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Grenville

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Posts posted by Grenville

    I am thankful for...

    in General Discussion

    Posted

    Happy Thanksgiving guys!!!

     

    I'm thankful for the internet…not sure if I'd be here doing what I do and reading the board. I'm thankful for my family's and my health. I appreciate the humor and keeping things light from everyone who posts on the msg board.

     

    I'm thankful that the craziness of ebola slowed down and seems more under control. I'm happy it's been a relatively calm year from my perspective.

     

    Thanks for starting the thread, enjoy reading everyone's posts.

    FNMA and FMCC preferreds. In search of the elusive 10 bagger.

    in General Discussion

    Posted

    I agree with everything you said. I'm not holding just because Berkowitz is in. I've read most of the court transcripts and filings and at this price it seems like an obvious bet for a small portion of my portfolio.

     

    What I'm worried about is that Discovery means that Fairholme and Perry have access to material non-public information (or lack their of) and have a huge advantage over everyone else; and given that he doesn't have to report his holdings, he can sell without causing a massive price drop.

     

    I think it's crazy to think Berkowitz could sell his holdings at current prices without moving the share price. He's got a massive position and  others would figure out quickly if he tried to move his position in the public market. If he move his positions in a privately negotiated position deal off market (assuming it doesn't have to be publicly reported in the daily ticker) that would be different.

    ebola

    in General Discussion

    Posted

    I hope the CDC puts on their game face and starts taking this whole thing more seriously…a bit disappointing.

     

    The second healthcare worker who has contracted Ebola should not have traveled and violated CDC guidelines, said Dr. Frieden. From now on, no one being monitored will board a commercial flight.

    Warren Buffett sings Sinatra to 400 women :)

    in Berkshire Hathaway

    Posted

    Great interview while Carol was asking questions. Lot more info from Warren than usual in interviews. Thanks for posting!

     

    Warren Buffet On Investment Strategy | 38 min - Full Interview Fortune MPW with Carol Loomis

     

     

    The difference between successful people and very successful people is that very successful people say “no” to almost everything.

    Warren Buffett

    FNMA and FMCC preferreds. In search of the elusive 10 bagger.

    in General Discussion

    Posted

    Great discussion. Thumbs up to all of you who are reading the opinion and the filings. It will be interesting to see how this plays out.

     

    I just finished reading the Perry opinion, still need to process it all. I thought the Perry arguments were better when I first read the various complaints. It does seem like the judge involved is just as important as the legal arguments/lawyers in terms of the outcome of a specific case.

    FNMA and FMCC preferreds. In search of the elusive 10 bagger.

    in General Discussion

    Posted

     

    Also - what are the chances the govt simply cancels the existing common and pref equity capital structure, including the Senior Pref, then IPOs F&F to the market with all proceeds going directly toward recapitalizing F&F's balance sheet?

     

    my two cents, if they wipe out existing shareholders then why would anyone reinvest in the entities. The same thing could happen again since F&F don't exist without the govt backstop.

    FNMA and FMCC preferreds. In search of the elusive 10 bagger.

    in General Discussion

    Posted

    I recently moved to Washington, DC, so I was able to sit in the joint status conference in Judge Sweeney's courtroom today. A few things struck me as interesting:

    • Judge Sweeney seems to be trying her best to be fair to all parties.
    • Charles Cooper is a far better attorney than (I think it was) Gregg Schwind.
    • Judge Sweeney mentioned the possibility of sanctions on the government for non-production.
    • The government has refused to produce documents relating to whether the FHFA was directed to enter into the 2012 Amendment at the behest of Treasury or other governmental branches.
    • At the end of the conference, Judge Sweeney directly addressed the government by saying that, while she knows all the government attorneys have the upmost integrity and would never do this, they would do well to inform their clients that they had better not refuse to disclose documents that were detrimental to the government's case.

    It does not look like the government attorneys are winning themselves any friends by dragging on production.

     

    Appreciate the color. Very cool that you were able to sit in on the conference!

    Nygren's latest letter

    in General Discussion

    Posted

    If you had asked any investor in 2007 how their bank stocks would fare if real estate prices fell by 30%, I doubt that even one of them would have said, "I think they’d be fine." Our big mistake was that we didn't see the real estate crash coming. 

    http://www.oakmark.com/Commentary/Commentary-Archives/2Q14--Bill-Nygren.htm?rf=dr

     

     

    Personally, I don't think that was his mistake.

     

    Warren Buffett's financial picks survived just fine.

     

    Nygren chose Washington Mutual to concentrate in, and Buffett was concentrated in Wells Fargo.

     

    So was not forecasting the real estate decline really Nygren's mistake?

     

    I reread your initial post. I agree with you.

    Nygren's latest letter

    in General Discussion

    Posted

    I was a holder of the Oakmark Select fund through this period when he had a huge stake in WaMu. I never felt like he owned up to the mistake in his shareholder letters both during the crisis and as things got better. In my opinion, until you fess up to your specific mistake and put in process to avoid it in the future, there is a risk you'll repeat it.

     

    I don't think WaMu and Wells Fargo are equal. I think if you're going to build a 15% position in a company, you should be confident in the quality of the loan book and the culture of underwriting. Wells Fargo would have made it through the crisis without help, WaMu wouldn't have. The quality of the loans were much worse. Wells Fargo made mistakes in underwriting some products but not on the scale that WaMu did.

     

    The WaMu deposit franchise and the footprint had tremendous value, but on the other side the loan book cancelled it out.

     

    When I look at banks, I have to feel comfortable with the culture. As an investor we have limited information so we must look for clues. The loan book is similar to the derivative book and their culture of managing risk. You can't avoid everything, but you do have to worry about it.

     

    My direct understanding of WaMu isn't great, but it's from what I read around the time it went under and was sold to Wells Fargo.

    2014 Q2 result

    in Fairfax Financial

    Posted

    Quick look at the release. Insurance combined ratios were good. Nice to zee Zenith post 90% CR.

     

    I thought this bit about the equity hedges was interesting:

    At June 30, 2014, equity hedges represented approximately 85% of the company's equity and equity-related holdings. The hedge ratio decreased from approximately 98% at December 31, 2013 because of the increase in market value of the company's equity and equity-related holdings.
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