benhacker

Interesting discussion. Luckily we have a market where we can place our bets. I'm really surprised how many have sold, but I do see the logic. I'm in the camp that a raised offer is probably an 80% or more probability so I'm holding (assuming final offer is $65+). Hopefully it will be done an decided in a few weeks... shouldn't take long to figure out what your company is worth. :)

Totally agree with Oldye on this one. I think that Gold does have an intrinsic value... it grows slowly with inflation... and like many things that are heavily psychologically oriented, Gold trades WIDELY around it's center valuation. @ $1000, it is tough to argue the merits of gold value. Silver is another story, and those who are looking for protection should be looking there. I have continued to toy with my GLD/SLV pair trade but I'm too chicken. Ben

Pulp prices offcially up drastically. The units are running. Ben

Yeah, I have to say a sweetened offer may be in the cards. Given the relative values of ORH and FFH, I'm content to wait for a raised offer to see what happens. Ben

Cheers guys. Bottom up to those of us who switched out a bit of FFH to ORH at the right timing as well! Ben

Cool blog, but methinks the statistical significance might be lacking for that pretty exponential. Not to add or take anything away from Bolt... holy sh1t... Ben

LOL... the most recent SEC N-Q filing for the PIMCO group of funds is 50MB. http://www.sec.gov/Archives/edgar/data/810893/000119312509038955/0001193125-09-038955-index.htm (not a direct link). Wow... I somehow think that no one has really dug in here who has the skeptical mind needed to give this option it's due diligence. I don't Bill Gross is a fraud, but I somehow think the level of Due Diligence here by most who recommend this pick is just to say "Bill Gross is the bond guy... right?" Amazing, this thing is as complex as some banks... Ben

So I've followed Bill Gross's comments for a while. I've never thought much of him, but he seems to have done well. My brother was sharing with me the other day about how he was shocked when he tried to read through the PIMCO holdings summary for the Total Return fund (in his 403(b) account) because he said it was incomprehensible. Lot's of derivatives, short transactions, etc. Well, i just got around to opening up the annual report and holy crap... http://globaldocuments.morningstar.com/DocumentLibrary/DocHistory.aspx?clientid=dotcom&secId=FOUSA00EH4&display=PTTRX### First, I didn't realize the fund now runs >$150B and has pages and pages of derivatives. All kinds of CDS, currency forwards, reverse repos, etc. Morningstar lists the fund as ~145% long / 45% short. This is absolutely the most "well respected" bond fund in the world, and all 401(k) administrators (nearly all) provide this as an option, and it's often the default recommendation. Has anyone really spent some time with this funds filings? I'm not a techno-phobe, but certain activities strike me as inappropriate for a "mutual fund" and this thing doesn't look at all like any mutual fund I've ever seen... I might dig deeper, but I was wondering if anyone had seen a really good break down of this fund... it will probably take a lot of work to break it apart. Thanks, Ben

I think Dell is handicapped by the fact that prospective investors can't even think about the half of their business that isn't focused on client. I think the exciting part of Dell is the Server side. Cisco is vertically integrating. IBM is aligning with Brocade, HP is pimping proprietary virtualization and blade technology with their own switch division and BRCM. What is left for a company that wants open standards and low cost? I think Dell is interesting, but I don't own any. Was tempted around $10, but much was tempting then. I think Dell has some opportunity in Storage and Server, and the client business can be no growth and the story here may be compelling... Michael Dell is an operator too in my eyes. Ben

Given that this was broken for years, I'm going to assume that Sanj's note motivated them to at least put something up there. Thanks Sanj... Ben

Eric! You don't think that 30 bps fee isn't a fair price? ;D LOL... I totally agree. What's funny, is we look at the logic of buying back under book (which I agree with), but the book is growing so fast that borrowing to buy it all now at a premium will probably be a good idea. And yes, this increases risks, leverage etc... but I still think now is the time. I do not have a great answer though for why the deal is in CAD though. At any rate, any outcome is good, and I believe Watsa and team will do the right and ethical thing. So I wait. Sold a big chunk of FFH Friday to buy ORH... ORH is now bigger, but I own both. Ben

Amended 13HR... ORH shares properly listed at 42.4m. End of Discussion. Ben

I wanted to follow up here. My final takeaways after looking into this was mixed. 1) Salaries are pretty wild for my tastes... really makes me want to walk away. 2) After we started this thread, PICO chose to dilute shareholders via a secondary of 20% of the common @ $27. While there may certainly be great ideas for this new money, this was a big turn off. 3) Much of the value in the Vidler subsidiary is really tied to Nevada (probably half the value of the company) and I just don't see the long term potential. As our country moves toward sustainability, I just don't see the population growth increasing in the desert. I think there is a real investment thesis here, and if I was forced I would definitely be long. I got my hands on a fairly nice report from Think Equity that values up all the parts of PICO and comes to a valuation of ~$47 ($80m write up in UCP, and >$350m write up for Vidler). Of course, this report was made 2 months before the massive secondary was pushed through... underwritten by Think Equity. I like the companies moves in the portfolio, but we have covered the dual taxation layer ad nauseum with the likes of FFH and others, and I'm not sure I'd put out hope that PICO guys can overcome the tax friction long term. Overall, the positives I originally liked seem to be pretty solid. I think I could get comfortable saying this thing probably has hidden value in the CA RE and Water division of maybe ~$200m, but that brings adj. book to ~$660m or $28.50/share. That's probably conservative, and I'd probably be looking to scrape up a few shares under $22, but I'm not jazzed at these prices. Interesting company, but I'm not interested enough at today's prices. Could be a home run though, but a lot of ifs for me. Ben

Which REITs are you looking at YuDeng? Just curious. Thanks, Ben

Sharper, nice timing (and analysis)! :) My shares bought at $0.30 feel somehow smarter with the common above $0.40 than they did with it at $0.20. Talk about leverage... Ben

Do you mean CompuCredit (CCRT) or Capital Source (CSE)?

I'd favor Lacashire at today's prices, but at P/B parity, I'd choose MKL everytime. I know Lancashire less well though, still getting a feel there... Ben

Just one data point, but interesting to see this... we keep talking about the investment portfolio but if this market turns fast... look about above! http://www.lancashiregroup.com/lre_group/investor_relations/results_presentations/presentations/2009/2009q2/2009q2.pdf On a related note, Lancashire is another one that folks here should put on their quality insurer watch list... they look pretty solid to me from what I've seen (no position though). Ben

I find some of his (Sprott's) comments so obviously wrong, that i can't quite tell if he's blinded by something, or if he is really just trying to sell pretty hard... His comments on inflation and how it effects earnings were spurious at best, and his continued conflation of economic activity with the stock market is a bit heavy handed. Regarding sentiment and earnings, he is correct and anything is possible, but his entire essay seems dedicated against having an intelligent discussion, and leans more toward attempting to scare his clients. Perhaps he truly believes what he says, but I doubt it. Ben

Accrued Interest had a good review. http://accruedint.blogspot.com/2009/07/californias-budget-unfortunate-that-i.html Ben

For those watching the ORH / FFH portfolios closely, you may want to take a look at WSC and get comfortable with what they own (it's simple, 6 stocks + GS warrants/preferred). Not as statistically cheap, but depending on how you feel about the underlying investments, the valuation is compelling. I own a small bit purchased in the $280's. Ben

Kawikho, The fee is $10/month. Any commissions during the month are deducted from the fee... so if you buy fewer than 2000 shares / month, your total fee for using IB is $120 / annually. There service is shit, and they are only for experienced investors, but they are the best value I think. Ben

Arb, Thanks for the clarification. Totally understand. I was able to buy some OTC junk bonds via IBKR, but I understand that a lot of stuff still requires a full service broker. I personally believe that IBKR will be an agent of change for continued commoditization and transparency however, and in the long term they will win unless the iBank lobby does (it may). Kawikaho, I don't know your situation, but if you spend more than $50/year in commissions, IBKR is probably a better deal. Not only is their $120 ($10/month) fee reasonable, it is only charge after your commissions, so you effectively trade for free after the fee unless you are buying a lot in single months. On top of that, IBKR's executions are noticeably better than other brokers so you will make back a few bucks a year on better fills. I don't own the stock (yet), so my comments should be taken as genuine. :) Ben

Arb, where do you work that you have not heard of IB? They **WILL** own the premium brokerage business. They are simply hands down head and shoulders above everyone else and they are gaining share like wildfire. Their margin loan rate is at cost, because they are the lost cost brokerage business, they do not need to make a profit on their margin loans like other brokers, they can simply use it as a tool to gain active professional traders and crush their competitors. Their business model is not my favorite, but I like the company, and it is currently not richly priced. I have my personal account at IB, and I have been thinking hard about migrating my RIA business over to them as their offering is stunningly better even with a few drawbacks for small time players like me. I ask why you have not heard of IB not to ridicule you, but because I'm sincerely curious about how many untapped professionals are out there that they have yet to touch. They just started advertising recently. Ben

Just thought this was a bit odd, so I wanted to say something: Savant, It has been a while since you personally made $10/hour I'm guessing. :-) Every single person in this forum who is not so distant from those times of our lives is probably laughing at this statement, or maybe crying at how someone could make enough to make that math error. $100,000 / year divided by $10 / hour = 10,000... divided by 52 weeks = 192 / week implied work time. There are only 168 hours in a week, so those must be some wild bankers you know. ;-) Now whether it is a $20/hour job, or a $40/hour job, or just a $10/hour job may not be (is not) critical to the point you were trying to make, but as a 28 year old who used to work in live sewers (I'm not exaggerating...) for less than $10 / hour, rounding error in your statement was not lost on me... Ben - no longer making < $10 / hour... or working in sewers... :)