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LC

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Everything posted by LC

  1. I chuckled What % are you in FFH? Purchases due to muddy waters took me over 45% I view it as having good known baseline performance over the next few years (due to the bond positioning), some potential for further outperformance (depending on the insurance market, investment performance). But I am looking to pare it down as I find investments with more upside torque.
  2. Hah! I’ve owned Simpson on and off. Do you think it qualifies as having a long runway based on new housing stock needs?
  3. The railroads are a good asset but you know, when your “moat” is the political and regulatory minefield that makes it impossible to create competitors, it makes it hard to complain about those same politicians and regulators taking their pound of flesh. You make the bed, you need to sleep in it…
  4. I think it’s a lot easier to stop writing insurance policies when regulations become too onerous, versus energy where the upfront capital is much more expensive.
  5. Any prospects you're comfortable sharing? Buffett in his latest letter reiterated the approach: worry less about price, buy high ROIC with long runways. Obviously hard to divine, but that's the goal.
  6. Nice letter to read! Amazing they are still able to crank out 20+% operating earnings growth yoy. Really glad he included comments on Oxy and Japan, and BNSF and BHE. Strong words on energy indeed!
  7. He's busy helping Mohnish install hardwood baseboards in his library
  8. That's kind of the only thing that attracts me to Sony as well. I assume you think UMG is too expensive on a relative basis? UMG you get a pureplay and slightly better market positioning. I do like some of Sony's other businesses (gaming), but it's a huge conglomerate and my knowledge is cursory - I don't know what could be creeping under the surface.
  9. I just sold my LEAPs as well (StoneCo) two days ago. Rode that one up from ~9->15 in shares, then LEAPs from there to like 18.50. Thanks, Todd.
  10. Agreed. Almost every company makes the same mistake - they find themselves in super favorable business conditions, generating tons of cash. Shareholders clamoring to buyback shares. Buybacks inevitably commence. 12, 24 months later? The business landscape changes. The share price is half what it was, same with competitors/adjacents. Rather than being able to take advantage, the company spent hundreds of millions, billions, on buybacks at prices 2x above the current price.
  11. BTW just a minor correction - net premiums from 13B to 23B
  12. Replace GIG with Fairfax stock and you just described many investors on this board. People with cost basis at 50% of today's price
  13. Agreed- what do you think old guys with liver warts do on park avenue? Spend time with their family? I don’t think so!
  14. What you have unintentionally done LC (and other regulars) is give some fuel to the troll fire. Fair enough, and I can understand the sentiment. But I absolutely hate an echo chamber- even when the majority are correct. I'll entertain any nay-sayers as long as they have a good point to make. Same to the point Greg was making about cowardly short sellers who don't have the sack to claim outright fraud. To me - I don't care, say whatever you want. We're all big boys who make our own buy/sell decisions. If you have a good point why a stock is overvalued, I'll hear it. If the best short thesis is immaterial accounting treatment and articles by Brett "CFA" Horn...well, I don't find the short points compelling, and I was a buyer yesterday and today.
  15. Jpow is gonna give us 10% rates for 3-5 years. Crush the FUBU element you describe and reallocate some wealth to the "suckers".
  16. Ok so the argument is: if there's 1 cockroach, there's probably 100 more. Fair enough of an argument. But I think there's a few factors that run contrary: -Earnings: they exist and they are of high quality: interest & underwriting profits -Interest income is hard to fake. -Underwriting profits, sure you can under-reserve. But this info is public, and it is well known the industry is in a hard market. So it's hard to disprove that these are real profits. -On the asset side: if you think they are delaying taking markdowns of certain assets, then you also have to credit them for delaying unrealized markups of other assets. It has to cut both ways. Question: Warren Buffett/Berkshire marked down its Kraft-Heinz position well after a large and sustained drop in the share price. This is the same behavior MW is accusing Prem of. Do you think Buffett is a crook?
  17. Help me understand here: So if MW argues that Fairfax's book value needs an 18% downwards adjustment, and you're saying if 10% of that is true....then I need to be worried about a 1.8% BV contraction? Sorry but the magnitude is not screaming "trouble" to me....what am I missing? And if you'd care to elaborate - what parts of MW's allegations do you think are most accurate and most impactful? I'm just having trouble seeing it.
  18. Thank you, I must have missed your post - so I'm guessing mostly the off-the-run treasuries, so no big deal at all. Some accounting reading for anyone interested: https://viewpoint.pwc.com/dt/us/en/pwc/accounting_guides/fair_value_measureme/fair_value_measureme__9_US/chapter_4_concepts_u_US/45_inputs_to_fair_va_US.html#pwc-topic.dita_1533084709184712 Carson Block in shambles.
  19. The only outstanding question I have is on the Level 2 classification for FFH's bond portfolio. My guess is there are covenants/options linked to these bonds which cause the L2 classification. Even with that question mark outstanding, the interest income generated from these bonds is observable so it is really more of a curiosity vs. a concern.
  20. Someone has to tell Carson Block to get a new suit. Guy looks like he's wearing a pillowcase. I was bemoaning selling ~3% of my position at 1310 or so. Well, thanks Carson as I bought that back and more.
  21. Agree with pupil on the overall market structure. Do not agree with Brett Horn who couldn't hit a tee ball, rather insisting that the ball is actually 2 ft lower.
  22. Yeah the main point of MW is overinflating book (carrying) value of assets. There appears to be a case for that. Market values are lower than carrying value for many of FFH's smaller investments. Two points: One, this is one of the reasons I don't really like using BV as a means of valuation. Earnings matter. Second, as Dinar said there is a flip side. Other assets in FFH are performing very well. And, let's assume there was no nefarious reason for FFH's dealings - well, they would have to be booked the way that Fairfax has done so. i.e. If I decide to buyout the remainder of a partial investment, I have to write-up the whole investment on my books. Now, testing impairment should also happen regularly. But take a look even at Berkshire - how long it took them to impair their Kraft Heinz position despite the market price already having reflected. Carrying value will always trail market value. As long as both move in the right direction I think it is reasonable. I would like the company (Prem) to make this point...and perhaps some board members who are closer to the company can share their views.
  23. So, what is the solution? War on drugs? Build a wall? Efforts to constrain the supply side are 0-for-2. It may be time to look at trying to reduce demand for the product. What drives people to drug use, what can we do to limit that? I'd argue the stuff I see posted around: "Late stage capitalism" "The American Dream is Dead" The massive wealth gap, homelessness everywhere... The chances of upward mobility for a teenager/20-year-old grow smaller and smaller. This leads to hopelessness, depression, and drug use. This is what we should focus on.
  24. Everything in Denver priced under 2022 peaks is getting snatched up. The only stuff sitting is the stuff listed as if we're still @ 2.5% rates.
  25. It's essentially riskless, but yes theoretically it could be. You agree to lend your shares out, there is a chance the ultimately counterparty(s) may fail to deliver to the central clearing house (DTCC/NSCC). For anyone who cares about the plumbing: https://www.researchgate.net/publication/228260887_Naked_Short_Sales_and_Fails_to_Deliver_An_Overview_of_Clearing_and_Settlement_Procedures_for_Stock_Trades_in_the_US
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