constructive

What do you guys think of Jean Coutu? Hitting new highs, but still seems cheap at ~6.3 EV/EBITDA. They've been reducing their stake in Rite Aid. http://markets.ft.com/research/Markets/Tearsheets/Summary?s=PJC.A:TOR http://www.benzinga.com/news/13/06/3709724/the-jean-coutu-group-announces-sale-of-40-5m-rite-aid-shares-remaining-stake-equa

When I say short positions I also mean options as well as stock. Obviously large single name short stock positions (a la Ackman) are not an effective hedge against large single name long stock positions. That wasn't my point at all. I'm sure you know as well as anyone what hedges are. If someone is long AMZN, holding cash or holding WMT are not hedges in my opinion. Some people seem to think they are.

I agree. But I find it even more puzzling when people say cash or another defensive asset is "the ultimate hedge" or something like that. Nope, short positions are the ultimate hedge.

Warlords in Manchuria?

If you found an insurer that would sell you schmuck insurance, I wonder how large premiums would be for Sardar versus Carl.

Realistically I think CRM is more like 5x IV, and their acquisitions are more like 2-3x IV. Not as much value creation, and the differential could dry up quickly.

My favorite part was their discovery that they owned Barbados Power & Light.

Macro tourist? Bass has run a large, successful macro hedge fund for the last 7 years.

I think it's reasonable to assume the opposite. If PRXI had multiple bids in hand, they probably would have disclosed them and wouldn't have extended bidding. Referring to additional potential bidders doesn't imply that any actual bidders exist. They might have had 3 potential bidders, and then added 2 more potential bidders.

I'd buy company A. But at around $15 per B share I'd buy both and $10 per B share I'd only buy B. A will primary generate internal gains, while B will primarily generate external gains, followed by your own reinvestment. It seems more unpredictable, therefore a discount is required.

You can screen for high yield bonds and preferreds. http://reports.finance.yahoo.com/z1?b=1&cpl=3.000000&cpu=-1.000000&mtl=-1&mtu=-1&pr=3&rl=-1&ru=-1&sf=y&so=d&stt=-&tc=1&yl=6.000000&ytl=6.000000&ytu=-1.000000&yu=-1.000000 http://quantumonline.com/ I don't think the high yield asset class is attractively priced right now, but there are always some opportunities here and there.

Mohegan Tribal Gaming Authority. Looks like there are several bond issues outstanding. http://www.fructivore.com/2010/08/place-your-bets-on-the-mohegan-tribal-gaming-authority/ http://www.leveragedloan.com/mohegan-tribal-gaming-authority-completes-private-bond-exchange-trading-near-par/

I haven't ever felt the need to hedge currency exposure. But on the other hand, I might look for more Australian stocks if I wasn't concerned about the AUD declining. Under the right circumstance I would look at hedging.

Apple Genworth Symetra DirecTV Teva Pharmaceutical Apollo Global Intel Corning EMC Baidu And smaller long and short positions.

Corker saying that the bill would "ensure that taxpayers get all of the upside that comes with the risks they were asked to assume in 2008" seems unexpectedly strong, even compared to recent articles on the same legislation. Bad news for common and preferred in my opinion.

Philosophically I'm not convinced that allowing patents to be divorced from commercialization is the best way for society to encourage productive inventions. I wonder if there are any countries that take a different approach.

Yes, I think Fannie and Freddie's scale, established business, financial structures, relationships etc. give them a large cost advantage over any current or new entrant. But no matter how much financial sense it makes to recapitalize the GSEs and return them to business as usual (instead of winding them down), it doesn't matter if Treasury, FHFA and Congress have opposing political priorities.

Maximizing ROI is probably not Treasury's primary goal here. They aren't capital or time constrained so there is no rush to do anything. Judging by the preferred share agreement, their primary goal is to radically reduce the size of the GSEs. Recapitalizing and turning the companies back to the public markets doesn't support that.

Argentine banks look good on paper but there are many problems. ROE is much less impressive once you realize they have 10 to 15% (underreported) inflation over the last few years. The government has tight currency controls and radically increased capital requirements, to stop the banks from paying dividends. Worst of all Argentina has a long history of sovereign default and confiscatory nationalizations. http://seekingalpha.com/article/477871-argentina-on-the-brink-what-is-the-real-investment-risk

I own shares of SYA. Here is a good thread on them: http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/sya-symetra-financial/ The corporate presentations also provide good background: http://investors.symetra.com/phoenix.zhtml?c=213723&p=irol-presentations Recheck your source, because they haven't grown book value 1200% in the last 5 years. SYA's ROE has been unsatisfactory the last few years (although still adequate to support the valuation in my opinion). ROEs are generally depressed in the current low interest rate environment (especially life/health insurers). They have put up decent results compared to other insurers, but their valuation is much lower. You may be right that WTM wants to buy more. SYA also has a 10M share repurchase plan. In my opinion they should be prioritizing buybacks above growth and dividends, but that's not the case.

Morality is not an investable thesis. "Payment in full of all of our liabilities" means liquidation of the company and paying off $3.2 trillion in liabilities. It doesn't mean that anything happens once they pay dividends equal to the face value of the preferred stake. Their is currently no mechanism for Fannie and Freddie to repay the preferred.

No, obviously the situation is nothing like AIG or BAC. Fannie and Freddie are in conservatorship and are winding down. The government owns senior preferred shares in Fannie and Freddie, which currently hold 100% of economic value. It's possible that they will decide to recapitalize, and Treasury will give up the senior preferred for cash. But how would that happen? Treasury and FHFA agreed on the current approach which gives all profits to Treasury, and no value left for public shareholders. Do you think Treasury will change their mind and give money away to hedge funds, just because they asked for it? If not, do you think both houses of Congress can agree on that?

And of course, I feel sorry for the thousands of retail investors who will surely lose money on these, no matter what the outcome.

I don't mind honest speculation on these, but Berkowitz irritates me. The Federal Government doesn't need any of his "help" to recapitalize, or capitalize new companies. He's really just asking for a handout.

What percent of stocks beat the market over 40 years? You have to be in the top 10% of investors to apply a strategy that selects the top 10% of stocks. People are not born knowing how to select good dividend growth companies, they have to learn.