lessthaniv
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Posts posted by lessthaniv
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19 hours ago, SharperDingaan said:
Folks, the reality is that FFH is going to go a good bit lower before this is all over. Simply do a swing trade, buy your stock back later at the lower price, and take your cash difference off the table. MW drives the share price down; FFH does a share buyback at below book, and books both a gain on cancellation, and a higher EPS.
SD
Hedge by liquidating to cash based on a weakly supported argument ahead of what will likely be an exceptional looking annual report in 7 days? No thx. The last thing I want to do is lower my exposure here.
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22 hours ago, keegomaster said:
Bought some Enbridge Preferreds (Series H) on margin. The rate reset is happening on Aug 30th and I anticipate the upcoming rate will have a ~9% yield that should cover the ~6% margin cost.
Not sure I'm understanding the math on your comment? Can you elaborate on your calculation?
The following is from the Aug 2nd, 2023 newswire but the 5yr hasn't moved materially.
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Article on the airport expansion and coming renovations
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On 1/19/2023 at 2:15 AM, Ulti said:
https://podcasts.apple.com/us/podcast/top-traders-unplugged/id888420325?i=1000595128967
excellent interview with Jeff Currie on commodities energy inflation etc
I like Jeff Currie. Opinions always seem well researched. This might be of interest to you.
Thanks for the podcast link.
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2 hours ago, Viking said:
@whatstheofficerproblem when you get your answer please let me know. I continue to think that interest rates are one of the keys. If the Bank of Canada keeps raising rates then i think more pain is ahead. The spring market (gets going in Feb) will be key - and it is not far away.
If the economy also slows in 2023 that will probably be a hit to housing.
—————Prices are coming down pretty hard in the areas that were most frothy. I looked at my old neighbourhood (Langley) and house prices look to be back (perhaps even lower) to where they were back in March of 2021.
we’re neighbors! -
6 hours ago, RichardGibbons said:
Does anyone have any opinions on the probability of the Liberals implementing a "windfall" tax on Canadian oil companies. Freeland recently said that they weren't looking at it, but I still wonder about it, because:
- Trudeau tends to be a follower, requiring external validation, and Europe's already validated that it's OK for him to impose a "windfall" tax on energy
- The NDP, with its first-order thinking, looks like it would support pretty well any tax on wealthy people or any corporation
- The energy sector is the most vilified sector in Canada, so an easy target
- The Liberals have already done something similar with their "large financial institution" tax (which targeted the third most vilified sector, those greedy banks.)
So, when thinking about Canadian energy investments, I'm curious if anyone has any thoughts about the odds of such a tax before the next federal election.
(I put windfall in quotes because for the energy sector, I don't think it's actually windfall in the sense that people who aren't politicians define the word.
Companies drill recognizing that in recessionary times, oil might fall so much that their wells will be unprofitable, but also understanding that in booms, the business can be wildly profitable. If your business model depends on the idea that "profits in the good times make up for the losses in the bad times", then calling those "high profits in the good times" a windfall doesn't make any sense, because those aren't unusual, extraordinary profits. Rather, they're expected and necessary for the business to make economic sense.)
Total joins Shell in cutting North Sea investments due to Windfall tax ..
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Me too
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1 hour ago, Parsad said:
Good man! If it wasn't steak, it would have to be ribs!
What type of steak do you enjoy...T-bone, Ribeye, New York Strip, Sirloin, Filet...I start drooling when I think of any of them, but New York Strip's are my favorite.
Cheers!
All of the above! Tomahawks or thick cut Rib eyes if I have to pick! -
Steaks and beers. It’s Saturday.
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3 hours ago, Spekulatius said:
I am currently in Europe and talked to my brother (living in Germany) about the energy situation and he thinks that Germany is on track to have the NG storage filled before winter, the reduced gas flows from Russia notwithstanding. In fact right now, the storage is already ~74% full.
Also, Polands storage is already full right now and the first (out of 5) LNG terminal (Brunsbüttel) on the German coast will be completed in Dezember 2022 and could actually help to alleviate the shortage for this winter. He think power prices will stay high until next winter and then drop a lot.He watches this more than casually, because the company he works for (lumber mill) also operates a cogeneration power plant with wood chips as fuel and it‘s making a lot of money now, but he doesn’t think this will last past this year.
He thinks that the German government spreads a bit doom and gloom to force some savings that may not be necessary and think by next year the crisis will be over.
Thx for sharing that. Interesting.
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On 7/7/2022 at 9:17 AM, lessthaniv said:
Bought into ATCO yesterday. Attractive against the backdrop of FCF that it could spin in a few years.
Also bought in on July 6th, 2022, Sanjeev. You weren't alone.
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46 minutes ago, StubbleJumper said:
The offer *is* low and if it had been tabled any time before April it would have been laughed off as completely ridiculous. The question is not what FFH should instead offer, as clearly they can offer as much or as little as they like. The question is whether the company should describe itself as "Fair and Friendly Acquisitions (Fairfax)" when they wait for a broad market correction to offer an amount that would have been considered ridiculous four months ago. They themselves are the ones who made the assertion that their business would be conducted under the principle of "fairness." You can judge for yourself how well they have walked the talk.
SJ
They are simply offering a price they are willing to pay to acquire the outstanding shares. I’m sure most of us have placed a low ball bid on the shares of a company we like at some point.
Based on their condition, it’s up to the majority of the minority to ultimately make the decision, not Fairfax nor the Consortium. That’s what makes it fair. The sellers decide if they like the price.
If you don't like the price, just vote no with your shares.
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1 hour ago, Parsad said:
The one thing no one has mentioned in this is that from a Fairfax investor perspective, this is a real win-win if the transaction is approved and consummated. Why?
- Fairfax gets a great business with great operators at a fair price.
- Fairfax solidifies the relationship even further with Sokol and Chen!
Could there be two better investor/operators we could have added to the Fairfax team than David Sokol and Bing Chen? Fairfax shareholders always bitch and complain about the quality of acquisitions. Sokol's got quite the history on building and finding quality businesses.
A few years ago David Sokol was Buffett's heir apparent. Now he's working for Fairfax. David brings on Bing Chen who proves to be a savvy operator and leader. Now Bing works for Fairfax.
As a Fairfax shareholder, I'll be quite happy if these two guys are working for us, not just partnered with us.
Cheers!
Yes and I wonder if Sokol will perhaps move into an bigger role over time. Also, on Dec 31/2021 ATCO closed $14.18. The annual report shows carrying value at $922m vs. fair value at $1,286m. Depending if the deal is completed and at what price .. the fair value would be north of this. Wondering if this transaction could result in a mark up in the carrying value? Not too sure but if any accountants know - please share. Might be another positive for Fairfax's reported book value.
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9 hours ago, Xerxes said:
"As a minority, an Atlas buyback would have been preferable, but the big shareholders already have control so the natural next step is buy the whole thing. "
I don't follow this logic?
1. The proposed takedown is money coming from the Consortium to the minority shareholders.
2. Atlas buyback is money coming from Atlas to buyback stock off the open market.
How is this comparable?
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49 minutes ago, Crip1 said:
This is not intended to start an argument, rather, it's intended to better understand. A few folks have indicated that the offer for ATCO was low and, accordingly, unfair to minority shareholders. The question then is "What should have Fairfax done had they wanted to purchase ATCO? Offer $15? $16? $20? Obviously, Fairfax owes it to their shareholders to acquire businesses at the most attractive price possible so if indeed the offer is a low-ball, that's what they really should be doing for their shareholder base, IMHO. Thoughts related to this are welcome.
-Crip
I agree.
It's the majority of the minority that will ultimately decide if that pricing makes sense and whether the deal is consumated. With ~68% owned by the consortium, that leaves ~32% for the minority so about ~16% in favour will push it through. I suspect the board will follow up in due course with an independant valuation. Prices will be compared, the board will provide an opinion and the consortium may or may not sweeten the offer. Regardless, just cast your votes when the time comes to represent your individual position and we'll all live with the outcome knowing the majority decides. That's business. Nothing "unfair" about it. The outcome is entirely in the hands of the minority shareholders.
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1 hour ago, gokou3 said:
I believe he would just need to wait until the next January 1st, not 365 days, to re-contribute the $80k?
Yes, correct. Thats what I intended to convey but probably could have chose my words better.
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Yes. You have to wait 1 calendar year after the withdrawal is made but you’ll be able to contribute all those funds back + 2023 allowance once were in 2023.
Edit: Assumes your maxed out already.
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SGY.to
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I’ve reviewed Surge, Baytex, Whitecap and Meg so far. There is a common theme echoing from the board rooms right now wrt cash distribution after debt reduction. Whitecap just did the XTO acquisition granted but they confirmed on the call today the distribution plans remain in tact, simply pushed back a bit. They felt the opportunity offered the greatest long term return potential. We’ll see, I guess. I definitely get a different vibe this cycle though.
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Great summary. Looking forward to the CC tomorrow.
(1 edit ... buyback was 156K shares not 156M)
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Interesting read. Academic paper out of Yale analyzing the Russia/Ukraine situation. A very good summary of the energy markets included within.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4167193
Slide deck was also provided.https://yale.app.box.com/s/7f6agg5ezscj234kahx35lil04udqgeo
Fairfax 2024
in Fairfax Financial
Posted
Early note redemption announced yesterday for ~ $350m C$
https://www.globenewswire.com/news-release/2024/02/14/2829510/0/en/Fairfax-Announces-Early-Redemption-Of-Senior-Notes-Due-March-3-2025.html