Uccmal

Now I dont want to be seen to be promoting rumours but if I were an investor in an SAC fund I would be getting very nervous about now. This is the first time I have seen people arrested who were working at SAC while the alleged fraud was occurring. And they are pleading out for some kind of a deal. Now isn't a company resposible to supervise its workers? At the very least it speaks to a lack of internal controls - at the very least - which should net a settlement in the hundreds of millions - at the very least. Cohen's legal fees and fines could get to be enough to break him. He is only a young man with lots of time to get wiped out completely. We thought we had a mouse in the house this winter. I caught it and since then I have caught 12 more.....

On topic. Is it the big stake that FFH has in this company holding it back. I can't see how all its peers can move so much and FBK just sits there. I think part of the problem is that nearly all the shareholders are probably value types, and at this point that is holding the stock down. A catalyst is really needed to get it moving.

Thanks TNT, cfx - up 2.5% today ufs - domtar - up 2.65 - 3% cfx reports this week. Sooner or later the poor cousin - fbk - is going to catch up.

tnt, Where do you get this information?

I think there are legal issues around destroying currency if you are not the government.

I dont buy the 10% inflation argument. It is simply not reality. This implies that a basket of goods that I am buying is double the price it was 7 years ago. There is not an electronics device, or a manufactured product in existence that has doubled in price since 2004. Housing has not doubled. Heating has not doubled - if you use gas it is actually cheaper for you if you had pay increases of 2.5% a year since 2004. Even Petroleum (Crude) is within historical norms on a 3% inflation adjusted basis - at the high end of normal but still rangebound. I know that oil and gas are taken out of the basket of goods but they are indicative of the underlying bias toward inflation. Other commodities are doing their see- saw thing and hitting the high end of the cycle. Food inflation exists but there is no way my food bill has doubled in 7 years in North America. My Starbucks coffee is up perhaps 25% - alot of that due to taxes in Canada. Taxes is another thing entirely but they have certainly not doubled in 7 years.

A potential bidding war brewing, perhaps. Tembec, ABH, Domtar?

I got so irritated with my families combined phone, inet, and cell services bill, that I bought Bell Canada stock - about enough to offset the costs with the dividends, initially. Since then I have sold some BCE stock due to a nearly 40% gain in a year or so. Between capital gains and the dividends I have probably paid these services out about 3 years. Cant beat the f'ers then join them. Eternally grateful that Bell was not taken over by the Pension funds.

oec, I guess my thinking is that by investing in well run residential or commercial real estate you get the advantage of locked in mortgages or bond issues that are good for greater than 10 years which is probably a reasonable window. So, your debt gets inflated down and your asset still earns money. Better than gold, no? I personally dont buy into the doomsday scenarios so I wouldn't bother with any of this. I can earn my 20% bogey using other methods, although I have never invested in an inflationary environment so that would be a new experience. We are seeing the results of inflation in Egypt and Tunisia though.

I wonder what would happen if they tried feeding ethanol to the cancer cell. Maybe one can get all the phytochemicals and antioxidants from drinking wine with none of the cancer-promoting fructose from drinking grape juice. They would get drunk and have promiscuous sex with all of the other cells....

Walter Schloss or John Neff "we like to leave some on the table for the next guy..."

cwericb, As a two time shareholder myself I agree and disagree with your thoughts. I rode the original SFK to my biggest all time loss of capital in dollar value. Prior management was truly inept at managing the company through the cycle. The present management as we have discussed seems a little sluggish. However, if we look at the history a little bit maybe we can understand why present management is taking it easy on the marketing side. Past management over promised and under delivered. They promised they would maintain 20 M cash to see them throught the cycle, cut distributions to do it, and then blew the capital on the RBK purchase and diluted everyone in the process. With this as a back drop I might be very cautious if I were new management. New management has been in place a little over a year and with the help of the pulp prices have stabilized and strengthened the company. I dont think there is any way they will sell the company unless each of them gets some kind of a great deal that pays them huge returns on their stock options. There is not a chance in hell that an ABH or a Tembec would keep current management since they each have their own managers at each level already. I also think it matters a great deal to FFH that they get a good price on the shares of FBK. FBK would be a bird in hand while ABH would be an unknown.

What's wrong with Real Estate, specifically REITs or rental properties, such as BAM invests in? Two birds with one stone. You get the advantage of steady income and an inflation hedge via the leverage used. Obviously you want the leverage to be manageable under crash circumstances. Equally obviously you want the asset to be in a stable political region. It will make more money than gold/silver while you wait for doomsday. BTW: I looked at gold companies as investments a while back, and unless you pick the right company the stock prices have not kept up with the commodity at all. Finally, with regards to gold: If a true worst case scenario occurs then you are going to want the actual metal in hand, not a piece of paper indicating you own gold stored in a vault somewhere, or worse, a blip on an electronic screen. Just thoughts, no disclosures here.

FFHWatcher, I agree with you. The only party in this suggested triad with any interest in keeping the price low would be ABH. The low price is of no benefit to management due to the options and stock holdings, plus they may well lose their jobs in a buyout scenario. The low price is of no real benefit to FFH. ABH adding FBK is not going to be any material benefit to FFH. It is a bolt on for ABH, not a game changer. FFH benefits most if FBK goes up by 5-10x in price. Finally, as per you comments, deliberately trying to keep the price down, even if they could, is illegal. This is similar to what Buffett and Munger were accused of in the Blue Chip Stamps/Wesco investigation. Following on the "even if they could" scenario: FFH cannot even manage their own stock price let alone FBKs. The only thing FBK is guilty of is passive marketing. However, the actions of today indicate that they are ramping things up a little.

I bought a small O&G E&P company that where the CEO was buying back shares every day for the entire month. The company had been around a few years. The day after I bought about $4000 in stock they bankrupted. CEO an idiot? I will never know. Sold the shares at about 5 cents on the dollar. An addendum to Peter Lynch's rule on CEO buying shares: Sometimes a CEO may be delusional or stupid. Laidlaw, in the late 90s - dividend was 20% - apparently for a reason. Selling puts into a falling market - Fall 2008. Ended up buying back a succession of puts at pretty steep losses. This is a wonderful strategy filled with Joy and happiness.... in a rising market... god help you in a down market. 130% marginability catches up real quick. You could pretty much name some kind of legal investing learning experience and I have probably had it. I did manage to side step all of the biggest ones though, such as investing in tech in 1999, or housing in 2007. I pay alot more attention to the Buffett ideas of price is what you pay, and value is what you get... and saving my swings... and dont lose money.

Funny how we complained today and got our results so fast ;). This is a very positive development. Whether or not they decide to sell the company I would like to see the stock price going up. I figure if they decide to sell they will at a minimum have to offer around 130% of the prevailing 30 day price (1.70) as a start. Putting it in play may start a bidding war when others realize that someone is stealing it. i.e. If ABH makes a lowball offer I would think that Domtar, or Tembec may not be far behind. I wouldn't worry too much about FFH interfering. They will take the highest bid because they have to.

Its trading insanely cheap as compared to its peers especially Mercer which is arguably in a more tenuous financial position. I would back any plans to pressure management with my shares. At the minimum I want to see those debenture gone and the associated interest costs. I would also like to see the lines of credit bought done to zero as fast as possible as per Canfor. Management with alot of cash on hand scares me.

Yeah, I hope they are buying in shares right now. They certainly have the cash flow to do it, disregarding the destruction of book value this year. I am mostly trying to right (shrink) size my holdings after exercising the last of my options. As per Myth's comments I think there is a downside to the stock price right now that may be reached by whatever catalyst takes us to a hard market. Dropping tide reduces all boats kind of effect.

Nope, The best company... with a really crappy stock. Sdev, I have owned FFH in various forms for nearly 14 years. I did extremely well with the options. If I had held the common stock all this time I would have shot myself. The p/b has shrunk from 3x to ~1 over that time getting lower each year. We always seem to be waiting for some great catalyst to move the stock. Now its the hard market we are waiting for. When that comes and the stock doesn't budge out of its moribund state what excuse will everyone use.

Got it now... Hasn't made up for anywhere near the drop in the stock, mind you. This is turning into a really crappy stock to own. I remember the good old days when the company was a sinking ship and traded at >1.5 book, or two years ago when it traded at 1.25 book, or 12 years ago when it traded at 3x book.

As above?

The King's Speech was awesome. I was really skeptical when my wife dragged me to see it. Best in years.

I dont think the BV is anywhere near 401 US at the moment. They have taken a bath on some of the mark to market derivative positions. I cant recall if they had collared some of their puts with high strike call positions - they have in the past. A combination of the $10 post dividend swoon and the assumption that they are looking at some pretty big unrealized losses has the stock tanking. What's annoying about the table above is that the stock trades at an ever cheaper multiple to book.

Beerbaron, You can google the details but Einhorn was trying to get changes to the captive board of MID since 2003 because he bought shares and thought the company was not being operated in the interest of shareholders, which is wasn't. He sued and lost but kept the shares. Stronach has proven far too tough for any and all activist investors he has ever encountered - you dont go from $0.00 with no education to being a billionaire without some hard-headedness. Einhorn should have known better, but experience is a great teacher I guess. I am still not getting an answer as to what Einhorn wrote about FFh.

BSB, What exactly did he write about FFH in his book. If he gives you some detail then why dont you elaborate. Otherwise, why would anyone here bother to comment. Wasn't it Einhorn who tried taking on Frank Stronach at MI Developments and lost?