Uccmal

I have been looking at 2014s Jan calls on AIG. They look to be 20-50% undervalued. I use BS as a guideline. 715 days, volatility 40 % and thats being conservative. Risk Free - 4%. Have a look. Thoughts? I am still analyzing AIG but have initiated a tiny call position.

This one is interesting. its going to take alot of work to comprehend, but is probably worth it.

That's entirely reasonable. Many on this board with small or larger resources have outperformed all mutual funds and all indexes over a few years. I learn from most everyone, even the most aggravating posters. It doesn't take very long to move from small to larger once you get a process that works for you.

Go to for 2008 classroom session. More up-to-date http://www.bengrahaminvesting.ca/Resources/videos.htm

The influence of WEB on this company is obvious.

In general, or with regards to BAC, perhaps. I have struggled with this one since I first bought warrants 1.5 years ago, thereabouts. Most of my position is in jan2013 and 2014 leaps now. BAC is trading, for now, off of its capital improvements. The first leg up for the stock will be the easiest and quickest as institutions decide they had better not miss out on this one. I figure TB within a month or two, and 15 around the end of the year. After that it will trade off earnings, good or bad. The S&P is up on tech and financials. Not much else has rallied so far. So there has been extensive sector rotation, so far. I hope your rationale is better than that.... i.e if you followed Prem into Dell, Rimm, JNJ, fbk, etc., you may not be happy right now. I know twacowfca has done their research as I did on this. I decided it was too early. Safer in this case to let FFH buy for me.

I think we are starting to see the end of the secular commodity cycle, which should gradually shift toward a secular bull market in equities. This should be very beneficial to BAC :D Actually, I am serious about the cycle shift. Love the chart. Now, what basket of goods would you use to normalize it. Seashells, and papyrus... or IPads and HDTV.... or perhaps something more middleagey such as whale oil lamps, and guillotines... or perhaps something roman such as togas, and sacrificial lambs blood.

Up 40%. Between Ffh directly, and via KW they must be sitting on 200m in gains, at least.

Rabbitisrich, check BAC results. With those capital ratios I do not care about macro. Yes indeed. I added some more 2014 $10 leaps yesterday. This position will be my all time gain if it goes back to where Fairholme bought at 15. Nothing wrong with averaging down when it works out although buying yesterday more resembled averaging up, perhaps. Around 20 %ytd which brings my Jan 2011 to today losses into the 23-25% range.

I expect we are going to see Rim shift much more to an enterprise model, with less emphasis on handsets going foward. It already looks as though they are going to release vastly fewer choices with BB10. The car in Vegas was an example of where they are headed. QNX/BB10 is already in use in a number of applications requiring robust software, less prone to crashing. Not an investor in Rimm right now, except on a look through basis.

Biaggio, that seems to be what's happening. People are withdrawing money, causing the fund to have to sell at a loss. This is a big problem for mutual funds and why individual investors or groups like FFH and BRK can so handily beat them.

Dont waste time on it. I have never, ever seen Prem answer this question about any company they have invested in. He always has a stock answer ready. Hwic has average returns on money invested in common stock of 20% over 25 years. There is only a handful of investors on this baord who have managed that in any time period. Leave them to it. Not a single person on this board knows what Rimm has cooking and Prem isn't as naive as you all seem to think.

I don't know Al, when you back out cash from Apple isn't trading at the multiple of a growth stock. You talk a lot about growth, but you don't really seem to mention the company's price relative to earnings. No argument on that point Tariq. What if earnings get crushed going forward due to any number of factors that eventually slow down large companies: 1) bureaucratic infighting 2) supplier revolts 3) an innovation gap 4) a botch up in marketing 5) overconfidence/arrogance 6) competition coming out of nowhere in an area Apple has misjudged. - exactly as happened to MSFT, RIM, yahoo, dell, Sun, netscape, aol, Ibm, nokia, sony, atari, commodore 7) gov't interference - eventually competitors and gov'ts want their piece of flesh as well - this is a big one 8) the big one for me is the consumer fickleness aspect. Sometimes people change products simply because one has lost its cool aspect - it is very difficult, if not impossible to keep this going. This is the advantage that exxon has over apple - opinion is not real relevant in selling oil. 9) the law of big numbers - stock prices go up because earnings are rising - if earnings stall, or worse, drop, then watch out below Time will tell with this. I just happen to think that a downtrend is more likely than any upside. And certainly, for those of us interested in doubling our money in 3 or 4 years Apple stock isn't going to cut it. Nuff said. Others disagree and thats fine.

I thought he was sounding alot better and more relaxed. Must have had some coaching. I keep waiting for him to speak irish when he opens his mouth..... very disconcerting, I must say.

Try an Apple TV if you want a change of pace -- I have to reboot it (unplug the power) time and again to fix it when it stops responding. Thats priceless. You both gave me good laugh. :P Good to know about the Ipad though Oldye. I am an addict as well. Not to say I couldn't be properly detoxed with a cheaper better device, say one that folded up, or you could stuff in your pocket and unravel as needed.

txlaw, I dont know how much FFH you hold? Anyway, I just worked out my lookthrough holdings in rimm via ffh. 0.6 shares of rimm for each FFH share subject to several roundings. Thats probably enough for me for now. I try not to duplicate FFH holdins in my general portfolio, unless it is extraordinarily compelling. FFH makes up around 40% of my holdings right now.

Valueinv, All of your projections are product projections. In reality the growth you are talking about has never happened before. Consumers, suppliers, and business people are fickle. I could go on, and on. All of your assumptions presuppose that Apple will out market, out innovate, and somehow thwart basic consumer fickleness, Q after Q, year, after year. I think they stumble sometime later is year. The thread will still be here. I will check back then.

How did you get the 500-600b number? The largest market cap of all time for a publicly listed company was 600 b as I said above. I dont see how Apple can exceed that number. In fact I will go as far as too suggest that it is very close to a peak, and that is what Mr. Market is telling us. As others have mentioned competition will come on fiercer than ever. It is simply the way of things. Revenues will get squeezed from here on out, and the effect will be a stable stock price, if your lucky, such as WMT, or a drop in price such as GE. One Q this year they will start to report a squeeze in their profit margins and poof, there goes the stock price.

Right, and AAPL's biggest competitive advantage died last year. I think the 10 year returns for AAPL shareholders from here will be bad, but the two or three year returns will be very good. Multiples are irrelevant if we're thinking truly long term. This current amazingly popular product line they have will have to eventually be replaced just to keep earnings and revenue steady, for the multiples to mean anything, and that will be an almost impossible task. RIMM circa 2005 but with a better balance sheet. I have been hearing that for the last 10 years (and buying). If there is one lesson on Apple, it's that it is hard to predict even in the short term, much less in the long term. Look at all the analyst predictions from just 6 months ago: http://daringfireball.net/ All the theories like law of large numbers, loss of visionary founder, competition eroding margins, disruptive models, etc have gotten it wrong so far. But they're gonna to be right in the next 10 years? So what would you say is the upside on the stock? GE peaked in late 1999 thereabouts at 600 b and was exceedingly overvalued. I will give you an ultimate upside somewhere between 500-600 b That's around a 25-30% upside from today. Not much of an investment return at this point. With present cash they could retire 25% of the float. So you could push reasonably predictable return up to maybe 40% - eliminating the cash load via buybacks wont do much for the share price since it's few times book at least right now. I am a sorry but I just cant see it.

huh? You'd classify Apple as a momentum stock? Dcg, Care to put an upside on the stock. 448 billion cap. right now, if I read that right. Worth more than XOM? Xom operates in an oligopoly. AAPL is in a rudely competitive market. I am guessing people are waiting for the cash payout.

Well, they can at least be thankful that Android has bigger market share. But, they are now a walking target like MSFT was for every competitor and litigator in existence. Sometimes wish I could bring myself to invest in momo stocks.

I just picked up a pile more bac jan.2013 10 strike calls for..... 0.50

I dont see an issue at all with Watsa and how he chooses to spend his time. I would suggest he already has a good handle on Rim's business from a historical perspective. Now, he gets to participate from a go forward perspective. Since he is a director we will now have complete access to FFH insider filings which we didn't get before - we only got the US trades - I have always maintained that HWIC was buying Rim in Canada as well. On a go forward basis we should be able to gauge Rim's prospects from the insider buys now. FFH and Watsa are no slouches on the tech front - they have people who do this as a specialty and will hire outside help as needed. Watsa and his team own shares in companies worldwide and he travels a fair bit so he undoubtably can get a pretty good view of BB worldwide usage and enthusiasm. On the negative side, there are past investments that have blown to pieces rather rapidly such as Canwest Global, and others that have degenerated slowly such as fbk or torstar. So, take his involvement with a grain of salt, and focus on more of what he does over time. I am unsure how to gauge Lazaridis's proposed buy. He is very bright but may be prone to sentimentality, or 50 million may just be interest and dividends from other businesses. On the fence - waiting - no position any longer.

bmichaud, I honestly think that circa 2005 the downside for FFH was zero. A repeat of 911 would have toasted them. As it was they had to raise equity at below book, two years in a row and sell off substantial parts of their healthiest business. Lsongleaf held 25% of Ffh, BUT it never made up 25% of the longleaf portfolio. The MOS for me was in the Leaps As Eric mentions. 10-15% of my portfolio would have gone to zero in a worst case. The downside for Bac is definitely not zero. The retail banking arm in itself must be worth at least $7 in a fire sale.

No shit... I think I'll save the 500 bucks and compound it at 20%.