jay21

Why is that? I use IB and I could buy the PSH shares with no problem at very low cost. Fidelity can do it too but would charge you a pretty big commission. I'm with Schwab and PSH doesn't even show up in their database. Lame, I should switch brokers. Call them or use the chat feature. I think they will find a way to take your money.

Another counter to economic bears: And even that might hide the strength of the recovery this year. GDP growth has exceeded 3% in four of the last five quarters. In two of those quarters, growth was in excess of 4%. It is simply reasonable to believe that the first quarter GDP report was largely an aberration. Do not dismiss the real improvement in the economy since 2009. It is not unimportant that 2014 is likely to be the biggest year for private sector employment since 1999 and that auto sales will reach a level not seen since 2001. It is not unimportant, in contrast to the conventional wisdom, that "in the post-Great Recession era, the growth in full-employment is, without a doubt, way out ahead." These are just three of many genuine signals of economic strength. It seems to me that in the effort to find what is wrong with the economy, everyone misses what is right. .... As long as people have babies, capital depreciates, technology evolves, and tastes and preferences change, there is a powerful underlying (and under-appreciated) impetus for growth that is almost certain to reveal itself in any reasonably well-managed economy. This ultimately is the reason that despite the seemingly persistent belief that the recessionary bogeyman is just around the corner, recessions are remarkably rare events. Since 1983, the US economy has been in expansion for 350 months. Recessions account for just 34 months, less than 10% of the time. In any given month, the probability of recession is certainly less than 10%. Recessions are concentrated in a handful of periods. If you are not in a recession this month, it is almost certain that you will not be in a recession next month. Consider that only three times since 1983 has a recession occurred in a month preceded by an expansion. But this makes it seem as if recessions simply spring out of thin air, which they do not. Even if you thought the conditions for a recession were currently brewing, it is highly unlikely that the momentum of the US economy will turn in twelve months or less. Even if you thought, for example that the financial sector could not absorb any losses that stem from a decline in energy prices and thus be faced once again with crisis (unlikely, in my opinion, especially in the wake of regulatory enhancements since the last crisis), it would still take months for that shock to propagate throughout the economy. .... To be sure, improvements were not as quick as many had hoped, but the shortfalls can largely be traced to two sectors – housing, in which the financing mechanism was damaged, and the failure of the fiscal authorities to adequately plug the hole. But the resilient economy continued to march higher nonetheless. And now fiscal policy is no longer a drag; the bottom in government jobs has likely been reached. Moreover, there is one silver lining in the relatively low pace of new housing activity – such activity has room to run. I expect that over the next two years housing will become an increasingly strong force in the US economy. Nor will the economy likely be impeded by monetary policy, which even if tighter than expected is likely to remain more accommodative than traditional metrics of appropriate monetary conditions would suggest. Bottom Line: Perhaps, just perhaps, the US economic expansion has been consistently undersold, and continues to be undersold. It is worth considering that maybe it is time to just accept the good news without the desperate search for every dark cloud. http://economistsview.typepad.com/economistsview/2014/12/fed-watch-yes-i-am-optimistic.html

Was there a good discussion on the board about this acquisition? Here are some comments from a VIC writeup: Some comments on XTO acquisition: In December XOM announced its intention to buy XTO with stock and $10bln of debt for $41bln-its first deal in over 10 years. The market has frowned upon this deal saying that XTO will dilute the XOM returns (by as much as 400bps) and therefore XOM should lose its premium to other big oil companies. I look at it differently. The spread of oil/gas ratio is well above norms with the gas market currently oversupplied. In a sense, XOM maybe playing for the eventual mean reversion of this spread while locking in significant North American gas resource at a decent price (~$3/mcf on a proved reserve basis). XOM is buying a very good natural gas asset at what will likely be the cycle trough. It fills a whole in its portfolio of assets (North American gas) with a best-in-class management team, expertise that it can leverage, and bets on its previously stated long term vision that natural gas will demonstrate good growth in demand over the next 20 years. To this XOM adds a bullet-proof balance sheet and scale, which are competitive advantages in a US natural gas industry that is levered and beholden to hedges and drilling to "hold" acreage. If, in fact, the ultimate recoveries of the new shale resources are not as high as all the management teams currently tout, this may prove to be a very good investment for XOM as it would be able to use its balance sheet to curtail production in the short-term for the sake of higher prices down the road. The implied value of XOM's resource based on what they paid for XTO is much higher than the market is paying today. XOM paid just under $18/boe of proved resource and just under $5.50/boe of total resource. With the North American gas industry drilling what may be uneconomic wells due to hedges and to hold leases of land they own, XOM may be taking a longer term view on what this land is worth and with its balance sheet, it can easily pull back on production and wait for a better time to drill. Over the long run, the merits of this deal will depend on how much XOM can lower XTO costs, how beneficial a balance sheet of XOM will be to XTO's asset base, what the ultimate recoveries of shale gas are, and what really is the marginal cost of US natural gas. In the short run, it is likely dilutive to earnings, but accretive to cash flow and volumes. http://www.valueinvestorsclub.com/idea/EXXON_MOBIL_CORP/41276#description

From what I heard (forget the source) is that Citizens was very conservative on both the liability and asset side. Now management wants to be more aggressive. I haven't looked at the FS to determine if thats true. And I don't know if mgmt will be "prudently aggressive" or just aggressive.

Forward churn will be higher as they try to get a deeper penetration which will come from less affluent buyers. My point isn't debt service (I think they will be fine), my point/speculation is they will go down potentially faster than the market in a downturn.

Also want to raise a counterpoint to economic bears: http://www.calculatedriskblog.com/2014/06/the-future-is-still-bright.html In the near term, the reasons for a pickup in economic growth are still intact: 1) the housing recovery should continue, 2) household balance sheets are in much better shape. This means less deleveraging, and probably a little more borrowing, 3) State and local government austerity is over (in the aggregate), 4) there will be less Federal austerity this year, 5) commercial real estate (CRE) investment will probably make a small positive contribution this year

Well, they have $0.5 billion of net debt, with a NAV of $13.7 billion… Doesn’t seem levered at all to me… But it is also a growing cash machine, isn’t it? ;) Gio 1. You're right, I double checked LMCAs leverage and its lower than I thought. 2. SIRI is doing about ~1b in FCF compared to >4b in debt. Also, if you believe the economy is going to fall then auto sales will slow which would be negative for SIRI. I think SIRI definitely has a lot vol/ST price movement risk given the debt and that it's tied to a cyclical industry. I know you probably don't care too much and trust Malone. It's not an investment that makes too much sense to me given your outlook and the fact you are positioning yourself around that outlook.

That’s why I hold lots of cash! ;) Anyway, I don’t know of anyone better than Malone at taking advantage of any market crash that might await us. I will be much more willing to double down in the Liberty family of businesses than in any other company, because I know Malone is working on some incredible bargain. And don’t forget LMCA today is almost debt free! In 2008 it was not so, and that could be a great advantage this time around. LMCA is not nearly debt free. And their biggest investment is highly levered. You have to be comfortable with leverage to invest in a Malone entity b/c you are most likely buying a levered equity that owns a levered equity. That's one reason for me having a Malone basket rather than a single stock.

Are you referring to this: http://finance.yahoo.com/news/tony-robbins--ray-dalio-s--all-weather--portfolio-161619133.html First, Ray said, we need 30% in Stocks (for instance, the S&P 500 or other indexes for further diversification in this basket). Initially that sounded low to me but remember, stocks are three times more risky than bonds. And who am I to second guess the Yoda of asset allocation!? “Then you need long-term government bonds. 15% in intermediate term (7- to 10-year Treasuries) and 40% in long-term bonds [20- to 25-year Treasuries].” “Why such a large percentage?” I asked. “Because this counters the volatility of the stocks.” I quickly remembered it’s about balancing risk, not the dollar amounts. And by going out to longer-term (duration) bonds this allocation will bring a potential for higher returns. He rounded out the portfolio with 7.5% in gold and 7.5% in commodities. “You need to have a piece of that portfolio that will do well with accelerated inflation so you would want a percentage in gold and commodities. These have high volatility. Because there are environments where rapid inflation can hurt both stocks and bonds.” Lastly, the portfolio must be regularly rebalanced. Meaning, when one segment does well, you must sell a portion and reallocate back to the original allocation. This should be done at least annually and if done properly, can actually increase the tax efficiency. This is part of the reason why I recommend having a fiduciary implement and manage this crucial ongoing process. When my own investment team showed me the “back-tested” performance numbers of this All Seasons portfolio I was astonished. I will never forget it. I was sitting with my wife at dinner and received a text message from my personal advisor, Ajay Gupta, that read, “Did you see the email with the back tested numbers on the portfolio that Ray Dalio shared with you? Unbelievable!” Ajay normally doesn’t text me at night, so I knew he couldn’t wait to share. As soon as our dinner date was over I grabbed my phone and opened the email. During what I call the “modern period,” 30 years from 1984 through 2013, the portfolio was rock solid: 1. Just under 10% (precisely 9.72%, net of fees) average annualized return. (It’s important to note that this is the actual return, not an inflated average return.) 2. You would have made money just over 86% of the time. That’s only four down/negative years. The average loss was just 1.9% and one of the four losses were just 0.03% (essentially a break-even year)—so effectively you would have lost money only three out of thirty years. 3. The worst down year was -3.93% in 2008 (when the S&P 500 was down 37%!) 4. Investor Nerd Alert: Standard deviation was just 7.63% (This means extremely low risk and low volatility.)

I think you need to include an OpCo to get it to be nontaxable. Maybe they can throw one ATM into the mix?

Maybe im totally wrong but I somehow seem to remember that Buffett did not like the fact that Gillette bought Duracell. He felt it was a commodity business. He is getting a good deal to compensate.

I dont fully agree. Obviously if the distributions were fully FCF than it would be better than debt. But if you look at their debt/ebitda metric, they have kept it constant, not increased. So they are just maintaining their capital structure. Its not like he's putting on excessive leverage here, if anything BRK underlevers their assets (like every single asset they own, its crazy they generate the returns they do running with so much cash and little leverage). See this presentation: http://www.bnsf.com/about-bnsf/financial-information/fixed-income-investors/pdf/fixed-income-investor-presentation-1-quarter-2014.pdf Also, when I looked at their reported maintenance capex, I believe it approximated D&A. Their FCF returns look strong to me. If you haven't, I would take a look at the BNSF thread in the subforum: http://www.cornerofberkshireandfairfax.ca/forum/berkshire-hathaway/bnsf-and-midamerican/

BNSF files. Check there as it is a line item in the CF statement. IIRC yes, a good chunk of the dividends appear to be debt recaps but thats driven by their increased earning power. I am sure you can lever it more aggressively (just like almost any other BRK business) if he needs the cash (i.e. the debt is entirely appropriate and he isnt sucking the business dry). Agree on the dilution. Buffett should be forced to buyback the dilution ;) Edit: http://www.bnsf.com/about-bnsf/financial-information/form-10-k-filings/pdf/10k-llc-2013.pdf Distributions 2011: 3500. 2012: 3750. 2013: 4000

Another update - bold are recommended: Richest Man in Babylon - quick read that has personal finance basics Hard Things About Hard Things The Great A&P - Borderline recommended. Same author as The Box which I think ppl enjoyed, therefore I am recommending it. It was interesting to learn about the history of the supermarket How the Scots Invented the Modern World Maximize Your Potential The Enlightened Economy: An Economic History of Britain Art of Profitability Once Upon a Car The Signal and the Noise Pour Your Heart Into It Naked Statistics Rosie Project - This was recommended by Bill Gates. It's a fun read. I think many analytical types can relate to some of the book. Thinking with Data Fountainhead Innumeracy In the middle of The Prize. Good so far, but I was hoping for a more insightful look at the oil industry rather than a historical narrative type book.

No, but i have Excel/Google Docs to keep my reading list

Wow, what a smart guy. ;) Option A. Invest with Gottfried. Pay his management fee (2/20?) to own top 3 Clarke holdings. Option B. Buy Clarke at 30% discount to book. Gee, I don't know, that's a tough choice. H/T - top of the list now

Further to that they paint a picture as if the way they find ideas is the equivalent of wearing a tuxedo and drinking tea with their pinky in the air while screening is like digging ditches. IDK, I didn't really get that sense. I liked this quote: "It's so difficult to find truly compelling ideas that you have to take them any way you can get them. When I find some way of simplifying the process of locating bargains, I'm unapologetic about reusing it for as long as it works."

Besides the ones he mentions at VIC, I don't think so. The guy doesn't even have a website. Yes, I was very impressed with his interview. If anyone has more info on him, please share. His returns have been great as well: "Since inception, we've generated net returns of 21% a year. That compares to 13% for the TSX Composite Index in Canada, where the vast majority of our portfolio has been invested over the years. We've beaten the index by about 8% annually while averaging 24% cash." Recent VIC presentation: http://www.valuewalk.com/2014/09/guy-gottfried-radar-underfollowed-gems/

I thought someone told me you can use google sheets to import the Yahoo News feed for certain ticker symbols. Anyone know how to do this?

I have avoided these names as well. I try to see if I can easily tell if the acquisition was smart or not. For MKL, BRK, LMCA, and Fiat, I was able to answer "Yes, they are good at acquiring and allocating capital." LUK has been a little tougher for me and its size is smaller accordingly. The roll ups like TDG, CFX, VRX, etc. are much harder imo

Nice writeup. Packer is one of the ppl on the board whose process I feel I know and would invest with. Keep up the good work

I think non-agencies is one place where you can still get decent carry, and if it's a good manager than capital appreciation too.

Are there any good free websites/blogs/publications/periodicals on the energy markets that someone could recommend?

2. My favorite thing about them so far is that they have done some non-"stock picking". Weschler was involved with their ResCap acquistion. Combs was instrumental in the Phillips 66 transaction. Knowing that Weschler is a huge Malone fan, I wondered if he will pull out any financial engineering tricks later. It gives me a little bit of confidence that they can do corporate finance in addition to "stock picking".

Are there any filings for this company? Interested to know the fee structure and its price to NAV. Thanks