-Your best investments for 2024 and beyond-

[Viking]

• Fairfax is up 52% + dividend = 54%
• VOO is up 26% + dividend = 27%
• XIC.TO is up 21% + dividend = 23%

Making money in 2024 has been like shooting fish in a barrel. Congratulations to all those investors who bought pretty much anything - because that is about all it took to do well this year. And i say that with all due respect…

 

Edited yesterday at 09:57 PM by Viking

[73 Reds]

2 minutes ago, Viking said:

• Fairfax is up 52% + dividend = 54%
• VOO is up 26% + dividend = 27%
• XIC.TO is up 21% + dividend = 23%

Making money in 2024 has been like shooting fish in a barrel. Congratulations to all those investors who bought pretty much anything - because that is about all it took to do well this year. And i say that with all due respect…

 

@Viking What, if anything does that tell you about 2025 and beyond?  FWIW, here's what it tells me:  There is a lot of speculation in the public markets.  How long it continues is anyone's guess - makes little difference to me though.  But one day the masses are going to wake up and come to realize that just like any number of times in the past, prices don't go up indefinitely.  Enjoy the ride for now.  Companies like Fairfax and Berkshire will be your friend and ally when the sh-t eventually hits the proverbial fan.

 

[Viking]

23 minutes ago, 73 Reds said:

@Viking What, if anything does that tell you about 2025 and beyond?  FWIW, here's what it tells me:  There is a lot of speculation in the public markets.  How long it continues is anyone's guess - makes little difference to me though.  But one day the masses are going to wake up and come to realize that just like any number of times in the past, prices don't go up indefinitely.  Enjoy the ride for now.  Companies like Fairfax and Berkshire will be your friend and ally when the sh-t eventually hits the proverbial fan.

@73 Reds , my crystal ball is about as good as the next person. Here in Canada, stocks have underperformed for a long, long time. So a 23% move in one year is nothing crazy in my mind. And in the US, if you get lower interest rates, lower taxes, less regulation, return of animal spirits (more business investment), acceleration in onshoring production of goods, and deficit spending from the government… how do stocks not go higher? So i am mildly optimistic for stock returns over the next year (XIC.TO and VOO). I would not be surprised to see a melt-up in stocks. Not my base case. But a possibility.

 

Of course there are watch-outs, like there are every year. Geopolitical would be one. Trump doing something nuts would be another. Super high deficit spending by Western governments would be another - although this is likely more a 2026 or 2027 risk. Perhaps the biggest risk might be a resurgence in inflation later in 2025 or 2026 - this could be a big one because people now hate inflation - and the hand has just been over the flame, so the reaction to a resurgence in inflation from people (and bond/financial markets) could be dramatic. Bottom line, important to monitor. Bit nothing IMHO flashing red today.

 

And looking further out, if Canada elects a Conservative government in October, 2025, that could release animal spirits in the Canadian economy (there are so many important things a new government could do to improve the economy). That would bode well for Canadian stocks for 2026. We could easily see a couple of years of above average returns for Canadian stocks.

Edited yesterday at 10:27 PM by Viking

[73 Reds]

3 minutes ago, Viking said:

@73 Reds , my crystal ball is about as good as the next person. Here in Canada, stocks have underperformed for a long, long time. So a 23% move in one year is nothing crazy in my mind. And in the US, if you get lower interest rates, lower taxes, less regulation, return of animal spirits (more business investment), acceleration in onshoring production of goods, and deficit spending from the government… how do stocks not go higher? So i am mildly optimistic for stock returns over the next year (XIC.TO and VOO). I would not be surprised to see a melt-up in stocks. Not my base case. But a possibility.

 

Of course there are watch-outs, like there are every year. Geopolitical would be one. Trump doing something nuts would be another. Super high deficit spending by Western governments would be another - although this is likely more a 2026 or 2027 risk. Perhaps the biggest might be a resurgence in inflation later in 2025 or 2026 - this could be a big one because people now hate inflation - and the hand has just been over the flame, so the reaction to a resurgence in inflation from people (and bond/financial markets) could be dramatic. Bottom line, important to monitor. Bit nothing IMHO flashing red today.

I'm of a different view, likely to occur even during Trump's term.  I think indices will go much lower.  Not sure when  - could be months, could be 1, 2 or more years away.  Unless and until we figure out a way to reign in govt. spending and begin to bring down debt, there has to be a reckoning sooner or later.  There is no political will on either side to do it.  We can't grow our way out of debt.  Its not debt itself that is the problem, its the amount and never-ending increase of debt that is the issue.  Forget about trying to pay it down, who is going to service it and how?  The next generation?  Many of whom don't even want to leave their homes and go to an office to work?  And its not even debt that will trigger the downturn, but some exogenous event or series of events that will cause folks to wake up and realize that paying 25+ times earnings for the average mature public company just makes no inherent sense, along with all the other speculation that works until it doesn't.  

[Luke]

I remember my "your predictions for 2024 SP 500 thread". I ticked 5% Returns btw! xD

Edited yesterday at 11:08 PM by Luke
Added an "xD" smiley. XD

[gfp]

28 minutes ago, 73 Reds said:

I'm of a different view, likely to occur even during Trump's term.  I think indices will go much lower.  Not sure when  - could be months, could be 1, 2 or more years away.  Unless and until we figure out a way to reign in govt. spending and begin to bring down debt, there has to be a reckoning sooner or later.  There is no political will on either side to do it.  We can't grow our way out of debt.  Its not debt itself that is the problem, its the amount and never-ending increase of debt that is the issue.  Forget about trying to pay it down, who is going to service it and how?  The next generation?  Many of whom don't even want to leave their homes and go to an office to work?  And its not even debt that will trigger the downturn, but some exogenous event or series of events that will cause folks to wake up and realize that paying 25+ times earnings for the average mature public company just makes no inherent sense, along with all the other speculation that works until it doesn't.  

 

perhaps ironically, the most likely thing to cause a downturn in the stock market would be a reduction of the deficit.  Running a surplus would cause a depression.

[Viking]

49 minutes ago, 73 Reds said:

I'm of a different view, likely to occur even during Trump's term.  I think indices will go much lower.  Not sure when  - could be months, could be 1, 2 or more years away.  Unless and until we figure out a way to reign in govt. spending and begin to bring down debt, there has to be a reckoning sooner or later.  There is no political will on either side to do it.  We can't grow our way out of debt.  Its not debt itself that is the problem, its the amount and never-ending increase of debt that is the issue.  Forget about trying to pay it down, who is going to service it and how?  The next generation?  Many of whom don't even want to leave their homes and go to an office to work?  And its not even debt that will trigger the downturn, but some exogenous event or series of events that will cause folks to wake up and realize that paying 25+ times earnings for the average mature public company just makes no inherent sense, along with all the other speculation that works until it doesn't.  

 

@73 Reds , there is an easy solution to the problem you have highlighted... and it has been what governments have been doing for hundreds/thousands of years... and that is to inflate it away. I don't think it is all that complicated. Who are the losers? Savers/lenders. Who are the winners? Owners of assets - pretty much everything, excluding fixed income.

 

That is bullish for stocks moving forward. Also bullish for commodities. Real estate (housing). And that is what we have seen over the past decade. Asset prices (in general) have been on fire. 

 

And I think the US has just elected a president who is likely to enact policies that could accelerate this trend (if inflation accelerates, my guess is he will do his best to not let the Fed increase rates). It really is a super interesting set up. We could get some pretty wicked volatility - which would be normal when you enter uncharted territory. 

 

"Everyone has a plan until they get punched in the face." Mike Tyson - modern day philosopher

Edited yesterday at 11:29 PM by Viking

[Viking]

21 minutes ago, gfp said:

 

perhaps ironically, the most likely thing to cause a downturn in the stock market would be a reduction of the deficit.  Running a surplus would cause a depression.

 

@gfp I agree. And I think that is what makes using 'macro' as a core input pretty much a losing proposition for most investors. I think there are times when paying attention to macro matters - like when we get to historic extremes (like the 2006/07 housing bubble). I don't think that is where we are today. 

[Xerxes]

2 hours ago, Viking said:

• Fairfax is up 52% + dividend = 54%
• VOO is up 26% + dividend = 27%
• XIC.TO is up 21% + dividend = 23%

Making money in 2024 has been like shooting fish in a barrel. Congratulations to all those investors who bought pretty much anything - because that is about all it took to do well this year. And i say that with all due respect…

 

congrats to you and all the FFH bros !

well done 

[Xerxes]

48 minutes ago, Luke said:

I remember my "your predictions for 2024 SP 500 thread". I ticked 5% Returns btw! xD

All good. looking forward to see you start the 2025 thread in the next few weeks, to get ideas going around. 
 

I think Dinar had a whole bunch. 

[Viking]

28 minutes ago, Xerxes said:

congrats to you and all the FFH bros !

well done 

 

@Xerxes Hopefully there are a lot of people on this board who have been able to make a little money on Fairfax's amazing 4-year run. And yes, the run we have seen in 2024 has been epic (after how much it had already gone up in 2021, 2022 and 2023). The crazy thing is the stock is still cheap. Yes, not as cheap as it was... but still cheap. Why is it still cheap?

1.) Its past performance (last 4 years), measured by change in BVPS, has been best in class among P/C insurance companies.

2.) Its P/C insurance businesses are better quality than is generally understood.

3.) Its investment portfolio is poised to delivering a return of +7.5% per year, which is exceptional.

4.) As a result, the company is poised to deliver ROE of 15% for each of the next 3 years.

5.) Its management team has been executing very well over the past 5 or 6 years. Its capital allocation has been exceptional (insurance and investments). This suggests ROE should continue to be very strong looking out 4 or more years.

 

Yet, despite the historic increase, the stock continues to trade below peers (P/BV and PE). Given its past performance, outlook and strong management team, should Fairfax not trade at a premium to peers?

 

The only reason to say 'no' is because it hasn't historically. But that isn't true. For many years, Fairfax traded at a significant premium to peers. Most investors just either don't know this, or they have forgotten. 

 

Fairfax has morphed from a turnaround to a value play. It is now morphing right in front of everyone's eyes into a quality play. (That is called multiple expansion for those of you who are not paying attention.)

 

As Fairfax demonstrates that it is indeed a high quality company, it deserves to trade at a higher multiple. And the longer it continues to outperform, the better the multiple it should trade at. This process could run for years.

 

Three things drive a stock price:

• Earnings
• Multiple
• Share count

All three are working in Fairfax's favour today. Of the three, multiple expansion is the rocket fuel to the stock price.

 

Just ask a company called Apple - multiple expansion happened continuously over an 8 year period. 

Edited 22 hours ago by Viking

[Junior R]

a lot of stocks are over valued like COST, JPM ect but there is still undervalued/fairlyvalued stocks like our fav FFH

 

the real question how much of the gains are front loaded on the other stocks..

Edited 23 hours ago by Junior R

[Spekulatius]

1 hour ago, Viking said:

 

@73 Reds , there is an easy solution to the problem you have highlighted... and it has been what governments have been doing for hundreds/thousands of years... and that is to inflate it away. I don't think it is all that complicated. Who are the losers? Savers/lenders. Who are the winners? Owners of assets - pretty much everything, excluding fixed income.

 

That is bullish for stocks moving forward. Also bullish for commodities. Real estate (housing). And that is what we have seen over the past decade. Asset prices (in general) have been on fire. 

 

And I think the US has just elected a president who is likely to enact policies that could accelerate this trend (if inflation accelerates, my guess is he will do his best to not let the Fed increase rates). It really is a super interesting set up. We could get some pretty wicked volatility - which would be normal when you enter uncharted territory. 

 

"Everyone has a plan until they get punched in the face." Mike Tyson - modern day philosopher

Inflating it away doesn’t work any more if everyone hates inflation. Inflation takes a bit to be noticeable and most people haven’t noticed it before 2021 . It‘s like touching poison ivy, first time it itches a little and the second time it sucks. Trumps policies are inflationary all over the place - high deficits, less immigration, tariffs. The current market assumes he can do this without negative externalities. Thats a brave bet to make.

[Viking]

28 minutes ago, Spekulatius said:

Inflating it away doesn’t work any more if everyone hates inflation. Inflation takes a bit to be noticeable and most people haven’t noticed it before 2021 . It‘s like touching poison ivy, first time it itches a little and the second time it sucks. Trumps policies are inflationary all over the place - high deficits, less immigration, tariffs. The current market assumes he can do this without negative externalities. Thats a brave bet to make.

My guess is with Trump we are entering uncharted waters (at least in terms of the last 75 years or so) in terms of what a President will try to do. And people want change. So my guess is he will get a lot of rope, especially early. 
 

I think we are likely going to get a lot of different ideas/actions. Kind of like a bunch of science experiments all happening at the same time - where we aren’t really sure how they are all going to work out (individually or collectively).

I agree. I think there is a risk inflation could surprise to the upside looking out 12 to 24 months. Except i also think Trump will not tolerate a Fed that does not do what he wants (another science experiment). Bond vigilante's? Like a game of ‘whack-a-mole’, Trump and his team will not sit idly by. 

 

But the US seems to want change. I think Trump is going to deliver - in spades. 
 

I am cheering for him and the US. I hope it works out / goes as planned. At the end of the day, we want people/countries to succeed. And perhaps there are parts of his plan that other countries can use to their advantage.

 

But the next round of elections are only 2 years away… so pitter patter he better get atter. And i think he will. 

Edited 21 hours ago by Viking

[Xerxes]

1 hour ago, Spekulatius said:

Inflating it away doesn’t work any more if everyone hates inflation. Inflation takes a bit to be noticeable and most people haven’t noticed it before 2021 . It‘s like touching poison ivy, first time it itches a little and the second time it sucks. Trumps policies are inflationary all over the place - high deficits, less immigration, tariffs. The current market assumes he can do this without negative externalities. Thats a brave bet to make.

great cover page 

[WFF]

Haven’t done the math for exact numbers… but I was pleasantly surprised that the best performer in my portfolio this year is…

Winners:

EWBC + 52%

Tencent + 33% 

Berkshire + 33%

 

The losers were surprising, like JOE thanks to Bruce. 
 

For next year, I expect Tencent to continue to outperform as stimulus and potentially more stimulus to help.  JOE will outperform after the Bruce B. Hangover is over.

[73 Reds]

13 hours ago, Viking said:

 

@73 Reds , there is an easy solution to the problem you have highlighted... and it has been what governments have been doing for hundreds/thousands of years... and that is to inflate it away. I don't think it is all that complicated. Who are the losers? Savers/lenders. Who are the winners? Owners of assets - pretty much everything, excluding fixed income.

 

That is bullish for stocks moving forward. Also bullish for commodities. Real estate (housing). And that is what we have seen over the past decade. Asset prices (in general) have been on fire. 

 

And I think the US has just elected a president who is likely to enact policies that could accelerate this trend (if inflation accelerates, my guess is he will do his best to not let the Fed increase rates). It really is a super interesting set up. We could get some pretty wicked volatility - which would be normal when you enter uncharted territory. 

 

"Everyone has a plan until they get punched in the face." Mike Tyson - modern day philosopher

Yes, and higher inflation breeds higher interest rates.  Having been through a few of these cycles the party will end - quite badly if you are heavily positioned in more speculative investments.   

[Spooky]

13 hours ago, gfp said:

 

perhaps ironically, the most likely thing to cause a downturn in the stock market would be a reduction of the deficit.  Running a surplus would cause a depression.

 

Agree. The US government has been running a deficit of about 6.7% of GDP which is helping the US economy keep growing.

 

13 hours ago, Viking said:

We could get some pretty wicked volatility

 

Agree. Coming off of the run-up we had in the markets this last year and a half I am expecting more volatility. The Fed has been making noises that the US remains vulnerable to an inflation shock. Trump's / Republicans' policy goals seem contradictory with most voters wishes to lower inflation. Higher tariffs will increase prices and potentially damage global economic output. Mass deportation will increase labour costs. Also, if the Republicans extend the tax cuts without addressing spending then the deficit will get blown out even further. Layer on top of this heightened geopolitical risk and there is a lot of uncertainty. All that being said, I'm not selling down my equity positions based on macro factors, just going to make sure I have some extra dry powder / resilience for the year ahead. 

[Saluki]

JOE, CPNG and NTDOY are some of my bigger positions, and they haven't done much this year, but I like the setup for 2025 and beyond.   JOE is extensively talked about, so I won't go into it, but CPNG is still growing a lot and the operating leverage is allowing their margin to get bigger as they grow and the market doesn't see it yet, so I feel like it's a coiled spring.  

The only thing I worry about NTDOY is the tariffs under a new administration, which was not something I saw coming. However, the price is what it was a couple of years ago, but the new Switch is only a few months from being released, there are new games coming out, new movies (Mario Bros and Zelda) and Universal is building Nintendo World theme parks, for which NTDOY doesn't have to put up any money, but they get a percentage of the gate sales, and obviously the Nintendo merchandise sold inside. It looks like it's trading at a trailing P/E of 29, which doesn't seem terrible when you consider all those lottery tickets, but when you realize that they have no debt and about 20% of their market cap in cash, it starts to look really interesting. 

 

I have some smaller positions in things that look good in 2025 like CROX, RTO and KRKNF, but if it's only a 1% or 2% position, I don't want to make a prediction about it, other than it looks interesting enough for a small position, but there are too many risks and unknowables to make it a big position.

 

Nintendo has been around over a hundred years and no debt and as Peter Lynch said, it's hard to bankrupt if you don't owe anyone any money.  And CPNG has a model that operates like float in insurance, so up to a certain point there cost of capital is less than zero. So I'm more comfortable sticking my neck out on those. 

[SharperDingaan]

On 12/24/2023 at 11:34 AM, SharperDingaan said:

Not for beginners; but if you have the risk tolerance, liquidity, TFSA capacity, want to practice your risk management, and are predatory nimble .....  4-6 year play - at the end of which you might have enough to buy a modest house outright, tax free 

 

Lot of ugly's in this, not particularly well run, and there are better quality choices at higher prices. But Lenny, .... if you can afford 100,000-125,000 shares today, and the dog eventually gets to $4.00, 5 years out .... 400-500K is a worthy prize. The hope is that somebody takes CET out before then, and most likely in the next cycle.

 

We own a few shares, with a cost base in the low cents after swing trades.

https://www.cathedralenergyservices.com/

 

SD

 

Just a bump and update ..... 

7:1 consolidation over the year, re-branded as ACX.TO, and trading today at CAD 6.32, up 28% YTD ...  strong metrics and only 34.9 M shares outstanding. Quietly moved all of our ESI.TO into this over the year, for 2.5x more torque on US/CAD drilling for the same CAD investment.

 

All goes well, 2026/2027 could be a very good year!

 

SD