JEast

Just four (4) discount tickets remain — as value seekers planned early this year. Also, we are starting 30 minutes earlier this year to squeeze an additional speaker into the schedule, along with a guest author for a few comments/discussion during lunch. <a href="https://yyxtoronto.ca/symposium.html">Registration & Tickets</a> Since this event is a collaborative and participatory effort, we limit the size so last minute tickets may not be available this year as in the past.​

A few early-bird tickets still available for CoBF members and past attendees — then we will open (email blast) to a wider audience early next week. https://yyxtoronto.ca/symposium.html

In 2015, a group of like-minded value investors reached out to each other with the purpose to have a forum discussing value investing as practiced and analyzed. In part, that effort was due to the success of the Fairfax Financial annual meeting maturing into a larger event every year and affording less time to re-connect with old acquaintances and also have an allotment of time to make new connections. In this spirit, we again have organized a small event to discuss/pitch value investing opportunities our presenters have identified around the globe. The format is similar to a TED type talk with a 10 minute idea presentation (hard stop, usually), followed by a more lengthy Q&A from the group. If interested in attending, please PM me or at the email below with a brief bio and indicate if you want to pitch an idea or just play the role of constructive devil’s advocate during Q&A. You can also purchase a ticket at <a href="https://yyxtoronto.ca/symposium.html">Value Symposium</a> before we fill up as attendance is limited to 35. YYx Toronto Value Symposium Date: Wednesday, April 15, 2020 Time: Doors open at 8:00 AM — 8:30AM to 2:00 PM (Lunch Provided) Location: Maple Leaf Square Registration: <a href="https://yyxtoronto.ca/symposium.html">Registration Form</a> Ticket Note: Cost: A limited number of early bird tickets are just $79, then $129 for a regular ticket. Non-registered guests will be charged ($199) at the door, provided space is available. No charge for content-generated participants. Feel free to contact us at email info{@}yyxtoronto[dot]ca address. * Origin of YYx - Replaced Toronto Pearson airport code with exponential function.

Another challenger bank bites the dust, but the multitudes still keep trying. Maybe a few will eventually take hold in 10years time as the big FAANG types seem more focused with making 'content' for streaming these days. https://www.fintechfutures.com/2019/10/us-challenger-bank-denizen-shuts-down/

Since 2010, there have been 100+ challenger banks and fintech start-ups in the UK. The results to date are not very encouraging as most have closed their doors or still trying to launch officially. The ones that have opened only scratched the mostly cash only and less than $1,000 dollar accounts (e.g. basically non-accretive accounts that change after the next best deal comes along). The poster child of challenger banks is/was Metro Bank, but that now seems to have imploded on aggressive marketing to attract the wrong customers. In conjunction with UK government support for challenger banks along with attempting to punish/destroy the top 5 banks all the while the top 5 just got bigger over these years since 2010! I guess that question is answered by where one looks. JPM (You Invest) and BAC (Merrill Edge) have offered zero commissions with research for sometime but just don't advertise it. Were these folks gaining share and reason Fidelity/Schwab had to react??

Based on the recent short form notice, they have bought 65k since June 30. Not anything like that have indicated that they would buy though, but with the caveat being that they needed the capital to buy more Brit/Allied.

The big banks reported this week and nearly all exceeded expectations and reported that the consumer is strong with exceptional credit. The big banks indicated they will continue to gather more deposits (market share) in a low rate environment and appears to be true as BAC opened up 700k (net) checking accounts so far this year.

Sold the last remaining 4.91% stake of ICICI Lombard for a slightly better price than the previous block. https://www.business-standard.com/article/companies/fairfax-offloads-4-9-stake-in-icici-lombard-for-rs-2-627-crore-119101700048_1.html

From about 1986 thru to 1992, US banks in general had a tough time with the S&L crisis where over 1,000 banks were closed and that also included a nice recession in ’90-‘91. Near the end of this terrible period, you could buy banks for 60-80% of TBV and all paying a healthy dividend. Then, coming out of that period the banks had a long runway for 10 years only culminating at the end of the dot-com era. Then low interest rate gave them another run until the ’07 crisis. It took nearly six years to clean up the mess the first time and appears that it has taken about 8 years to clean up the mess second time. What’s different now versus the ’86-’92 period? A lot. • There were roughly 12,000 banks in the US in 1992 and today their are less than 4,900 due to consolidation and Dodd/Frank pushing smaller banks out, and • Now, the top 10 banks capture the vast majority of all US deposits. • The regulatory capture has also made the largest banks even in a more advantageous position with the ‘stickiness’ of IT, such as, • Winner takes all effects with digital and ongoing with Fintech R&D (e.g. what small bank can afford to spend $500m a year on cybersecurity). • IFSR9 implications are pro-cyclical (booking loan losses up front) so the downturn when it comes will be less worrisome not to mention the overcapitalization of most banks now. • Also, Buffett gave a big thumb up to banking with his BAC conversion in ’17 and Dimon says it is just the sixth inning in early ‘19. There used to be a metric in the cellphone industry that each customer was worth $1,200 (if memory serves) for the life of a customer, usually less than 5-years. For a bank, what is the customer life? If you open a checking account and keep it for two-years, you are a probably with that bank for 30+ years! Even with all the baggage of bad press, etc… WFC opened up over 500k new checking accounts in the first six-months of 2019, and other big banks were positive too. What are those customers worth? Big banks may not perform for innings 6-9, but they do not appear to be value traps as they are adding value by capturing more of the pie. We just need to figure out how much pie there will be in five years.

There are three (3) seats remaining for the Value Symposium event after which registration will be closed. Any at the door attendees will be charged $150 to cover unexpected food/facility charges, etc... There is also one (1) spot remaining to be a content participant. Please reach out if interested.

You are welcome and excited about our new venue. Several asked for the Early Bird option, so its back up until this weekend only. If interested to attend as a guest or contribute with an investment pitch, please register online. https://yyxtoronto.ca/symposium.html

Brief Update — We have secured our new venue and we are looking forward to giving it a test ride. The line up is coming together with some interesting investment ideas as our contributors look for opportunities around the globe. For our CoBF friends, a quick reminder that the Early Bird will expire in two weeks. If interested to attend or contribute, please register online. https://yyxtoronto.ca/symposium.html

The Fairfax week continues to mature into a larger gathering every year and subsequently there is less and less time to re-connect with our friends and familiar acquaintances but also have an allotment to make new connections. More importantly for analyst/investors, less time to share ideas like when several of us would arrive a day early to sit in the back of the former Joe Badaldi's restaurant late at night, or until the staff kicked us out. In that spirt, four years ago a few of us organized a small event to discuss/pitch value investing opportunities we identified around the globe. Hence and for those that will be in Toronto early for the Fairfax activities, we have again scheduled this event. The format is similar to a TED type talk with a 10 minute max idea presentation (hard stop), followed by a brief Q&A from the group. If interested, please PM me with a brief bio and indicate if you want to pitch an idea or just play the constructive devil’s advocate role during Q&A. You can also request attendance at https://yyxtoronto.ca/symposium.html (attendance limited to 30). YYx Toronto Value Date: Wednesday, April 10, 2019 Time: Doors open at 8:45 AM — 9:00AM to 2:30 PM (Lunch Provided) Location: Maple Leaf Square 15 York Street Toronto, Ontario Registration: Required * Origin of YYx - Replaced Toronto Pearson airport code with exponential function. https://yyxtoronto.ca

In non-legal speak, the defendant usually pays for the privilege to not have to admit guilt.

January, 20th 2003 — Morgan Keegan & Company put out a fake report that FFH was bankrupt and the stock price tanked in the morning to around CAD$50 briefly. Others joined in for the next few years until around 2006 when a lawsuit was brought forward against all. Morgan Keegan & Company finally admit their guilt over fifteen years later. https://www.fairfax.ca/news/press-releases/press-release-details/2018/Fairfax-Settles-Lawsuit-With-Morgan-Keegan/default.aspx Many of us knew this was a hit job and especially when about three days later after the report release the analyst revised his story and said he had a typo of just a few billion (if memory serves).