alertmeipp

looks like he is not very confident about RIMM.

One more well-respected value manager jumping in. :)

>>The beauty of owning companies at a discount to TBV is that there is no need for growth, and management can actually create value for shareholders by shrinking the business. high TBV compared to PPS is meaningless if the return on book is also compressed. Now, BAC is working crazy on the expenses side (cutting jobs, replacing high-cost debt, etc...), the PPS will start uptrending when the revenue side finally come together when the econ turn.

Clear data point: I am down like 40% from my previous peak.

How come I only see the preview from the link?

But.... all these negatives were there at the beginning of this year, 3 months ago, etc... The market is now pretty much at the same level as Jan. Not much has changed. I don't see how one can have different views now vs barely just few months ago. It's pretty simple isn't it? I didn't think Spain was on the precipice of defaulting and that the amount of money Europe would throw at this thing would be larger than it is...and as such, I became more cautious. You should read the rest of that Leucadia letter. Cummings and Steinberg sold investments to specifically pay down debt. That isn't any different than what we did. What did they see two months ago, that they did not include in their analysis 6 months ago? Something perturbed them as well. And whether anyone likes it or not, why did Buffett forgo a $22B deal that normally would have looked very good? Because he doesn't want Berkshire's insurance businesses to be constrained? No. Berkshire went as low as $22B in cash in 2008/2009. They have about $40B in cash at the end of last quarter. He could have easily issued $4B in debt at rock bottom rates to finance this thing, and still kept $22B in cash. Something stopped him from doing the deal. What changed in two months that he didn't see six months ago? Cheers! I think your reasoning is a bit stretchy. Say if Buffett announces a 30 billions deal tomorrow, will that impact your thinking? Holy smokes, this is like pulling teeth! I'll make it simpler and less stretchy Alertmeipp, that way I don't have to go through the pain of this any further. I'm a market timer and we are timing the market...to the minute actually. Cheers! Hey, seriously, I was just trying to learn. Obviously, you made the right move so far. (I guess the rest depends on when you move your cash to work.) I often kick myself on not moving out when things were obviously overshoot short-term (e.g. BAC doubles in couple months)

But.... all these negatives were there at the beginning of this year, 3 months ago, etc... The market is now pretty much at the same level as Jan. Not much has changed. I don't see how one can have different views now vs barely just few months ago. It's pretty simple isn't it? I didn't think Spain was on the precipice of defaulting and that the amount of money Europe would throw at this thing would be larger than it is...and as such, I became more cautious. You should read the rest of that Leucadia letter. Cummings and Steinberg sold investments to specifically pay down debt. That isn't any different than what we did. What did they see two months ago, that they did not include in their analysis 6 months ago? Something perturbed them as well. And whether anyone likes it or not, why did Buffett forgo a $22B deal that normally would have looked very good? Because he doesn't want Berkshire's insurance businesses to be constrained? No. Berkshire went as low as $22B in cash in 2008/2009. They have about $40B in cash at the end of last quarter. He could have easily issued $4B in debt at rock bottom rates to finance this thing, and still kept $22B in cash. Something stopped him from doing the deal. What changed in two months that he didn't see six months ago? Cheers! I think your reasoning is a bit stretchy. Say if Buffett announces a 30 billions deal tomorrow, will that impact your thinking?

But.... all these negatives were there at the beginning of this year, 3 months ago, etc... The market is now pretty much at the same level as Jan. Not much has changed. I don't see how one can have different views now vs barely just few months ago.

you think IMF will chip in?

I think they are looking to different names for the same thing.

That pretty much describes how I look at things too. What I want is independence and freedom, not shiny stuff. Most of what I like to do doesn't cost much anyway. The most important things in life are free.

twa, Assuming this is a realistic risk, how would you explain the complete lack of disclosure regarding this issue in the two most recent 10-Q's and the last 10-K? I am not even sure what cfa was trying to say. Does he mean to take a static snapshot of all BAC's subsidiaries and net out their assets and liabilities and that will lead to more capital raise? But we all know BAC is building billions of capital while working through legacy issues as we speak and they just passed the stress test?

I got enough of BAC already, don't tempt me to go overweight.

what kind of value are u expecting?

shouldn't they make a killing on this?

Very good question Cardboard! To answer your question, ask yourself why my opinion would change? ;D The answer: I saw the problems with the PIIGS, and expected Portugal, Ireland & Greece. I didn't think Spain would get to the point it has...and I'm far more worried about Spain than Italy...but that could change if things degrade there with the speed they did in Spain. As soon as I recognized how big the problem was in Spain, and the scope of helping them, we started buying out of the money SPY puts...we then added the BAC puts. Not because we saw any issues with BAC or the United States, but that this was going to be a problem and we were going to see volatility probably worse than in 2011. The BAC puts are up well over 130% and the SPY puts are up about 25%...they were well out of the money. We've sold 35% of the BAC puts and none of the SPY puts. We don't work in a vacuum. I'm constantly reading and trying to put together information that I pick up. If the scenario changes where the risk/reward ratio degrades, I have to accept the new analysis and apply it to the fund...otherwise, it would be like floating in a boat that develops a hole in the hull, determined to reach your destination, and not patching the hole because you choose to ignore the new information...you may make it or you may not, but the decision to ignore could be very costly. Cheers! Puts hedge on top of 50% cash. I see you trying to swing big with some macro view and market timing. So far so good...

The problem of QE in EU is German doesn't like or need it. And EU without German is like a man without 2 arms. It will take a lot but German can't afford EU to go down tho. The new French president may help.

BRK. ;D

What's wrong with intelligent market timing? Obviously, selling a large position in a great business that isn't overvalued is apt to be penny wise and pound foolish for some short term protection. But Warren himself said It was a mistake to hold even great, mature businesses at 50 times earnings in the late 90's when he had seen the writing on the wall. What's wrong with going "all in" in March, 2009 when great businesses were selling at 20% to 30% normalized earnings yields? And what's wrong now with having cash available during a season that historically has poor returns to pick up bargains if things in Europe get ugly? Nothing wrong with it. Whatever works for you. Of coz, everyone wants to buy cheaper, but one may also miss the boat when things rally back.

moore_capital54 , What's ur cash level?

You do know that we can't rec on this board. ;) I'm into a lot of resource companies that have just posted record results and are getting slaughtered. Pure Energy and Total Energy to mention a couple. Please "reply" then. :) Yes, commodities based companies which are well discussed here are getting killed last couple week - SD, FTP, CHK, ATPG, POT, MERC, CFX.TO, PBN.TO. At least 20-30%.

I sure hope so, very well put.

What are u seeing there? Greek pulls money from their banks? And then what? Spain CDS going up? And then what? How come this time we don't see the almost daily ECB /German+France meeting

That's also partly the reason we do keep more cash than virtually all other fund managers to begin with. We have no lockup and we have a fiduciary responsibility to protect our investor's capital. We like cash...there is nothing wrong with cash. We don't hold it for years, but we hold it for periods where we think the market is ignoring fundamentals or obvious macroeconomic risks. Stocks were fair value a month ago, and they are only modestly cheaper. There is one stock that we are averaging into right now, but most are not cheap enough yet to risk capital and ignore risks. We like what we own and we have significant gains in some. Things just aren't cheap enough right now if we plan on providing outsized returns relative to the index long-term. Cheers! Fair enough. I own my companies can do better than cash over the LT.

Wow, he goes with the worst - BAC and C. And he chooses GS over MS too.