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General Discussion / Crypto broad opportunities.
« Last post by rros on Today at 10:06:58 AM »
The recent hiring of Brian Brooks to Coinbase could be viewed as an important landmark given the close association between the Sec. of the Treasury and Brian Brooks himself.

While it's unclear whether this means a seal of approval by the government of what cryptocurrencies represent, a maneuver with more obscure purposes or simply an opportunity for financial gain by Mr. Brooks, it is also possible it may signal the start of a new phase for this field.
Investment Ideas / Re: VMD.TO Viemed Healthcare Inc.
« Last post by Cigarbutt on Today at 09:56:56 AM »
They've mentioned this many times on their earnings/investor and called out the VA effort specifically on the last earnings call. You can also call up the COO and he'll tell you the same story.

Slowly digging deeper here. In these potential "the best is yet to come" ideas, I usually end the analysis with the more direct stuff (calls, videos etc) because doing so early in the appraisal may frame the thought process as many of these owner-operators can be unusually good at sales pitches. ;)
Is it that hard really? I basically have always done this, even as a child. How can you expect to do better for yourself if you don't analyze what you (you, not someone else) do wrong in order to avoid it in the future? Why do you think you deserve anything whatsoever?

I think people (and millenials particular, which apparently I officially just fall into as well) are just too damn soft on themselves. I've always been far more strict on myself than anyone else and alled myself an idiot on many occasions.

I don't think that's hard. That's not being a pussy.

As far as it wasn't clear, this wasn't meant at you John. You're clearly open to questioning your own failing and looking to learn from them :)
OK let's see what I remember from my Ekonomischticks 101.

1. Some professions such as software engineering are built on experience.   So, if basic programming tasks are moved from country A to country B, country A might find itself later on with a lack of experienced programmers. Likewise for other professions.

2. As any value investors would know, time arbitrage is a thing.  We accept waiting for 2 - 5 years (for the U.S.A., I wouldn't try this trick for Venezuela).  Economies work on even a longer scale.  #rhetoricisfun

3. If country A all of a sudden starts to place tariffs on country B.  Does it necessarily mean that party A  *started* a "trade war"?  Yes, if everything was equal between the two.  if, on the other hand, country A has an extremely open economy while country B has an extremely close economy, the word "start" should be removed from the discussion.

3.1 Would tariff resolve trade imbalances? Probably not because it might just go through country C.

4. But, but, country C, D and E and F all do it ( does it go all the way to Z? now I know my...) why can't B? Because B's economy is now significantly large (and was for a long time now) to negatively impact A's economy.

5. Country B spends a tremendous amount of resources and money, which originates from the non-private sector, leading to the fact that private companies in country A find it extremely hard to compete.  Country B products are now extremely cheap and it exports these products to Country A. Because "trade makes things cheaper". Yay.  Is this necessarily a net benefit to country A, in the long run?

6. Country A supports the development of country B in various ways, under the belief that country B's markets and structure will become similar to country A's.  One day, Country A wakes up from its daydreaming and finds out this is not happening.  What should it do?  Should it just continue in the same way because, hey "trade made us all these cheap stuff"?, or should it look into the future, say 5, 10 to 50 years from now?

7. These days, is the surplus or deficit between countries A and B depends on the trade of goods? No.

Just for balance ....

Trump started with the tariffs in early June, and eveyone responded with matching tariffs. Real smart boy that he is, he didn't put tariffs on just China (apparently the target) - he put them on Canada, Mexico, and the EU as well, escalated, and claimed it as a 'negotiating tactic'. All the counterparties have publicly stated they are just responding in kind - unwind the US tariffs and they will unwind in kind. Not the 'alternative facts' of the white-house propaganda line.

Your preferance for an open economy, does not obligate other countries to follow; your economic model is just one of many.
If you think partners aren't being fair, you don't have to buy from them; if you choose to trade you've accepted the terms. But if you aren't going to buy their cheaper goods - you're going to have to either make them yourself at a higher price, or buy them from somewhere else and pay more. Goods are going to cost more.

You buy from me, and I'll buy from you.
You buy more from me than I sell to you, and you run a trade deficit. The size of that deficit evidences my net comparative advantage over you: if we allow our currencies to float - my currency appreciates and yours devalues. Dont allow your currency to devalue, and you suffer unemployment instead - as you just aren't competitive.

For you to run a deficit, I have to finance you; do this repeatedly for a number of years and I control you.
You may believe that if you owe me enough money (bankrupts view), your continuing ongoing solvency is my problem (your banker). But I know that if I simply refuse to roll over part of your debt, interest rates will spike as you crowd-out the market, and I will earn a lot more on my money (as sovereigns can't bankrupt). If those higher interest rates tip you into recession and you stop buying my goods, it's also a good thing for me; as you're a bum I dont want to sell to, and I'm allready making the margin you would have contributed - on the higher interest being paid on my existing  investments in your country. I might even get the opportunity to buy the Trump Tower at cents in the dollar ;D

Jobs are appearing because the massive QE over the last decade has finally turned the economy around.
But much of that decades worth of displaced labour has retired, and as soon as wage competition appears - machines are going to be replaced with more productive versions that require fewer workers, reducing wage competition. The 'why' the folks on the bottom are not benefitting, whereas the folks at the top are.


Berkshire Hathaway / Re: berkshire - cheap?
« Last post by John Hjorth on Today at 09:18:17 AM »
With regard to how to value the Berkshire insurance float, - popping up again here now -, I still think the best place I have read about it is rb's post #89 in this topic of July 19th 2017. rb's angle & way of looking at it just makes so much sense to me.
Investment Ideas / Re: VMD.TO Viemed Healthcare Inc.
« Last post by maybe4less on Today at 08:52:25 AM »
As you probably know, they are indeed actively doing this. They've yet to land a big deal so far though, but they are also unaware of anyone else in the industry having done so. Viemed is hitting the VA pretty hard; hopefully that goes somewhere soon.
Your post seems to imply a privileged access to insider info.

Not at all. They've mentioned this many times on their earnings/investor and called out the VA effort specifically on the last earnings call. You can also call up the COO and he'll tell you the same story.
... As soon as he stops externalizing blame he might turn into anything else than a screw-up. I doubt he ever will.

That's actually also the really hard part. To recognize and derive, by analysis of your own actions in the clear rear mirror, that you were not wise, nor smart, perhaps even silly, or just a plain idiot. Over that hurdle, it usually gets easier along the way, depending of to which degree one has screwed up.

I've been there about ten years ago [and have posted about it here on CoBF], done that & got that [selfimposed] "Idiot!"-shirt.

- - - o 0 o - - -

The moral hazard dimension of the GFC has been discussed at great length in a series videos produced by CNBC recently - interviews with some of the key players about the wild days  - about 15 minutes each - among them Mr. Buffett.
My thoughts have always been that coming of age during the financial crisis would be a blessing. You basically get into things on a generational reset. Housing prices are cheap, employment would start out challenging but be in expansion for for the next 10-20 years, and more importantly, you'd have fresh in your mind the lessons learned by others during the GFC. I never thought it would be an excuse.
Berkshire Hathaway / Re: berkshire - cheap?
« Last post by longinvestor on Today at 08:37:21 AM »
Not a bad quick and dirty back of the envelope.  Seems a little aggressive to put a multiple of 14.5x some normalized float growth figure (you used $8B) and declare thats worth $116 Billion when we have already included the value of the stock portfolio, much of which is funded by float.  I do understand that growth in Float is a component of cash flow available to owners though.

I agree with you that assigning a value of $116 Billion might be to stretch a little. Buffett has for a long time, at least 10-15 years, stated that further float increases will be hard to achieve, but as a matter of fact float increased by roughly $40 Billion from 2012 to 2017. I think it will continue to increase for a long time, but maybe it would have been more proper to assign a PV of 80 Billion or so for expected future float increases. Their float is extremely enduring / long tail, so Buffett has said that it can be compared to equity.

On the other hand, maybe the multiple on the operating earnings should be higher than 14.5 given the quality and endurance of those businesses, so I still feel comfortable valuing the company at 700BUSD+.
+1 to $700B and multiple higher than 14.5x. Berkshire will continue to earn its way to deserve this. Buffett has been saying this about the numerator for many years now “our focus is on growing per share earnings”. With the quip “we bought a little stock” he has signaled that decreasing the denominator is also warranted now. Vicious cycle has begun.
ponsibility, but most people absorb the lessons they I read the papers you linked to.  Although the New America paper is based on only 59 focus group participants, I think it's more interesting and suggests many causes, including immaturity, financial illiteracy and low agency.  For example, look at all the quotes suggesting that borrowers had no idea what their monthly payments would be or didn't know that they'd have to payback the loans if they didn't get a degree.  Similarly, the apparent total befuddlement about IBR, even after it was explained, is both sad and frightening.

I have no evidence to support it, but I continue to believe that we could address some of the problem by having mandatory basic financial literacy education in high school.  For example, with an internet connection, a graduating high school student about to take out significant loans to attend college should be able to figure out (i) the expected monthly payments on student loans at graduation; (ii) expected rent in the city they want to live in; (iii) a rough estimate of additional living expenses (car, food, etc.) and taxes; and (iv) whether all of those expenses are greater than or less than a reasonable estimate of the starting salary in their hoped for profession.  I don't actually expect most 17 and 18 year olds to do that on their own.  But if they were forced to do it as part of a graded financial literacy class, it would hopefully open their eyes up to what they're getting themselves into.  Along the way, they'd learn many useful pieces of financial knowledge, e.g., the effects of compound interest, amortization tables, the actual impact of payroll and income taxes, the actual cost of renting an apartment, etc.

Not sure if formal teaching with an elaborate curriculum is the way to go or if only some kind of online simplified program could do the trick. Perhaps an even more targeted approach (cost effective) may help.

Just for awareness of potential evidence, there seem to be green shoots.

A simple annual "reminder" seems to "nudge" people in the right direction.
A bit sad that we may need "programs" to help people helping themselves but the principle of secondary prevention is to minimize the impact of a disease once you have it. Obviously primary prevention is better but democracies are not perfect.

I think a class and other nudges and good ideas probably would help a bit on the margin.  BUT as I have gotten older and have seen how people make their financial decision there is a ton of stupidity, emotion and laziness involved and I think 95% of it doesn't have to do with knowledge but really emotional discipline to defer gratification.

The internet has often 50x the amount of information you need all you have to do it look it up to make prudent decisions but people still don't use to to learn and save.  Such is life... I'll bet it will never change and I just expect it.  Sorry to sound defeatist but I think it is largely realistic.
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