3G Capital: Buy, Squeeze, Repeat
Canadians would know them for their acquisition of Tim Hortons, and their close association with Warren Buffet and Berkshire Hathaway. Their hedge fund manager, Dan Dreyfus, presented at our Investors Conference in 2015 and also serves as a member of our Board of Directors. For those interested in learning more about the firms many efforts, the Fortune article provides a good glimpse into the 3G, their proven formula, and what they may potentially purchase next.
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Buffett and Gates at Columbia
At the end of January, Warren Buffet and Bill Gates visited Warren’s alma matter to share some thoughts. We won’t spoil the details, but the topics range from Trump, to the excellent current environment for dedicated “learners”, to a plan to eradicate malaria within our lifetime.
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The Most Respectful Interpretation
A thoughtful piece on interpreting events around us, particularly those which might inspire anger or frustration. The most important thing is often pausing to reflect and recognize we are making a negative assumption. The challenge is to exert ourselves and to invert the situation: “What is the most generous assumption I can make?” For the good-tempered man tends to be unperturbed and not to be led by passion, but to be angry in the manner, at the things, and for the length of time, that reason dictates; but he is thought to err rather in the direction of deficiency; for the good-tempered man is not revengeful, but rather tends to make allowances.
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Ranks of Stock Analysts Dwindle
We rarely utilize sell-side research for investment work given our preference to use our own unbiased diligence. That said, we do find it useful in understanding what the consensus view is on a particular business. It is worth taking note that the ranks of analysts have been reduced by 10% year over year, a trend we don’t see letting up soon.
There are 805 Canadian-listed stocks with at least one analyst rating them, according to Bloomberg data as of Tuesday’s close. Of the more than 5,400 total recommendations on those stocks, a measly 225, or 4 per cent, are “sell” ratings.
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Getting Rich vs. Staying Rich
We often say there is a time to make money, and a time not to lose money - and broadly speaking believe we are in the latter period now. Paranoia and modesty are key characteristics to staying rich for the long term.
I sometimes think that no price is too high for a speculator to pay to learn that which will keep him from getting the swelled head. A great many smashes by brilliant men can be traced directly to the swelled head.
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Gates Foundation Annual Letter
The Gates Foundation annual letter is addressed to Warren Buffett. The occasion is marks by the 10 year anniversary of Warren donating the bulk of his fortune to the foundation to fight disease and reduce inequity. This was the largest philanthropic gift made by anyone, ever. The progress made to date has been remarkable.
Here are some of the most poignant quotes from this year’s letter:
The Power of Philanthropy – Melinda Gates
That’s the magic of philanthropy. It doesn’t need a financial return, so it can do things business can’t. But the limit of philanthropy is that the money runs out before the need is met. That’s why business and government have to play a role if the change is going to last.
Moving toward zero is perhaps the biggest difference between our philanthropy and a business. In the private sector, the goal is to stay in business. In our case, nothing would make us happier than going out of business because we’ve achieved our goals
Optimism – Bill Gates
Extreme poverty has been cut in half over the last 25 years. That’s a big accomplishment that ought to make everyone more optimistic. But almost no one knows about it. In a recent survey, just 1 percent knew we had cut extreme poverty in half, and 99 percent underestimated the progress. That survey wasn’t just testing knowledge; it was testing optimism—and the world didn’t score so well.
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