OIL?

[73 Reds]

14 hours ago, Lotsofcoke said:

Don't give away all my secrets Sanj...

 

As for opportunities: I recall some old guy saying something about finding out who is wearing trunks when the tide goes out?

 

As for end of world... One must invest like the end of the world doesn't happen... If it does... what you bought or sold won't matter and your cash won't help you or get you into the after life in a better position... My wife often says we should do this or do that because we may die tomorrow; my standard reply (before ultimately agreeing with her anyways) is "but what if we live to 130?" 

 

I've been mostly in cash the last two years (except NU/NYSE which I started buying in 2022)....I have started to nibble again (in oil). I sold all my BRK a little at a time last year... to go into cash and get out of US dollar exposure. Nothing bad about BRK.. just US dollar exposure and fully valued IMO.  It's always my first choice because I know it best and it's such high quality. I have complete confidence in Greg Able. And remember: crisis=opportunity.

 

All we need is Jim Kramer screaming what a horrible investment it is... a screaming buy signal... (anyone around BRK the last two decades will get the joke)

 

Stay frosty people. 

 

 

Why the US dollar?  Particularly for someone who shuns the US in favor of Canada?  Would have figured you to have been more in gold.

[gfp]

36 minutes ago, 73 Reds said:

Why the US dollar?  Particularly for someone who shuns the US in favor of Canada?  Would have figured you to have been more in gold.

 

It sounds like they are saying they were "getting out of US dollar exposure" and you heard the opposite 

[73 Reds]

8 minutes ago, gfp said:

 

It sounds like they are saying they were "getting out of US dollar exposure" and you heard the opposite 

Yep; misread it.  Still wonder about cash the last couple years - there always seems to be something more worthwhile.  As a Canadian and member of COBF, what would he have against Fairfax?

Edited March 21 by 73 Reds
missed line

[SharperDingaan]

1 hour ago, 73 Reds said:

Why the US dollar?  Particularly for someone who shuns the US in favour of Canada?  Would have figured you to have been more in gold.

 

Hard for an American to see, particularly when you have benefited from it for most/all of your life ..... but the USD is loosing its reserve currency status. These things are 'managed', with Yuan a more recent example; now also a petro recycling currency, with completely separate competing banking/settlement, digital currency, etc, etc. Sanctions on anybody are unenforceable unless they agree to it.

 

Live in North America; some of your assets will be in either USD/CAD/PESO (house, chequing/savings accounts, etc.); you can do things to mitigate the exposure, but whether you are an individual or an company - one of them will be your accounting 'currency of record'. The longer you look out, the more reasonable it seems that the USD trades at a discount to CAD at some point; 40%+ F/X gain should it occurr. 

 

There are other reasons as well, but Lotsofcoke can speak to them.

 

SD

 

 

 

Edited March 21 by SharperDingaan

[73 Reds]

2 minutes ago, SharperDingaan said:

 

Hard for an American to see, particularly when you have benefited from it for most/all of your life ..... but the USD is loosing its reserve currency status. These things are 'managed', with Yuan a more recent example; now also a petro recycling currency, with completely separate competing banking/settlement, digital currency, etc, etc. Sanctions on anybody are unenforceable unless they agree to it.

 

Live in North America; some of your assets will be in either USD/CAD/PESO (house, chequing/savings accounts, etc.); you can do things to mitigate the exposure, but whether you are an individual or an company - one of them will be your accounting 'currency of record'. The longer you look out, the more reasonable it seems that the USD trades at a discount to CAD at some point; 40%+ F/X gain should it occurr. 

 

There are other reasons as well, but Lotsofcoke can speak to them.

 

SD

 

 

 

I think we all see the fallacy of fiat currencies and particularly the US dollar.  One of the many reasons we are here and invest in productive assets.

[Lotsofcoke]

2 hours ago, 73 Reds said:

Why the US dollar?  Particularly for someone who shuns the US in favor of Canada?  Would have figured you to have been more in gold.

Is there a reading comprehension problem on here? I am pretty confident I never said I shun the USA.

 

Getting out of US dollar exposure isn't shunning the US. Most people would assume that means I was concerned that the USD may lose value.  

 

As for Gold.. I thought this was a "value investor" board?

 

What's the value of Gold? Where are the discounted cash flows? The value of Gold is simply what someone else is willing to buy it for. It's fine as long as you don't convince yourself you are investing... gold is a speculation on the direction of price.You aren't buying an asset that produces anything.

 

[73 Reds]

1 minute ago, Lotsofcoke said:

Is there a reading comprehension problem on here? I am pretty confident I never said I shun the USA.

 

Getting out of US dollar exposure isn't shunning the US. Most people would assume that means I was concerned that the USD may lose value.  

 

As for Gold.. I thought this was a "value investor" board?

 

What's the value of Gold? Where are the discounted cash flows? The value of Gold is simply what someone else is willing to buy it for. It's fine as long as you don't convince yourself you are investing... gold is a speculation on the direction of price.You aren't buying an asset that produces anything.

 

Nah, just cryptic messaging.  And don't all fiat currencies lose value?  Which begs the question, why cash?

[Lotsofcoke]

1 hour ago, 73 Reds said:

Yep; misread it.  Still wonder about cash the last couple years - there always seems to be something more worthwhile.  As a Canadian and member of COBF, what would he have against Fairfax?

I don't have anything against FFH.

 

1) I want the cheapest price I can get it for. So I typically have been buying it when everyone is selling it. 

2) one of the things people don't see in decisions people make (and it's a different calculation for everyone) is opportunity costs and risk assessments.

 

If you are doing value investing correctly - you will find you are usually heavier in cash when valuations are high. Not because of timing but rather because of margin of safety analysis in calculating intrinsic values of the few things one understands well enough to calculate reasonably well.

 

In other words - cash isn't betting against any particular business. it's a different analysis of risk and opportunity. and if one thinks things like Gold are speculations and one doesn't speculate - it's not a comment on that either. it's a principle of non speculation on price direction alone.

 

Of course, most people research their fridges more than their stocks. But I am what I am. 

Edited March 21 by Lotsofcoke
typo

[73 Reds]

Just now, Lotsofcoke said:

I don't have anything against FFH.

 

1) I want the cheapest price I can get it for. So I typically have been buying it when everyone is selling it. 

2) one of the things people don't see in decisions people make (and it's a different calculation for everyone) is opportunity costs and risk assessments.

 

If you are doing value investing correctly - you will find you are usually heavier in cash when valuations are high. Not because of timing but rather because of margin of safety analysis in calculating intrinsic values of the few things one understands well enough to calculate reasonable well.

 

In other words - cash isn't betting against any particular business. it's a different analysis of risk and opportunity. and if one thinks things like Gold are speculations and one doesn't speculate - it's not a comment on that either. it's a principle of non speculation on price direction alone.

 

Of course, most people research their fridges more than their stocks. But I am what I am. 

Agree with all that.  But two years is a long time and a lot of opportunity cost, no?

[Lotsofcoke]

9 minutes ago, 73 Reds said:

Nah, just cryptic messaging.  And don't all fiat currencies lose value?  Which begs the question, why cash?

The US Dollar (DXY) has depreciated the last 12 months by approximately 4.19% to 4.41% as of March... Last 12 months (as of March 2026), the 

Canadian dollar (CAD) grew somewhere between 4.38% to 4.56% against the USD. If you are going to be in cash because of lack of opportunity costs and to manage your accessed risks - then you don't want to be in a currency that is losing more value than others. 

[Lotsofcoke]

12 minutes ago, 73 Reds said:

Agree with all that.  But two years is a long time and a lot of opportunity cost, no?

It all depends on your assessments of risk and valuations.

 

Remember the Dot Com bubble? The market for that era peaked in March 2000... From March 2000 when that bubble popped to October 2002 (more than two years later) - the market had wiped out all the gains of the late 1990s. The NASDAQ - heavy with speculations in that bubble - lost about 5 trillion in market cap over that period or about 75% of its value from its market peak. 

 

How many times did I hear - why aren't we buying internet stocks? you are missing out on the market... this is the future... cash? are you nuts? 

 

Amazing how silent those voices became after a year or two.

[Lotsofcoke]

If one bought Bombardier in late June 2001.... And there are charts that can show the opposite as well for other stocks.. But I don't understand every stock enough to make an intelligent decision. Is AI the future? IS IT? I don't know how anyone is "investing" in AI since there are no cash flows to discount. Wait til the market figures out that the Strait of Hormuz isn't only preventing oil from getting thru... without Helium gas - manufacturing of Semiconductors ceases.  Wonder how the AI investors will react to that reality when it hits the investment news, trading desks and finds the desks of mass media reporters... 

 

IS AI overvalued? How does one even know? Even the people who run the industry don't know the answer. And just to put a fine point on their calculations - the same people running that industry calculate a 20 to 30% probability of AI destroying humanity. So.... I take issue with their assessments of anything at this juncture.... and given how much of a market cap that represents in the markets... Yea. That concerns me and I consider it a market risk. I see a huge speculative bubble. 

 

 

 

Edited March 21 by Lotsofcoke
typos and selected wrong chart

[Lotsofcoke]

it's now over 30%....

 

Edited March 21 by Lotsofcoke
typo

[Parsad]

1 hour ago, Lotsofcoke said:

I don't have anything against FFH.

 

1) I want the cheapest price I can get it for. So I typically have been buying it when everyone is selling it. 

2) one of the things people don't see in decisions people make (and it's a different calculation for everyone) is opportunity costs and risk assessments.

 

If you are doing value investing correctly - you will find you are usually heavier in cash when valuations are high. Not because of timing but rather because of margin of safety analysis in calculating intrinsic values of the few things one understands well enough to calculate reasonably well.

 

In other words - cash isn't betting against any particular business. it's a different analysis of risk and opportunity. and if one thinks things like Gold are speculations and one doesn't speculate - it's not a comment on that either. it's a principle of non speculation on price direction alone.

 

Of course, most people research their fridges more than their stocks. But I am what I am. 

 

100%!  Yeah, most people think when you move to cash because it is difficult to find good ideas, you are permanently in cash...which isn't the case.  That you will miss opportunities by being in cash...which also isn't necessarily the case.

 

If you buy something at a 25% discount, and it returns to par plus 10% per year over 3 years, that's a 21% annualized return.  If you are patient and buy something at a 50% discount and it returns to par plus 10% per year over 3 years, that's a 39% annualized return over the same time period. 

 

Not only do you wait for fatter pitches, you preserve capital from downside loss in a market dislocation if finding ideas are difficult due to valuation.  

 

That being said, if you don't have the psychological makeup for this behavior, or the aptitude/time to develop/spend on it...then you ARE better off just buying index funds/specific stocks and averaging in every year or every time there is a downturn.  Cheers!

[Lotsofcoke]

1 minute ago, Parsad said:

 

100%!  Yeah, most people think when you move to cash because it is difficult to find good ideas, you are permanently in cash...which isn't the case.  That you will miss opportunities by being in cash...which also isn't necessarily the case.

 

If you buy something at a 25% discount, and it returns to par plus 10% per year over 3 years, that's a 21% annualized return.  If you are patient and buy something at a 50% discount and it returns to par plus 10% per year over 3 years, that's a 39% annualized return over the same time period. 

 

Not only do you wait for fatter pitches, you preserve capital from downside loss in a market dislocation if finding ideas are difficult due to valuation.  

 

That being said, if you don't have the psychological makeup for this behavior, or the aptitude/time to develop/spend on it...then you ARE better off just buying index funds/specific stocks and averaging in every year or every time there is a downturn.  Cheers!

 

It's hard to do even when you do know these principles...

[Parsad]

44 minutes ago, Lotsofcoke said:

it's now over 30%....

 

 

There is certainly volatility there...we've already seen a 20%+ drop in some of them like META.  At the same time, I think the earnings are definitely more real than anything we saw during the internet bubble era.  Now the bonds and cyclical nature of revenue generation...that may be a weak link...but the earnings are real as long as the revenue demand is legitimate.  Cheers!

[73 Reds]

1 hour ago, Lotsofcoke said:

It all depends on your assessments of risk and valuations.

 

Remember the Dot Com bubble? The market for that era peaked in March 2000... From March 2000 when that bubble popped to October 2002 (more than two years later) - the market had wiped out all the gains of the late 1990s. The NASDAQ - heavy with speculations in that bubble - lost about 5 trillion in market cap over that period or about 75% of its value from its market peak. 

 

How many times did I hear - why aren't we buying internet stocks? you are missing out on the market... this is the future... cash? are you nuts? 

 

Amazing how silent those voices became after a year or two.

But value investors don't buy, or care about the market.  Value investors for the most part avoided internet stocks.  The point is, there is always something better than cash.  

[Parsad]

1 minute ago, Lotsofcoke said:

 

It's hard to do even when you do know these principles...

 

Oh, definitely not easy...you remember the amount of 10-Q's and 10-K's we were reading on the old Motley Fool BRK Board and on the old MSN COBF Message Board.  I've easily read 8,000-10,000 financial statements over the years!  Don't know how many discount cash flows I've done or broken down balance sheet assets.  Geez, I'm a self-taught accountant catching CPA and auditor mistakes these days!  Crazy!  Cheers!

[Parsad]

2 minutes ago, 73 Reds said:

But value investors don't buy, or care about the market.  Value investors for the most part avoided internet stocks.  The point is, there is always something better than cash.  

 

That is one of the biggest fallacies in "value" investing, because Buffett and John Bogle espoused for small investors to always be invested.  

 

But if you go back to Ben Graham, you first have to locate enough ideas to fill your portfolio.  Most investors don't have the time to do that, so they default to index funds or buy large amounts of just 2 or 3 stocks like Berkshire, Fairfax, similar industries, etc. 

 

That probably creates less than desirable results and often correlated risk because people tend to buy more in a specific, distressed industry with similar economics.  

 

Cheers!

[Lotsofcoke]

13 minutes ago, 73 Reds said:

But value investors don't buy, or care about the market.  Value investors for the most part avoided internet stocks.  The point is, there is always something better than cash.  

Was Bill Miller a value investor? , the guy who founded Miller Value Investors?  I remember him loading up on Amazon when the rest of us were scratching our heads.

 

So your statement that value investors didn't invest in internet stocks isn't quite correct. Amazon was considered an internet stock. Miller saw the potential and felt he could intelligently value those future cash flows. To say value Investors don't invest in XYZ business is a demonstration of a lack of understanding of what exactly value investors do. 

 

A value investor will invest in anything cheaper than its value (however they access it). The fact they don't invest in something is a matter of them not being able to value it or it being fully or over valued - and all these assessments, if properly undertaken, employ some manner of risk assessment which Buffett managed by seeking a significant Margin of Safety in his valuations.

 

As for your statement that there is always something better than cash. To say that, you would have to have a circle of competence large enough to value all possible investments.

 

I don't thing I'm smart enough. Maybe you are.

 

But I take comfort that I can recognize the limits of my intellect. At least sometimes anyhow..

 

A Genius is a Man who knows he is not one. (attributed to Einstein - I heard Warren quote this once)

Edited March 21 by Lotsofcoke

[73 Reds]

3 minutes ago, Parsad said:

 

That is one of the biggest fallacies in "value" investing, because Buffett and John Bogle espoused for small investors to always be invested.  

 

But if you go back to Ben Graham, you first have to locate enough ideas to fill your portfolio.  Most investors don't have the time to do that, so they default to index funds or buy large amounts of just 2 or 3 stocks like Berkshire, Fairfax, similar industries, etc. 

 

That probably creates less than desirable results and often correlated risk because people tend to buy more in a specific, distressed industry with similar economics.  

 

Cheers!

If anything, this Board shows it is 100% doable.  What is the point in holding cash you don't need for day to day expenses?  There is a distinction to be made in holding cash for future investment and having access to cash for the same purpose.  To me, one is much wiser than the other.

[73 Reds]

1 minute ago, Lotsofcoke said:

Was Bill Miller a value investor? , the guy who founded Miller Blue Investors?  I remember him loading up on Amazon when the rest of us were scratching our heads.

 

So your statement that value investors didn't invest in internet stocks isn't quite correct. Amazon was considered an internet stock. Miller saw the potential and felt he could intelligently value those future cash flows. To say value Investors don't invest in XYZ business is a demonstration of a lack of understanding of what exactly value investors do. 

 

A value investor will invest in anything cheaper than its value (however they access it). The fact they don't invest in something is a matter of them not being able to value it or it being fully or over valued and all these assessments if properly undertaken employe some manner of risk assessment which Buffett managed by seeking a significant Margin of Safety in his valuations.

 

As for your statement that there is always something better than cash. To say that, you would have to have a circle of competence large enough to value all possible investments.

 

I don't thing I'm smart enough. Maybe you are.

 

But I take comfort that I can recognize the limits of my intellect. At least sometimes anyhow..

 

A Genius is a Man who knows he is not one. (attributed to Einstein - I heard Warren quote this once)

LOL, I'm not even smart enough to understand the term "value investor".  Most investors (as opposed to traders) use value principles to evaluate an investment, i.e., buying a dollar for less than a dollar.  As for AMZN?  You could say I was smart and dumb.  I bought the stock in 1997.  And am perhaps one of the only multi-year shareholders who didn't make any money.  But the education was worth a lot more.  And the idea that patience is far more important than price.  

[frommi]

24 minutes ago, Lotsofcoke said:

As for your statement that there is always something better than cash. To say that, you would have to have a circle of competence large enough to value all possible investments.

 

I don't thing I'm smart enough. Maybe you are.

I dont think it has to do with being smart, it has more to do with having the time and desire to broaden the circle of competence. With AI its so easy now to pick apart and understand every business you want. Doesnt mean everything will be investable, i for myself will probably never invest in something like Tesla or MSTR. But over the past 15 years i never had a year where i didnt find something that is cheap enough to beat cash by a longslide.
When you are managing several billions, that can be a reason to be constrained. 

And btw. there are more good businesses on sale than ever before as far as my list is trustworthy. BRK is not one of them

Edited March 21 by frommi

[Parsad]

26 minutes ago, Lotsofcoke said:

Was Bill Miller a value investor? , the guy who founded Miller Value Investors?  I remember him loading up on Amazon when the rest of us were scratching our heads.

 

So your statement that value investors didn't invest in internet stocks isn't quite correct. Amazon was considered an internet stock. Miller saw the potential and felt he could intelligently value those future cash flows. To say value Investors don't invest in XYZ business is a demonstration of a lack of understanding of what exactly value investors do. 

 

A value investor will invest in anything cheaper than its value (however they access it). The fact they don't invest in something is a matter of them not being able to value it or it being fully or over valued - and all these assessments, if properly undertaken, employ some manner of risk assessment which Buffett managed by seeking a significant Margin of Safety in his valuations.

 

As for your statement that there is always something better than cash. To say that, you would have to have a circle of competence large enough to value all possible investments.

 

I don't thing I'm smart enough. Maybe you are.

 

But I take comfort that I can recognize the limits of my intellect. At least sometimes anyhow..

 

A Genius is a Man who knows he is not one. (attributed to Einstein - I heard Warren quote this once)

 

By the way, Lotsofcoke has known Buffett probably longer than almost anyone on this message board, even though he's only about as old as me.  Lotsofcoke, how old were you the first time you went to Omaha? 

 

Also, he co-founded the Yellow BRK'ers and had one of three yellow hats!  They would go to Buffett's office every year with a birthday cake for him to cut!  Cheers!

[Parsad]

29 minutes ago, 73 Reds said:

If anything, this Board shows it is 100% doable.  What is the point in holding cash you don't need for day to day expenses?  There is a distinction to be made in holding cash for future investment and having access to cash for the same purpose.  To me, one is much wiser than the other.

 

Yes, that is true.  Holding cash for investment is different than just holding accessible cash.  Both need better returns, but the duration of investment is markedly different, so you take a different approach to both.  As you said, they are not the same.  Cheers!