benhacker

Bargainman, I liked Taleb's book a lot, but his opinion's about who I should respect are quite a ways down my list of relevant data inputs. :) Netnet, I totally agree with Roubini in that the carry trade will unwind. Is anyone really not aware of this?? People borrow cheap when things are stable to buy risky assets... when something changes (the stability, or the rate of cheapness on the borrow, etc) things unwind. How is this new information? We all lived through the housing boom right? His commentary about the effective cost to borrow being -20% or whatever is only relevant after the fact, and since he didn't predict this situation, his 'forecasting' on where we are today may be right, but his value to us is zipo. I have no issue with the message, I just don't believe it's intellectually challenging to come to the same opinion (early than Roubini)... people on this very board have talked about borrowing at 2% to invest in various risk assets paying more (like various bank preferreds)... this is just the nature of the financial markets. We clearly all have to make our own investment decisions. I don't believe Roubini's statements have helped anyone with that task though. His commentaries about zombie / insolvent banking system during March were some of the biggest contrarian signals I've ever seen in my investing career. The government was printing printing printing and facilitating liquidity causing EXACTLY what he is blabbering about now, and he just kept talking about the system near collapse. I'm sure he is very smart, I just don't think he adds 'any' value for investors who can do their own legwork and research. Ben

Roubini seems very much to me to be a broken clock. He cannot espouse anything that is not dire and negative. Reading through that piece made me chuckle as one of his 'bearish catalysts' was that the US GDP growth may surprise to the upside... which would lead a covering of the dollar, which would depress asset prices due to carry trade unwind... etc etc etc. Who is this guy? His negative catalyst is now stronger than expected growth? It's easy for people who borrowed at 0% to buy risky assets as stupid carry traders, but I guess it's quickly forgotten that the carry trade hasn't exactly been considered the no-brainer strategy during the last 6 months. Now that massive profits have been made by making timely (maybe wise, maybe not...) bets, now it's all so obvious why this is happening? I don't get it. I'm not saying our system is healthy. I'm not saying the carry trade isn't in force. I just don't get what Roubini adds to the discussion. You could have said the same thing in 2003. Maybe he is really just focusing on the big picture of our government meddling in markets and throwing various monetary and fiscal measures around to manipulate things. I agree. That is happening. It's been happening for years. Sorry for the rant finetrader, I just don't see the value of Roubini, but no offense to you intended. My lack of insight may be my own problem, but I'd have a lot more respect for Roubini if he would have called this carry trade 8 months back... telling me what I already see is happening isn't too useful to me. :) Ben

I will bet a lot of money with anyone who thinks <0.6x will happen before 1.4x. Seriously guys, this is a total lack of clear thinking about history if anyone thinks that's going to happen <with any meaningful probability>. At 0.7x or 0.8x, I think I *still* might take the bet. That is not to say that FFH is a no-brainer, just to keep in perspective how different things are now vs. 2003 (or even 2006). Thanks, Ben

He is saying that managers should 'relax' their valuation rules on Emerging stocks because he thinks there is a significant probability that the next bubble will be in this asset class. He is arguing that the sector should receive an option premium value in addition to replacement value. Regardless of what you think of him, he is one of the most remarkably consistent and accurate pundits out there... he has saved and made me a fair amount of money over the years which I thank him for. Ben

I write management / IR an email and make a concise and clear case for why i think they should consider or do XYZ. You may not have any influence, or you may and you just won't ever know. If small investors never raise their voice and just assume no one will listen, they will be right. I wrote ORH management after the first offer from Fairfax explaining to them why I wouldn't accept any offer below $64/share. They probably didn't take my small opinion into account, but if I didn't send it, then I know they wouldn't have. Vote your proxies and act like an owner, otherwise you may get what you expect. But keep your expectations set properly. Ben

That is solid banker due diligence! LOL...

Sanj, He means Cumulative out performance...

Kilt, CUSIP: 92977V206 Prospectus: http://www.sec.gov/Archives/edgar/data/1188382/000095016802003725/d424b4.htm Ben

For those with no tax issues, WNA-p is yielding 9% @ 80% of par, callable in 2022. Same credit position as WFC-L despite the differing structure. Long both. Ben

For those interested, a similar parrallel discussion over on the Fool. http://boards.fool.com/Message.asp?mid=25007529&sort=whole#28034510 Halfway down the page for the recent comments. Ben

Thank you all for discussing. I'm very interested in this company, and I've been given the motivationg to revisit my analysis again. Appreciate it. Ben

I think I've raised this before, but isn't FUR EXTERNALLY managed REIT by Asner??? Does this not make many of your uncomfortable? This is a GP / LP type structure, not a Buffett, Prem, Biglari structure. Not saying it's the kiss of death, but the fact it's never discussed makes me feel like the crazy guy... or maybe that was back in the day when I researched FUR, and not the case today. Would love to know. If FUR was internally managed, I'd be a buyer at liquidation... externally managed would probably make me push my bid down to 0.6x book or something, regardless of where the high watermark is. Just my 2 cents, but I'd love to hear some thoughts from the owns (thanks for the rundown above by the way). Ben

BB, I think if he meant that, he would have not used the term "stock" in his sentence. :) I don't know why I responded, I don't agree/disagree here anyway, I just didn't get it...

Huh? Us market up 15-20% in 3 months.

Down 26% in '08 - up through Q3, but then Q4 destroyed all my illiquid stuff. Up ~70% YTD in '09 - Mostly my holdings came back and put a lot of action on Wells and FFH during March and a few other holdings. The single most important mistake I didn't make was hesitating to buy in late March and April as new money came in. The fact that some stuff was up 100% made me feel sick, but I just bought anywya based on what was cheap. I had about 30-40% of AUM added in inflows during this time so this would have been a major bone head move if I would have 'waited for a pullback' for the new accounts. Ben

All good points Eric. Some comments: 1) Borrow on SHLD is tight (meaning, difficult to source over time, the rate is dynamic and sometimes not available) 2) Current borrow is expensive - IBKR quoting me >25% annually. Has been as high as 70% in the last 8 months. 3) Some folks can't trade options. Tax deferred accounts often aren't set up here. 4) Some folks have massive deferred tax in their SHLD shares... probably not the best to sell and exploit the options market for those guys. 5) Many investors in SHLD, do not necessary have the ability via their mandate to write puts (ie, most mutual funds). It's an inefficiency. I own a trivial amount of common in several accounts. All <100 shares, and all in non-margin accounts. I own predominantly bonds of various maturities. I'm probably going to be selling a few puts for myself in a bit though... we'll see. I hope Eddie is lending SHLD treasury shares out to prime brokers. Ben

My argument for BRK: 1) After Buffett is gone, is the human, and business capital in place better or worse than average? By how much? 2) Is the valuation on the BRK set of businesses above or below average? By how much? The answers to the above make me at least think that BRK will be a much better than market investment going forward. I will miss Buffett dearly when he is gone, but great businesses don't turn to shit overnight... they turn to average first, and that will take a long time in my opinion.... and you are not paying up for anything, quite the opposite. Ben

rmitz, You took my line, I was about to correct the common misconception. Any audiophile knows that there is indeed very very high end cabling for coax and even speaker wire that is made with silver as the conductor... the sh1t just costs $100 / m so no one really owns it. ;-) I saw a set of speaker cables once that cost $145/foot... no joke. I wish I knew what company sold that... Ben

Partner, ORH had two series of preferred, a 8.125% fixed version, and a LIBOR+3.25% version. A and B series respectively. Ben

i think WMT and COST are fantastic inevitable businesses. I'd love to own both if the price was right. I'm still trying to figure out what 'right price' really is, but I'm interested in both at today's prices. I think WMT is one of the most misunderstood businesses out there personally. Ben

Simple, non-trick, question for all those on the board and you finetrader: Did the recession change the S&P fair value in a meaningful way? If so, by how much... and why? I won't posion the discussion with my answer, but I'm very curious what others think. thanks, Ben

A lot... depending on many factors. Often more than $0.50/mcf I agree with everything but the last part. Well, it was for 1 share, plus 1 two year option @ $1.55... so it more than tripled the share count on a diluted basis I believe. Cite your source. :) They attempted to sell when they were in the $10-12 range, and the process took nearly a year, and they didn't get any bids they found reasonable. The disount on the assets appears quite large, I agree. You are in a race against time on the 2013 notes though. New CEO appears sharp, but I'm not adding here. I though may be biased against action since I took such a big bath on this one. I still own common shares. Ben

I've owned it since higher, and it's a great (but risky) value here. Note their costs, and note their pricing is in Alberta (AECO). Also note the massive dilution to the tune of 200% the other day. :) Ben

20 years is tough. BRK would be on my list. FFH XOM would probably be on my list. Maybe JNJ or MKL as well. Hard to really feel comfortable with a company to have an enduring enough culture/business to survive that long unwatched. Ben