SI

I am with JRM on CenturyLink. If the 5.2-5.3x ebitda multiple holds, you get $2/share this year if the company continues deleveraging. With $1 in dividends that is a 23% return. With Brookfield taking out its most closely traded public comp(though mostly a consumer biz) at CBB and Zayo on the way out the door to private equity as the closest the enterprise peer - there is the chance for multiple expansion which i would expect in 2021 as they hit their target leverage. At that point i think the company again trades on free cash flow yield which at $3/share and a 10% fcf yield(long term telco multiple is 10x earnings so it isn’t quite apples to apples) implies that if we get multiple expansion it could be explosive. Lastly, earlier this week the company vastly improved their governance. To me this was the biggest risk. A bit more color: -Harvey, the chair, was a bigger issue than Glen, the former ceo, but a break in continuity was needed. -It is more than just those two things as it puts the board on notice it is bloated in number. -Those with a quarter century of board membership now see the door. -It lowers the risk that Jeff Storey, the ceo, would leave out of frustration with this legacy CTL board. It also ensures Jeff's successor is a capitalist from LVLT. -While the exit door may not be today for the rest of them, it also shows them who is in charge until the board refresh is complete. -It allows the center of gravity to drift out of Louisiana and the RLEC mindset. -It likely speeds the pace of decision making. -It shows potential infrastructure buyers that this board is now open for business as the new chair was the previous nominee of the 13D filer and the new board member also comes from the 13D filer, Southeastern.

Waste Management

UBS lowered numbers yesterday, Morgan Stanley the day before.

Wasn't ducking the question, I just wanted to wait until it was public but it was as of this afternoon, the mutual fund is: HTAYX.

That was really helpful Tim, thank you!

Thanks Parsad but what if you are delinked on the account and it is not in your control in the case of a termination or someone getting sick. I was told you could file an amended 13G claiming as long as you could claim you did not have disposition authority. Any idea?

Looking for some of the expertise of this board. I have been offered a board seat on a corporate we have an ownership interest in. By we I mean: personally, for separately managed accounts and in our small mutual fund. I understand I would only be able to trade during the window and could not trade on material non-public but what if a SMA account client gets sick. We recently had a client come down with brain cancer and liquidate. Would this AUM setup prevent me from taking the seat? Any other thoughts on your opinion of cost/benefit would be appreciated. I obviously think the company is massively undervalued and I could have an impact.

PICO

I enjoy Michael Maboussin, Bill Miller & a former colleague who runs PAA Research(please act accordingly).

It is the activist filing Friday after the close that is sustaining this move.

This looks more interesting this week than when they did the deal So what has gone on in the stock that has you looking: (1) We are seeing natural resource sellers(maybe even margin calls?!?) (2) index sellers as weight was reduced in the Russell within the past month (3) 3 activists have filed(great write-up of the asset by mutual fund river road from late March in a link here: http://www.valuewalk.com/2015/04/pico-holdings-activism/) (4) and what I have termed the small cap asset-value funeral which I think has unearthed a decent price oppty as their shareholders are getting redeemed which I juxtapose with positive fundamentals: (1) After a recent divestiture, there is no cash burn other than small corporate staff and no debt. (2) Builder Mkts intact, where I think we get a transaction as comps trade 1.15x(small caps) and 1.8x BV(large caps). Its homebuilder is 57% controlled by Pico so it has a massive illiquidity discount. (3) Water Mkts that I think have the potential for dynamic upside (4) With water in mkts where development outlook is firm a. The scale daunting with AMZN, Drowns, Tesla, 15 Japanese Battery developers, Apple, Google, etc (5) Mgmt under pressure increases likelihood of water / builder transaction (6) An expensive mkt....

Here is one I have started legging into, PICO holdings: Pico(written up in the past) was formerly Physicians Insurance Company of Ohio which is to suggest that Pico started life the same way Berkshire(basically)/Markel/Fairfax did by using an insurance company as the foundation of an investment manager. Pico has used its premiums to turn deeper into liquid assets, namely water. Pico controls Vidler Water which owns interests in 45,000 acre-feet of water rights mostly in the Southwest(ex-California). If the Southwest drought can create water scarcity, what drives Pico’s shares is demand that derives from housing, industrialization and urbanization. With more job creation, the sand states should resume their ever increasing population and with it, the price of water assets should return to elevated levels. The slowdown of development in Arizona and especially Nevada has kept water prices in check. As available jobs and later people begun filling back into the sand states, we expect water rights to increase in value. One such driver is the economic development in northwest Nevada which is near an important Vidler water assets. It is worth mentioning that Pico also has one other investment in a homebuilder, UCP(asset value in Monterrey, CA)though the majority of their value stems from their water portfolio. So what has gone on in the stock that has you looking: (1) We are seeing natural resource sellers(maybe even margin calls?!?) (2) index sellers as weight was reduced in the Russell within the past month (3) 3 activists have filed(great write-up of the asset by mutual fund river road from late March in a link here: http://www.valuewalk.com/2015/04/pico-holdings-activism/) (4) and what I have termed the small cap asset value funeral which I think has unearthed a decent price oppty as their shareholders are getting redeemed which I juxtapose with positive fundamentals: (1) After a recent divestiture, there is no cash burn other than small corporate staff and no debt. (2) Builder Mkts intact, where I think we get a transaction as comps trade 1.15x(small caps) and 1.8x BV(large caps). Its homebuilder is 57% controlled by Pico so it has a massive illiquidity discount. (3) Water Mkts that I think have the potential for dynamic upside (4) With water in mkts where development outlook is firm a. The scale daunting with AMZN, Drowns, Tesla, 15 Japanese Battery developers, Apple, Google, etc (5) Mgmt under pressure increases likelihood of water / builder transaction (6) An expensive mkt.... Pico is specifically an asset based player in the water allocation of construction projects with leverage to water, its storage and transportation. I believe the company is setting out to increase the corporate exposure to this valued expertise in the Southwest amidst water scarcity and believe at a 27% discount to its book value – I think investment potential is attractive.

Good to see the $85mn of debt gone. Watching them lose another $11mn last quarter in Northstar/Canola and then seeing them need the debt waiver 2 weeks ago it seemed that a take-under was 'certain'; the bear case of not being able to shut it down, further equity contributions potentially being required, with no end insight was tortuous for the long struggling longs - just look at that shareholder list which looks like a funeral small cap value(and it felt that way at the annual meeting earlier this week) in active mgmt. With all that said as backdrop, I think the mkt should respond fairly positively to tonight's announcement. With the balance sheet cleaned up post this transaction, a small buyback likely to ensue, a stock with a pro-forma book value over $17 and mkt quotation under $14, no debt(UCP has debt at the subsidiary level against its assets), a simpler story with the upped focus on just 2 related and geographically adjacent assets - it seems like equity investors may finally get a reprieve. Mgmt now has the oppty to turn their attention to solving for mr. mkt in UCP before the Vidler asset story starts to see some sales yardsticks.

+1 for the rights offering

A few months ago I stumbled on a cef I thought was interesting, GTU. I have had some interesting in speculating in gold near $1,000. By buying a closed end fund that invests only in physical gold, via a vault in one of Canada’s largest Banks, Imperial Bank of Canada, at the 11.5% discount I purchased it in the 1st week in November – it was synthetic means of getting quite close at its then $1,145/oz spot gold price.