original mungerville

So US debt is down from 360 to 330, but take a look at Japan and Europe, add up the total, and you can see that overall we are levering up in the developed world.

Berkshire will double in 10 years as well with more diversification. So why buy this thing at this price?

Yes, our 5-yr is at 2.75% or something, then the typical 10-year is at 4.6% or something. By some fluke/stroke of luck, I am currently locking into a 10-year at 3.6% which for Canada is a steal. (I think the rate has already move up to 3.8% or something - this is Desjardins). In any case, you are usually talking mid to upper 4s when the 5 year is below 3% which is not great. Hi Mungerville, Why are those rates you are talking about so different from what I see on Desjardins website? http://www.desjardins.com/ca/rates-returns/financing/mortgage-loans/ Their website lists the 10 year fixed rate mortgage at 6.75% My search always starts with a mortgage broker. In this case, this particular broker: http://www.truenorthmortgage.ca/ It looks like they are offering a 10-year for 3.75% at this point (so a little higher than what I locked in about 6 weeks ago or so).

Yes, our 5-yr is at 2.75% or something, then the typical 10-year is at 4.6% or something. By some fluke/stroke of luck, I am currently locking into a 10-year at 3.6% which for Canada is a steal. (I think the rate has already move up to 3.8% or something - this is Desjardins). In any case, you are usually talking mid to upper 4s when the 5 year is below 3% which is not great.

What do you mean "luck" and a gold bull market? I am no expert, but I think his career was built from the early 1980s to the early 2000s with the original Franco. So gold went from something like $800 an ounce to under $200 by 2000 or something along those lines. Meanwhile, in this huge bear market for gold, Franco compounded at 30-40% annualized or something. I may be off, but my understanding is he made huge absolute returns even in a huge gold bear market over about 20 years.

Isn't 3-5x on the high side for North America. I think something like 2.5 - 3.5x is the norm historically (but I'm going from memory of a GMO slide from a few years ago).

Let me guess....Gold Standard. I don't know what standard, but at some point debt to GDP has to fall because its not stable: either via inflation or deflation.

If you believe Berkshire will trade at the same price to book in 7-10 years (ie 1.3-1.4x), in 7-10 years, Berkshire will likely at least double from here (if not, it will be because we had a second Great Depression). That's something like a 10% to 7% annual rate of return. If you are content with that, then invest. Expect a very very rocky ride because in that period, I expect a new monetary order. Leveraged, its pretty good. Unleveraged, its average (although I am certain it will destroy the S&P over the next 7-10 years because the S&P can not go up much further unless we have some sort of massive inflation).

Hi Sanjeev, just to clarify: When you say "we are set to participate" in the Bermuda vehicle, is that the new public company which is participating or MPIC funds?

Congrats Sanjeev. Sounds very promising. Email sent.

Good luck, my friend! :) I am sure you will be wildly successful! Gio Thanks Gio. I hope I will be. It will be a very long road with little payoff almost guaranteed in the early years. Your confidence in me is inspiring though! Cheers, Mungerville

Ca$hvertising and The New Rules of Marketing & PR are pure gold. Thank you DCG - I will look into those.

Thanks oddballstocks - I'll give all that some thought!

In general, I have to agree with Al... but I think you might be onto something Shalab!

original mungerville, are you starting an investment management business? ;) Gio Yes Gio, I am. Its been 14 years in the making, time to start. I imagine I'll only have a few investors to start out with and it will be a long journey, but that's the plan.

Do you have any good book recommendations on marketing (ie rather than sales?). For example, one that would relate well to starting an investment management business?

"but still, it seems like trying to calm your mind frees a creative part that gets drowned out at times because you're always actively thinking about stuff and never passively just letting it roam around." Absolutely. My most creative moments come when I relax (eg, during a walk, over a beer), almost never at my desk during routine work...or if I think a bit about something at night, the morning after when I wake up with the house quiet and again looking at the same issue - a creative solution all of a sudden pops up. You seem to need to enter a state of mind that is both conscious and subconscious at once, focused/relaxed, ... The mind does seem to need the time to sort of float or roam around in order to be creative. I have actually purposely tried to let it do that over the course of my career. Emails and routine work all need to be blocked together during the day in order to free up time to think during second block of time. You can't mix/multi-task the two blocks and be efficient at both when you are targeting creativity/deep thinking. Not once has that worked for me - other than when trying to resolve superficial matters.

Did he not just buy an Indian bank - that could be the small cap?

If any board members have started an investment partnership in Canada and understand the inter-provincial dynamics of securities law, I would really really like answers to the following two questions (before starting to spend money on lawyers, I am trying to get an idea of the high-level): 1) Do you have recommendations for a good securities lawyer in Quebec? 2) I live in Quebec, my clients would mainly be from Ontario. Does anyone understand how these regulations work: ie Can I just set-up the general partner (of the limited partnership) as a corporation in any province and thereby have that province's rules apply? Eg, could I set up a BC based general partnership and BC limited partnership with Ontario clients. Or do I need to set up in Quebec because I reside in Quebec despite most of my clients likely to be Ontarians? Does where I reside personally even matter? or is the only thing that matters is where the general partner is set up? And BC seems to be the easiest province to deal with in terms of securities regulations.

What type of impact does this have on profits? Any idea?

Frommi, No need to start recommending index funds for Gio. I was watching Gio pick up a stock two weeks ago at a level that will likely provide him with 15% annualized over the next 5-10 years regardless of where the market goes from here. Now, if Grantham is right, the US stock market will deliver something close to zero real over that time. But lets not believe Grantham and pretend the US stock market gets 7% returns over that time from these quite high levels. Gio would have to be more than 50% cash, to equal that 7% index return (which itself is probably about 5% annually over GMO's projections which we are not giving weight to). I am very sure Gio will do far better than an index fund. Has anyone asked Gio how much cash he is holding? I don't think so. Further, he is also not the only good investor on this board liking cash. Last time I checked, Uccmal had "Cash" as one of his recommended top holdings for 2014 - and he does a not too shabby 25-35% return annually for the past decade. So far that "Cash" seems to be working this year relative to small caps? Also, as far as I can tell Ericopoly basically does nothing with most of his portfolio, then takes a portion like 10-20% and goes all in with that into LEAPs referencing his notional or a multiple of his notional. So, he seems to be all cash until he finds something big and uses a barbell type approach to limit downside risk. Eric seems to have a lot of cash at many times. That said, I agree that cash can be a big drag if held too long particularly if your alpha is super high. Gio is far from needing to index.

Gold stocks. I think if Yellen keeps tapering, the stock market starts to decline, then she reverses course - gold stocks are really really going to rise.

Thanks Berkshiremystery. Now I have to figure out if I can still make it!

I've a significant position in PME based primarily on the gold/PME relationship, but I would expect gold to rise given inflationary printing. That makes two of us!

Hey Sanjeev, I was just wondering what time the dinner starts? It doesn't seem to be indicated in the above but I remember 6:30 pm from some thread somewhere. Does it start at 6:30?