Uccmal

I have never understood this business. Why would anyone who is purportedly so smart (Byrne) try and make a go of it in a business that is so complex and competitive. The lessons learned at Buffett's knee seemed to have gone right past him. I know I am going to get flamed for this but so be it. It is a lousy, capital intensive, business concept, competing against gargantuan competitors, who generate more cash flow, in a few hours, then this thing generates in a year. If you want to define value trap then this would be it. No matter how you try to value it you will come up with zero. On a net asset basis what would it be worth if it was wound up? On a discounted cash flow basis what would it be worth? Where is the margin of safety? Where is the dividend? Where is the years of profitable growth? (I forget - just around the corner) I vote for sunset....

Smallcap, What I see is quite different and BRK has been buying insurance recently. Didn't he just invest 1.3 billion in Swiss Re? I think Brk also faces two other issues that prevent Buffett from doing anything: 1) move the needle issues - a small deal like FMR is not going to add much to BRK 2) competition concerns of two types - buying externally will put them into competition with themselves, and anti-comp legislation likely prohibits Buffett from alot of purchases in insurance these days. I dont have any comment about SNS aside from Bigliari has no experience in the business and I do think that is critical in insurance unlike simpler businesses. FFH has vast experience in insurance and buying bad insurers so they certainly know how to do it now, as does Buffett. FFH has somewhere around 7 B in float, maybe more now. It is published in the AR. There is at least 20 B in investable capital.

I think Daphne's got most board members beat in terms of long term. RE: drop in price. Usually I dread the conference call after which the share price plunges, not before, so this is a little strange. But volume is very low. Delisting on NY has mostly gotten rid of volatility. I wonder at what price automatic buybacks start to kick in?

That is true and well thought out twacowfca. It will be a straight dollar per dollar conversion. Perhaps what you lose on the dividend compounding you gain on the tax deferral? You get to keep the money invested rather than paying tax on it and paying tax on the compunded amount as well.

Looking at the Canfor results I get the impression that this is as good as it gets for Canfor. Barring higher pulp prices for a long duration the cash flow has no where to go but sideways. If they put their money into an acquisition it is unlikely to be accretive in any way since they are a low cost producer. Geographic distances make it unlikely that any head office synergies could be realized. When they convert to a corp. the dividend will be reduced by 30% or so, which I am guessing is priced into the stock price. I am a holder right now of a slowly dwindling position in CFX. I actually hold the parent - cfp - as well since lumber prices really have no where to go but up and they have the cash flow from cfx.un to tide them over.

Its in there claphands... If BAC raises the dividend above 0.01 (the present dividend) per Q it starts reducing the ACB of the warrants. I think Damienolive means that his table does have the feature. Anyways, a great layout Damien. Thanks.

fbk - Up 6% - sell out now! whoaa. calm down, calm down.... :P

The concerns with fbk and other Graham style return to value scenarios are easily addressed by the dirty word diversification. One has to make fbk a big enough part of their portfolio such that if/when it moves, it moves the needle. Simultaneously, one, or should I say, I need to make it small enough that I dont obsess over it constantly. I too sat and watched fbk/sfk rise to $2.00. I sold some on the way up but didn't want to sell out before I hit my target, which is somewhere nearer to $3.50 back then. I would do exactly what Sharper suggests as the stock rises selling a few hundred to a thousand shares at various points below my target.

This poll tells you only thing with any degree of accuracy, assuming of course that everyone is honest. It tells you that the majority who have voted beat the S&P 500 in the last three years. There is an inherent bias to report ones results when they are outsize rather than undersize. The only way to determine the actual perfomance of board members (assuming honesty again) would be to force all members in Sanjeev's list to report their results. All that being said there is no reason that this group shouldn't wildly outperform the markets. Its just difficult to actually prove. This group is also self selected investors. If one didn't exceed the index over 3 years or 5 or 10 then one would likely give up. One would also have lost the money they need to invest which is a further encumbrance. 8nhjmuvv 7uv 7um

Never mind excess cash. I am still puzzling over the example provided in the document on Mr. Rees style. What I am getting is that he determines intrinsic value to be between $10 and 16 for the example company. He pays 6.50 or so. So, he determines the value he pays by taking the tangible book, adding projected normalized earnings for 10 years, and then he turns around and pays tangible book for the stock. Seems a little perverse to me. I am missing something or the example is really poor. |Interesting person though.

bam.a I have held this a couple of times in the past. Each time I have sold it for something cheaper that has a little more zing (upside catalyst) to it. Management is quite good and has created a guru status but I wonder when he will key into getting his stock noticed. As scorpion suggests they invest in Real estate, power assets, some commodity assets etc. But they operate more like a package of hedge funds, and subs then a single business. So, Bam lies at this confusing interface between being a utility, a reit, and an Asset manager/commodity company. Now I dont know about you but if I want a utility with solid growth prospects I may buy Bell Canada, TCPL, or Enbridge, which all pay good dividends in our cash starved world. If I wanted to own a commodity stock I would likely buy one directly. Similarly, if I wanted a reit I would buy one that paid a good dividend with a long term record. If I want as asset manager I would buy one direct such as IGM, or a good US equivalent that pays out 4% of earnings and still grows at a 15% clip. BAm is a complex, heavily leveraged, quite large, and certainly confusing entity, run by a bright guy who hasn't figured out that a 4.5% dividend with a 15% increase each year would be in his best interest. If I want a Bam I would buy a GE which pays a reasonable dividend to go with its complexities.

Several countries have taken the same or similar medicine with success - New Zealand, etc. The US got into this situation by overspending and under-taxing. The way out is to underspend and increase taxes. To appreciate the situation in Canada you had to be there. It was bad. There was a period in 1992/1993/1994 when nobody I knew in my age group was working - I mean no one. There was no commodity support as alluded to above. There was the support of the export economy and the IT industry in Ottawa soaked up some gov't job losses. I dont believe that the US can do what Canada had to do because of its political structure. In Canada we had a majority government elected late in 1993 which had 5 unimpeded years to do what needed to be done. In the US you have the issues of the two party system and the continuous electioneering that our politicians simply dont have. There is the additional effect that the US would have on the rest of the world by overspending and raising taxes simultaneously. They would likely cause a rapid and deep worldwide recession and no one would be insulated including Canada. With the likely exceptions of border states Canada's cuts had little overflow effects on the world at large.

The loonie problem seems to have mitigated somewhat with the rise in the US dollar this week.

IMO, Warren uses BRK as an example as an investment mistake when it was more of a very valuable learning experience. There is no way he would have been as successful without these type of experiences. One cant understate the value of an education borne out of experience. If Prem hadn't made those US purchases he wouldn't have learned what he needed to know to move forward today. If I hadn't owned FFH from 1999-2004 I wouldn't have learned what I needed to learn to get the success I have had since 2005.

Unfortunately, no where near as good as I am hoping for. I bought the BAC warrants over a month ago for cheaper than today. I posted my somewhat simplistic calculations on another, earlier post. They are very easy to hold for the long term. Day to day, month to month, and even, year to year, crises will have little effect on the long term conversion value. Only the forward grind of the respective banks will make a difference.

I dont think the holding period is relevant in any case. The ability to assess a holding from time to time and determine if the cash is better elsewhere is the mark of a good investor. Francis is very careful on purchase, and makes a concerted effort to keep his MERs low and minimize taxes. None the less, There is a range of outcomes that can be expected. I dont hold his fund or any other funds but his would be among my top choices if I was looking at such a beast.

FFHWatcher, No arguments here. I am quite familiar with his style and holdings. Obviously one cannot plan the outcome with deep value investing, hence the level of diversification. Francis operates similar to Graham, with modifications in value determination to fit the present day.

It is analogous to home insurance. My home insurance is roughly 1/350 - similar ratio to the fleet insurance. It my be only property insurance, and not casualty.

I am not thinking that Francis will be real thrilled with this. He has had this holding for the better part of a decade meaning his return is very low on an annualized basis.

I was avoiding debating the merits of shorting or not shorting gold. I just wanted to determine the best way to short it should I one day decide that it makes sense. About the time my mother buys another ounce or her younger equivalent. A whole other thread could go on for years on whether it has or will maintain any value over time. My recollection is that it reached around 800 US in the 1980s. We are nowhere near that price yet on an inflation adjusted basis - say 4 % inflation - an equivalent today would be in the range of $2400-$3000.

brox, I was thinking along the lines of shorting a non-leveraged gold etf such as GLD-N. Leveraged ETFs are dangerous to go long due to time-decay. They could be lucrative if you could short them but I expect the borrowing costs would be high since this practice was quite lucrative earlier on when leveraged etfs first came out. Good point about the currencies. I am just musing at this point. My target would be to start shorting when everything is lined up on the buy side.

I have started looking into shorting gold. Does anyone have any ideas. I will be avoiding leveraged inverse ETFs due to time-decay. On the other hand shorting a leveraged etf can be quite lucrative but thats another topic. I am not going to do it now... I figure gold has a ways to go yet. I would be really early right now. PLEASE start another thread to debate whether gold is in a bubble. Any thoughts, Thanks, Al.

Well. there is Walter Schloss' son Edwin...

LOL, Thanks folks, Myth, did you vote in 65 or 66 category?

We have alot of brain power on this board being dedicated to one of the more inane arguments I have seen recently. Shouldn't you all be researching value ideas and sending them to me, or something else more useful such as lying on the beach. Dad. :P