Uccmal

Alert, curious, what market did you sell your puts on?

A little more balanced perspective: http://www.bloomberg.com/news/2011-06-02/sino-forest-plunges-as-short-seller-targets-stock-that-paulson-s-fund-owns.html Your going to have to convince me that Paulson, who holds hundreds of millions of this stock, and Davis, didn't do their background research. If this is found fraudulent alot of careers are going to end.

As for Carson Block and his Muddy Waters organization. Does it not seem a little sleazy to put out a research report on a company you hold to drive down the stock price? My question regarding him is this: Did he sell his short positions today or is he still in it? If he has stayed in it he has conviction and is giving management time to prove him wrong. If he just drove it down to make a quick buck then he is in for a SAC type future with lawsuits and investigations wiithout the protection and capital base of SAC.

Yea, Indirect, I held Sino up to around 5 years ago. I sold after I tripled my money but well before the stock every reached $10. Remember Df Canuck who used to recommend this every couple of months. I never thought it was fraudulent and management seemed honest enough. That being said, it is difficult to value and verify. They get independent auditors reports on their forest reserves the same as any one else but what exactly is the value of a Eucalyptus forest in China. They have an enormous growth story but it is only as good as its auditors. This is where dividends come in. They should install at least a 2% quarterly dividend to return money to shareholders. It would be a show of good faith and would help separate them from the real frauds. On the other hand maybe they are and always have been a fraud. But then Ernst and Young is going to be going the way of Arthur Anderson. Qualifier: I have not followed this company since it got overvalued. I may start watching again depending how management handles this situation. Finally, management should cobble together a response with the backing of their auditor within a couple of hours regardless of the time diffferential.

That article makes me think of the people who are mining neodynium in China, or picking coffee beans in South America. Their lot is better? Its way too reductionist and focussed on one small segment of the population. I agree that human ingenuity has value but I also think that there are curveballs that will get thrown. Sometimes we know they are coming as in Peak oil, or global climate change, and sometimes we dont, such as the Japanese Earthquake, Hiroshima, or Nagasaki. The real presence of human ingenuity occurs when we detect and deal with coming problems such as Y2K. He is also off base in total costs for oil usage. There are so many externalities built into oil production and subsidized by society at large that it is impossible to say with any accuracy that oil is cheaper now than alternatives. The Turkey analogy is a good one.

My own card story - this past year. I have only ever had one card, TD Visa, that I use regulary and payoff monthly. Then last summer we bought a pile of furniture at Sears. To get various discounts, 3 months interest free, and Sears points, I got a Sears Card. We made our purchases. We made a second tranche of purchases and I paid off the first and saved a bucket of money on the second purchase. All fine and dandy, and then life got busy, and I missed one of the Sears bills, and ended up paying 29%/12 on the outstanding, which essentially negated all of the savings I had to that point. So that's the end of the Sears Card for me. Too much complexity to keep track of more than one card. The Visa with no discounts will do just fine.

oec2000 said "In fact, we should make mutual fund companies and financial advisers give warnings to the effect that studies show that most active managers underperform their benchmarks and that unless they (the mutual fund companies, etc) can provide proof of long term outperformance, clients should assume that they too, will underperform. " That would sure kill and industry... Never mind the damage it would do to my shares of SLF, MFC, PWF, WFC, and BAC IMHO most people dont really care. They sock away money in RRSPs, or the US equivalent and hope for the best. They spend all of 1 hour a year working on it. People do the same thing when buying cars. How else would you explain GM or Chrysler selling a single vehicle. Maybe Chrylsers should come with a warning too: "This car is badly made and will cost you a fortune in time and money to keep up - buy a Hyundai instead." RE: Credit Card rates - part of the reason for the extortion rates is the high level of default. Look at the income statement of any of the major banks. 20% of their income +/- comes from credit cards - the default rate can run as high as 5%. Does anyone actually think that warning people about credit card rates will slow down the usage? It appears that if the economy were perfectly efficient and run by value investors a large portion of the population would be out of work.

Any thoughts on the fact that they are moving the debt to the holding company level instead of at the subs? Frees the subs up to write more business when the time is right.

Well, only if, if, the pulp prices dont tank. If the pulp prices tank this is toast. I sold 1/3 of my position down today. Didn't lose anything - lower gains than I would have had yesterday but c'est la vie.

I simply cant afford the wait on this one not when there are stocks like SSW pay me 4% to sit around.

If you back out the assets tied up in the RBK mills which essentially earn nothing then the stock is trading at above its book value. ~170 m SE/130 million shares = 1.30 per share adjusted book value. Waiting 18 months for the RBK mills to realize value is a long ways off. What it the pulp markets, adjust downward in the meantime. Then the cash flow from St. Felicien gets compressed and the stock tanks. If the value was really there then where are the take over proposals. Were putting alot of stock in the pulp price staying up.

Hi Leftcoast, I think you just defined a bubble. Most people knew that tech stocks and housing were getting ridiculously priced in their respective turns. Crowd psychology starts to operate and people figure that things are expensive but they will keep going up so you better get in now or you will miss out. It is not a rational process by any means but then people aren't rational.

I still hold roughly a 20% position in FFH common. At this time it is acting as a pretty good, anecdotally, market hedge. I have noticed that it has gone up during the little correction we have had in recent weeks. I dont think that FFH will follow all boats in either a market crash or a deflation this time around. Enough people are aware of the style of FFH now that a market crash and or sustained deflation should actually bouy the company. So, wouldn't FFH common without all the tax implications make a better inflation hedge than 7.75% pre-tax interest? In a down market any of us can easily beat the 5% after tax bogey just by buying depressed dividend payers.

This is probably for another thread but I have a question for the board members who were there in 2003-2006. Without the hedge fund attack would FFHs share price have reached the lows it did? Would they have had to raise capital at below book from Markel and Longleaf? I am thinking that the severe lows at the beginning of 03 would not have been reached but that FFH would still have had to raise capital at disdadvantageous rates. Part of the low share price was justifiable and part was not. What do others think? A number of us did very well from the leaps. I wonder if we would have done as well without the short attacks. My guess is that it would have been good but perhaps not as lucrative as it turned out. However, the real world was at play and we identified and stuck with our thesis so the gains are legitimate, but maybe, just maybe, I should mail Daniel Loeb a couple of hundred dollars to help out with his defense. Or maybe not!

2nd chapter of "The Warren Buffett's Next Door". The fellow profiled uses convered calls, and sells naked puts. I have had some success with Leaps at pivotal times. I have never used any formulas as per Packer because they dont make any sense.

Really have no idea - maybe pulp is a supply/demand thing. IMO the commodity bubble if that is what is happening is fueled mostly by QE. It is definitely commodity specific - energy has not really participated for example - oil still hasn't reached prior highs and gas has done nothing. Shipping is rock bottom. Setting that aside for now. FBK and the others that are still alive in the industry I see as survivors of a long term consolidation. The new plant in Tasmania is going to cost in order of 2 B and equal somewhat more capacity than fbk total. So fbk plants be at least say $6.00 per share replacement. The pulp supply is somewhat controlled by barriers to entry in terms of lag time, environmental regs, etc. So that leaves demand and who knows? I would like to see FBK go debt free and institute a dividend before they do anything stupid with the cash flow. I would also like to see them get on with the energy facilities PDQ before they lose their grant. I am holding but nervous, like yourself Carboard.

Ever since the emergency refinance days they have kept those maturities way out. The short term cost of issuance of the new notes and bringing in the old notes will seem insignificant when they loan out money to the likes of H&R Reit at extortion rates sometime in the future, or have the capital available to deploy in a severe hard market, when others cant borrow a shoelace.

FT, unfortunate but you are probably right. Lets just hope that the new/old leadership tries to be more inclusive rather than exclusive, going forward. I can guarantee one thing. The provincial liberals in Ontario basically have the fall election sewn up now. McGuinty couldn't have looked more thrilled in a press conference. Good/or bad, the PQ will win as well.

Southern Yankee, You could apply the same rationale to anything the government spends money on. Why should my tax dollars subsidize you when you have a heart attack because you drank one too many cokes, or smoke, but it does. Fair is fair... Either subsidize both or neither. As per Myth, doing neither is the libertarian view. Are well educated and looked after children beneficial to society, or is spending money subsidizing nursing homes more worthwhile? We spend substantially more on health care in Canada than on childcare and education. The long (rational) view says take money from health care and apply it to child care and education.

The final really bothersome thing for me is Harper's willingness to stop parliament twice due to issues being on the table that he wanted to block. In a normal situation like this you would work with your opponents through committees, etc. to resolve things. Harper prorogues parliament instead which is an avoidance tactic, and a bullying tactic all at the same time. I truly think that the only reason he got elected the last two times is due to disarray in the liberal party. I also think that his personality is going to be his undoing now that he has a majority. The undoing is going to come from within, not without, and he refuses to recognize the skills and abilites of his own party. Last time around we ended up with the Bloc. Who knows what the outcome this time will be. I am not anti-conservative, but I have noted that neo-cons such as Bush, Reagan, and Mulrooney, and perhaps Harper are terribly tough on national budgets. Bizarre, but true.

oec2000, Your comments are fair. This is not the best forum for addressing it but I will answer what I see. Vision: The Harper government has lacked vision. Perhaps this is not fair when compared to the predecessor governments, as you note. They have served as reasonable caretakers but little more. They have no national vision for science, business, energy, or much of anything else that I can recall hearing. Balance the budget in 5 years maybe? Much of what they are about is dismantling things. Caretakers, nothing more. Their campaign presented nothing tangible that will improve our lives. No vision for childcare, no vision to make Canada a great country in education, no vision for anything. Bullying: Harper allows only a handful of his MPs to say anything public. They stay on message or else. Even his 4-5 questions per day is a form of bullying of the press. Dale Goldhawk was lamenting how much of a hassle it is to ask questions of MPs who are afraid to say anything at all. this experience is commonly related by the media. Woman's rights: I wish my wife were home to type this. First there is his treatment of women in his own party: Rona Ambrose, Helena Geurgis, Bev Oda et al. Why do his male MPs never get strung out to dry like the women? Then there is the whole stance on Universal daycare, childcare etc. They have been reversing years of progress to help women into the workforce. My wife tells me that specifically the Harper government has attacked programs aimed at improving the lot of women. The guy believes that women belong in the home. I believe that he personally detests women. Niceness is not a requirement to lead and maybe a liability but vision, and civility probably are.

XOM, maybe Suncor - XOM pays out more - SU has more assets. dont hold either and wouldn't buy either since 5 years is not a requirement and neither are deep value.

Im not leaving anything to "the experts" as they are expert in nothing - thats why they are in politics. Most cant do anything else/. LOL - the opposite holds true - many normal intelligent people dont do politics very well....

Ah well, Life goes on.... Makes diddly squat difference to me personally who won - I will pay enough taxes for a few Canadians regardless. Unless Harper can learn to work with others, including those in his own party this is going to end very badly for the conservatives. He's got his chance to prove 60% of us wrong now. I liked Ignatieff's resignation comments on the state of the Liberal Party "the surest way to get the liberals back in the game is to have 4 years of Conservative majority, with four years of NDP opposition" - worked in 1993 when the Cretin deleted out the real conservatives. Some strange anomalies: In one riding in PQ the NDP candidate did not campaign, and in fact was in Vegas a week ago for a weeks vacation. She won by 6000 votes. In my own riding the conservative candidate was an unknown, did not campaign, and beat an incumbent liberal who is honest, works hard, and campaigned vigorously.

Do you beat them if they say otherwise?