oldye

The 13-f it leaves out 1/3 of their holdings that are outside the U.S, including ridley, sfk, brick etc.

http://www.paperage.com/2010news/02_19_2010sodra_price.html Sodra announcing further softwood increase to 890$/ton. Cheers!

pro forma: investments per share up to roughly 1100$ ;D "I am in the capital allocation business. My job is to figure out which businesses to invest in, with whom, and at what price. I am not like a steel executive who can think only about how to invest best in steel. I've got a bigger canvas, simply because I have spent my life looking at companies from Abbott Labs and going through to Zenith."

They diluted heavily to get the new oil field and now they're using that money to pay for their headquarters. Management obviously has an empire state of mind. If you think gas prices will be around 6-7$ or you think their cost to extract will drop once the new plant is online then this is going to be a hell of a play for Fairfax. I can also see this going poorly, every single company out there has a mandate to drill, or there just isn't enough political will to keep the patient off the emergency room floor this will end badly. This is why they hedge!

Real quick, VIC has a good write up on it, basically they have lots of exploration upside, production set to nearly double by 2012, and an average total cost of extraction 4.50$. They just announced they're spending 100 million on new headquarters which brought the shares below the recent issue price.

Hey FFHwatcher, you're trying to figure out what you're paying for the company using historic information, not a good way to go about it. By the end of Q2, they'll have enough cash to pay off the debenture. So even if you assume net working capital(except cash) is worthless, at todays prices you are paying roughly 250 million dollars for 3 mills. Nobody knows what pulp prices will be tomorrow let alone a year from now, if the U.S government decides to spend another 8 billion dollars subsidizing U.S producers they'll probably trade back at 30-40 cents again. Consumption of paper per capita in India is still 1/6 of that of China that is only 1/10 of the amount of paper we consumer in the States. Thats roughly 2.5 billion people that are going to become very wealthy over the next half century. I'm betting that they use more paper than they do now.

Too bad, it is a good book for anyone interested in derivatives.

I don't understand insurers that don't know how to invest, if their CR's are that good why wouldn't competition undercut them next year on the same policies?

Jim Cramer said he's the "real deal" he just doesn't read good :)

199 out of every 200 investors should not be picking their own stocks ;)

Just Remember that its Buffett your talking about ;) He probably knows with a 90% certainty or better how much this business will be worth 10, 20, 50 years from now. Remember at their current pace, China and India will both have 40+ trillion dollar economies by the middle of this century. My guess is that there will be plenty of business to go around.

So I've been trying to figure out how much they'll make selling 10 MW in green energy starting in 2012 at first I was guessing somewhere around 1.5 million but thanks to Mercers newest 8k I know I was way off. Even though their project is much smaller, Sfk will be be generating an additional 6-7 Million Ebitda starting 2012! Thank You Canada, this will help offset a healthy chunk of the losses from the Abitibi bankruptcy. Now if we could just get Kraft to buy the company for 13x Ebitda....you get Kraft Pulp? Cheers

He says something truly profound like "What hope do we really have in making accurate predictions of how the world will recover from all of this, and in what ways it will be changed? Very little." The very next sentence is "My view of the economy’s future is boringly unchanged: “Seven Lean Years.” I still believe that after the initial kick of the stimulus, we will move into a multi-year headwind as we sort out our extreme imbalances. This is likely to give us below-average GDP growth over seven years and more than our share of below-average profi t margins and P/E ratios" For someone that says its very difficult to make correct top down predictions he sure as heck seems to base his investment strategies around them. "So all investors should brace for the chance that speculation will continue for longer than would have seemed remotely possible six months ago. I thought last April that the market (S&P 500) would scoot up to 1000 to 1100 on a typical relief rally. Now it seems likely to go through 1200 and possibly higher. The market, however, is worth only 850 or so; thus, any advance from here will make it once again seriously overpriced,"

I think this guy is nuts.

http://www.gatesfoundation.org/annual-letter/2010/Pages/bill-gates-annual-letter.aspx

Devalued relative to what numeraire? The pound sterling? Gold? Or do you mean relative to "real goods" like apples or eggs? I was actually paraphrasing Charlie Munger, you obviously get a heck of a lot more computing power for your dollar today so its all relative! according to this site which uses some PPP calculations http://www.measuringworth.com/ppowerus/?redirurl=calculators/ppowerus/ 1$ in 1900 was worth 26$ in 2008. http://usa.usembassy.de/etexts/his/e_prices1.htm according to this the average Teacher made 328$ a year, average annual income was 438$ so roughly 100:1

The U.S dollar has devalued by 98% over the last century, yet the standard of living is up quite a bit.

Yea this is a bit off, The U.S stock portfolio was break even hedge included for the Quarter, and that doesn't take a lot of other factors into account including what should be a strong Q4 from insurance. After the quarter ended they're up about 8$ per share based on the old 13f Cheers :).

Think of Kraft stock as a BBB rated Perpetual Bond, (strictly back of the envelope calculation here) Pre Cadbury you had a bond paying 7.1% growing at 10% per year Post Cadbury you have a bond yielding roghly 6.2% growing a little faster than before. Buffett doesn't like to use synergies in his calculations so I'm not surprised he doesn't think the added growth will make up for the lost yield. At 28$ it still fits the Peter Lynch stalwart stock criteria and should earn a satisfactory return for its owners over time.

Arbitrage!

200 million is not a lot of capital for Fairfax..we're talking 2-3% and I hope they use the proceeds to buyback stock!

Sounds like there are further price increases in store for Feb. Mercer International (MERC) which owns 3 very productive plants, 1.4 million tons of production or roughly double SFK, carries over a billion dollars in debt and has a market cap of 120 million. Mr. Market must really like leverage, pulp operations outside the U.S going forward either that or SFK is relatively worth around 3$ a share right now.

Grants Interest Rate Observer but its like 800$ a year for a subscription.

Don't get too excited about AHL, These guys are squarely in the "know nothing" investors category which means theres a very high likelihood they'll make a big mistake somewhere and put a lot of capital at risk ie putting 10% of their investments in a fund of funds. This company would be a monster if they could average 7%-10% on their investments but they'll be lucky to do 2-4% without falling off a cliff, and heres why: "The Investment Committee of our Board of Directors establishes investment guidelines and supervises our investment activity. The Investment Committee regularly monitors our overall investment results and reviews compliance with our investment objectives and guidelines. These guidelines specify minimum criteria on the overall credit quality and liquidity characteristics of the portfolio. They include limitations on the size of certain holdings as well as restrictions on purchasing certain types of securities. Management and the Investment Committee review our investment performance and assess credit and market risk concentrations and exposures to issuers." € "For 2008, we engaged BlackRock Financial Management, Wellington Management Company, Alliance Capital Management L.P., Credit Agricole Asset Management, Deutsche Bank Asset Management and Goldman Sachs Asset Management to provide investment advisory and management services for our portfolio of fixed income assets. We have recently terminated the services of Wellington Management Company. We have agreed to pay investment management fees based on the average market values of total assets held under management at the end of each calendar quarter. These agreements may be terminated generally by either party on short notice without penalty."

It is about 60 degrees here right now in Southern California, should be a high of 71 tomorrow ;D