biaggio

http://www.gurufocus.com/news.php?id=106292 Mark Sellers Speech To Investors – Focus On The Downside, And Let The Upside Take Care Of Itself "Sellers is likely most well known for putting almost his entire fund into Contango Oil and Gas (MCF)..."

For my own education: FCF yield=FCF/market value=~16%, with ~ 12% dividend at current price...seems very appealing -company going to provide broadband to rural areas where there is not a lot of competition. -will they be able to increase prices? Probably -will they be around in 10 years? Do they have an enduring competitive advantage? (I am thinking that it is unlikely that someone else will try to run the lines again or they will not be allowed to) -Tangible book value of ~$9.5 billion ($1.2/9.5 billion=12.6% ROC---would indicate decent business?) Why is it selling so cheap? -level of leverage? -perception by market that nobody will need there lines + switches ( I think they will be around, as the satellite, wireless companies need the competition) -recent spinoff/merger so street is not up to speed on the value present Anyone else have any other thoughts?

Thanks Packer + TariqAli Reviewed presentation at http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9Mzg1NzcyfENoaWxkSUQ9Mzg4MjQ1fFR5cGU9MQ==&t=1 -certainly makes me a lot more enthusiastic versus SEC filing to people issuing debt at http://sec.gov/Archives/edgar/data/20520/000119312510159347/d424b3.htm if you look on page 29 of above sec filing it will have total long term debt which includes defered taxes + "other liabilities" of almost $3B. I am thinking these are real future payments. (?) it is interesting the difference in tone of the "investor/shareholder presentation" vs the SEC filing

Shares outstanding:987 million x $7.94 +$11.3 billion =~$19.24 billion enterprise debt EBIT pro forma for 2009:~$1.4 billion Net income after tax:$433 million Depreciation + Amortization of $1.5 billion less estimated capital expenses of $700 million (about what it has been for last several years) Owner's earnings of $1.233 billion owner's earnings/EV=6.4% yield.-does not look cheap Am i doing something wrong. Packer were you looking at the same #'s

I started to look at sec filings on FTR, as I would love to buy a 10+% yield with a 20% Free cash return. It would appear that FTR merged with spinco. that owned a bunch of telephone lines that was spun out of Verizon. http://sec.gov/Archives/edgar/data/20520/000119312510159347/d424b3.htm (I am about half way reading this + following would be concerns/positives) Positives: FCF + appears to have decent yield Prem + Co have 4% position Concerns: i. "Our business has experienced declining access lines, switched access minutes of use, long distance revenues, federal and state subsidies and related revenues because of economic conditions, increasing competition, changing consumer behavior (such as wireless displacement of wireline use, e-mail use, instant messaging and increasing use of VOIP), technology changes and regulatory constraints...access lines declined 6% between March 31, 2009 and March 31, 2010, and declined 6% in 2009 and 7% in 2008 " -i.e. declining business? ii. "Verizon’s historical capital expenditures in connection with the Spinco business, excluding expenditures relating to Verizon’s fiber-to-the-home network (“FiOS”), have been significantly lower than our level of capital expenditures when compared on a per access line basis. Replacing or upgrading our infrastructure will require significant capital expenditures, including any expected or unexpected expenditures necessary to make replacements or upgrades to the existing infrastructure of the assets which formerly comprised the Spinco business." -i.e. may require higher capex, resulting in lower FCF iii. "We and our industry will likely remain highly regulated" iv. highly leveraged, Ratio of earnings to fixed charges 2010 2009 2008 2007 2006 2005 2004 1.77x 1.64x 1.49x 1.76x 1.87x 2.13x 1.75x For purposes of computing the ratio of earnings to fixed charges, earnings represent earnings from operations before income taxes plus interest ex

I can feel the food inflation..I bought panini buns for $0.69 per bun last week (I didn t look at the price, then too embarassed to return) Are there any investment ideas based on food inflation. Who will do well? Farmers. Wil grocers? Will they be able to pass along price increases to customers? Has anyone looked at NWF.un on TSE- I think probably close fully valued now- I thought it had a moat with most of their stores in rural areas -provider of food, general merchandise to small rural communities-often not many alternatives- Large box competitors are several hour drive away. Customers supported by various government programs.

for whatever it is worth, I have picked up a position recently + am hopeful that this cigar butt turns into a prince.

oec 2000 I picked up some SCP, at less than net cash after you initially discussed it on the board. I recently sold it(I am thinking it may have been a mistake), thinking that it was fairly valued + I did not like the management fee (2 + 20)-I was thinking that getting into SII may be better as it will get 2% of the assets + 20% of profits of SCP, as well as their mutual funds- I am having trouble with the price SII is selling at. It seems fairly priced. It is at least a good business with a great jockey but selling at almost $500 million market cap, manages ~ $5 billion i assets + has ~ $100 million assets itself. So I am thinking that a good price would be 2% of AUM ($100mill) + net assets($100 million). or $200million vs market cap of almost $500 million. I love the fact that Mr Sprott owns 102 million shares.

Thanks for sharing!

WEB does think of the macro Found this old NYT oped (I was looking for the one that said that he was buying America + found this one, you gota luv google...I had never seen this one before) http://www.nytimes.com/2009/08/19/opinion/19buffett.html OP-ED CONTRIBUTOR The Greenback Effect By WARREN E. BUFFETT Published: August 18, 2009

oec 2000, I see and agree with your points. It seems to me that as a value investor, it is hard to think of timing the gold market. Check out the following video on gold as a currency ( I previously posted last year) http://www.youtube.com/watch?v=Gk5aRIz17fk "Mark Dice tries to sell $1100 one ounce gold coin for $50; no takers."

"Sales pros are bullish on Manulife" http://www.theglobeandmail.com/globe-investor/investment-ideas/streetwise/sales-pros-are-bullish-on-manulife/article1690245/ -not a good sign for price of stock if there has been strong recommendations, yet price lags (for good reason) -technically might be ready for a bounce

Sorry Parsad, I think I read the article too fast. I tend to skim at times. I thought he was describing Francis's thesis...sometimes skipping some small key words can change the whole meaning. I posted the article thinking it was great that Mr Chou is getting some recognition out there (I noticed as well, he was also picked as a "guru" this weekend on gurufocus.com for those who read that sight.) Good for him, it seems to me that he deserves it.

Be Greedy When Others Are Fearful: Francis Chou Edition in seeking alpha at http://seekingalpha.com/article/222751-be-greedy-when-others-are-fearful-francis-chou-edition

Slightly off topic though, I found it interesting that Andrew Carnegie one of histories great capital allocators, according to the biography I read several months ago sold his empire for Gold-backed security yielding 5%(he was fearful of governments printing currency). Now I would interested in that. I don t suppose that these exist today.

for what it is worth, it is hard to buy gold as a value investor. "We" normally like to buy the present value of $1 for $0.50. It is hard to buy without knowing what the IV or present value is. It is especially hard buying something that probably does not have a lot of personal utility value. Most of us are cheap skates + only after we get enough pressure from our wives that we breakdown + maybe buy some jewelery (I can t even spell it).

Thanks for the link. Enjoyed the interview. Some interesting quotes: -2/3's in equity, 1/3 fixed income or cash, because all great investors never run out of cash. -what worries him- "is knowing that it is usually a person's last investment idea that kills him...because as you get bigger you put more into your investments and that last idea that may be bad will end up losing more than what you have made over decades.

" we believe that investment grade bonds are now close to fully priced. However, when compared to corporate bonds, U.S. treasuries are in bubble territory. In our opinion, this is the worst time to hold cash and short-term treasuries unless you believe we are headed into a 1930s style depression." It sounds like we should be fully invested. I was lucky to get into Chou Associate Fund & bond fund during downturn, thanks to Parsad and other s on this board--thanks.

Good commentary on commercial real estate. "Pulse of the Commercial Real Estate Market" at http://www.cnbc.com/id/15840232?video=1575283853&play=1 "things are terrible out there right now, but in 5 years this will be seen as a fantastic buying opportunity IF you know what you re doing" to paraphrase.

Just go to google and search for the title of article

DePuy Orthopaedics Voluntarily Recalls ASR Hip System http://finance.yahoo.com/news/DePuy-Orthopaedics-prnews-3916371134.html?x=0&.v=1 ?another recall I am thinking J& J reviewing all their operations I am surprised Mr Market is not giving us a better price. I am thinking this is a good sign. i.e. all the sellers have sold

"My guess is that their past successes produced emotional networks which caused them to feel too comfortable with some risks, and too certain in the face of new information." -good quote on Farnham's blog site from Mark Twain:“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

http://www.searsholdings.com/invest/ Letter from Mr Lampert to shareholders. Sounds pretty frustrated.

I have tried to be more focused. I have tried to keep # of holdings to less than 10. I think having 1 or 2 would be too little-I probably do not enough confidence to choose the right security-though I would be comfortable holding security like BRK, FFH, LUK. Trying to be more focused has forced me to be more selective, more critical of any particular idea. I ask myself if any particular security is better or cheaper than what I already hold before buying. Did WEB not say that we should have a very limited # of ideas during are lifetime. He talked about having a card with only so many hole punches that we can use to make selections. Don t put all your eggs in one basket vs Have less baskets, but watch baskets very closely.

Johnson & Johnson recalls contact lenses overseas http://www.usatoday.com/money/industries/health/2010-08-23-jnj-recall_N.htm Health giant Johnson & Johnson has issued its ninth recall of a consumer health product in a year, this time covering millions of 1 Day Acuvue contact lenses sold in Japan and several other countries in Asia and in Europe