FFHWatcher

Are you kidding? Ummm, that is called a home run. You averaged in at less than Hamlin Watsa and sold out just above where they sold half and below what they are selling their other half. Your net % gain is likely in the same neighborhood as HW. May all your 'this hurts,...' be that bad. Me, on the other hand averaged a little lower but sold out WAY lower than you. Too embarrassing to type but not at a loss.

I am voting to institute a new 200% penalty for law firms. The Law Firms must pay 200% of all legal fees incurred for frivolous lawsuits. Appeals will incur a further doubling of the initial 200% penalty to 400% and prior to filing, the law firm must put that estimated cost of all legal fees in an escrow account (HW to manage, of course).

I think I heard a manager (I think it was Tim McElvaine) once say, 'Buy, Hold and Worry'. Not sure if it was original line or not.

Arch Coal to buy International Coal for $14.60/share in cash deal. We know FFH still owns ICO as they have to report their trades and I can only assume Chou Associates still owns ICO as they did at their Dec. 31, 2010 filing. As I recall, Francis picked up a bunch at $2.50 or some insanely low price like that. FFH sold about half of their position a few months ago at something close to $9. as did Wilbur Ross. http://ca.finance.yahoo.com/news/Arch-Coal-buy-rival-capress-289306301.html?x=0

Did I miss that Pabrai owns 14.6M shares of FBK? Is this old news? http://www.newswire.ca/en/releases/archive/April2011/18/c5142.html

Ericd1: I just took a brief look at your Merc vs FBk spreadsheet. How did you deal with EUR reporting of MERC?

I am just finishing up a write up to post on the board of why I like Mercer more than Fibrek. Fibrek has been my largest position for about a year now and I am transitioning to Mercer based on my research. Fibrek is still cheap but I feel that Mercer is 'out executing' Fibrek on many fronts. Obviously debt is the biggest negative at Mercer but I feel that Mercer's surplus energy revenue in 2011 and into the future will almost entirely (90%?+) pay all the interest on Mercer's debt using secure long term contracts with local governments. Fibrek is still almost 2 years away from surplus energy revenue and Mercer is benefiting now. Based on my initial estimates/guestimates, Mercer will still have about 10x's the revenue from electricity sales when Fibrek's energy sales eventually come online. Fibrek is using NBSK profit to pay their interest and to pay off their converts now, while all of Mercers NBSK profits are kept to shareholders benefit. Albeit, Fibrek has a lot less debt (one tenth or so). Either way, both seem cheap if NBSK stays over $900/tonne. Anyways, I will post more info. a little later, hopefully today. Any questions or Mercer concerns, please ask away and I will try to answer or include in my Mercer write up. I am not Sanj, Harry L., or SD but I will do my best with the write up.

Does it really take this many posts to figure out whether or not you want to invest with someone? I am not directing this question to anyone as I can't remember who started this thread. Just a general comment. No number of questions or analysis will make an investment perfect. With any investment fund you give up all powers to direct your investments and completely entrust it to someone else. You either trust that investor or you don't. Prem has trusted him for 25 years or something like that. He has been nothing but ethical. What else does one need to know? His favourite colour is green? I love the fact that Chou has a 2% early redemption fee for 24 months after purchasing and, I believe he has the option to keep those fees himself but instead adds the proceeds into the fund itself and it boosts the performance of the long term holders. Wish the fee was 10%, not 2%. Disclosure : Long Chou for at least 5 years

Similarly, I had more scrutiny setting up a clients $50/mo RRSP contribution. Who looked at the actual securities?

History repeats itself and no one learns. More importantly, I want to know what you own. What is your 1-2% equity position? If you do still like some stocks but don't want to hold because of the market risk, have you considered hedging the 'market risk'? ie. 25% in your favourite stocks, 25% short the <insert various market indexes here> and keep the other 50% in cash? Can you be any more pessimistic and 98-99% certain that your decision to hold cash is right? How can anybody be that sure about anything?

I have thought about the option of selling Saint-Félicien (it had never crossed my mind before SD proposed that as an option) and I just can't get my head wrapped around how that would play out in reality. It may be the ideal business case but not reality, IMO. Fibrek is predominantly a Quebec based business with Quebec based senior executive and Quebec based board of directors and their Quebec based mill is the only one that is currently producing EBITDA of any significant amount. Knowing that, how do they sell their only Quebec based mill? I think it is the one mill that buyers would be most interested in but knowing everything else about the company, I just can't see how the future would look at Fibrek without the Saint-Félicien Mill. If Saint-Félicien were to be sold, I would conclude that Fibrek would no longer exist (in it's present form with a similar executive team and a similar BOD) and I can't see how the (Quebec based) Board and the (Quebec based) senior executive would manage 2 U.S. based mills. It is possible that FBK could fetch enough $$ from Saint-Félicien on it's own to represent all of the current market vlaue plus debt of FBK, leaving the US mills worth nothing at the current share price. That I can see and accept as reasonable. I just can't accept that it is likely that Fibrek will sell the only Quebec based Mill. That just isn't how Quebecers think and every single person involved in a decision to sell Saint-Félicien Mill is a Quebecer. My opinion obviously.

supposed to be after the close today. conference call tomorrow.

I am more concerned as they have been right before.

Thanks for the link. Question: Why would Scotia and Dundee both release new price targets for Fibrek the day before the earnings release? Dundee increased their's from 90 cents to $1. (recommends a sell) and Scotia downgraded to Sector Underperform and a price target of $1.30. I am not commenting on the value of their estimates but more with the timing. I just don't see the value in releasing this hours before the earnings release. Hours afterwards makes sense....but before?

What presentation? Is there a specific powerpoint or .pdf presentation or are you just referring to the information on the site? I can't find a specific presentation on the website.

Is it wrong or greedy to think that I could sell some of my Mercer that has gone up 40%-50% and buy some more FBK?

Too funny or coincidental? When FBk had retreated back to $1 there was a fraction of embarrassment that I owned so much of a losing stock. Averaging down (and averaging up) took this from a 5% position to about 5-6 times that amt. Now, with the recent firming in nbsk pricing and the subsequent bounce in pulp co shares, it makes the research time and the finger crossing that I put into this profitable (so far). Putting in dozens and dozens of hours (maybe over 50 hours?) and having a $100k loss is not much fun...trust me on this one. Feels good now. Not sure what Harry longs risk policy would say about averaging down that much? As far as selling now? I will be honest, I am a bit manic on this. I tell myself that I should reduce my position a bit, I then execute that and shortly thereafter usually buy back the position when I re-analyze how cheap the stock is and how cheap I thought it was when it hit $2 last year. Yes, I know that is dumb, lacks a certain plan and is tax inefficient.

Fbk is up 50% in a couple months and it is still the worst performing. Fbk is still the most undervalued too. MERC had what it appears to be a blow out quarter. Nbsk pricing is firming. FBK stayed at $1.00 for the longest time. Frustrating for a few months or so but, really? How much more of an opportunity do potential shareholders need? I looked at Apple in the low teens and thought I missed the ride when it hit the high teens in a few months. DUH! Not the same, but kinda.

What about merc on NYSE? Up about 16% today

When is FBK supposed to report earnings? Can't find it. Feb 23?

You should really look at doing it during the summer. I am always looking for an excuse to go to the west coast but in February? Must be better than here in Toronto, I guess? Why don't we think bigger? Why not set up the first "Berkshire & Fairfax Message Board Winter Conference" Location would have to be south of San Diego, Phoenix or Orlando...mandatory. Seriously though, why not?

What do other FBK investors think about meeting before Sanj's FFH meeting at Joe Badali's in April? We don't have to meet there but perhaps next door or somewhere downtown. I could come in 1-2 hours early. Any thoughts? Of course, I assume everyone is going to Sanj's meeting...because if you aren't you are missing the best value investment of the year! It turned out to be a 20 bagger for me last year. How many of those will you get in 2011?

Ok, what am I missing? In what situation does a shareholder and option holder want to keep the share price depressed? If there was an offer in the works, it would explain the lack of insider buying but it does not explain the "they want to keep the share price low" theory. How would any shareholder, especially someone with over 1M options at $1.35, over 1M long term incentive options and over 175,000 shares not want the share price to be HIGHER? How the heck does it make sense to keep the share price low when you are a shareholder if you already know who will be buying you out? Non logical premise (IMHO) plus there are some fiduciary responsibilities to minority shareholders that may be in question if what some are suggesting were true. I really like the idea of clearing off half the debentures now and the plan of paying off the other half later in the year. It shows fiscal conservativeness plus a longer term view (minimal upside to paying off the other half right now, especially if they had to stretch themselves). Just the sentence of saying they plan on paying off the other half is all this shareholder needed to hear to be reassured that management isn't ignoring this important issue. Interesting that the market didn't move. Perhaps it isn't on all shareholders minds, perhaps we represent the minority of minority shareholders? Of course, there were a total of 13 investors making trades (as per my system) in FBK today.

I agree with some of the stuff you have written. They are not good at selling the company to shareholders and future shareholders. In a perfect world, they wouldn't have to market their company to the market, brokers, institutional investors, private investors, etc. They would focus all their time and effort on running a great company. Unfortunately, FBK is a publicly traded company and occasionally they need to raise capital. If you haven't sold your company to the market effectively, your cost of capital will be significantly higher than a similar company that does market themselves properly. Remember when Prem didn't even do quarterly conference calls? That was a big step for FFH. FBK mgmt really haven't personally invested much personal capital into the company nor did they invest significant personal capital into the company after it was clearer that they were not going to file for creditor protection back in early 2009. I believe their investment was something but it was perhaps a few months salary. It was difficult for me to reconcile how it was a good investment on my part to investment more personal capital than the CEO and CFO combined when I earn a tiny fraction of what they earn, and I have a tiny fraction of their inside knowledge of the company. The question comes down to, Do they know something that I don't, that is keeping them from investing or are they business managers and not investors? I have reconciled that they are business managers and not investors. If they were investors, they would have done 2 things differently; 1/ Invested confidently when they refinanced their debt and 2/ Tell the world how cheap they were by making available investor presentations on their website and to present at industry investment conferences. I can not confirm that they do not attend and present at investment conferences, but if they do it is not published or advertised on the internet or on their website. Heck, they didn't even feel it was necessary to have a website for several months even though they have hundreds of millions of dollars of annual revenue and about $20M in the bank. In my opinion, FBK needs a fundamental shift in how they represent their company to the public, especially through the electronic media which is obviously critical in today's investment environment. On any other investment, I would just sell it and move on. I think it is worth sticking with FBK and encouraging mgmt to change. I will leave it up to FBK mgmt to make business decisions but as time goes on without any fundamental corporate changes, shareholders will become more restless. If FBK is planning on doing something other than paying off their convertibles in full, and end up costing shareholders additional dilution or more long term debt at unfavourable terms, I will be pretty upset that simply a lack of marketing their company has cost us money. I guess you could also ask the question, If they don't know how to market their own company to the stock market (existing shareholders/potential shareholders), than are they properly marketing FBK to their customers? Having said all that, I have talked to Patsie at FBK and she was quite pleasant, knowledgeable and helpful. An excellent resource. As shareholders, we often make assumptions and that is a mistake. Pick up the phone and call them or write them a letter. I, for one would be more than happy to join in something that supports the recommendation of increasing the corporate emphasis on the promotion of FBK to the market.

$0.20 x 90M shares o/s = $18M (plus all their debt back in mid 2009). But a market cap of $18M!!! Wow. Their operating cash flow was $18M last quarter. They certainly came close. Seems low risk now, compared to then.