Valuebo

This so much. Many seems to gravitating to (acquisition) compounders. Hardly any valuation happens because many are happy to simply extrapolate past growth ad infinitum, hooray! Let's just buy quality at fair prices any price and get market beating returns without any work at all. Should work great!

Agreed. I wonder if we are seeing "It's far better to buy a wonderful company at any price than whatever man". Certainly feels like it! 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%. Sorry Ross, read DISCK as DIS. My bad! :) Have been looking at DISCK myself given the price action and Malone influence. DISCA/K and FOXA are quite cheaper than DIS. DIS has bigger moat, stronger brand. Does that justify the price spread? I guess for some people it does. I own/buying some DISCA/K, FOXA. No position in DIS. Yeah agreed. Read DISCK as DIS(ney). Time to get some glasses I guess...

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.".

People always say that but is there some actual research to back this up? Not just from your average retail investor database I mean. Quotes from Buffett and Munger don't suffice either. As SharperDingaan says, it can be a way to hedge.

1.2% no matter what seems more attractive if you are able to do well enough and have some luck on your side with short term gains that would otherwise be taxed. In the future (10+ years) when I'm hopefully in the high 6 numbers area, I might go live there for exactly that reason, maybe right over the border. All family and friends still <1 hour away. But who knows, that's so far off and taxes (and people) can change plenty... Anyone? Also, what about locking in gains with options? Of course less doable with foreign and small cap stocks;..

There already was a topic about this here: http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/meet-aviva-france-the-world's-dumbest-insurance-company/msg212979/#msg212979 :)

Thanks, some good reads on his blog. At least he isn't one of those bloggers that has blog postings the length of a small book. Short and to the point, no bullshit.

Well, no more... Starting in 2016 we will have a short term capital gains tax (when selling in the first 6 months) of 25-33% (not disclosed yet so hopefully not more). We will be able to deduct losses however. We also have a tax of 0.27% on any transaction and 27% tax on dividends for example. We are also the country with the highest personal income tax in the world. This current tax was brought in by our current right winged government and will surely be hicked many times when the left parties come into power. It's estimated to bring in €28M (yes, million) revenue per year but many experts think that is a rather high estimate. So that is €2.54 per Belgian, good enough for a coke at a bar. I guess in a few decenia I'll be paying a sizeable portion of that? By comparison, our transaction tax of 0.27% brought in €180M+ last year. So brokers and banks have a shitload of work to do and costs to make for taxes that will probably just offset (part of) the losses in the transaction tax revenues (because people will trade less frequently). It's a complete joke. I know I'll be trading less frequently but I wonder what it will do with my returns. I'm very concentrated so I like to add and trim my positions constantly. For example with $NTLS in July alone I bought 2 times and sold 2 times, June basically the same. I was also able to sell most at $8+ some time ago after a quick run-up although I believe IV is likely >$12. I would have never sold any if there were short term taxes. I was happy to pay the transaction tax even though I could legally avoid it and will do that starting in 2016 by changing brokers. I believe this year alone NTLS is good for a 20% return on my portfolio and if I just bought and held on it would probably have only added around 10%. It's an extraordinary year in terms of good timing and returns but goddamn this short term tax will sting. Worst of all is that it won't add any real tax revenues for the state so they will likely raise it and/or add LT capital taxes as well. Then I can deposit savings that were taxed at 55% (personal income) to invest and get taxed again at maybe 50% on any gains I make. It's why I'll be looking to buy more stocks like LMCA for the longer term as well and be diversifying more. Also, wouldn't it make sense to buy higher risk stocks with high volatility after you lock in ST tax gains? After all, you can deduct any losses you make against your gains. If the risky stock goes up you got a little richer again (and if enough time, you can do the whole trick again with more money!) and if it goes down the state is paying for it. Any personal experience by members would be appreciated!

One of the first hits on google: http://www.theguardian.com/society/2015/jan/31/inheritance-britain-wealthy-study-surnames-social-mobility Or doesn't that count as lasting? Imo it does... Social mobility is still nowhere. So nope, plenty of people do inherit their wealth. I'm not pro a heavier inheritance tax (Eric made a good point with the problem of wealthy and f*cked up kids) but pro a yearly wealth tax above a certain threshold (of many hundreds of millions or even billions). Make it 12-month LIBOR rate with a maximum, idk... Decent wealth management can keep up with this and you can view it as an annuity to society. That way when the rich get richer, they are at least paying more YoY as well... It's a better investment for society to let those people keep compounding their wealth and letting them give a certain percentage/year than trying to tax them big just once (which fails anyway). Here is the major logical flaws in that article that mentioned wealth 5 generations apart. 1st generation: it is wealthy and has 5 children 2nd generation: Out of those 5 children 4 are wiped out 1 of them is wealthy and has 2 children 3rd generation: 1 child loses 1/2 of his fortune (enough to remain in the upper middle class) and the other is wiped out. The one in the upper-middle-class has 4 children 4th generation: 1 of those children marries the daughter of a successful businessman and they have 3 children 5th generation: the children benefit from their mother who inherits the business from her father. It can now be concluded that the family wealth has survived 5 generations? There is a lot that goes on. A family over 5 generations has a lot of branches. If JUST ONE of those branches is very wealthy after five generations, it is concluded that there is no social mobility??? Law of large numbers doesn't require of them that they look at each descendant anyway right? On average it works out and they can show correlation. They can just look at one random descendant per starting point (the rich 19th century family) and look at the average results between those two data points. Just an aside because I really doubt they would analyse it like you said. If they did it is obviously worthless and those guys should look for another job. But this is sadly often the way they try to sell people false stories. It would be easier if we actually saw the research of course... I don't see how they could prove correlation without including "anti-evidence" as well as it brings out above-average results elsewhere. But you are obviously right that there is strong correlation between education and wealth. This could show that the "inherited" wealth is mainly there because of learned values, attitudes, social structures, etc and not so much because of the pure monetary inheritance. This is something that analysis won't show and it is possibly way too complex to really find out. Intelligence in itself is hereditary so you have both nurture and nature that come into play. That doesn't mean strong wealth transfer can't be sizeable regardless of these facts that make it more likely. I honestly don't know how much each factor contributes and I doubt anyone does. It could very well be that over time "pure" wealth transfer has little to do with it and that it's all about inherited intelligence and passed on values and attitudes. In a way, it's harder to debate transferring more from the intelligent and hard working class to say the stupid and lazy people (to put it bluntly) because "having earned it by personal traits" comes into play. You could of course argue that those personal traits are also not really earned but given in a way but at some point I guess you have to start being pragmatic. Anyway, I just now figured out you basically said somewhat the same (but better) in your first reaction to me so yeah... thumbs up! ;D It's getting late here so apologies for the random odd words and sentences...

One of the first hits on google: http://www.theguardian.com/society/2015/jan/31/inheritance-britain-wealthy-study-surnames-social-mobility Or doesn't that count as lasting? Imo it does... Social mobility is still nowhere. So nope, plenty of people do inherit their wealth. I'm not pro a heavier inheritance tax (Eric made a good point with the problem of wealthy and f*cked up kids) but pro a yearly wealth tax above a certain threshold (of many hundreds of millions or even billions). Make it 12-month LIBOR rate with a maximum, idk... Decent wealth management can keep up with this and you can view it as an annuity to society. That way when the rich get richer, they are at least paying more YoY as well... It's a better investment for society to let those people keep compounding their wealth and letting them give a certain percentage/year than trying to tax them big just once (which fails anyway).

I got it right from the first guess but only because I already read about it in some book...

Stuur mij maar een bericht als je zin hebt in een kop koffie in Reykjavík. Super, lijkt me leuk. Ik laat je tijdig iets weten als het zou lukken want we zijn er maar voor een 5-tal dagen. Wij bezoeken het zuiden van het land en zijn enkel de eerste en laatste dag in Reykjavik. Ben je afkomstig uit België of Nederland gezien je Nederlands praat? Ik had al zo'n vermoeden via je nickname... :) Stuur gerust een PM! Yes on paper but I'm not sure most beer drinkers that aren't used to heavier beers will actually like it the most as well. :) But I'm not an expert...

Is there something there in particular that you find funny/objectionable/etc.? Yes. They just had a referendum a week ago that had almost the exact same proposals as this one. Sure, they will get some more money, but what did the last 6-8 months cost their economy? What about respecting the 'No'? So yes, quite funny and absurd to me. So long for being extremist lefties. Btw, I "get" it. Their bluff was called and they had to fold. Tsipras isn't an extremist in the end. It just goes to show that the last half year was completely hopeless and gave the Greek people false hope. There is no other way that is sensible. I am confused to see lots of "Starting from July 1st 2015, we will xxxxx" statements. If this is submitted on July 9th, why do they say starting from July 1st? Is this an old proposal that they submitted and got turned down by EU? Or did they do the job in such a lousy way that they didn't even bother to proof read and modify ""Starting from July 1st 2015" to ""Starting from July 13th 2015"? Also, if they had agreed on this same terms 6 months ago, Greece would have been in a much better shape. Unfortunately Tsipras is an idiot. Agreed. I simply believe he overestimated his hand and leverage over Europe. Ditto. Also, Mythos does not taste very good. Do you have a favorite brand of kriek to recommend for me watching this show for the weekend? Hm yes Mythos isn't that special. Why are you asking me? Because I'm a Belgian drunk? ;D If by kriek you mean the "beer with cherries flavor", I can't really help you as I'm not a big fan. For other beers it depends on what you can buy in your country really. Where are you from? From some friendly Americans we met here in Ghent (aren't all American tourists overly friendly? ;D) and drank good beers with, we found out that they could barely buy anything better than a light beer locally, let alone a decent Belgian trappist like Rochefort, Chimay or one of the many others. Is there something there in particular that you find funny/objectionable/etc.? Yes. They just had a referendum a week ago that had almost the exact same proposals as this one. Sure, they will get some more money, but what did the last 6-8 months cost their economy? What about respecting the 'No'? So yes, quite funny and absurd to me. So long for being extremist lefties. Btw, I "get" it. Their bluff was called and they had to fold. Tsipras isn't an extremist in the end. It just goes to show that the last half year was completely hopeless and gave the Greek people false hope. There is no other way that is sensible. Their bluff was called? You mean the creditors - whose brilliant reforms to-date helped create a depression in Greece as the economy contracted 25% - are forcing more austerity onto Greece. Yes Greece needs to reform, it is long over due, but there is plenty of blame to go around. If Greece is a debt riddled spending junkie the EU is their dealer. Even the IMF is calling for debt forgiveness. Albert Einstein defined insanity as doing the same thing over and over and expecting a different result. Apparently the EU feels that after 7 years of austerity the best thing is more austerity? Again. plenty of blame and Greece needs to reform but lets have some compassion for the people of Greece. Ask yourself "what would here if the economy contracted 25%" ....... I'm not saying creditors aren't to blame, all parties are in a way. As a European tax payer I feel that I have shown more compassion than most these last few years. Not only have I helped through taxes, I've also directly supported PIIGS & co quite a bit as well. I've visited Portugal twice and went to Greece mainland once (late last year) and later this year I'll be going to Spain and Iceland for a few weeks as well. Just sayin'... :D While I go on vacation to have a good time, part of the reason I visit these places now is to support them. I do feel bad for those in Greece that can't catch a break, surrounded by relatively wealthy allies that are part of the problem. Maybe stating that I find the situation "funny" isn't the best way to put it... But I'd love to go back to Athens now to see the difference. In an alternative universe I'd visit them where Syriza didn't get into power. Wonder if I would see and hear a difference...

Is there something there in particular that you find funny/objectionable/etc.? Yes. They just had a referendum a week ago that had almost the exact same proposals as this one. Sure, they will get some more money, but what did the last 6-8 months cost their economy? What about respecting the 'No'? So yes, quite funny and absurd to me. So long for being extremist lefties. Btw, I "get" it. Their bluff was called and they had to fold. Tsipras isn't an extremist in the end. It just goes to show that the last half year was completely hopeless and gave the Greek people false hope. There is no other way that is sensible.

Can't make this up: http://www.naftemporiki.gr/finance/story/976680/the-greek-reform-proposals

Wow mind-boggling if true: Is Tsipras going to use his mandate for even more austerity? I guess he has little choice if he truly wants to avert a Grexit.

Haha no new proposal at Eurogroup. With 80% of Greeks wishing to stay in the Euro I wonder what most are thinking now. Syriza getting their Grexit wish soon I guess. GL guys, you'll need it.

Feels like it. There is no way (or no sensible way) to now go ahead and offer Greece a fancy deal. Cut your losses. Maybe a few weeks of pain without any economy, food shortages and civil unrest will make something possible in the end but it's looking bleak.

Same (again)! ;)

Agreed. With 75%+ of my portfolio in three holdings I can't really afford to only look at prices once a month. I would also have missed many opportunities in the last few months. Tjeez, old geezer is more like it... ;) But yeah, you're right on the mental energy argument! It can be a little draining both on very good and very bad days when you check every 15 minutes. Life goes on.

Emeco could probably be added here. Currently at only 1/3th the price some board members bought it at. Could pay off very well but much (if not all) is dependent on commodity prices going forward.

Those frikkin' Greeks... Would have bet it was solved by now. My frustration is growing and to celebrate the half year (plus minus) anniversary of this mess, I sold some INLOT the last few days.

Ok… Therefore, who is right? Is FFH a “relatively decent” hedge against USDCAD movements, or is it an “exact” hedge? Gio PS Not that I care much... Just curious! ;) Huh? I'd read benhacker's post again, really no other way of explaining it. Unless I'm misunderstanding you. Fairfax holds a lot of USD nominated assets that increase in value if the CAD weakens versus the USD. So you have a hedge against USDCAD rising further but as a foreigner you also have to look at your own currency. If the EURUSD stays the same, you'll just have CAD currency losses as a EU investor when EURCAD rises, partly offset by USD nominated assets that increase in value in CAD. Canadians are partly hedged against their own currency of course and in that way it is possibly a relatively decent hedge. What do you mean with an exact hedge btw? How could it ever be? The fluctuations between those two different shares have nothing to do with all the underlying assets and liabilities, partly nominated in various currencies, and are just different currency quotations of the same thing. I'm confused.

As someone else stated before (and others probably have before as well), the deflation bet wasn't as much a bet as a hedge. Without them, they would suffer horribly in a protracted deflation scenario. Watsa wanted insurance against that happening and only later seemed to have taken on more because he believed it to be more likely. I don't believe they would recoup all their opportunity cost of the last 5 years. The same is true for the equity hedges. Again not a bet but more a very conservative stance because things could (emphasis on could here...) get ugly and that would be a serious treat to the further existence of Fairfax as a whole. I don't agree that someone who is agnostic about the future should buy Fairfax. If you follow that reasoning, you could just as well also buy something that is bound to do well in very inflationary periods but mediocre/poor in a low inflation/deflation environment. So all you are doing then is diversificating macro risks that might happen by buying securities that will do mediocre at best if nothing extraordinary happens. And if something extraordinary does happen and one of your positions does great, your others will falter. You are essentially creating the risk that your portfolio will do mediocre in most scenario's if you ask me. Betting on those very specific views of the future (as vinod1 called it) is bound to lower returns on average. Isn't it more sensible to just buy cheap stuff and learn to stop worrying? ;) That or you can take a ballsy call in either macro direction but we were talking about agnostic investors on a macro level. So to conclude, this is kinda my point: you don't take a meaningful position in Fairfax now if you are a macro agnostic, that doesn't make sense.

I'm not a frickin billionaire though...