twacowfca

Fraudsters have a nasty habit of being serial offenders. Madoff produced statements showing extraordinary returns in down markets within a year or two of first managing money. Go back in time and check out the second career of the "reformed" Billy Sol Estes after he got out of " The Big House". I have not researched this and the suspicion of wrongdoing could be unfounded, but cases involving fraud frequently go to zero and are complete losses at any price.

I am certainly no friend of Chanos et al , having suffered through their short attacks on several occasions not only with FFH, but also with USG over the years. Both positions were ultimately redeemed with huge gains thanks to the integrity of their CEO's. I fear that some posters are about to commit the same logical error that Chanos fell into when he tarred FFH with the same brush he used to expose the insurance fraud at Baldwin United early in his career. On the surface there were similarities with major reserving issues, but Baldwin United stepped over the line and fraudulently concealed their true condition while FFH worked through their difficulties in a steadfast and ethical manner. Likewise, the circumstance that a potential fraud has been spotted by the bad guys should not be used to whitewash the objective facts. If the news report about consenting to an earlier SEC finding of fraud is true, run, don't walk to the nearest exit.

Why take a chance on this co in view of the past SEC record. IMHO this trumps everything. If, despite all the red flags it turns out that the co is OK-- what have you lost? There are plenty of other opportunities out there. Wait for another good pitch or one that's even better.

Interest rates are low now, and it's not rational to pay much for float to invest in a low return environment. Reinsurers know they lucked out with no supercats in 09. Some have announced big share buybacks. Axis in particular has had a history of using retained earnings to expand their business, but even they have announced a large share repurchase. Reinsurers don't have large staffs or agents they are obligated to keep employed and are structurally better able to adjust to less demand by writing less business than primary insurers.

Thank you from the bottom of my heart, Sanjeev for the many hours you have spent to make this the best board by far for acquiring useful information and assistance with a value perspective. May The Lord bless you and yours richly this Christmass season!

Aon Benfield (Dec 24 09) reports reinsurers aggregate CR for first 9 mos 09 was 91.2%. Reserve releases added an additional 3.2% to results. ( This info is from a private service so no link available. Sorry) This info is now public. Link is www.webnewswire.com/node/492347

Their sources must not have had the services of consultants to form a compensation committee.:)

The second biggest US housing bubble tried to pop in 1927, but The FED put the petal to the metal and kept it going till 1929. It probably passed its former peak unofficially during WWII, but this didn't show up in statistics until after the war because of wartime price controls. However, if you make allowance for the extraordinary flip flop of the FED from moderate to loose and then very tight immediately before the 1929 crash -- plus the wartime restrictions-- the residential bubble might have peaked in 1927 and finally passed the former peak in about 1947-- exactly 20 years later! :)

You took the words right out of my mouth. ;D In addition: After they pay off the deferred rent the cash on hand is approx $7.14 per share. They should have enough cash to last till volume picks back up. I really don't pay attention to the other assets on the balance sheet such as the properties they own and are undeveloped. Because of the position TA is in, they are able to weather this downturn while competitors are shutting down. Once the economy is up and going this should help TA pick up more market share and also increase fuel volume. It is in the best interest of HPT to work with TA and lower the rent if needed for this company to be profitable. Since most of these locations are in the middle of nowhere, it would be very difficult if not impossible for them to rent out these locations to another company. I think HPT would rather take a little less in rent than no rent if TA asked for it. The relationship between the two is a two way street b/c they both depend on each other through their agreement. Sure they could take TA back over, my understanding is HPT would lose their REIT status if they did. I'm not sure where oil will be 1 year from now, if its back up to $150 anytime soon there will probably be a revolt. When oil is that high it hurts the economy, with everything that happened the last go around goverment officals will try to take the steps necessary to avoid this again. Please feel free to pick apart my logic. CONeal, I can be real picky,but you know a lot more about this situation than I do. The relationship between HTP and TA that you describe sounds like it could be similar to the relationship between Coke and its bottlers where it's in Coke's interest to allow its bottlers to earn a small profit, but not too much profit. However, Coke is well financed, but if they were leveraged to the hilt like private equity cos often are, they might go bankrupt if they didn't receive enough revenue from their captive to pay the obligations of the parent co. Also, PE cos are often greedy and may be unwilling to let a captive "earn" more than enough to barely fund their capex -- making the captive co a cash cow for the PE co through rents or royalties with no milk left over for the "owners". This doesn't sound like a retail store where an owner can box up his goods and move to another location if he doesn't like the landlord's raising the rent.

Hmmm. Seems like there were a lot of free tickets on winning horses littering the ground last March. :)

Happy Holidays! "It's better to give than to receive" Try it; you'll like it! :)

Of course he did. Hasn't every value investor worth his salt done this? If so, you know that it only works well after a catastrophe such as a delayed appeal and disqualification when all the disappointed drunks are apt to throw away their tickets.

That's why my motto is "friends don't lend friends money" unless it's < 20$. Right, and if your friend is worth more to you than what he wants to borrow, consider giving him the $. Then you'll only lose the $ and not the friend. :)

You may not need to hedge your exposure to Cn $ if you are in US because FFH's price may track the USD more than the CnD. FFH has most of it's INS contracts and investments balanced in USD securities. I have had a large investment in a LSE co with a similar USD portfolio and INS contracts, and my experience has been that its price tracked the USD more than the £. :)

Sounds like lemmings following The Pied Piper.

Why should investors assume that Amazon's free cash flow is free? They get it by squeezing their suppliers. As they become less popular, the "free" cash flow will become less free. Make no mistake -- ALL retailers eventually become less popular because there are few if any durable moats in that industry. Take away their FCF and what have you got? It's like DELL, a potential for margins that regress to the mean.,

"Smarter than the average bear!"

Keep an eye on this. This could be a "good cop, bad cop" Prisoner's Dilemma situation. The first canary to sing gets a free get-out-of-jail card. :)

Re living in lovely Vancouver: I learned from another thread that people in Vancouver are indebted to Alfred Nobel for the circumstance that they now live in Canada rather than the United States. It seems that the Canadian Pacific railway would never have been able to punch through The Rocky Mountains in the late 1800's without using dynamite, invented by Nobel and that the treaty setting the western boundary between Canada and the US at the end of the 19th cent. would almost certainly have ceded BC to the US were it not for the railroad connection. This was quite a surprise. I had always thought that BC was part of the US. -- -- the 51st State!

Don't forget the Martians. The next breaking story( You heard about it here first) will be that Tiger has been consorting with not just any old Martians, but actually Martian hermaphrodites!

This pattern of accumulating and giving away unnecessary "stuff" goes back to our tribal history. The potlatch in the Pacific Northwest is a good example. A chief wannabe would get his friends to give him a bunch of "stuff". Then, he would throw a big shindig and give it all away at the feast. Early parliamentarians in England and the colonies were also elected this way. When George Washington wanted to be elected to the Virginia legislature as a young man, he was informed that he would have to throw a big barbeque with lots of drink or no one would vote for him. Wilberforce had to throw the biggest election feast ever to get elected in a district that wasn't "safe". Almost all the great capitalists followed this pattern of giving. When they started giving away all their stuff at the end of their lives, they became magically transformed in the eye of the public from " robber barron's" to philanthropists. Being generous is reasonable. After all, "you can't take it with you", and you'll get a much bigger reward. In a free market, most people who accumulate fortunes are decent people who achieve success with the cooperation of others. These business owners will generally follow a pattern of generosity if not taxed heavily during their productive years and allowed a big charitable deduction on estate taxes. Those who grow wealthy consume a much smaller percentage of resources in relation to their incomes than most people; this is a good deal for society, probably a much better deal than if the rich were heavily taxed because the accumulated resources are invested productively in ways that benefit everyone instead of being wasted in often unproductive or even counterproductive government programs.

Anybody on this thread ever read The Bible, especially the Bible verse that says: "Judge not that you be not judged"? Talk's cheap, but it's most unusual for a celebrity to issue a public statement in such circumstances filled with language such as: " the harm I've done my wife and family.... sin .... transgression....etc. Transgression was supposedly the most looked up word on on line dictionaries after his statement was released. This says as much about our culture as it does about Mr. Woods. Stay tuned. This sad tale may play out differently than most.

And this is why there is such a "Cult of Warren." Are there other investors that might beat or equal Buffett's record? Maybe. But that's only a very small part of what Warren has given to us. I live a better life, I am a better person and I make better personal decisions because of Warren. There is much more to learn from Warren than how to increase our CAGR. If I were to publish a book of "Pithies" about investing, WEB quotes would likely fill more than half the book.

There were plenty of bubble walkers who had extraordinary success in the 90's, but few were smart enough to take their money and run before the bubble popped. How did your mentor invest? What did you learn from him?

What saved me was having most of my assets in two deep value situations where the mainly financial assets held by these equities were not exposed to market risk and the underlying businesses little affected by the downturn. Both of these businesses are run by founders with great track records, nearly perfect alignment with shareholders and almost paranoid concern for avoiding market risk.