Uccmal

Did anyone listen to the call. I was out all morning doing my day job. Alertmeipp -I think you meant that the any increases in sales will go to the bottom line. This applies to the NBSK Mill where the costs are fixed for the most part but much less so for the US mills where the price of waste paper determines much of the profit margins. re: cfx.un taking them over. Why would they bother? The book value is around 4.50 but it looks like the price of 3 new mills would be closer to 7.50 per share - at least. I am in an internal debate at what price to buy more shares at. My major concern is that prices start to drop off before SFK has their balance sheet back in order.

Where is the balance sheet? That was not real impressive. I want to get a read on whats happening with book value etc.

I would suggest that there are a number of members of this board that could get an analysts job at Dundee. cwericb, Now that really wasn't a very nice thing to say. :P

of interest: Canfor Pulp yield expected to rise Posted: February 22, 2010, 10:40 AM by David Pett distributions, Canfor Pulp Income Fund, Market Call, pulp Canfor Pulp Fund's current yield of 14.8% looks safe after pulp producers raised prices on northern bleach software kraft (NBSK) pulp. Even better, the company's distributable cash is only going to get bigger, says Daryl Swetlishoff, Raymond James analyst. "Given current pulp markets we not only view [the current] distribution level as sustainable but see upside," he said in a note to clients. Canfor Pulp's current yield of 12¢ per month or $1.44 per year represents a 66% payout ratio based on a NBSK price of US$850 per metric tonne and a loonie at US95¢. Mr. Swetlishoff said Canfor has historically paid out at a 90% ratio, implying a 20% yield or $2.17 per year dividend. But he estimated that the distribution could go even higher. "Canfor maintains high leverage to NBSK pricing and we highlight that at current spot pulp [of US$880 - US$910/mt] and FX rates our model forecasts Canfor generating $2.75 - $3.29 in annual distributable cash implying 28% - 34% annualized yields," he said. The analyst raised his rating on Canfor Pulp to Strong Buy from Outperform and increased his price target to $12.50 from $11.50 per share. Read more: http://network.nationalpost.com/NP/blogs/tradingdesk/archive/2010/02/22/canfor-pulp-yield-expected-to-rise.aspx#ixzz0gMtRvxkU The National Post is now on Facebook. Join our fan community today.

I am thinking that it doesn't help if Prem is issuing shares at 95% book every 4 months. Right now the market is accounting for more below book dilution.

I would agree with Redskin on this point. FFH as a collective of insurance companies is certainly not of lessor value than ZNT, ORH, or NB. If it were put up for sale it would likely fetch about 1.4 x book itself in todays environment. Further, if you look on the back pages of any of the ARs it lists the closing BV and stock price each year. The average price to book is 1.3 for 2000-2008 (9 years - including 5 of 7 lean years). The lowest ratio was 2002 just after the NYSE listing during the first short attack. That year it closed at 98% of book value. There were only two years of hard market during that period. In summary, the present price is ABNORMALLY cheap considering all the improvements. It should be at 1.4 x book, as a minimum, no matter what the state of the insurance market. That gets me $518 per share. Either that or I am completely wrong and the prices from 2000 to 2008 were abnormally high.

Hi Nick, re: part 1 about dividends. I searched high and low for the answer to this question but couldn't find it. In Canada an individual pays an adjusted amount according to the dividend gross up calculation. I am thinking that a corporation records it as income the same as any other income. I have never seen any note to prove otherwise on any balance sheet I have read. Dont know about the US - however, I would say that the same applies given I see no evidence to the contrary. Dont know about part ll of your question. I did learn that if an individual in Canada can make up to 60000 from dividend income before paying any income taxes at all, providing that is ones only income stream. Convenient information. This is based on a personal exemption of about 40 k and the dividend gross up formula.

There is a history with Fitch. FFH doesn't pay them for any ratings, and does not provide them with any relevant accounting access. The more important ratings for FFH are S&P and AM Best.

We bought a Mazda van 6 years ago with 0% financing for 48 months. It really was 0% financing (that is there was neither a markup nor a rebate on the vehicle). We negotiated the price, and then got the financing. At the time everyone was offering similar deals except Toyota and Honda. It is the same again now. I am given to understand that it makes more sense to get the financing than to pay cash. The dealership doesn't care if you pay cash, or not, so they generally wont bother to deal on that alone. To a dealership financing is the same as cash... it just comes from different source. The other thing is that dealerships make the Lion's share of their money on repair work not car sales. Even Honda's and Toyota's need work sometimes. Anyway, I invested the theoretical 30000 from the cost of the vehicle at my customary rate of return which is somewhat higher than 0%. These low interest rates have been like a license to print money. Borrow money at 3 %, and invest some in dividend paying stocks at 5%, pocket the spread. All too soon, this too shall pass, in fact its already passing as divident paying stocks rise in price.

This seems to be common practice in any takeover these days. They are fishing for clients.

I think this is a phenomenal investment. Aside from NB and ORH it is the best ever! The 200 Million is an easy raise using preferred shares and the demand for them is insatiable in Canada from Blue Chip Companies.

The whole freak'n show is sleazy. Look at this stock chart on a company that has made about 100 B profits since it went public: http://finance.yahoo.com/echarts?s=GS#chart2:symbol=gs;range=19990508,20100212;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off Put the chart on Max # of years. Being an employee of Goldman Sachs is akin to winning the lottery.

Thanks folks - market value... I guess I could've looked that up. Anyway, some pretty good holdings.

I'll reiterate: Question? Are these values the purchase price or the listed price?

Question? Are these values the purchase price or the listed price?

I have been mostly selling to right size my position. I have probably been selling to some of you. I had to get rid of the shares I converted this year. I also figure that Fairfax will do its annual swan dive shortly. If it doesn't I still hold a huge number of options and shares (40% of my total holdings). Probably the forward driver on the stock from here on is going to be the interest and dividend income. If they have maintained and increased this line on the income statement then things should bode very, very well. The great thing about FFH is that you can take their 15% y/y and increase it to 25 or 30% by buying at strategic points when the stock comes off.

I bought my first 1000 shares of SFK in June 2005 at $5.03/share. That was pre-Fairfax BTW. I bought more off and on until 2008 then unloaded everything. It has been my biggest all time dollar value loser to date UNTIL now. As of Monday when I bought my last shares at 0.88 (bought from 0.23 to 0.88) I now hold 65000 shares. So $5.00 a share would suit me fine. That would only bring it to adjusted book value should they pay some of the debt down along the way. I actually held a larger dollar value of cfx.un but I am thinning this one down a bit. Should the price of pulp drop off they may get hit and there is also the pending conversion. I owe thanks to yourselves, SD, Dazel, and to Viking for helping me see different sides of these businesses than I would otherwise recognize myself. RE: the takeout potential. After all this time I am not thinking that FFH would approve a takeout below $10 on sfk.un. I believe they still hold the shares, unless I missed something. Al.

Hi Viking, I will qualify this by saying that I have not looked at your two companies in any detail. With regards to AIG, do we have any evidence that they are shrinking? Do we have any evidence that there will be a hard market. If you recall a few months ago, Cardboard posted a synopsis showing the duration and times of hard markets in the past 40 years or so. It amounted to a couple of years every decade with ever decreasing lengths of time. I figure there eventually will be a hard market but we will probably be able to buy every single P&C insurer below book in the months preceding it, after the requisite disaster of course. So, without looking at your prospects in great detail: Without the investment skill of HWIC or Buffett's operating businesses where are you going to get your increase in book value? Just a few thoughts.

I think its an excellent book. I have reread sections on some of the deals particularly the stuff from when he worked for Ben up until the time he became well known. The personal stuff was interesting and showed what Buffett is like as a person. Her book didn't change my opinion of him one bit. He is basically a pretty good person doing the best he can, warts and all. As for her capitalizing off of this - Would a man who sells candy and shoes at his annual meeting have any problem with that?

Ughh right. And it has nothing to do with inclusion in the S&P 500 then?

BBN has roughly 10 hours of programming to fill per day. There are a limited number of mutual funds who get results above the index (~<5%) for greater than a couple of years. So, therefore most BNN guests have no idea what they are talking about, or what they are doing. But the marketing works so those that appear get business. I can no longer be bothered to watch it at all. I hate the way it clouds my thinking. I didn't even watch Brain Acker's statement and now I am going to go around thinking 318 for two weeks. Somehow seeing an "expert" on some topic on television has the ability to short circuit ones brain. It is not only bad advice but it is downright dangerous the way it affects ones thinking. I read a great deal instead.

I've thought about seeing if I could score a deal on a Toyota Vehicle. Will take a pass on the stock. The competition in this business is absolutely brutal, and the stock has traded cheaper than this. Toyota used to have a lock on quality but they now have to do battle with everyone else. Good cars though.

I respect his choice. There is a huge amount of capital available amongst board members here. I generally dont disclose anything until I have bought all I want, not that my ideas are particularly original.

Valuegeek, That looks about right... 20% is generally the equity maximum from float. Simpler method: 20 B in investments at 5% = 1 billion/20 million shares = $50/370 share = 13.5%

I would think that they will just continue to buy it in the open market as Cardboard has suggested for now. It will be alot cheaper to buy in a few hundred million in a year or two than 1 billion right now. One hopes that they are spending some of the surplus above their surplus on buying back their own shares now that they have reached somewhere in the range of 90-80% book value. I am not seeing any significant impairments to book right now. In fact I see a couple of significant additions rather than impairments (Magna, HR). They will also be committing some of that capital to the Brazilian, and European operations that are being developed.