FlyingArrow

Does anyone have a current file with up to date holdings they could share?

Yep we just need an enterprising investor to update it :D I can update that spreadsheet when i get some time over the weekend - if someone can list the link to the 13f (dont have it here) http://google.brand.edgar-online.com/Default.aspx?companyid=11605&formtypeID=35

Im not exactly sure when they made their purchases on Rim but if it was before I posted the most recent thread on Rimm, it was most likely in the high $4.xx- $5.xx acb http://google.brand.edgar-online.com/Default.aspx?companyid=11605&formtypeID=35 over $100M in RIMM shares at $49.39. $26M gain here.

Nothing in my TD account either. What symbol are the rights trading under and where can you find quotes/volume?

Thanks for the feedback. I realize you're all "flying blind" as I can't disclose all details. This option is a kicker on a much larger transaction which in itself is not an investment per se, but an asset I will use for my business. I will be doing this regardless as the 15k is a very small cost component of the overall transaction. The $300k is already discounted due to it being a future asset you'd have to flip to realize the gain. If it comes together it's more like $600-$700k benefit and I might actually keep and use the future asset vs. sell it right away and take the gain. As to the timing, it could happen as much as 7 years out but I'm thinking if it doesn't happen in 5 it won't happen at all. I posed the question because I'm trying to value this kicker against the rest of the transaction. It's a bonus that could lead to a 20 bagger on the $15k which would significantly reduce the cost of the base transaction (which I'm actually fine with even if this doesn't come to pass). So the question isn't "should I invest the $15k" as I'm quite sure I will as it seems like a no brainer. The question really is "what is this option worth?" My gut tells me it's well north of the $15k I'm paying hence I can treat it as a further discount on the base asset purchase. SD: "30% chance of 300K is 90K, for which you're paying 15K. Alternatively to recover the 15K the chance of the 300K occurrence must > 5%." That's kinda the no brainer side of it that I saw. But it doesn't allow me to put a value on the option. i.e I'm getting an option that's worth say $60k based on some calculation for $15k. Thanks again

I'm appealing to the options guru's on the site to help me value a financial option on an asset. This is not a stock option. I can purchase this option for $15k which will enable me to purchase an asset in 48-60 months at a price that will be $300k below market value at that time. This is a binary event. It will happen or it will not. I estimate the likelihood of it happening being approximately 25-35%. Hence, I am purchasing a $15k option which has a 25-35% chance of being worth $300k in 4-5 years and a 65-75% of being worth zero. This is part of a larger financial transaction so I'm trying to determine how to calculate the value I might assign to this component and how that value might vary based on the chance of occurrence, the timing of the occurrence and the final value. Thanks for your help. Cheers Mark

I don't know much about Delti. I have been buying tires at Tirerack.com for years. They have a strong foothold in the US and about 8 or 10 distribution centres across the country. They ship to Canada and collect duty and taxes directly. I looked at the Delti website and found it wanting compared to Tirerack. Tires were about $10-$15 more per tire for what I buy. There are many internet tire sellers in the US. Discount tires is one. And look at how well google adsense works! My browser is showing a discount tire ad at the bottom of this thread! I have no idea how big tirerack is or what their market share is. Scale will matter and price matters most. Once comfortable buying on line there is zero "stickiness" among buyers. I happen to like Tirerack but if I can save $20 somewhere else I'm gone. I'd do some serious homework on this before I invested. Cheers

You're missing the impact of leverage Vinod. If the float is $20B and we average 10% on that (mix of equity and bond returns) that's $2B. If insurance is break even and assume equity was $6B you would have a 33% increase in book from a 10% overall return on the portfolio - all of it from investing operations, none from insurance. Except of course that it was the insurance operations that gave you the float to invest... ;)

You may find the attached informative. Commentary running back many years.

Al, please let us know what you find. I'm in meetings all day tomorrow until late afternoon. I too have a very large number of 2011's I was expecting to hold. They are deep in the money and I damn well don't want a tax bill on them this year. Nor could I convert them entirely to common at this time. I have to believe they are doing this ultimately in the long term interests of their long term shareholders of which I am one. The SEC and it's family of crooks who pervasively exploit NYSE listed stocks has been no friend of ours. But if this attracts a short term tax hit I really wish they would have waited till the new year....

Let's add the $$ to your table assuming we start with $100k. 5 years 14.9 $200,263 14 $192,541 Difference $7,721 10 years 15.7 $429,866 14 $370,722 Difference $59,144 15 years 16.2 $950,806 14 $713,794 Difference $237,012 20 years 16.6 $2,157,600 14 $1,374,349 Difference $783,251 25 years 16.9 $4,958,642 14 $2,646,192 Difference $2,312,451 30 years 17 $11,106,465 14 $5,095,016 Difference $6,011,449 At 15 years the difference is a quarter million. At 30 years its six million....

Not sure I agree entirely Al. Take FFH. I've had some wicked rides up and down over the past 5 years, particularly since I've been using leverage. I've had 50% swings representing some significant $$ amounts. Had I been a perfect market timer and sold at the top only to buy in at the bottom I'd be wealthy beyond my dreams. That's easy to say and do with hindsight but much harder at the time. Instead, I've taken the dips as an opportunity to load up. In many cases I've sold common near the bottom and bought leaps to enhance returns. As a result, each of my successive rides up has gone to higher heights. I realize I'm talking about a concentrated portfolio of FFH, and that throughout this time I have never felt it has risen to my estimate of its worth, however I feel the experience is worth noting. My strategy has taken the "Patience of Job" and "Patience bordering on sloth" to execute however I'm extremely pleased with the results and will eventually add my numbers to this thread when I get around to the figuring. I assure you that throughout this my convictions have been tested beyond what I ever thought. I guess I'm a little stuck on Buffet's favorite holding period (forever). Even if FFH rises to 1.3 or 1.5x book, I'm not sure I'll sell and take the tax hit. As long as I feel the jockey is performing and future returns on capital will be there I will have trouble selling and celebrating with a cheque to Revenue Canada...

Define "clouded". In my view tax considerations are an intricate part of investment decisions. They inform the decision. They don't cloud it. Selling an attractive asset, taking a big tax hit, and buying another asset that is only slightly more attractive does not make alot of sense. If you're in the highest tax bracket the alternative needs to be meaningfully more attractive on a risk adjusted basis. But everyone here knows that. Do we all practice it?

I haven't posted as I haven't had the time to figure out my returns. As I am and have been heavily weighted FFH for years the numbers are pretty nice. And I have virtually no tax bill to pay. Most of the opportunistic trading I've done (switching into ORH from FFH then back) has been in registered accounts so no friction there. I've got some nice returns on GE calls and SKF but I'm just as likely to sit on those as I just hate paying the taxman if I don't have to. I wonder how many of the returns in the above posts are before or after taxes? It seems there are many here who trade at a meaningful level which can have meaningful friction costs.

Many of us sold and bought back into FFH. In my case sold at 62.50 and bought back into FFH at $367 CAD on Sept 14. Lucky timing but the runup in FFH to $398+ CAD means that the ORH deal would have to close at more than $67.80 for me to have left any money on the table. I think that highly unlikely. Given that I originally sold FFH at $372 CAD to finance the purchase of ORH at $48 this has been a very satisfying round trip.

Well, like some others here I pulled the trigger on a few ORH shares. 20 percent of my ORH holdings and only some common, not the options. I'll see what the days ahead bring and maybe get down to half of what I had like Al. I got $63 near days end which is pretty good. As I said before I'm conflicted as 15% of my portfolio is ORH common/options with about 110% FFH common/leaps. Heads I win, tails you lose. This is much more fun than 2003 and 2006!

Can someone explain how the options contracts will be closed out and treated? Will the value on closing essentially be the difference between the strike and final buyout price? For example the last trade on Feb 40's was 11.10. Will that just move to a value of $20 on closing assuming the buyout price was $60 and will it automatically settle on the closing date? I'm not looking forward to the tax consequences of this. I guess it's a nice problem to have... ;D But damn I hate friction.

Well if this follows the same path and the final price is similar to the delta on Northbridge we'll be at exactly $65. 39/36*60=65 As the rest of my funds are still in FFH I'm conflicted. But 65 sounds right to me.

When we're on a roll we're on a roll. I think I owe Eric a keg of beer and a few bottles of single malt whisky! And you're invited to the party Sanj!

One interesting question relates to float "control" or shall we call it "management". Could FFH invest say up to the maximum in ICI (49% in near future) and then be in a position to have HWIC be hired/appointed to invest all or a significant component of the assets? Could this be repeated in time in China?

So if the promoter is indeed the bank then the rules suggest they must IPO and reduce their stake below 74% which would enable FFH to increase theirs. I like it. It's an interesting regulation. I wonder how low ICIC needs to take their ownership?

"The insurance entities will be able to come out with flotations only after the government raises the cap on foreign stake to 49 per cent from 26 per cent. A bill in this regard was introduced in Parliament last December. Another rule stipulates that a private insurer can float an IPO only after it has been in operation for 10 years. According to Section 6AA of the Insurance Act, 1938, a promoter holding over 26 per cent in an insurance company will be required to divest in a phased manner after a period of 10 years from the date of commencement of the business or as prescribed by the central government." I'm confused. The first paragraph suggests they can IPO after they change the rule allowing more foreign ownership and after the business has been operating for 10 years. The second paragraph seems to suggest that a "promoter" with more than 26% must divest after the business has been running more than 10 years. Who is the promoter and who must divest? The bank or an investor like FFH? If the bank then the two statements are aligned. If FFH then this suggests they have to start selling if an IPO happens, not start buying. ???

Eric, you've convinced me. Somewhat. After a good pop in FFH already I've sold some (15%) and put it in ORH. Mostly common and a handful of Feb 45 calls. As with you if we get a pop due to a buyback/privatization I will put it right back into FFH. I'm doing this transaction in my registered accounts. I hate friction and I hate paying the taxman too soon. If it doesn't happen I'm perfectly content owning these ORH shares for quite some time. They are a great value regardless. I hope to end up owing you a beer. Cheers.

Al, I owe you a beer. Shortly after this discussion I reviewed my leap purchases discussed in a later post of mine in this thread. After selling some FFH common and buying more FFH leaps to increase my exposure I found I had some "spare change" left over. I reviewed GE and pulled the trigger on 45 contracts Jan 11. Paid 2.50 to 2.59 for each. Also bought 500 common. As of today the common is up 18% but the leaps are up 60%. Not bad for 10 days work... Note that I did this following both Al's and my rules. I'd be happy to own the stock at the price quoted on the expiration date (including the call price). If I had just bought the common I would not be nearly as happy.

$1,023,174.93 In 26 Days? Chuck Hughes Official Site. $10,000 Minimum. Fully Guaranteed. www.MVPAdvisory.com WOW! That ought to appeal to members of this board! Sorry Sanj. It just made me laugh. I have no problem ignoring the ads and hope that they generate some funds for the board. I might just click it a few times to "take one for the team".