Uccmal

Today provides a good example - markets down, bonds up, lifecos down. Imo, markets are telling us something about lifecos forward earnings.

Ubuy2wron, the float last a long time but is very restricted to policy holders. That and the sheer size of AUM makes watsa style investing near impossible. When things are going their way these things pump out cash as they did after demutualization. Now they look to be just treading water. I have no doubt that very long term they will be good investments but in that same time period I will have 10x the return so I take a pass. Watsa has steered clear, and even divested inherited Lifeco holdings over the years. Buffett has none. That says alot to me. Watsa talks about a run on assets from the policy holder side that forces one to liquidate at the most inopportune time, which of course works counter to his style of having cash when others dont. Dont know about Elf. Hadn't noticed it had gotten so cheap.

Lol, guess papandreou is hoping for buy-in.

I sold all pwf, slf, and mfc out of my margin accounts. Still have smallish positions in my registered accounts where I have a 20 year horizon - they still pay dividends. Lifecos have to hold liquid securities for policy holders. These liquid securites are treasury bonds. In the case of the above names the t-bonds would be in cnd and us depending on where the policy holders are. With the extreme low interest rates the bonds are often yielding less than the policy holders have been promised as payouts. With each passing Q with low interest rates the lifecos have to increase policy holder reserves. I cant speak to Gwo but slf and mfc have hedged themselves against low bond yields but this only works to a point. They dont want to overhedge due to future portfolio drag. Add to this pending retirements for baby boomers and you start to see long horizon drags on earnings. Then there is the mutual fund business that each has. Pwf Between gwo and igm is the largest mutual fund co. In Canada. Mfc and slf both have mutual fund business in the Us and Canada. Needless to say the mutual fund business is subject to market whims and with lower returns fee income is going to get squeezed by etfs etc. Bright spots: mfc and slf have a growing presence across Asia. I wouldn't hang my hat on that as it is a small piece of their business, and I expect it is difficult to dividend cash up to the holdco. levels. Finally, these businesses make Bac easy to comprehend.

It seems he drank some Watsa koolaid. Still wont touch the stock. Reduced cutting doesn't bode well for fbk.

1) not that I have noticed. I try to do it as soon as possible subject to my next answer. 2) the ones i buy generally have a spread of only a few cents around what BS formula would calculate. Try to buy when stock is cheapest as best I can. I work outwards from an analysis of the co., then if its common is cheap enough, then is the options market highly liquid, and do the options seem to reflect the underlying stock price reasonably. I have learned to stay away from leaps that dont have a liquid market. I am under no illusion that this is scientific inany way. Too many assumptions to be other than approximately right.

Lol

Recently Don Drummond, was appointed to oversee Ontarios Public service spending. Mr Drummond is a well regarded economist who spent a long time with TD bank. He was asked in an interview last week on TV Ontario, I believe how he would solve the US fiscal crisis. His answer was that the Us doesn't have a fiscal crisis they have a tax crisis. He would raise taxes enough to offset the deficit. He went on to say that it wont happen of course because the US is ungovernable! That strikes me as cutting to the chase.

Claphands, you are entirely correct about timing. Part of my procedure is to continuously move the option date out further. Right now I am slowly exiting the jan 2013s and buying the 2014s. If the stock price is stagnant next year but the situation of bac is better then I will roll over to the 2015s. There is a small fee due to time value deterioration but that can be taken as a tax loss. In every year except this one I have had to clear out losing positions to offset gains ahead of tax loss selling season. This year I have already taken most of these losses early. :P They say that most options expire worthless. My record is closer to 5 % expiring worthless. I am doing the same with wfc (have warrants as well), a tiny position in jpm, bby. Jury is out on whether I will do the same with ge or rimm. Ge looks to be near fair value right now.

I dont see the number as particularly relevant. Clean energy supply is the bottleneck. Massive growth in clean energy sources translates to cleaner water, more agriculture, etc, etc, etc. Solar energy manufacturing capacity is exploding worldwide. If we got accurate numbers that included all the subsidies received by fossil fuel industry through the government infrastructures I am guessing solar may start to become cheaper than coal soon. With coal, oil, and gas, you need roads, rigs, pipelines, etc. all paid for by government or tax protected utilities. The externalities are never included in price comparisons. Solar can be used anywhere, even up here in the great white north, to some extent. Nat. gas can fill in the gaps. Even the Saudi's are promoting solar usage.

I dont. Have never had much luck with commodity stocks. claphands, The absolute pummelling the stock has taken is what drives me on BAC. I had the warrants and sold them, at a small loss, and bought 2013 options, now the 2014s are available and have been buying them. If this beast is going to go up it will happen quickly and within two years or not at all, IMO. Total amount invested is about 4% position (1/15th of my FFH position). So, I wouldn't say it was a strong conviction by any means. They are cleaning up continuously and its going to start to hit the balance sheet very soon. A simply risk/reward analysis. Nothing mathematical except being approximately right is necessary. My 2014s go in the money at just about $11.20. What are the odds of BAC not trading at above $11 in the next 9 months? My assessment, such as it is, suggests very low. I have read the entire 10k from last year and kept up with the story.

I probably hold the record this year: Down about 25% ytd. Things are starting to turn up rapidly. Leaps on bac, ge, rimm, jpm, wfc, and virtually ever common position I held got hammered this year (ssw, rbs.pr.p). Sold several weaker positions to buy better companies dirt cheap through the whole downswing. Took enough tax losses to shield me for a year or two of gains. Extremely happy with my portfolio now. I was buying 2014 january bac 10 leaps at barey above a $1 before the Eurozone announcement for petes sake. Should bac rise back to 17 I will make 10 x my investment - 180000. Three bright spots so far: bby leaps, ffh, fmd - small canadian co. That just got taken out. Also took relatively small losses on my Lifecos when operation twist was being contemplated. Got out of them completely. 8 yr. Returns circa 22% rigth now.

Tombgrt, you bring up good points. Ffh makes up a big part of my portfolio. In this environment it makes an excellent economic hedge. That and the upside potential are the reasons I keep it. They hedge so I dont have to

Lol, a little up actually. I wasn't exactly good at this when I started out. The original shares are certainly long gone to tax loss heaven. I have kind of averaged down buying in the low 80s way back when.

Re: labour shortage. I dont buy the hogwash employers spout off about this topic. Interview the goddamn Arts major. If they appear to be capable of learning then hire them. Then spend 2 years training them, give them a reason not to leave, and your fixed for the next 30 years. Business got too conditioned to the notion of a disposable workforce. Even hiring an engineering grad takes months or years of training and apprenticeship. Manufacturers need to take a page out of the high tech playbook. If your at the cutting edge you have to assume that your potential hire is going to need months or years to get up to speed. In the old days this was more formally called an apprenticeship. The whole system got screwed up by the likes of Neutron Jack, and his ilk.

Sdev, there are probably only two or three board members here who have continuously held ffh as long as me: 14 years.

I stick to my asessment gents. If you back out the bond gains which are gone now we are back to a book value closer to where it atarted. It is not a criticism. Re: combined ratios. I saw a brief article a couple of weeks ago that compared ffhs expense ratio to others in the industry. It was among the very highest. But as followers know the ffh team has made a deliberate policy of keeping staff on and trained for a tighter market. I am okay with this. When others in the industry start to implode ffh will hit the ground running with fully trained, experienced underwriters, who will write extremely profitable long term business, worldwide.

If they didn't take any bond profits then the book value is back down around 380 today. IFRS complicates things more than ever. By marking to market unrealized gains book value just jumps around. I was not convinced they would take the bond gains. They still need liquid regulatory capital and moving from the higher interest payments of 10-30 year to 3 Month would reduce the portfolio' interest income. We know they have been putting lots of money to work, just not from bond sales. Mediocre quarter, about what I epected.

By all accounts Winston Churchill was an absolutely, insufferable prick. Without him the English anf French would all be learning German now, and the Americans would have had a 60 year cold war with Nazis.

I agree with you there biaggio. Apparently Bezos has an idea good enough to wipe them out. I would think they have enough competition in their own space to worry about.

Obviously anyone Interested has seen amazon's latest results. Not pretty. They had better hope that the mobile web browser takes off. Alot of competition in the cheaper tab space now. That's alot riding on a device that is over two years late to the game. I would short it but it appears too late.

Liberty, Just curious. Why did you take responsibility for peter_burke_ceo's post: I think you meant to say cover his short... Yes, of course. Sorry. I'm too used to 'long' terminology because I don't do shorts :)

The reviewer quoted above is one of our board members.....

Why dont you set up a spreadsheet and see it would have worked over the past year. I wouldn't bother personally - I have no trouble buying when the markets have tanked and selling into rallies. I also have no problems taking up to 20 percent hits - above that and i get jumpy. Problems I see: taxes with all this trading. One cannot report your losses due to wash rules, but you have to report your gains. Option trades are expensive - factor in 70 x 52 intrading costs. A huge amount of effort, discipline, and maintenance required. If one cannot buy into a plunging market and sell into a rally, where is one going to find the discipline to stick tightly to the outlined program.

Thanks biaggio, That earnings release didn't provide any operating earnings with the one time 'gains' taken out. It was clear as mud. I did buy some jan 2014s yesterday when they became available. Slowly rolling over my derivative positions from 2013 to 2014s.