pipeline access: https://www.google.ca/amp/s/www.theglobeandmail.com/amp/news/british-columbia/bc-attempts-to-cool-alberta-trade-war-by-referring-pipeline-fight-to-courts/article38074486/ Cardboard

"I see where you get to this, but the market does not value other businesses this way (e.g., see MKL or BRK)" BRK ok and we know that it is much more than an insurer investing money. I would suggest that MKL is overvalued: any misstep will cause a rapid and painful derating. Cardboard

Good post Petec. If they continue heading in that direction, it will work out but, it will take time for the market to consider this the new state. Buffett has done it for decades now and it does not trade at a large multiple of book value. And these bonds or cash holdings are not permanent positions like a Precision Castparts or a BNSF. These will be sold or invested elsewhere. So yes, if they do well and earn money, the stock should follow that rate of progress. However, to call Fairfax a table pounding opportunity at this point because it should pop and simply trade at a much higher multiple of book is wrong IMO. Actually the market is likely making a favour to these people if they are true investors and not just looking for a quick exit or instant gratification since it allows to repurchase shares at a reasonable price which combined with a potentially profitable future that we just alluded to leads to a higher investment return. Cardboard

Problem RB with your post is that it is static or the result of what has happened in the past. Some of the benefits mentioned come from heavy pain in the early 90's and painful adjustments afterwards. While Canada has an enviable position currently it seems to be heading in a dangerous direction. Deficit is mounting rapidly, you have sounded the alarm multiple times on housing and related unsustainable consumer debt and you admitted that oil is a key component of our exports. Can we agree that these are facts? So in my view, and of others, these elements combined with others that I have not mentioned all seem to lead to a deteriorating trend. How can that be interpreted as positive? Catastrophes or black swans throughout history all seem to have happened following a string of bad events occurring in sequence. It seems that removing some of the risks or knowns from that chain is the way to prevent or minimize its effects. Of course, an economy or a country is dynamic and adapts over time but, say 10 years is a very long time for most people and reasonably so. Cardboard

This is from CNBC which has been typically pretty favorable to Trudeau: http://www.cnbc.com/id/105021256 Cardboard

SD, have you forgotten that Alberta is formed of independent producers? This is not an OPEC country that unilaterally decides what happen. High cost producers will shut-in production and new transport capacity (rail) will emerge short term. The market will then adjust itself somewhat. And I would say that more transportation is the more likely: Venezuela is coming down, Mexico as well, Cushing inventories are down significantly and we have a draw per API tonight or unheard of for this time of year. Why now? I think that people have had enough to endure delays and obstruction. The country loses collectively billions/year and this must change. The demand is there and will come from somewhere whether the greens want it or not. Cardboard

RB is correct on long term contracts but, now rail companies want something similar. Regarding flexibility on where to ship, there are very few destinations for oil. The refineries have been in place for decades with almost none built from scratch in the last 40 years. Same for shipping docks. While there is sometime a need to ship a certain grade of oil to a refinery, it is not major. Regarding safety and spills, I believe that the data speaks for itself. There are also very strict standards as to what enters a pipeline: level for certain chemicals cannot be exceeded. And train routes mostly connect cities and go right through them. Cardboard

And new technologies: http://www.fractalsys.com/wp-content/uploads/2018/02/2018-02-06-FRACTAL-SYSTEMS-CONFIRMS-ENHANCED-JETSHEAR-READY-FOR-COMMERCIAL-DEPLOYMENT-v2.pdf https://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aCVE-2570808&symbol=CVE&region=C https://www.cninnovation.ca/ Cardboard

A good summary of various projects: https://www.themaven.net/thealphadiscoverer/general/these-3-pipeline-projects-can-transform-the-canadian-oil-industry-5mmZCoDJNkyRxfg2Xouc7Q Cardboard

For a company that prides itself on its great investment capabilities and has a decently large team to do just that, you should question why they outsource any of it? Cardboard

"In that case, you should know that this pipeline is a pretty big deal to people in BC." That guy Gibbons is such an arrogant...... He keeps telling everyone that they should know everything but, reading his posts just on this thread alone show a level of ignorance that is pretty high. He is essentially just one more of those: not in my backyard type. Well, if the millenials in B.C. get so upset about inequality, lack of jobs, housing, etc. then I won't cry when they come for you. Cardboard

This is really a post about logistics, money and how many businesses are affected. There are multiple threads on: Macro Enterprises, oil, O&G producers. Should we move them all to the Politics section? Should we also move to the Politics section the: "I love Elon Musk thread?" What is also at stake is that we have a country that could potentially turn out very different than it is now if a new leader is elected in Alberta in 2019. We already have the current pro-environment Alberta leader boycotting B.C.'s wine, electricity purchases, etc. in retaliation to what is going on. What happens if someone with a more populist thinking comes to power? So I think that understanding what is going here is pretty important for any investor in Canada. This goes further than left or right. An out of control constitutional crisis could affect credit ratings, how business gets done in the country and potentially worst. In another words, a black swan. Cardboard

Both. These are called projects for the National interest. Just like Americans did not start going around and asking everyone's permission to build Los Alamos and huge plants in Tennessee and elsewhere. Let's look at B.C., what do they produce? Natural gas, very light oil and condensates. Where does that go? Mostly to Alberta since that is where natural gas and oil pipeline collectors are. Why does B.C. still produce so much natural gas in a very depressed environment? Because their very light oil and condensates which comes from these same wells is selling for often more than light oil in Alberta. Why? Because bitumen producers need it to mix it with their product to allow shipment into pipelines and into most rail cars. Obviously the B.C. producers would like feeder pipelines to LNG plants on the B.C. coast but, for now that is just a dream with all the obstructionists. So their business right now, royalties collected by B.C. are mostly due to Alberta. Start to see the level of hypocrisy? Cardboard

"The pipeline company pissed off the people..." Wow! It is more that a mayor in Montreal opposed it in every way possible because he is anti-oil. Yet this idiot who has not been re-elected by the way (although the new mayor is likely no smarter) allows oil to flow by tanker in the St Lawrence. He even dumped a massive amount of sewage down the River because the town infrastructure could not deal with it for a while. IMO, when Energy East got blocked, Alberta and all the Western provinces for that matter should have done everything in their power to stop equalization payments. They should still and show all the arrogant pricks how things work. Cardboard

What about positive externalities such as $ billions sent East in the form of equalization each year? And it is not just Alberta that ships oil out West but, B.C., Saskatchewan and Manitoba too. More shipping options help them all and the country. Lots more money than a Valdez potential here at play. And in case you did not know, double-hull ships are now the norm since the Valdez, there is insurance, etc. Why are tankers from foreign countries even allowed on the St Lawrence River with thinking like that? And what is your excuse for not shipping your own B.C. made natural gas via LNG? Some Albertans would likely be glad to deal with fewer shipping options and to keep all the money home. I am certain it would be net positive for them. What a country! Cardboard

The real issue here is not a short term pop in the differential because a key pipeline had to go down. The real problem is a continual differential that costs each Canadian (not just Albertans), $500/year in lost taxes, royalties, etc. and an industry at a significant disadvantage: capital, lost cash flow because of it. Unlike an IT backup, oil does not disappear and storage is already in place in the chain to ensure continued supply. Previously there was also a "backup" with more pipeline supply than production and currently, there is excess rail supply to ship. However, it does not go into full run mode at the flip of a switch. However, to bitch about the Alberta government because they don't have emergency railcars is silly. What about engines, crews and tracks too since they are needed to get the job done? Once again, the industry saw increased demand, did what they could to ship with existing pipelines, developed on their own a more expensive alternative shipping method: rail, because they have asked permission for years without success to build new pipelines. I actually believe that they have done a lot more than elsewhere in the world. Was there a backup pipeline in Scotland when they had to shut it down? They are also on the Ocean, where was the backup plan? You are free to complain about the Alberta government not retaining revenues from O&G for future needs but, some kind of nationalisation of how to ship oil makes no sense. And regarding some competing opportunity in NewFoundland what the heck are you talking about? Most companies have largely abandoned offshore production because of high cost, large capital commitment and years before a return. Cardboard

SD you make zero sense on this one. There is no problem with the industry, pipeline companies or railroads. These is no funding issue and no need for the Alberta government to get involved. The industry players are simply asking for the authorization to lay a pipeline and it has to go through another province. Others are asking for authorization to build LNG plants and a feeder pipeline on the West Coast. And Newfoundland is sitting on the Ocean unless you missed it and they don't need to ask permission to another province. Cardboard

http://business.financialpost.com/commodities/energy/pembina-pipelines-new-purpose-get-canadas-oil-and-gas-to-the-rest-of-the-world Amazing what is going on. Go through Alaska or Oregon to avoid B.C.! $100 billion of projects that would have happened in Canada being done in the U.S. instead. Just imagine how many jobs, businesses and communities this would have helped? And while our obstructionists think they are doing something great, reality is that the same quantity of fossil fuels end up in the global market. Someone else is benefiting vs Canadians and that is the only difference being made. Cardboard

"Why? because china want to import their coal to America and they believed Trump will increase coal usage in America." LOL! America does not have a clue what to do with its own coal and now they would import some from China! I find the Left to be a farce since they lost the election. Prior to also but, now it is worst. The arguments simply make zero sense anymore. I also find this whole "get Trump" on the Russian potential interference to be a total joke. I mean, Russia makes a few posts on Facebook and the world is falling. They are interfering in our election process! The U.S. on the other hand eliminates head of states. Just a few examples: Panama, Iraq, Libya under both parties. You even have an ex-President who makes a video to support the election of Macron. Do you imagine Putin going on TV and stating that he wants so and so to be elected somewhere? Cardboard

"I'm guessing that it's general cynicism and ennui with FFH." Actually it is not. Already we are seeing cracks in under-reserving from their recent acquisitions. They also have a history of their own under-reserving following large cats. I am suspecting that we will see some more in 2018. There is also the expectation that 2017 was an odd year for catastrophes. I can't disagree entirely with that however, I believe that having almost no hurricane landing in populated area since 2005 is also very odd. And when was the last large earthquake in NA? Then we can review the last 5 years with some containing near zero catastrophe and we will find out that what I mentioned or pre-tax loss or running essentially breakeven without the help of capital gains was the case. So maybe that everything will go right and that they will make $850 million as SJ pointed out but, I have serious doubts. And once they start reinvesting some of the cash, there will likely be an near immediate drop in investment value as we all seem to experience whenever we deploy capital and you will feel less confident about their investing abilities. My recommendation continues to be: drop leverage, find better, more stable investments/businesses, stop the market timing game. Basically copy Buffett. The old guy has a much, much bigger capital base and has outperformed Fairfax over the last 10 years. That should tell you something. Cardboard

Sure. What is not ok in my view is to not even want to read/know what the other side is thinking. Confirmation bias is that how they call it? I have noticed a huge change in what ABC, CBS, NBC and CNN present information since Trump. Has not prevented me from listening to what they say and to then form my own opinion. Cardboard

"ever since Murdoch bought WSJ, I found the articles by WSJ (marketwatch is owned by WSJ) are very biased. Definitely very pro-trump. Sometimes you will see FT and WSj have totally opposite headline on some trump-related news on the front page. I called WSJ and unsubscribed." You should subscribe instead to the Communist News Network. Definitely very anti-Trump. Cardboard

Check your math at the end of next year and I can almost guarantee you that you will be wrong. Cardboard

2017 pretax loss before significant booking of capital gains and truly a one-time gain of just over $1 billion on the sale of a subsidiary was: -$462.9 million. And out of the eye popping 20%+ growth in BVPS, a large portion is due to issuing 20% more shares than last year above book to acquire insurance companies combined with the one-time gain. As I have mentioned countless times, there is no ROE generated if you exclude capital gains. So to trade well above book and generate the respect that you guys seek they have 2 choices: 1- Grow really fast like in the late 80's and 90's by acquiring company after company with an overvalued currency. 2- Generate a portion of the return via sound, repeatable earnings. That means low cost, less interest paid, profitable underwriting and more deployed into sound investments with the blessings of regulators. Cardboard

Yes, transportation is just one part of the equation. And as I mentioned before, look at the average age of cars on the road or over 10 years in both the U.S. and Europe. What does that tell you? It simply means that the average folk in the richest countries cannot afford a brand new car or will keep it for a very long time. So to put EV's on the road you need sales of new cars. Taking the U.S., or a very large consumer, out of the 17+ million units sold each year, the richer folks need to go out and buy a large percentage of EV's to replace the park of 260 million vehicles in any meaningful way. And what is selling right now? Pickup trucks and large vehicles! http://www.wsj.com/mdc/public/page/2_3022-autosales.html Then what about the massive infrastructure bill in the U.S.? This represents a large amount spent in energy to make steel and concrete. Energy to dig and lay the infrastructure. Then a significant amount of asphalt. All of this comes mostly from fossil fuels. Of course, I am not intelligent enough to know what a tipping point is? Although, I have been told by smarter people than I am that the trend is your friend. So I will keep me eyes closed and wait for the supply crunch which some very smart people using a lot of data are thinking is coming in about 2 years max. Cardboard