biaggio

Have not looked at it very closely, as I always thought it was priced fairly to expensive. Probably a lot more growth than LLY, MRK, PFE, etc. Also I am not as familiar with its products as I am the other cos. JNJ if you can get at a bargain price would be like a health ETF or mutual fund but probably better (great business. Diversified products in different areas of health care...Great write above about JNJ)

agree there are no guarantees. Have looked at MRK + PFE...LLY seems cheaper + higher yield (maybe for a good reason). They are all going to be challenged with replacing products losing patent protection. I like MRK over PFE. Have owned them all in past. Own none at the moment. But have put in low ball bid for LLY

agree probably not much growth. My valuation was based on 7% growth x 5 years only (est growth rate of health spending) + I feel that pharmaceuticals have been able raise their prices to keep up with inflation, so I put a terminal growth rate of 2% To me appears undervalued. Get ~6% dividend while you wait.

I have been looking at LLY almost 6% yield! I think it is worth $60. I just reviewed their latest 10K. I have attached my notes.

Health care has got to be due for a rebound. Has been beaten down for the last several years. If we consider the demographics, it has to be one of the most important industries going forward. the problem is we all want to be healthy, but who is going to pay the price? Pharma's have been some of the best businesses around in the past. I have been in the HMO's thru UNH (you need to have a system with checks + balances,,,the HMO's have already built out the infrastructure + relationships...the gov't needs them. I have been worried about all the blockbuster products losing their patents so I have been in Mylan labs. $135 billion /year of drugs losing patent protection over the next 5 years according to IMS I have also owned FRX selling at $26...they will have $3.50 in FCF the next 2 years + $13 per share in cash, buying back their shares. They are losing patents on their 2 largest products + future will depend on their pipeline which appears promising. I like the fact that they are a $8 billion company with $4 BILLION IN CASH, so they dont need multple billion dollar products to restock pipeline (as opposed to larger pharma's)

"Yes they can pay their debt trough inflation, it's the oldest trick in the world" I have heard that the gov't also fudges their CPI. ie underestimate CPI. This would accelerate the repayment/reflation process. How do folks here think of this? I feel that their some truth in it. My personal expenses seem to be increasing faster than stated inflation rate.

http://www.gurufocus.com/news.php?id=95914 interview with Bill Ackman

TXLAW reviewed old posts. I liked: "I think Berkowitz is looking at C and thinking a few things: 1.) If C earns a 1% ROA going forward, we are talking about $19 billion of net income annually (on current $1.9 trillion b/s), or, ~$0.65 per share...so at today's $3.30 per share you are paying 5x normalized earnings. 2.) The company is overcapitalized and could write down $20 billion tomorrow and you'd still be an owner at below tangible book. 3.) The company is over reserved with reserves to NPA's of 112%. 4.) If the government pushes the banking industry to create more plain vanilla products, the biggest banks will be the biggest beneficiaries as economies of scale will be more important than they've ever been. 5.) The question that I would have for Berkowitz is how much more does he think C will have to shrink the balance sheet? Any thoughts?" by A hamilton and your post "Reasons for why Berkowitz and now HWIC are in Citi: -We've passed the inflection point for the pig in the python losses -Gov't ownership acted as quasi-receivership where the government would have closely examined Citi's balance sheet and off balance sheet arrangements; the government would probably not be selling if they did not think Citi could survive more economic turmoil -Citi is still too big too fail, but the capital markets are in good enough shape that Citi probably could get private capital (or sovereign capital) to help with any further issues they might have, if any -Citi is overcapitalized and Citi Holdings dispositions and runoff will help serve as a buffer to keep Citi Corp overcapitalized in case of more turmoil, both in the US and abroad -Low CRE exposure compared to the other big US banks -New loans are the best loans as we are at the bottom of the credit cycle -Long term, Citi is in a good position as it is one of the three big network banks (see Economist special report on banking in emerging markets); you can't replicate their network, their payment systems are vital to multinationals and governments, and they will probably continue to win more advisory business from foreign firms -Citi continues to dispose of non-core businesses and will not really be affected by the push to break up the banks, as that is already an ongoing process at Citi Given all of the above plus the price at which it is trading, it will likely be a great investment over time. Obviously, I own C." Would it appear that C would be a good buy at <$3.25 (50% x $0.65 x 10), assuming conservative/normal earning power of $0.65 & 10 % discount rate

good point Ericopoly

"I would tend to think that Jim Pattison or John Irving might qualify for as CEO's with the largest equity stake in very large companies...." They must be looking at publicly traded companies only

http://www.theglobeandmail.com/report-on-business/managing/executive-compensation-2009/which-ceos-own-the-most-equity-in-their-companies/article1581565/

"On the whole inflation/deflation thing, it is a bit perplexing. Every economic sign (gold aside), especially excess capacity, yields, and consumer debt, points to deflation to me. However, i think the response (in a multitude of ways) thus far has been, and will continue to be, that deflation won't be allowed. This policy of avoidance of deflation at all costs we seem to be in suggests that we will have quite an inflationary period in the future, as it is very likely to be overdone." I think we may some deflation at first, then a lot of inflation. It is not in the government's best interest to pay back all their debt with dollars worth more than they are today. I think we may have some deflation (decreased prices of real assets) initially,then once economy starts to grow + gain momentum we will have a lot of inflation.

Calonego, ":I'd add that as someone that has done this before, you should be inclined to just buy the common. Selling puts is really scary and risky" I am so happy to read this. I have thought of using options in past. It gives me a headache. I think my poor brain is too small. I feel much more comfortable purchasing common like a business owner. Agree for most best to keep things simple.

I am impressed by the various well respected investors buying Citi. I don t understand why the government would be selling if it is a good investment. But then again governments have not been known to be great with money. Can gov t afford to be seen as enriching the "rich" ie selling them Citi cheaply to see stock soar. By now the government officials should know what is inside Citi's "blackbox" of loan/asset portfolio. They have to have a better idea what the security is worth than the outside investors.

Prem is in top 3 in Canada as well.

Thanks Calonego,I have enjoyed what I have read so far: "My strategy is to identify a relatively small number of really exceptional companies that I think can increase more than five-fold in the next five years (5 in 5’s). At the same time, I keep some cash available for trading as interesting opportunities always seem to show up and create low risk short term opportunities. Here are some links to key strategy concepts: Why Invest In Smaller Companies? What Does Cheap Really Mean? Gearing Let's Talk Risks... What To Look For In Small Company Management When To Sell?" Most here would agree with what is written here. The only thing I have not heard before is the 5 in 5 strategy...I would love to be able to do this!

Thanks UCCMAL. Probably best to stay in non commodity type of investments within our circle of competence.

interesting article by Avner Mandleman noted above. I can t see how government can manipulate energy prices down. Other than promoting technology that decreases consumption. Everything I see makes be think that we re in for higher prices in US dollars (government printing $$$ to pay for bailouts, developing countries using more energy, North American's relunctant to give up SUV's). This is my conventional wisdom which is probably wrong, so I appreciate the thoughts of UCCMAL, and those posed in article.

issue making onto Canadian Papers http://www.theglobeandmail.com/globe-investor/budding-buffett-feels-a-backlash/article1579497/

http://www2.goldmansachs.com/our-firm/investors/creditor-information/preferred-stock.html for those intersted

what's the ticker symbol for class D floater?

Lawyer Story This is the best lawyer story of the year, decade, and probably the century. A Charlotte, NC, lawyer purchased a box of very rare and expensive cigars, then insured them against fire among other things. Within a month having smoked his entire stockpile of these great cigars and without yet having made even his first premium payment on the policy, the lawyer filed claim against the insurance company. In his claim, the lawyer stated the cigars were lost "in a series of small fires." The insurance company refused to pay, citing the obvious reason: that the man had consumed the cigars in the normal fashion. The lawyer sued....and won! In delivering the ruling the judge agreed with the insurance company that the claim was frivolous. The Judge stated nevertheless, that the lawyer held a policy from the company in which it had warranted that the cigars were insurable and also guaranteed that it would insure them against fire, without defining what is considered to be unacceptable fire," and was obligated to pay the claim. Rather than endure lengthy and costly appeal process, the insurance company accepted the ruling and paid $15,000.00 to the lawyer for his loss of the rare cigars lost in the "fires." NOW FOR THE BEST PART... After the lawyer cashed the check, the insurance company had him arrested on 24 counts of ARSON!!!! With his own insurance claim and testimony from the previous case being used against him, the lawyer was convicted of intentionally burning his insured property and was sentenced to 24 months in jail and a $24,000.00 fine. This is a true story and was the 1st place winner in the recent Criminal Lawyers Award Contest. ONLY IN AMERICA

Cardboard, "I typically hold a majority of small illiquid companies" My first thought was, is that not the opposite of what a lot of investors do in stressful times ie look for large liquid names. After thinking about it, it may be a good strategy as I noticed the 2 small illiquid holdings I have hardly move in recent panic selling of May 6. Would be an even better strategy IMHO if they paid a dividend (are there any such animals out there?)

I was not fast enough on last pullback Trying to do homework, put in some orders with low ball offers hoping to take advantage of Mr Mrket. I am currently 40% cash (unfortuneately have been at this level for much of the last year. I find myself too conservative. Too much thumbsucking) I would like to: add to my nat gas holding pey.un on TSE...low cost operator with ~$25 of reserves, yielding 10+%, insiders buying -hoping to purchase <$12.50 add PD.un -I am really underwater on this one- I think buying at <$5 would be a good deal. I feel that they should have owner's earnings of ~ $1 this year (my guess is probably not as good as others) What do others thinK. Also, for those perhaps more involved with the industry, would the following quote from Sharperdingaan apply to PD.UN: “You really cannot appreciate how valuable a small footprint, heavy duty horizontal directional drill rig is, untill you have some idea as to what would be involved - & how long it would take if you didn't have that rig. Or how much of a bastard it is, to get heavy equipment into certain areas during 'mud season.” SharperDingaan ...would this be an enduring competitve advantage (a small moat in a cyclical industry?-if there is such a thing) I would like to add to FFH at <$360 If canadian dollar goes thru par I would like to purchase L at <$33/share (60% of IV of $55) add to FRX <$26 (free cash flow >$3., almost $13 of cash net of debt on balance sheet, with some potentially promising new products which will make up for severl products losing patent protection in 2011. add to FUR <$10 purchase starting position in JOE (have not studied enough to come up with purchase target) but looks cheap at $5000 /acre of Florida beach front

"...There are only 3 ways to increase UW gains (1) Higher Premiums (2) Lower expenses (3) Higher Income." Sharper, if FFH is taking higher reserves, would that be in the expenses ie would their UW performance be poor because their expenses are higher because they are taking more conservative reserves. Sorry, may be a fundamental question that I should know the answer to, but I am still learning about insurance companies. Also as noted above, is FFH expenses not higher because they have reduced business without decreasing their head count (they have not cut overhead relative to the reduced revenue---choosing not to write unprofitable business)