Thrifty3000

This group (DRASTIC) is to the covid lab leak theory what Wall Street Bets was to the GME thesis: https://www.newsweek.com/exclusive-how-amateur-sleuths-broke-wuhan-lab-story-embarrassed-media-1596958

Copper is Altius’s biggest swing item. The blurb below on copper economics was in Almost Daily Grants on Friday. Seems like conditions are right for higher long term copper prices (which is exactly what Altius’s management has been saying for years). I’m looking forward to the investor day presentation this Thursday to get more insights. From Almost Daily Grants: Captain of Industry The doctor is in. Copper futures prices reached $10,417 per ton in London this morning, eclipsing the prior record high set in 2011 with a 30% year-to-date gain and more than doubling from their March 2020 nadir. Broad economic acceleration has underpinned that rally, while the emergence of popular green energy pillars like electric vehicles and solar power installations (which both require ample copper to operate) has put further wind in the bulls’ sails. Accommodating the brisk demand for the industrial metal will be no easy task, as much of the globe’s more accessible deposits have already been tapped. “You will need $15,000 copper to encourage a lot of this more difficult investment,” Ivan Glasenberg, CEO of commodity giant Glencore, told listeners-in at a Financial Times event yesterday. Suppliers “are not going to go to those more difficult parts of the world unless they’re certain [a project is economic].” Industrywide capital expenditures will foot to $16.2 billion this year and remain near that level through 2023, analysts at ANZ bank predict. That’s only marginally above the $15.2 billion in capex during the pandemic-addled 2020. Government diktat could serve to aggravate the sluggish supply picture. Yesterday, Chile’s lower house approved a bill increasing taxes on copper producers towards potentially confiscatory levels, via a sliding scale depending on the price of the red metal. The legislation, which will now advance to the Chilean senate, could discourage production in the country that accounts for nearly one-third of global supply. Enactment of the new tax schedule “would at the very least delay any new capacity, extending the lengthy timeline to bring on a new mine,” comments Bloomberg analyst Grant Sporre. While recent virus- and green energy-related developments have underpinned the rally, natural resource investors Leigh Goehring & Adam Rozencwajg, believe the stage for the copper bull market was set long ago. In their soon-to-be-released first quarter investor letter, Goehring & Rozencwajg point out that a surge in high-quality supply beginning in the late-1980’s has given way to steady depletion in both the quantity and quality of copper extracted. For instance, the average head grade of remaining reserves (which measures the metal concentration within the copper ore) was less than 0.6% last year, compared to more than 1% in the mid-1990s. Similarly, data from S&P show that new discoveries have declined precipitously in recent years, averaging 8 million tons annually since 2010, compared to 50 million tons per year over the prior two decades. That’s despite a trebling of copper industry exploration budgets to $2.5 billion annually in the post-2010 period from the 20 year prior average. The pair put it plainly: “We are strong believers that copper prices are heading significantly higher.” The Goehring & Rozencwajg Resources Fund (ticker: GRHIX) is one way that commodity bulls can express their views. The open-end fund, which sports $83.3 million in assets and charges a 92 basis point expense ratio, is up 43.4% year-to-date and trades at its highest net asset value since October 2018.

I have a hunch India's current covid wave will play out like prior waves have played out in other countries - like Italy and the US. Now that hospitals are at max capacity and global media has all eyes on India, governments will lock down, people will mask up/distance, and case loads will peak in a couple weeks. It will then take several weeks for cases to decline to the pre-wave level.

Bravo, Sanjeev! Thanks for making the effort to upgrade the site. Being a tech entrepreneur myself, I know full well how difficult it can be to migrate from one system to another. I'd be willing to bet you have some entertaining war stories. I once had an executive coach advise me that the best way to derail a prosperous career is to take the lead on an IT project. Haha. I know I've proved him right at least a couple times. I can already see there are some awesome and very valuable new features. I can't wait to dive in further. Many many thanks!

No, I think that time for Fairfax was back in 2003. The decision that we are no longer going to buy crappy insurers and turn them around led to the group of quality insurers they have today. The second part of that was making Andy Barnard in charge of all of the insurers. Even with Fairfax's more eclectic style of investing, the real culprit behind their underperformance has been due to betting against and shorting the market after 2009. They took advantage of the 50% correction, but started hedging and that really hurt their performance. Even with minimal exposure to the stock market, they would have done very well just in their bond investments, conglomerate investments and the equities they did invest in...excluding their shorts and market bets which cost them significantly. Maybe the decision to stop shorting is a step in the right direction...simplifying their portfolio decisions. Cheers! Sanj, please stop describing what FFH did as "hedging." More than 100% of FFH's equity portfolio was "hedged." When your hedge-ratio exceeds your exposure to the underlying (ie, more than 100%) that's called speculation. It was one of the investment decisions where the excessive position sizing reflected poor risk management. SJ They were bets on values regressing to the mean. Historically he was able to wait out Mr. Market and take advantage of volatility (see dot com and housing bubbles). Unfortunately, Mr. Market hasn’t cooperated for over a decade and Prem learned his lessons the hard way. Prem is smart. He learned. He’s not just another run of the mill, self-made, Canadian, multi-billionaire from India. And, he has formally, in writing, taken shorting off the table. I don’t think he is addicted to shorting or to shareholder lawsuits. This issue is easy to understand and was even easier to solve. He also knows he doesn’t have to juice earnings with shorts anymore, now that he has more good investment opportunities than he has capital (for the foreseeable future). Now, all he has to do is reward a bunch of all-star insurance and non-insurance managers/investors like David Sokol, Byron Trott, Wade Burton, etc if they can grow capital by more than 15%. If they can do it, they get more capital. If they can’t then they don’t. The real story of the last ten years was not the shorts. It was the global network of non-insurance capital allocators he has been assembling. The next ten years won’t look like the last ten years. And, the stock will trade above BV again soon enough.

+1

Thanks for sharing this. Chad offered some optimistic projections about their various initiatives that I've never heard before. He expects the project development portfolio - with junior equities currently worth $55 million - to produce 10x that value over the "fulness of the cycle." So, that's $500 million of value. He expects the value of ARR to be $150 to $200 million for Altius from the outset of the IPO, and for ARR to eventually dwarf the value of the originating commodities business; because of the favorable timing, circumstances, partnerships, demand for capital, etc. So, that's at least another $500 million of expected future value. They also discussed the current economics of iron ore making Alderon feasible, which would add a couple hundred more million of value to Altius should Champion decide to start production. (There's an interesting conversation at the 28 minute mark about China demand outpacing world supply - which makes projects like Alderon feasible.) If you add this to Brian Dalton's comment a few months ago expecting the Potash assets to likely be worth north of $400 million in a decade, you're looking at a management team that seems pretty confident they're building a business that will be worth over $2 billion by 2030. That's certainly a lot higher than I had been forecasting in my financial projection, but I'm glad to hear management is thinking big.

I believe copper is their biggest swing item. And, copper just reached a fresh nine-year high above $4 a pound, up 93% from its late April lows. Inflation alert?

r/WallStreetBets? haha

This is what’s going on. I wish I was joking... https://www.reddit.com/r/wallstreetbets/

As a board member Prem could also be urging BB to issue tons of shares and build a war chest (like Tesla has done with their WSB-fueled lottery winnings).

"Dear Prem, Sell BlackBerry. Sighned, - God"

The SP500 isn't the US, it's a global index. A ton of these companies get a lot of their revenues from outside the US, an the US market is by far the biggest market in the worl. So I don't think other benchmarks make a lot of sense -- they tend to be less representative of what someone who wants to diversify and index should do, actually (the home bias thing). And I think the goal posts have been moved over time as ALS has done badly... If you go back earlier in the thread, it was mostly pitched as this genius company that has been compounding at a 40% CAGR for years and was going to create all these options worth billions like Kami, etc. Dazel was ridiculously bullish on it until he disappeared, a bit like Linelidn (sp? can't remember how he wrote his name) was the same and then disappeared. I guess I'm the only one still around from the beginning of the thread ¯\_(ツ)_/¯ I’ve been following this thread since it was created in 2011. It’s one of my favorites to follow since I really like the management and since there’s so much business activity. I never made a significant investment until this year when it dropped below $7 USD per share. I don’t expect it to be a 10 bagger over the next decade from those prices, but I expect it to beat the S&P pretty solidly. A couple years ago I created a ridiculous workbook attempting to trace all their investments back to inception. It’s a very different company from when Dazel first posted, attracting a different type of investor. With Altius you have ultra high quality ultra long life royalties (that they didn’t own 10 years ago) pumping out tens of millions of free cash to a proven, experienced, innovative, management team that’s going to reinvest into the best likely return among: - high quality royalties - equities - exploration projects - share repurchases I don’t lose sleep owning Altius. And I love owning a share of those cash machine royalties.

It looks like he bought at an average cost of $308 USD roughly or about $420-425 CDN per share. It says he bought in the last few days before the press release...I would imagine it was around the 9th, 10th, 11th and 12th, where the stock was around $425 CDN or less and volumes rose. If he is buying there, then I would imagine he is expecting a return of better than 15% annualized or more over the next few years. Cheers! The question then becomes is Prem expecting a 15% return a good predictor of future 15% returns. ...and one to ask: ''is 15% a realistic expectation?''. I am approaching a decade of holding FFH and I am seriously wondering if this is a realistic target as recent shareholders (10 years or less) are yet to benefit from such appreciation. It sure attracts new ( and naive) investors. I am tired of hearing the 30 years track record and while I focus on the last 10 years, I can only come to the realization that shareholders fell short of expectations. yeah , yeah ... I am still around and will for quite some time, but I needed to vent and share ;) Even during the depths of the hedge fund crisis, when Fairfax stock fell to $53 USD, I don't remember Prem buying shares in such a significant amount. Frankly, I'm shocked that he put $150M of outside capital into Fairfax...that would be a decades worth of dividends for him. And if he didn't borrow the money, I would imagine that's probably half his net worth outside of what is held in Sixty-Two Corporation. Then again, I've got half my net worth outside of Corner Market Capital in Fairfax and Atlas Corp right now, so maybe I shouldn't be surprised...and I'm very comfortable with both and think both have 50-100% upside over the next 2-3 years! Cheers! What is the thesis on ATCO? David Sokol

wabuffo, thank you for a gracious, thoughtful, beautiful explanation. I'd like to first mention that a young guy named Nathan Tankus gained a lot of notoriety over the last year posting blogs explaining complexities of the financial system using the same kind of visual, T table-based, explanations you use. His fan base exploded when Bloomberg featured his blog in a story. You might like his posts: https://nathantankus.substack.com/ Also, just to be sure I'm correctly synthesizing the Hunt/Hoisington position with your explanation above, is it fair to say scenario 2 cannot legally happen independent of a corresponding tax receipt or treasury issuance? In other words, the government cannot legally create new private sector assets without taxing the private sector or increasing public sector debt to pay for those assets? Thus, making the Hunt/Hoisington case that deficit spending is near term inflationary (6 to 18 months) due to temporary supply constraints, but longer term deflationary, because the additional public sector debt decreases prospects for longer term private sector productivity/growth (as the private sector will be on the hook for servicing the additional debt). I believe this has been the ongoing rationale for Hoisington's position in long term treasuries - that the global, central bank-driven, debt explosion of recent years is long term deflationary. However, I believe in a recent newsletter Hoisington warned if the US congress legalizes scenario 2 above without requiring corresponding taxation/debt - aka legalizes true money printing - that all bets are off. Sounded like if that happened Hoisington would unload their long positions overnight, while expecting devastating, Weimar Republic-style, economic consequences (hence, the reason true US government money printing has been illegal thus far).