onyx1

Ever look at Straight Path Communication? It is a spinoff from IDT Corp. They are litigating against some of the biggest names in the tech space based on their patents related to communication over the internet. I've spoken with the CFO and it is obvious that the patent litigation has near term catalysts. I like the way how they structured the spinoff and outsourcing their litigation expenses on a contingent basis. Their philosophy is to minimize cash burn. Over $100mm of NOL will shield any patent litigation rewards and spectrum licensing revenue. I haven't--the issue I have with the patent field is that it takes an extraordinary long time to figure out if a patent is valid, much less an entire portfolio. Then you have to understand the competitor's product and what arguments will hold in court (takes a very long time). Then the actual court or licensing results are very hard to predict. If there are a few key patents that have survived litigation already, and gotten high licensing or verdicts, then it starts to get easier. Overall though, I view the other stuff on the forum easier to understand and invest in than anything in my own field. STRP Business Update scheduled for tomorrow, January 9, 9:30am EST http://finance.yahoo.com/news/straight-path-communications-hold-general-154600671.html

This is great advice. Greed and envy are an unavoidable part of being human. Until about five years ago I earned my living via employment and was paid salary + annual bonus, and the bonus was substantially all of my total compensation, so basically I was paid once per year. When I was in my early thirties I received a monster (at the time) bonus that represented over 10 times what I had been paid in any given year of my life, and more that my own father ever made in a year. Time for confetti and champagne, right? Crazy as it seems, my reaction was anger, Why? The guy next to me got paid 30% more than me!!! Oh my god, the humanity! I took me some time to recognize the absurdity and years later I finally understood that life is not a zero-sum game. Year after year I witnessed the same reaction from younger people in my organization. Some got it, others didn't.

I personally find this result (and Nate's as well) just as impressive as the higher gains with the more concentrated portfolio's. With more positions there is a higher probability that skill instead of luck is the driving force behind the returns, and you have a lot less risk as well (especially with the cash position). Agreed as well. It's easy to calculate returns. Without the context of risk though, returns can be very misleading in the short run.

Taxable account (before all tax liabilities): 71% Roth IRA: 59% For context, I manage a long-only, do-it-yourself, institutional-sized portfolio, with no third party money. I am a full-time investor and my risk is managed with the recognition that my age makes large losses unrecoverable. Or said another way, my portfolio is many times the size of what I could earn as an employee. 2013 Highlights: FMCC Preferred +334% small position but becoming more and more meaningful BBSI +143% a great business and shares are approaching a 10-bagger vs. my 2009 cost basis MSFT +136% leverage through 20x LEAPS significantly enhanced the 40% movement of the underlying BRK B +122% leverage through 70x LEAPS significantly enhanced the 32% movement of the underlying RJET +116% sold all shares at average of $12.25, and re-initiated a smaller position in the mid $9's recently BAC +30% hedging cost reduced by 4% the 34% return of the stock, large position. WFC +33% WRB +12% Non-correlated basket of 6-10 stocks approx. +10% 2013 Lowlights: PRXI -57% snatched defeat from the jaws of victory by not selling when I had a gain of over 50% BBRY -17% Doh! Thought I could make a quick return based on Prem's public statements. All in a great year, and I owe many thanks to members of this board for their rich contributions, including Twacowcfa for his keen and timely insights, Ericopoly for his clear thinking, Kraven for his financial experience and killer sense of humor, Packer for setting the bar high for the rest of us mortals, and of course Sanjeev for this one-of-a-kind forum. How lucky I am to be a part of it! Best wishes to all in 2014!!

I was accepted years ago and have also let my membership expire. It's more time than I am willing to spend to submit two ideas per year. That said, an expired membership is worthwhile as one can still read all comments and post them too. As far as your submission, keep in mind the judges are Magic Formula practicioners, so references to TEV/EBIT and EBIT/(PPE+WC) will help. And agreed, be thorough. Sprinkle your writeup with comments you personally received from management or industry insiders. This carries weight and shows you are willing to go the extra step in your research. Best of luck! Don't feel too bad if your idea is rejected, I know one very accomplished investor who has been rejected more than once. It's a subjective call.

US Government's response to Fairholme's 5th Amendment takings lawsuit filed last night, attached. 13-465_Motion_to_dismiss_12-9-2013.pdf

Well done Norm! And Keith, your track record is astounding. You are living the value investors dream!!

You are over analyzing the situation and should reconsider your priorities. In twenty five years in the business, I have seen hundreds of bright young people, often from great schools, get nowhere in the finance field because they choose to "strategize" their career path instead of responding to opportunities. I remember laughing at 25-year old Ivy League MBAs who didn't want to run financial models because they feared being pigeonholed as a "numbers guy". They wanted focus on the "big picture". In two years these empty suits were gone. They go it backwards by thinking that the firm was there to serve them. This new fund is a critical test for you. Ignore the assurances from your superiors that this is your choice. It isn't. If you say no, you have put yourself ahead of your firm and for that there will be consequences. Maybe not tangible way, maybe not immediately, but people will take note and it will happen. The bottom line is this: you should take the job and work your tail off with a positive attitude to make it a success, or leave the firm. The best way to advance in your career is to gain a reputation as a "can-do" individual who will do whatever it takes for the benefit of your current boss and your firm. Once you succeed here (and it will take many years of effort), opportunities will follow. Lots of them. When bosses start to fight over you and you start to get job offers outside the firm, then you are making good progress!

A brilliant proposal by Fairholme, et al! I read it as the private preferred would be made whole at par plus accrued dividends from the date of the Third Amendment Sweep, Aug 2012. What is not clear to me is whether the UST writes a check for the par + accrued on the private preferred, or whether it is credited toward capital by the new state insurance regulators. I suspect a check. The leverage comes from the litigation threat and the deterioration of the infrastructure assets while waiting for a legal conclusion.

Fairholme GSE proposal attached FAIRHOLME_CAPITAL_MANAGEMENT_ANNOUNCES_PROPOSAL_FOR_PURCHASE_OF_INSURANCE_BUSINESSES_FROM_FANNIE_MAE_AND_FREDDIE_MAC_0.pdf

Nice site full of important links, thanks for posting.

Washington Federal vs. USA Government motion to dismiss, attached. 01511657935.pdf

Yeah. When is the US government response coming? Here is what I know about the current timing: All junior preferred Federal Claims cases (5th amendment takings) have been consolidated and the US response is now due 12/9/2013. All junior preferred District Court cases (suits alleging violation of administrative procedures) are awaiting a status hearing scheduled for November 12, 2013 to determine consolidation, timing and deadlines. Washington Federal, which is suing on behalf of both the common and the junior preferred shareholders and thus is on a different path as the two above is moving forward. US government respond will be submitted via a motion to dismiss by end of business today, 11/7/2013. Expect 50 pages of very interesting reading!

IB says all pink sheet trading is down.

I'm very dissappointed here too. I thought his emphatic statements could be banked upon, but I was wrong.

Great work, thanks nkp007!!

Please be patient. There is a team working on it. All top notch people. They will prepare a report and revert back as soon as possible. While they are working on it, is there anything else you need? After reading this, my wife called out from another room: "Why are you laughing so hard?"

The good news for us as investors in the private preferred is that with greater than 4:1 odds, we will have lots of entry and exit opportunities over the long time period it takes to work through the court system.

http://www.theglobeandmail.com/report-on-business/watsa-insists-fairfax-has-strong-backing-for-blackberry-buyout/article14559903/ "The CEO of Fairfax Financial Holdings Ltd. says his company has plenty of potential partners – so many that he believes the equity part of the $4.7-billion (U.S.) offer will be oversubscribed." If it were someone other than Prem, I'd suspect this as a desperate attempt to gather momentum. But Prem is a man of his word and has an unmatched reputation for credibility and fair dealings. I put a lot of faith in his public declarations, and my money is on him.

There is an old saying that being sued by the government is like dancing with an 800-pound gorilla. The dancing stops only when when the gorilla decides to sit down!

http://www.fool.com/investing/general/2013/09/09/the-25-smartest-things-jeff-bezos-has-ever-said.aspx Twenty insightful quotes starting with this gem: 1. "All businesses need to be young forever. If your customer base ages with you, you're Woolworth's." Enjoy!

Take a look at MUSA, Murphy Oil's August 2013 spinoff of their retail locations. A pure play with real estate owned, 1179 locations, and a strategy of placing all stores right next to Walmarts. They get traffic from the superstores, and have an agreement to sell at lower prices under Walmarts discount program.

Thank you! Just to clarify, what do you mean by "Judge Sweeney yesterday ruled against USA's motion to stay 5th Amendment cases in the Court of Claims."? I think Fairholme sued USA for violation of the 5th amendment, but if this is a favorable ruling, it should be that the judge ruled against USA's motion to stay away from 5th amendment? "Stay" is legal parlance for putting something on hold. The US wanted all the Court of Claims cases (those claiming an illegal taking under the 5th Amendment) to be put on hold until the completion of the District Court cases (those cases that question the validity of the Sweep). This could have resulted in years of delay. The judge correctly ruled (IMO) that the 5th Amdendment cases are not path dependent on the DC cases. In other words, the judge implicitly agreed that even if the Sweep is ruled to be valid (the USA wins in DC court), the plaintiffs can still successfully claim an uncompensated taking under the 5th Amendment in the Court of Claims.

Judge Sweeney yesterday ruled against USA's motion to stay the 5th Amendment cases in the Court of Claims. We now have two different legal arguments in two different courts, either of which could provide a favorable ruling and a subsequent windfall to the private preferreds. 1) Court of Federal Claims. Fairholme and more than three other cases have been filed and some may be consolidated. These cases argue that the Third Amendment to the Senior Preferred Stock Agreement (the Sweep) is an uncompensated taking under the 5th Amendment to the US Constitution. Next key date: 11/7/2013, government response due on all cases. 2) US District Court. Fairholme and Perry Capital have each filed cases that are largely the same. Both argue the validity of the Third Amendment to the Senior Preferred Stock Agreement (the sweep) under the Administrative Procedures Act. Basically they argue that the Treasury and FHFA exceeded their statutory authority as conservator by agreeing to the Sweep. Next key date: 10/28/2013, deadline for Treasury and FHFA motions (likely for summary judgment).

Agreed. The real value of this board comes from understanding the dozen or so individuals that have real insights and well-considered recommendations. These happen at opportune times on threads that are often already created. One example (of many) is Twacowcfa who doesn't show up on the list, yet has offered some very high quality recommendations including MMPIQ, WSBASE market short, GSE preferred, or the epic call to lever BRK when it was trading at the buyback price.