leftcoast

I really liked "Oil 101" by Morgan Downey. It provides an excellent overview of the entire industry from a business/finance oriented perspective. I wish there were more books like this written on other industries. (Business opportunity?) http://www.m.amazon.com/Oil-101-Morgan-Downey/dp/0982039204 Here's the table of contents: Part One: Oil fundamentals Chapter 1: A brief history of oil Chapter 2: A crude oil assay Chapter 3: Components of oil liquids Chapter 4: Chemistry of oil Chapter 5: Industry overview Chapter 6: Exploration and production Chapter 7: Refining Chapter 8: Standards Chapter 9: Finished products Chapter 10: Petrochemicals Chapter 11: Transporting oil Chapter 12: Storage Chapter 13: Seasonality Chapter 14: Reserves Chapter 15: Environmental regulations Chapter 16: New engine technologies Part Two: Oil markets Chapter 17: Oil prices Chapter 18: Forward oil markets - futures and swaps Chapter 19: Forward oil markets - options Chapter 20: Managing oil price risk

More negative media coverage: http://www.indystar.com/article/20100714/BUSINESS/7140338/1003/BUSINESS/Biglari-rewrites-the-book-on-CEO-pay

IMO, it's because too few people know that they are getting royally screwed on exchange rates and there is no pressure on the banks to change. It would cost the banks a chunk of money to add US$ RRSP capability as it would be a significant information systems challenge, and then the banks would also lose the margin that the get from converting every little dividend back to CDN$ and from dinging clients a couple percent on each trade. Canadian clients focus far too much on the visible trading commissions (ie, we get totally pissed if broker X offers $9.95 commissions and broker Y has the audacity to charge $14.95). For the few dozen trades that I make per year, the difference in trading commissions amounts to bugger-all. Getting screwed once per year on a decent sized currency conversion totally overwhelms any differences in stock trading commissions amongst the big-5. The worst is that the banks' disclosure on their FX spreads is generally pretty poor, so it is really tough to figure out who screws you the least, and who screws you the most (probably IB is the best). SJ Agreed on all points. There was actually a class-action lawsuit against BMO on this issue: http://www.investorvoice.ca/Scandals/RRSP_FX/RRSP_FX_Index.htm The banks say they can't hold USD in RRSPs due to "software system limitations," which is silly given the amount they spend on IT upgrades every year. Given that the government rules on foreign currency holdings were changed in 2001, that excuse is wearing pretty thin. The reality is that currency transactions are immensely profitable for them, and for 95% of their customers, they are invisible.

http://www.cafepress.com/+big_deal_in_ghana_white_tshirt,351307220

Article by Alice Schroeder on gold, inflation, and the US dollar: Gold Tells You U.S. Bubble Hasn’t Popped Yet http://bloomberg.com/apps/news?pid=20601039&sid=ajPCIYcGX8t4

I think this is one of the recommended readings from Jeremy Grantham's last quarterly letter. IMO, the arguments regarding resource depletion over the next few decades are pretty compelling, whether it's Peak Oil or peak something else. Jared Diamond's book "Collapse" gives a historical perspective of the same problem, where exponential population growth eventually hits a hard stop limit. You can argue where that limit is, and how much technology might help delay it, but you can't argue about whether or not it exists. Nothing grows exponentially forever (not even BRK :(). And, as with most phenomena involving any kind of exponential growth, the end-game tends to sneak up on people and manifest itself in a way that seems sudden and dramatic.

FWIW, I agree with you about Vancouver's housing market. It will be very interesting to see what happens when mortgage rates start moving back up again. I'm curious what you see as the driver(s) for continued rising rents in Vancouver? Regarding "typical" price-to-rent ratios, this Fortune article has some good data on the US market: http://money.cnn.com/magazines/fortune/price_rent_ratios/ Here is the relevant data: Metro areaJun-2007 15-year avg. East Bay, Calif.50.931.6 San Francisco38.227.4 San Jose42.527.2 Honolulu35.225.5 Orange County, Calif.36.224.3 Seattle3823.3 San Diego3422.4 Stamford, Conn.26.422 Portland, Ore.31.720.8 Nashville26.820.5 Raleigh26.819.4 Sacramento28.719.4 Denver24.419.1 Las Vegas27.918.9 Inland Empire, Calif.27.518.8 Chicago22.718.3 Charlotte26.218.2 Memphis21.518.1 Milwaukee24.218.1 Boston23.218 Norfolk26.817.9 Palm Beach County, Fla.27.117.6 Columbus18.916.9 NATIONAL AVERAGE22.816.9 Richmond24.916.8 Austin19.116.3 Salt Lake City24.116.3 Dallas/Fort Worth17.816.1 Los Angeles26.716 Miami27.216 Greater Washington, D.C. 2615.9 Fort Lauderdale24.515.7 Long Island, N.Y.24.515.7 Minneapolis19.315.5 Cincinnati16.315.1 Hartford18.714.9 Indianapolis15.614.9 Orlando23.814.9 Atlanta19.514.8 Greater Kansas City16.814.8 New Orleans16.114.8 Tampa21.414.5 North/Central N.J.20.614.4 Cleveland13.214.3 Houston16.514.3 Jacksonville20.114.3 Phoenix21.514 St. Louis16.614 San Antonio17.713.5 Oklahoma City15.512.7 Baltimore20.712.6 Philadelphia18.612.5 New York17.811.7 Detroit10.310.9 Pittsburgh11.910.6 It's interesting to me that P/R ratios seem to be higher in cities that are considered desirable to live in. Intuitively, I'm not sure why that would be... if a city is desirable to live in, shouldn't that mean people are willing to pay higher rents to live there as well? There seems to be a big intangible "ownership premium" in desirable cities that has nothing to do with rental yields. Why are people willing to pay more to own vs. rent in these cities? Whatever the reason, it would suggest that Vancouver, which by most standards is seen as a very desirable place to live, should be at the higher end of the scale in terms of "typical" P/R, at least for Canada. Right now, with historically low interest rates, it's around 27. Ten years ago, before the huge run-up in prices, it was around 17. And the 15-year average for Vancouver seems to be around 21.

I would be up for that as well.

Jack, is your objection merely to the wording of the question? Or because the question was casually attributed to Berkowitz and you don't think it should be? I'm sure you don't actually take issue with the idea of assessing downside risk in potential investments. I don't think anyone (including Berkowitz) has claimed anything "new and nifty" about his thought process. He may use different words to describe the investment approach (probably trying to explain it in "layman's terms" or in a media-friendly way), but I don't think he's ever claimed that it's unique. Having said that, I personally find that re-wording a question is useful to the extent that it a.) improves comprehension, or b.) helps someone think about the question differently. In this case, asking the extreme form of the question ("what would it take to kill this company?") may prompt someone to be more creative in thinking about downside risk that just asking "what are some risks," especially when it comes to very low-probability risks that could potentially cripple even the strongest businesses. If you can't think of any way to kill a company (or kill its competitive advantage), then you probably aren't being creative or "doomsday" enough, because nothing is un-killable. For example, prior to 9/11, even Buffett was overlooking the the risk of terrorism when writing and pricing Berkshire's insurance policies. Buffett has said that if 9/11 had been nuclear, Berkshire (along with the rest of the insurance industry) could easily have been bankrupted. That risk was not unforeseeable, but it was apparently unforeseen, even by Buffett. So I think it's a perfectly valid question to ask, and people should use any wording or language they want to help them think about risk.

This is very nice. Thanks Sanjeev!

Right now the board does not seem to be in the board's time zone. Unless Sanjeev has moved to Alberta. :)