Sunrider

Can you ping me that paper please? I think it's from a few years ago? Anyway, if we assume for a moment that Treasury isn't simply going to write down its SPS to zero (why would they), then the capital stack is something like $400bn SPS, $40bn JPS (really don't remember what they are in aggregate), then common. Let's forget about common for a second. The entities make what $40bn (?) in profit - back of the envelope, slap a 10x multiple on it and we've only just covered the SPS? Since Treasury holds the cards and no restructuring happens without the SPS, the question here is how much do they want for their securities (as in, their restructured securities, whatever they turn them into). If significantly less than the liquidation preference then there's a good chance JPS do very well, if right on the liquidation preference, then chances not quite so good. So it seems to me "as simple as" (1) How much will the liquidation pref be by the time we get to release? and (2) How much less than that value will Treasury accept when it sells new instruments to replace the SPS and thereby release the entities? Edit: I should add - Treasury may turn its SPS into new common and leave the JPS alone (probably good for JPS), but I would expect they only do that if they can sell it at roughly SPS value. Not many have that firepower (hello Uncle W!). If you bought common from Treasury in that scenario, why would you want JPS in front of you? Treasury may instead leave common and JPS untouched and, let's be generous, create new preferreds on par with current JPS (Farnam street HQ might accept that deal) ... so then we're back to what's the SPS worth, if $400bn and JPS is $40bn, then roughly 10% of all dividends to preferred will go to current JPS. Again, not sure about the numbers but if the entities make $40bn and aggregate preferreds after the restructure pay something like 6%, then common has some value. Question in this scenario: Who buys newly issued preferreds pari passu with JPS if they could insist on preferential treatment to write the cheque ...

Saw a Substack or twitter post by kaoboy pointing out that Treasury’s senior pref is going to about 400bn by the time we get to release and that treasury previously concluded that they can simply write if off … if that’s so then it’s hard to see how there’s much value left for JPS, given earnings power and reasonable multiple …? views? Does anyone know any details on that treasury analysis which concluded it would be illegal for them to write off the SPS? thanks

Thank you. If there is one thing I’m sure about is that Trump as President or ex will only do what benefits him.

Indeed - what a slow burn. Just wondered whether there's anything new in terms of admin action or courts which I missed? I seem to recall that there was a plan to release once they build enough capital - was that ever formalised? How far away would the companies be from that? C.

Hi - is anyone still looking at these? It seems they've perked up but the twitter sphere seems to be confined to the conspiracy ramblers. Are there any substantial updates here (beyond people hoping for a re-run of Trump)? thank you C. P.S. Sleepydragon. Any of the prefs - if you believe that conservatorship will end and that common equity has value in that scenario, then the prefs should have substantially more value than their current prices imply.

yes, I guess the thing with Fairfax India which always put me off in the past was that it's hedge-fund comp masquerading as a public equity? Re SWBI - so then one should put the defence primes on the list, too? Maybe LDO in Europe, if they ever get European defence consolidation right, that could have a long run-way, too.

Not necessarily buy & hold for 18-20 years, though it would be nice if some of the stocks turn out to be worthy of that ...

Hi everyone I'm about to begin investing on my son's behalf both a lump sum upfront and then contributions monthly or annually. He's still very young, so a good 18 - 20 years before he'll get to use the funds (or hopefully rolls them forward at that time). I wondered which companies/investments others here consider worthy of such a portfolio which I would ideally run at very, very low turnover. Starting valuation is a consideration though not a driving one, given lesser importance of this over long time frames (though I just struggle buying things at 30x revenue). On my (perhaps eclectic) list currently: JOE, FRFHF, BRK, ALS.TO, TPL, BSM, ODFL, SODI, BUR.L. Other suggestions for me to look at? Thank you! C.

Is this a joke? Prices seem to say otherwise ... but then again Mnuchin was preparing for four years just to mislocate his Cohones when the time came ... so maybe it'll be another four years of the same stuff.

A general correction - ATH/APO are not looking at at insurance as 'float' as it is often understood. That float comes with a defined cost of funds - insurance investors typically assume that this COF should be negative. They are, however, looking at it as feedstock for the asset origination machine. For ATH it is accepted that the cost of funds is positive but what they do, compared to other insurers, is to take on existing books within a certain category of risks (check recent investor day - typically not taking mortality and morbidity risk), and then manage this to deliver a stable spread (so robust ALM is important, but a well-understood problem and can be managed). Second main success criterion is to find those 'high yield but sufficiently high quality' investments that deliver the return kicker needed when 90% of the portfolio has to be in IG government + corporates to back the liabilities you underwrite. As another poster made the point above, if your business is to originate such things to begin with, you're going to do better than hedge funds who typically just buy those things from the likes of APO who originate it. Other parts of the APO portfolio take different risks, but in the end it all comes back to acquiring liabilities/assets and delivering a spread with as much predictability as possible.

That argument has been made by some about other European places before … ca 1935 to 1938 took the world too long then to learn that appeasement does not work, Putin and his kleptocracy are unlikely to stop in Ukraine

The back of the troops? wasn’t he the guy who didn’t want to go stand in the rain in France to honour the fallen of ww2 because … well … he didn’t like rain and considered them ‘losers’? whether you’re left right centre or up or down I think it’s pretty obvious that djt only ever had and will only ever have one person’s back: his own. (And yes I did speak to people about this who served)

Let's start the other way around. Do we need all these ads? I just counted, when I opened the site, three ads on the first screen (ironically 2/3 were the same). Click on one topic, fullscreen ad I need to click away. Topic comes up, another two ads (top of page, overlay bottom of screen). Scroll through topic, ad in the middle. This is too much and feels not far off some of these click-bait-factory sites where you got ads left, right centre, front and back. It doesn't feel like the site is the product, but like I am. I am being monetised. And maybe that is what irks me so much. If the above is representative and my info on ad rates is correct, then I guess I'll contribute somewhere around 15 - 20c per day to the site. So call it $5 per month. Do I use it a lot? Not as much as some, so there will be a few who probably contribute a lot more. How much does it cost to run?

No, nobody has stopped me. I know you could've walked away from it a while ago but have not done so. I thank you for hat. I hope that you learned something from the failures in that business and that this will enable you to eventually turn it into a worthwhile investment (for you and for your investors) I do not know what it costs to run this site but no, it has not been free to use, there have been ads, which cost time and attention. I don't quite recall how many ads there were on the previous version, but I never noticed it so there were no friction costs for me then, but there are now. I don't know if it is a profit-making enterprise or not, and I admit my comment re supplementing was a cheap shot. I apologise. (I do know, however, that ads monetise at (allegedly) net $1.9 CPM. Since I see on average >2 ads on every screen. My usage of CoBF has declined somewhat and I guess I'm responsible for only three or four cents or so of revenue per day.) I feel that the discussion which took place after the switchover where you solicited feedback resulted in zero (am I wrong?) changes. This is what I find objectionable. Why pretend to care about the feedback if nothing changes? That's fundamentally at the same standard as the legend's marketing. I do not understand your comment as to why my criticism would be fair if I had not used it for free? What's the inverse? That I didn't use it at all before (so shouldn't complain because I didn't experience the prior version) or that I paid for it (and thus shouldn't complain then either ... because there would be no ads)? Would either of those scenarios change how much heavier the wasteful cognitive load is on this site is now and how much ad shit users have to go through? If not, then I'm not entirely sure what your point is? Whether I did or did not use the site before doesn't change the state it is now vis-a-vis the ads. We've gone a long way off the Wall Street legend. So let me bring it back to that. We both agree that the legend is legendary principally in his own mind, as to the ads: Is there not a better way? (cut out the ones which pop up fullscreen when switching screen which require clicking at least?)

No I'm just annoyed at the gall, should keep his own house in order first. And to be clear: I think WT is about as scammy a stock advice promoter salesman as you can get. I think he learned it at the Motley Fool.