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petec

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Everything posted by petec

  1. This isn't a purchase. He bailed them out in 2015 and the convertible is now in the money. It would be pretty stupid not to convert!
  2. This seems naive. I guess it's case by case but do you think that a soldier who joined up to fight the nazi's was in the wrong? It seems they actually saved a lot of lives by putting an end to that madness. Agreed, but it is arguably a unique example - possibly the only righteous war in history.
  3. I think there's a huge difference between signing up and the draft. Either way I don't blame the kids. One of my favourite documents is this one, and it has some great ideas in Chapter 4: https://ratical.org/ratville/CAH/warisaracket.pdf
  4. Agreed. My sentence should have ended “depending on the person”. It wasn’t meant to be a general statement.
  5. Yes - but it may not be healthy!
  6. Very true. "We were soldiers once, and young" is an exceptional book and the introduction discusses why vets gather in the corner of bars and say, "those were the days". It's not at all gung-ho, it's just an acceptance of the fact that sometimes you go through things that only people who were there at the time can understand, and the ties that those experiences create are incredibly powerful.
  7. My dad was a soldier and so was his dad (4 years in the trenches in 1914-8 - fucking hell). I'm pretty sure my dad never killed anyone but I know his dad did. Do not ask him whether he killed anyone. It's the wrong question. It's a selfish question, for a start: you're asking it because you want to know it not because he might want to talk about it. And second, it's a sensationalist question. My guess is, if you're honest with yourself, you want to know because somewhere deep down you might get a kick out of the answer. Don't take offence if I am wrong but I know that's how I felt when I asked my dad as a child. What I would do if I was you, is simply tell him in a quiet moment that, one day, if he wants to, you'd like to talk about Vietnam. Do it quietly. Don't demand. And keep it simple. Just say that you're interested in him and his life, because he's your dad. If you don't find the right moment, or if you think he would be more comfortable writing about it than talking, then write to him - paper and pen, not email. Maybe it would turn into a correspondence, and he might prefer that to talking.
  8. I think that stock buybacks are part of the plan once the balance sheet has been sorted out. Have they said so?
  9. It's ending a capex programme so FCF is exploding. It's got a decent capital allocator at the helm and if he can't find any opportunities just reducing debt will be very good for the equity. It's at a good point in the capital cycle (new supply at multiyear lows). It's on c.5x FCF. Looks good to me. The bear case is one of explosive leverage? Is there anything else? From what I understand, Seaspan looks to clean up the balance sheet then pick up the pieces in the next downturn occurs in the shipping industry? I don’t think the leverage is an issue now given a) equity issuances, b) massive contracted cash flows, and c) virtually no capex. From a strategy point of view they’ve identified that they might be able to consolidate what is a very fragmented industry with several distressed players. They’ve also said they expect over time to deploy capital into other industries when prices are right. That is a cause for alarm or optimism depending on what you think of Sokol, who I think will oversee capital allocation. His record at Midamerican was extraordinary and he was a serious contender for the next CEO of Berkshire before the insider trading scandal, which tells you how much Buffett thought of his skills. I think this is his next “project”, as it were, and he’s said “the next ten years will be a lot of fun”. So I’m summary you’re paying 5x free cash flow to buy into a fairly lousy industry at a fairly good point in the cycle (both the industry’s capital cycle and the company’s free cash cycle) with a free option that a (flawed) genius does something clever with the cash flow. Not a dumb thing for Fairfax to have option - levered exposure to.
  10. I believe they were close to pulling the trigger on 2-3 year bonds when the 2y was at 2.25%. I would imagine all that cash is now in 2-3y bonds. Super news.
  11. Interesting. Do you have a view on the ROIC it can produce?
  12. It's ending a capex programme so FCF is exploding. It's got a decent capital allocator at the helm and if he can't find any opportunities just reducing debt will be very good for the equity. It's at a good point in the capital cycle (new supply at multiyear lows). It's on c.5x FCF. Looks good to me.
  13. That's more or less the same conclusion I came to although I "converted" the prefs, only subtracting the debt and giving Dundee 46% not 37%. Works out at about the same NAV range though, and I have no confidence to call where in the range reality will fall. My overall view is that taking the stocks at market and haircutting most of the other assets by 50%, I could have about 20% downside from here in the common; but if either Parq or United work out, I have enormous upside.
  14. I came up with similar numbers on an ev/ebitda analysis. I didn't think of the hotel valuation separately. For me the big question is whether initial guidance was just wrong, and 75-100 will never be reached, or the issue is more the ramp time, in which case we might still get there but slower. Either way we don't really have enough info. I was also struggling with the appropriate multiple to use. I also centred on 10 but ran 8 and 12 for interest. These are hard and trophy assets which might argue for a higher multiple than the average equity analyst (me) would be comfortable assuming.
  15. I think in a case where the preferred has matured it needs to be paid off or extended by a vote. Otherwise the company would be taken into bankruptcy. I think the prefs also become voters in a default situation which could be interesting.
  16. No, not a clue. You'd imagine Dundee wouldn't hire them back if they weren't capable. It bodes well that none of them is a Goodman. True. But then I wouldn't have imagined that they'd have done half of what they've done over the years so sadly my imagination is not a good analytical tool ;)
  17. Thanks. Do you have a view on whether they are any good? It's interesting they've chosen to come back. That alone might say something.
  18. Junior mining can work very well if you know what you're doing. It's a graveyard for those that don't. I've no issue if they have a good team but I haven't found much on the guys they hired.
  19. My only thought on the Ned issue is that having ploughed my way through the only letter of his that I read (2014 maybe) I thought it was the most arrogant load of twaddle I’d ever read. Expecting people to read 100 pages of your output is bad enough. But it was a diatribe against money printing and made predictions of hyperinflation. Now it’s ok to speculate about that, and allocate 5% of your money to protect yourself, but any more than that and you’re grossly overestimating your likelihood of being right. Please NB that apart from reading the above letter I know practically nothing about Ned so I may be well off the mark.
  20. I hope we see significant assets sales soon. Right now when I look at the stock I hear that screaming sound that the shot down planes make in old WWII movies. The plane makes the screaming sound or the pilot? ;)
  21. I feel like the next quarter (post portfolio review) is key; the stock could drift a lot lower with no action or explode on positive action. Personally I'd: a) sell everything not listed below and buy back liabilities cheap; b) mature DPM and Parq and sell those (18 month timeframe) c) focus on maximising option value at DST and United d) Use the "new" securities business to find new options. Until I see a plan I can't decide whether to get more excited as the price comes down, or not.
  22. Ah-I misunderstood, having not bothered to sum the assets myself. Sorry!
  23. That's absolute madness. Surely you have to subtract at least the market value of the prefs (I would subtract the par value because they'll trade a lot closer to par if things go right, which is the only way you win in the common)? He is only subtracting 18 months of pref dividends!
  24. I think so too, but there hasn't been much profit in it yet. In my opinion, the risk/reward for some names has gotten much better as the oil storage situation has improved, the spot pricing of oil has improved, the potential for better pipelines (Line 3 and Transmountain) has improved, and stock prices have remained stagnant. At $30-$40 WTI, you had to be willing to anticipate improved oil prices. At today's approximately $75 WTI, you are only betting on sustained pricing (or course, there will be substantial swings). Can you give some stock examples? I have some Peyto, but that's gas, and I don't know the oily names.
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