Ross812

I agree with your last statement. What I take issue with though to a certain extent is the kind of wealth in the US that is concentrated toward. the 1%, 0.1% and 0.01%. After WWII until the Regan Administration, each quintile of wealth in the US grew together benefiting equally from the expansion in the Country's GDP growth. Trickle down was introduced by Reagan as a stimulus to get the economy going in 80 and it worked. The trickle down "stimulus" was never withdrawn and was expanded during later administrations. In the last 35 to 40 years, GDP has grown by roughly 60% on a per capita basis. If it were shared equally, people at all income levels should have seen an increase in income of around the per capita GDP growth. In reality, the bottom 3 quintiles have seen about 10% income growth, the 4th quintile (the start of the middle to upper middle class) has seen 35% growth, and the upper quintile has seen 70% growth. When we break down the 5th quintile we see the 80-94% have seen their incomes increase by about 50% and the upper 6% are doing about 100% better. The top 1%, .1%, and 0.01% have seen 200%, 400%, and 550% growth respectively. What worries me is we have started to see social movements (occupy) and political candidates (sanders) that are shining a light on income inequality and true to the polarized nature of politics in this country, there will be an overreaction. The overreaction of doubling the taxes on the top 20% will be so disruptive to the economy that the increase in tax money will all be spent creating social programs to steady the economy and we end up with a socialist system. An alternative scenario would be politicians decide to gradually raise taxes (ala the Fed and interest rates, winding down the stimulus) while still providing freedom to give money to charity and have a generous inheritance exception. A gradual increase would be a return to the 1970's tax brackets over 15 to 20 years. The increase in income can go toward reducing debt, and increasing education. The aim shouldn't be to make all the classes equivalent, but to maintain a capitalist system where all income classes participate in GDP growth.

Does Fidelity have a lending program like IB? I've been making ~$1k a year by allowing my securities to be lent to short sellers.

Thank you Ross, I would like to know your mind on four topics: 1) What do you see in AXP that prompted you to make it the largest holding in your portfolio? 2) I don't know LKQ: another large position of yours. Why? 3) BRK is a small position. What concerns you at this point? 4) Finally, TJX is a wonderful compounder: why do you think they have been so successful in a very tough environment for retailers? Cheers, Gio Gio, 1) I think AXP is a fantastic company, but JPM is proving they can go after AXP's bread and butter for the last few years. My position in AXP was based on valuation after their loss of Costco then what was essentially progressive betting on what was a falling knife. I bought a 2% position at $75, doubled it to 4% at $65, and held my nose and converted my last 3% of cash to AXP at $55. I've been selling since then. As for what I think it is worth, AXP is still a high quality company that is not going to be displaced, but it's growth will slow with competition. The company is still worth a PE of at least 15. 2) LKQ - My thoughts on the company are here: http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/lkq-lkq-corp/msg266841/#msg266841 3) I actually have a personal large position in Berkshire! The reported portfolio is from our more actively managed IB account. There is a large slug of BRK.B stock sitting with a pile of index funds in a Vanguard account. With that said, I am not very excited about Berkshire's investment into Apple. 4) The long and short of TJX's success is because they can offer something the internet cannot - a treasure hunt. My wife goes to TJ Maxx to find xyz and comes out with a nice sweatshirt and new shoes. I look at internet retail's impact on brick and mortar like this: brick and mortar stores that sell items people specifically seek out are easily replaced by internet retail. For example, if I want to buy a Vitamix blender, Ralph Lauren Polo Shirt, Samsung TV, or Ping driver I could drive to Bed Bath and Beyond, Macy's, Best Buy and Dicks Sporting Goods respectively or I could type it into a browser and purchase online. With retail models like TJX, IKEA, and Costco, you do not have this problem.

10.7% Cash 7.9% - AXP 7.8% - DIS 7% - LKQ 6% - FRFHF 5.5% - NOV 5.4% - TJX 4.8% - LBRDA 4.7% - LCSHF 4.5% - CHKDG 4.1% - WFC 4% - SBUX 3% - BDVSY 3% - BF.B 3% - IAU 2.8% - WLTW 2.8% - BAM 2.5% - LSXMA 2.2% - V 2.2% - GILD 2.1% - BRK.B 2.% - FWONA 1% - ATUSF 1% - TRIP 1% - KMI

This one that Ross812 put together is vote based. http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/corner-of-berkshire-and-fairfax-fund I think this is what you are looking for: http://cobff.chrisdrane.com/ all credit to prunes. The original thread was from 2013 - http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/corner-of-berk-scraper-and-fun-facts/msg130959/#msg130959 I it would be cool if prunes could update the scraper and see if the trends continued!

I've used Tax Act for 3 years now and it does a great job. I have to keep income, side income, wife's income, rental property, and investments straight. I can see some people getting annoyed with Tax Act because to review inputs you have to review the questions it asks. As long as you make good use of bookmarks in the program it is really easy to navigate. I think Turbo Tax is the most idiot proof software, but if you are intelligent and don't want to spend $80 on a one and done piece of software, Tax Act will work just fine.

In the IB accounts I manage maybe 1% right now is not tied up. I use the cash balance ~10-15% to sell cash covered puts, spreads, and condors. Right I have about 6% allocated to a Brk.B $120-$115 put spread expiring in November. I've written this put spread quite a few times this year. The contract paid 11% for 2 months (55c on $5). The spread is kind of a life insurance policy on Buffet, where I am the insurance co...

I've been busy the last few weeks: Sold 25% of Bidvest - Still my 2/3 largest holding but I don't think a US rate hike is going to help the ZAR:US rate. Sold $16 and $17 Nov covered calls on Fiat before the RACE spin off. I bought back the $16's for a nickle. Sold $17.5 Dec covered calls for ~1.3 on all but 100 shares of CHEF after the 20% jump yesterday. CHKDG is now my largest holding - I am thinking about paring this back a little and buying the 2020 bonds yielding 10.5% and more KMI Bought a little BAM Top 5 holdings are CHKDG, LKQ, BDVSY, AXP, BRK/B put spreads.

I don't understand the reasoning of saying preventing automobile accidents is more important than gun control. They are both important and something should be done about both of them. I see a couple of solutions for gun control: Let the private insurance market decide the risk of gun ownership. Gun owners should be required to carry a liability policy on their firearms. If you are irresponsible and let someone steal your weapons you are personally liable. Want to amass a collection of firearms that could outfit a small army? Great, but the insurance on that is going to cost you. Insurance will vary on gun model as well. Ex. a muzzle loader will be much cheaper to insure than an AR-15. The other option is to flat out ban assault weapons and magazines holding more than 6 rounds.

Walmart

Finished buying CHKDG today. Convertible cumulative 5% preferred stock trading at $50 with a $100 par value so it's yielding 10%. Converts to 2.76 common shares at the holder's discretion. Trades at a discount to CHK-PD (4.5% convertible (2.46:1) preferred) for some reason. I bought over several weeks from $45-52. I've owned this before. I bought when Aubry was on his way out at $70 and sold in the high 90's.

Made a cocktail last night: 1 part each: Islay scotch, Bourbon, Rye, Cognac - 2 dashes Angostura, 1 dash Xocolatl Mole Bitters, tsp of simple syrup, piece of a lemon peal. It was delicious!!!

I bought CHEF again this morning. There should be another 15c in expenses tapering off over the year from their Bronx facility so the FY 16 number could be off by 5-10c making this fPE around 17 and lower than where Mecham bought in Q3 of '14.

The majority of people, even posters here, would be better off buying index funds. Saying if you bought BRK, AAPL, DHR, etc... 20 years ago is just cherry picking. Buying great companies at fair prices doesn't work all the time. How many of the nifty 50 are still around? You have to evaluate the companies prospects into the future. A lot of companies, IBM was used as an example, are sold off because the market is uncertain of their future. The higher level thinking is evaluating if IBM will be around and can grow passed the fiasco of the day. Buying at an attractive valuation when the market is agonizing about the future of the business is how Buffett has made most of his money. Its not that easy to do, and all that reading is what helps you understand how the business is likely to perform in the future.

Try a Manhattan with 1/4 oz St Germain, 1/2 oz vermouth, 2 oz bourbon. In fact you can switch that St Germain for all kinds of liquors. Most fancy cocktails are just variations on the classics!

All the macro discussion is making me want to pour a drink. I've been using my latest vice as my profile pick for years and a bunch of people have messaged me about it. Right now I'm enjoying a Weller Antique with a couple ice cubes. Delicious. Does anyone have any recommendations? Anyone into cocktails? Cheers, Ross

I'm buying Fairfax. Should be a 10-15% position (which is huge for me) when I'm done.

I sold GOOG and PCLN today. I almost hit the sell button on Google after earnings at $640. At $673 and 31x earnings? No thank you. PCLN is similar for me. With the China news this morning, I'm not seeing PCLN getting a currency tailwind any time soon.

Good luck! I've been looking at DIS all morning (and it's been on a small watchlist prior to this morning). I also barely passed on INT at $36 the other day. There's definitely some interesting stocks getting close to attractive levels. I bought more DIS today. This is a no-brainer investment. Powerful movie franchises, a moat on theme parks, ABC, ESPN, etc. How about the valuation? DIS stock and others more than tripled since 2011 and now it's a screaming buy after not even a 15% drop? Maybe Mr Market is just realizing now they might not be that valuable? Clairvoyance sometimes comes with a shock, something little can set it off. DIS is at the level where it was 5 months ago. How many bought then? How about a year ago? Two years ago? Just playing advocate of the devil but I'd be wary of price anchoring. And how likely are you to outperform with a $185B company anyway? I've also noted this trend where quality seems to be everything. Valuation comes second for some reason. Or that's at least how I perceive it. Definitely see a surge in the popularity of this damn quote: "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.". DISCK is at a 3 year low. In that time (2012), FCF has risen 25%, share count has fallen by 12%, revenue up 45%... Fox is now cheaper than it was at the time of the spin off. Shareholder base is ValueAct, Buffet, and 13% of Yackman Funds owning 6% of the shares with Murdoc owning 15%.

I feel like this is similar to the old tech sell for MSFT, CSCO, INTC, etc. Those companies are still growing revenue, earnings, and buying back shares. But the market kept compressing their multiple. So hopefully there will be some sanity restore. Those ala carte options aren't cheap. Paying $10-20 each for NFLX, HBO, HULU, etc. ends up being the same or more expensive than the bundle option available nowadays. I agree completely. I've seen this game played many times over the years; In just the passed 5 we've had: the PC is dead, mobile and facebook will kill google, SSDs are replacing HDDs, ACA will kill Insurance, brick and mortar is dead, sell everything with operations in Europe, distributors are being replaced by amzn, and long haul trucking is all going to train. In every case it has been a buying opportunity. As long as people have a desire to watch the news, sports, movies, and programing beyond House of Cards and Orange is the New Black, these content providers are going to thrive. I own Fox and Discovery. I'm watching TWX and Disney for the time being.

I sold HOG to buy more DISCK and FOX. This sell off in media names is getting ridiculous.

15% tax all income - Including capital gains, dividends, gifts 0.5% federal tax on all liquid assets and real estate 0.5% VAT on all goods and services Get rid of cash - Everything must be done electronically $2k tax credit per dependent Family of 4 with a 400k house, 1M in liquid assets, making 180k per year pays 26k in taxes. Family of 2 making 50k pays $3600 (same as FICA now) Businesses- 15% Tax on all income (minus allowable expenses) 0.5% of all liquid assets and real estate 15% tax credit on payroll + benefits up to 12k per employee

I think Sequoia is probably the best proxy for the quality approach. I like Value Act, but Uben gets on the board and does some shareholder activism. Moat gets too sector concentrated, i.e. energy when it re balances 4 times a year. I think VIG may be a better proxy for buy and hold of good business as opposed to MOAT.

Liberty Media - Malone Kinder Morgan - Richard Kinder Bidvest - Brian Joffe

The problem with libratarian nirvana is biology. Every social mammal on this planet organize themselves into a groups. Leaders of the group are given power by their followers. The more power a leader has the more resources they can control. Sure everyone could live in candy land, but it only takes one bad apple to spoil a Utopian society. Creating a central authority with ultimate power is society's way of maintaining order. The central authority may change over time giving more or less power to its followers, but the central authority will remain. Sounds like protection money to thugs (i mean "protection companies") to me... You could do far more good by changing the system as it exists now for the better than complaining how it needs to change. Luckily you live in a society with a government that affords you the ability to do such. Your taxes (stolen treasure) allow you to do that.