Some call Prem Watsa the Warren Buffett of Canada. He is the CEO of Fairfax Financial (OTC: FRFHF), an insurance holding company modeled in much the same way as Berkshire Hathaway. And over the last 30 years, he compounded the book value of this business by more than 21%. Not only does he have a remarkable track record, but as early as 2004 he accurately predicted, and was warning of, the impending doom facing the housing market. #-ad_banner-#Recently, he began warning of a new danger to the markets: deflation. The United States… Read More

Some call Prem Watsa the Warren Buffett of Canada. He is the CEO of Fairfax Financial (OTC: FRFHF), an insurance holding company modeled in much the same way as Berkshire Hathaway. And over the last 30 years, he compounded the book value of this business by more than 21%. Not only does he have a remarkable track record, but as early as 2004 he accurately predicted, and was warning of, the impending doom facing the housing market. #-ad_banner-#Recently, he began warning of a new danger to the markets: deflation. The United States is six years into an incredible bull market: the S&P 500 has nearly tripled from its March 2009 bottom, and the markets continue reaching new highs every month. On the surface everything looks rosy. Underneath, though, Watsa warns of serious trouble brewing. In Fairfax’s most recent investor conference call, Watsa referred to the fact that current levels of inflation are now at 60-year lows. That by itself is somewhat alarming, but remember that those low levels were reached despite the fact that the United States and almost the entire world has been engaged in easy-money policies on an unprecedented level. Read More

Everyone who invests money is aware of Warren Buffett — the richest and most successful equity investor the world has ever known. Unlike many billionaires who made their fortune with one really good idea, Buffett made his by repeatedly picking outperforming investments. Arguably, there is no better stock picker from whom to borrow ideas. #-ad_banner-#What might surprise many is just how concentrated Buffett’s massive portfolio still is. As of his most recent annual report Buffett’s company Berkshire Hathaway, Inc. (NYSE: BRK-A) had a $117 billion equity portfolio and a whopping $64 billion, or 54.7%, of that… Read More

Everyone who invests money is aware of Warren Buffett — the richest and most successful equity investor the world has ever known. Unlike many billionaires who made their fortune with one really good idea, Buffett made his by repeatedly picking outperforming investments. Arguably, there is no better stock picker from whom to borrow ideas. #-ad_banner-#What might surprise many is just how concentrated Buffett’s massive portfolio still is. As of his most recent annual report Buffett’s company Berkshire Hathaway, Inc. (NYSE: BRK-A) had a $117 billion equity portfolio and a whopping $64 billion, or 54.7%, of that was invested in just four companies. Buffett has always run with a very concentrated portfolio. The reason: he is laser-focused on not making mistakes. Buffett’s first rule of investing is don’t lose money.  His second rule is don’t forget rule #1. If an investment isn’t an absolute slam dunk, then Buffett doesn’t invest a penny. Three years ago, when Buffett invested the largest single sum of money in his career in one company, people paid attention. Buffett quietly accumulated a massive $11 billion position in International Business Machines Corp. (NYSE: IBM) starting in 2011. I say quietly because he received… Read More

I’ve found that one of the best ways to reduce my chance of making an investment mistake is to follow the lead of great investors with multi-decade track records of success. #-ad_banner-#​The way I figure it, the guys who have been successful for a period of decades don’t make many big mistakes. Billionaire investor Wilbur Ross is one such investor that I follow. Ross’ method of operation is to hunt for bargains in the most distressed areas of the stock market. And he seems to be pretty good at it. Ross has achieved an annual rate… Read More

I’ve found that one of the best ways to reduce my chance of making an investment mistake is to follow the lead of great investors with multi-decade track records of success. #-ad_banner-#​The way I figure it, the guys who have been successful for a period of decades don’t make many big mistakes. Billionaire investor Wilbur Ross is one such investor that I follow. Ross’ method of operation is to hunt for bargains in the most distressed areas of the stock market. And he seems to be pretty good at it. Ross has achieved an annual rate of return of 44% since 1997, according to an introduction given by investing legend Prem Watsa. Ross recently revealed his interest in buying shares of beaten down Canadian energy producers.  I closely follow these companies and I can tell you that current share prices are exceptional values. Ross thinks now is a buying opportunity for Canadian producers, which have seen a severe decline in share prices, if you believe that the long-term outlook for oil is positive. Specifically, Ross is looking at small- and mid-cap… Read More

No sector has been more beaten up over the past few weeks than the energy sector.  The selloff has been even more severe north of the border where energy companies have been stuck in a down draft since the end of June. #-ad_banner-#This shouldn’t be a surprise to shareholders of these companies.  If you are going to invest in commodity producers, then you had better be mentally prepared to withstand some serious volatility when, not if, commodity prices take a drop. Case in point: Canadian light oil producer Lightstream Resources Ltd. (OTC: LSTMF), which has had its stock price cut… Read More

No sector has been more beaten up over the past few weeks than the energy sector.  The selloff has been even more severe north of the border where energy companies have been stuck in a down draft since the end of June. #-ad_banner-#This shouldn’t be a surprise to shareholders of these companies.  If you are going to invest in commodity producers, then you had better be mentally prepared to withstand some serious volatility when, not if, commodity prices take a drop. Case in point: Canadian light oil producer Lightstream Resources Ltd. (OTC: LSTMF), which has had its stock price cut in half over the last three months despite the company’s successful makeover of its balance sheet during that time. Entering 2014, Lightstream knew that it had to get its financial house in order. The company’s share price was clearly being hurt by its higher leverage ratio compared to its dividend-paying peers.  To bring its debt-to-cash flow ratio down to a level that is more in line with its peers, Lightstream released a plan to sell $600 million worth of assets by the end of 2015. The markets were skeptical that Lightstream could accomplish this, while also receiving attractive prices for… Read More

Do we or do we not have a stock market bubble in the United States today?  Looking back on the last fifteen years, almost all investors are familiar with how painful the popping of a stock bubble can be.  We have learned that we can’t ignore the overall valuation of the market if we want to avoid being part of the carnage. In 2000 investors saw the dot-com bubble pop, which led to huge losses for holders of internet and technology-focused companies. In 2008 there was no sector left unscathed by the financial crisis that caused the worst selloff since… Read More

Do we or do we not have a stock market bubble in the United States today?  Looking back on the last fifteen years, almost all investors are familiar with how painful the popping of a stock bubble can be.  We have learned that we can’t ignore the overall valuation of the market if we want to avoid being part of the carnage. In 2000 investors saw the dot-com bubble pop, which led to huge losses for holders of internet and technology-focused companies. In 2008 there was no sector left unscathed by the financial crisis that caused the worst selloff since the 1930s. #-ad_banner-#Today, one renowned investor is ringing the alarm bells — warning of a significantly overvalued stock market. According to market strategist John Hussman, the only points in U.S. stock market history that match today’s level of overbought and overvalued assets are 1929, 1972, 1987, 2000 and 2007. As you are likely well aware, each of those points in time were followed closely by a stock market collapse. Personally, I’m not sure that we are in a stock market bubble, but I can tell you one thing for sure. When the trailing five-year chart for the S&P… Read More

My family, like many others, has been impacted by breast cancer. We got off lucky and still have our loved one around, but many others haven’t been as fortunate. #-ad_banner-#As an analyst and investor, I would love to profit from a company that is working to save lives. TapImmune, Inc. (OTC: TPIV) is attempting to do exactly that. The firm is developing a treatment to greatly reduce the mortality rate of breast cancer — a disease with existing medicines that generate billions in revenue each year but only treat 20% of the afflicted population. I want to state upfront: TPIV… Read More

My family, like many others, has been impacted by breast cancer. We got off lucky and still have our loved one around, but many others haven’t been as fortunate. #-ad_banner-#As an analyst and investor, I would love to profit from a company that is working to save lives. TapImmune, Inc. (OTC: TPIV) is attempting to do exactly that. The firm is developing a treatment to greatly reduce the mortality rate of breast cancer — a disease with existing medicines that generate billions in revenue each year but only treat 20% of the afflicted population. I want to state upfront: TPIV is not an investment for widows or orphans. With analyst targets that are, in some instances, seven times the current share price, this opportunity might merit a small position in a diversified portfolio. TapImmune is trying to open a new frontier in immunotherapy, or the prevention and treatment of disease with substances that stimulate the body’s immune response. What that means is that instead of trying to kill cancer cells with an outside agent, immunotherapy uses materials that improve, target and restore the patient’s immune system to help slow the cancer’s growth, stop its spread and kill… Read More

In ten years, the most profitable oil sands development could very well be in the United States in the state of Utah. The fact that oil sands even exists in the United States may come as a surprise to some. Not only do they exist but these Utah oil sands companies are already promising to offer a competitive advantage against the Canadian version. For example, one of the primary challenges of the Canadian oil sands is its location in the remote northern part of Alberta. It is extremely expensive to get supplies, equipment and people this far north. Read More

In ten years, the most profitable oil sands development could very well be in the United States in the state of Utah. The fact that oil sands even exists in the United States may come as a surprise to some. Not only do they exist but these Utah oil sands companies are already promising to offer a competitive advantage against the Canadian version. For example, one of the primary challenges of the Canadian oil sands is its location in the remote northern part of Alberta. It is extremely expensive to get supplies, equipment and people this far north. Likewise, Canadian operators have to pay hefty tolls in order to ship the oil down to the Gulf Coast refiners. American Sands Energy (OTC: AMSE) is different. It is also an oil sand company, but it is located near Sunnyside Utah (150 miles southeast of Salt Lake City). They can simply load their oil production onto a train and ship it to one of six refineries that operate within the state. The second advantage that American Sands Energy and its Utah peers have over the Canadian oil sands is that… Read More

You simply don’t ever have to be contrarian. Many risk-averse investors make plenty of money. But those that take a leap of faith and swim upstream can benefit the most. That being said, I draw your attention to the country of Iraq and, in particular, the semi-autonomous northern region of Kurdistan. The Kurds control massive oilfields, which, for the bold investor, is a potentially lucrative investment opportunity. #-ad_banner-#​But before we get to that, let me explain the unique situation in Iraq and why this risky venture is meant only for a conservative portion of a brave investor’s portfolio. Read More

You simply don’t ever have to be contrarian. Many risk-averse investors make plenty of money. But those that take a leap of faith and swim upstream can benefit the most. That being said, I draw your attention to the country of Iraq and, in particular, the semi-autonomous northern region of Kurdistan. The Kurds control massive oilfields, which, for the bold investor, is a potentially lucrative investment opportunity. #-ad_banner-#​But before we get to that, let me explain the unique situation in Iraq and why this risky venture is meant only for a conservative portion of a brave investor’s portfolio. A radical Islamic group — known as ISIS — grew out of the Syrian civil war and began invading Iraq earlier this year with the goal of creating an Islamic state, or caliphate, across Syria and Iraq. The group has successfully captured and controls wide swaths of land in the northern regions of both countries. The Kurdish oil fields lie just north of ISIS-held territory in Iraq and remain a target for the radical group. Not surprisingly stock prices of independent companies operating exclusively in Kurdistan have been decimated. These companies control very large conventional oil fields that… Read More

Are you familiar with Fairfax Financial’s CEO Prem Watsa? If you aren’t, you really should be. Following Watsa’s lead over the last twenty years could have helped you not only avoid several disasters but actually profit from them. #-ad_banner-#With the S&P 500 having nearly tripled from the March 2009 lows, now is a great time to pay attention to a man famous for spotting bubbles. First a bit of a background on how Mr. Watsa gained my trust. It all goes back to the housing bubble and financial crisis that Watsa was miles ahead of the curve… Read More

Are you familiar with Fairfax Financial’s CEO Prem Watsa? If you aren’t, you really should be. Following Watsa’s lead over the last twenty years could have helped you not only avoid several disasters but actually profit from them. #-ad_banner-#With the S&P 500 having nearly tripled from the March 2009 lows, now is a great time to pay attention to a man famous for spotting bubbles. First a bit of a background on how Mr. Watsa gained my trust. It all goes back to the housing bubble and financial crisis that Watsa was miles ahead of the curve on. Incredibly, as far back as 2004, Watsa warned about the impending disaster in the housing market. And he didn’t just warn about it, he positioned his company Fairfax to profit massively from it by owning credit default swaps on the most vulnerable financial institutions (like AIG).  It was contrarian moves like these that made him known as the Canadian Warren Buffett.   Here is a bit of what Watsa said in his 2005 letter to shareholders foreshadowing the impending bubble burst: As we have mentioned ad nauseam, the risks in the U.S. are many and varied. They emanate from… Read More

Let me tell you, if you are a contrarian investor and looking for a place to hunt for bargains, this is it. Are you familiar with the S&P/TSX Venture Composite Index?  Standard and Poors describes this index as “a broad market indicator of Canadian micro cap securities in Canada.”  This index of stocks has been beaten down relentlessly. Check out the performance for the index over its recent history. It is truly a chart that only a bargain hunter could love. Read More

Let me tell you, if you are a contrarian investor and looking for a place to hunt for bargains, this is it. Are you familiar with the S&P/TSX Venture Composite Index?  Standard and Poors describes this index as “a broad market indicator of Canadian micro cap securities in Canada.”  This index of stocks has been beaten down relentlessly. Check out the performance for the index over its recent history. It is truly a chart that only a bargain hunter could love. This entire index of stocks needs to increase by 250% just to get back to where it was in early 2011. The performance of this index has been so miserable that today a full five years after the global financial crisis stock prices are back near the lows seen in those dark days. #-ad_banner-#​This performance is terrible on its own. When you compare it with the S&P 500 (which has nearly tripled from the March 2009 lows) it is almost indescribably bad. It almost goes without saying — given how beaten down these stocks are… Read More