Gregmal

Anyone hear rumor of this new NYC law requiring landlords to provide free internet? Hopefully just a rumor but doesn’t surprise me at all.

Theyre somewhat illiquid so I dont wanna give an exact date and strike, yet, cuz the trade is still in progress. But go out a few years and up 20-50%. So figure $100-125 strike on the CL. Pick your date accordingly but it doesnt really matter if you give yourself some time. You dont need a bee line. As we saw with the last correction, it just washes out the wimps and then resumes whats inevitable. We dont have the infrastructure for all these alt energy dreams and theyre killing what we do have. Its a basic supply and demand trade and globally theres places even worse than we are here. Wait til places like India start their "covid recovery"....demand....up. Joe will be gasping for a ventilator due to the sheer horror of what he's created. And we'll just laugh and count our dollars and smile while filling our cars with $6 gas.

Added a little bit to the crude oil futures call options and XLE calls. Credit to Kuppy again on the futures calls.....clearly the best way to play a big spike without the company specific risk. Another shoutout to the genius president and his fans for making it all happen. No better way to redistribute the wealth the high energy prices. $100 oil here we come!

https://www.yahoo.com/finance/news/heres-the-best-new-asset-class-in-real-estate-tricon-residential-ceo-145713574.html Once again, why are people wasting their time investing in anything else?

Eh, IDK. I dont think the broader markets do a whole lot over the next couple years. Maybe 10% a year or so but nothing special. Saying FFH will outperform the index by 40% a year no with real corporate actions or changes is a little bit fo a stretch, no?

Well that’s kind of the problem. He s built it, and got nothing left to prove. And fwiw I had the “audacity” to criticize Buffett too, both about the refusal to buyback stock for several years and for being a pussy in April of 2020. For those keeping track at home… Gregmal 2 WEB 0 Im right about Prem here too. If they announced they were liquidating the entire equity portfolio, buying back stock up to 90% book value, and refocusing on India and insurance only the stock would probably do 50% over the next 2-3 quarters regardless of what the broader market does.

Briefly, no I m not short this, nor am I long this. I track these type of situations so that in the event it inflects I can make a lot of money in short order. Most recent example was BRG. Total shit management team but trades at 50c on the dollar. Only catalyst is a sale. Rumor leaked of strategic alternatives, stock took a day to process and you could buy at $11 and sell a couple days later at $13...easy. Same thing to an extent with Berkshire. I questioned the logic of Buffett and his allocation strategy for years and probably annoyed some of the loyalists but said all along when the buybacks got serious the stock would rerate. Saw the buyback in 2020 Q4/2021 Q1, made it a 40% position at 230, and a couple quarters later its flirting with $300. @Viking Its nothing to get sensitive about or call below the belt. I "bought last year and the thesis is working" isnt really the same as I bought on the same thesis I have now almost 2 years ago at a higher price than it trades today. In the later case, its really again just falling victim to what folks have suffered through for 10 years now. Harping on cheapness and the quant crap and missing the key that unlocks it all. Nothing more, nothing less.

Anyway, time for the weekend. Good playing ping pong with the bull/bear stuff. Cheers.

Exactly, more of the same... meanwhile people are saying things have changed. The market and most people do not find FFH management trustworthy and find that there is great risk of big screwups, even ones we are told shouldn't be worried about, and thats the major reason this trades at 60c on the dollar. And THAT, barring a management overhaul, or a huge tender, hasn't changed and won't go away anytime soon.

Why can't it change depending upon the variables? Its good to have a set strategy communicated to people. However at various points in time the strategy can be right or wrong, no? It doesnt stay the same forever? So yea you can have it both ways. Buffet was more into acquisitions, until he wasnt. Again, the mental process and ability of the management team is whats called into question with FFH. What benefit is there currently, to addressing the debt vs buying back stock that trades at 70% of an understated book?

Yes outlining the allocation strategy is a clear plus because it holds them accountable. However if, as many are claiming, your stock is so raging cheap, then why isnt that list shifting? Why arent lower risk/reward opportunities being exited in favor of better risk/reward? I mean is reducing debt right now really a better use of capital? Either the business is cranking and making oodles of money and its(the debt) not an issue or.......

More on the buybacks, but first...if you're touting something as an investment, you can't then hop scotch around with "I traded it". If you're waiting for a rerate and premium to book, I dont think its unreasonable to assume a holding period until it reaches that. If its a good, well run company, it will withstand the market hiccups...yes, even covid. Pretty much EVERYTHING(good and bad companies) is currently trading higher than pre covid levels. And with FFH, again, we're hearing, "WE'RE RIGHT AND EVERYONE ELSE IS WRONG". So...on buybacks, why is it a satisfactory excuse that because they do insurance they cant buyback stock? Plenty of insurance companies run buybacks. Berkshire has done a ton, just as one example. IF FFH is so cheap and buybacks are undeniably the right move, is it not further evidence of mismanagement, not being able to execute them now for well over a year? Doesnt it speak volumes about capital allocation when a company literally has their hands tied and barely any spare capital to opportunistically take advantage of a 60c dollar? If you have a 60c dollar, doing 2-3% of outstanding a year is a red flag.

But then they need to actually repurchase stock. There's still excuses for that. Again, going back to the post above, below is Viking in 2019 talking about buybacks. Are they really just a constantly hanging carrot? You have things you can monetize, and frankly when you trade at 60c on the dollar everything should be fair game in terms of monetizing. And yet.... the story is always the same here.

To be specific, you keep mentioning how you bought into FFH mid last year. But thats not really an honest statement. You've been touting FFH for years and listed it as a top pick going into 2020. Yes, you panicked and sold all your stocks during covid, and then bought it back, but I mean come on. Acting like its a new position and the thesis has played out and the IRR has been great isnt really reality.

LOL so yea, now Prem finds pinching pennies convenient. In other words, its a crock of shit. How much money has been directly or indirectly IE Torstar thrown away to related parties? Multiples upon multiples of what it costs to be public on the NYSE. If FFH listed I'd almost guarantee a 5-10% valuation improvement, at least.

We're just talking about different things. You guys(most of you, some see it) continue to miss the obvious reasons for why this is a dumpster fire and ignore what needs to change(or pretend its already changed). I mentioned it above. Its too onerous for Prem to list on the NYSE....why LOL? Too much disclosure? How is that bad? Too costly? What did his embarrassing BB fake buyout bid cost in just legal fees? Not too mention all the other waste? But now we're worried about a few mil in costs...when $300M Griffin Industrial can list on the NYSE but mega insurer FFH cant? Please. So yea, maybe we talk past each other but I mean when we talk about how the holdings dont really matter because until you show you're serious about ringing the register you're only going to get 50/60 cents on the dollar, and then you throw out a spread sheet breakdown of how much the holdings are worth and tell me the markets wrong.... Or how we mention the performance and how this has been terrible and your response is that it doesnt matter because you trade it.... I mean we're addressing different point and at some point it would be helpful to have an "I'm right" or "I'm wrong" moment for everyone...however if the bar is trading 20% market fluctuations up or down or say the market rallies 30% and this does 35% and folks wanna say they were right....I mean, as I alluded to above...it doesnt matter cuz you guys have all the answers. I think myself and a few others have highlighted what most likely needs too happen in order for this to rapidly rerate(irrespective of the broader market) and we're nowhere near that. You guys are saying different and pointing to things the market already knows. Maybe we'll see, or maybe we won't.

I guess at the end fo the day people get the returns that they deserve. Facetiously, but also summarizing all the shit Ive heard about FFH recently... On NYSE or a real listing(after all, as Viking mentioned, they are a huge insurance company; start acting like it!).. they dont need one, its a waste of money On increased disclosure: Its fine, I hope they disclose less going forward On buybacks: They cant because theyre an insurance company, besides they have total return swaps On shitty performance and long term track record: Its fine, the more it goes down the more I like and the more I buy On the horrendous investments: Theyre fine now, just look at what they've done lately! On Prem's lack of interest in maximizing shareholder value: How dare you question his motives/integrity On selling losers: Hopefully he will but he's waiting for the right time. On trading at a discount to book/NAV: Its ok eventually the market will get it! Its impossible not to revert to a premium at some point On being a dog post covid: It did 30% TTM! On terrible track record: Its fine, I sold it before it went down, bought it back, sold it at a profit, bought it back again On shorting: He said he's done so we must take his word. If you ignore the shorting he's done OK On repeatedly picking lousy businesses: He's not a stock picker, he is a businessman! I mean you cant even make this shit up. At least if one wants a cult stock buy BAM or TSLA or something that rewards its shareholders. I mean seriously, just buy Berkshire for God sakes and stop wasting time on this junk.

Viking do you have an answer for this?

Exactly. I feel like there’s no more victim of the typical value investor bs than FFH shareholders and even FFH itself. As a general rule of thumb, Mr Market is generally right. He can be wrong at times. But typically there’s reasons. With FFH they continually sit there are arrogantly claim everyone else is wrong and they’re right. Wake up, do a couple easy things, and see what happens. Not that hard. The question is whether Mr Watsa is just that arrogant, doesn’t care, or simply won’t do it for other reasons. My money has been on the later two. So far it’s been correct

I just headed out fishing for the night so the response is simple, but here goes…. do you not believe something needs to change for FFH to get appreciated by the market? IE a corporate action or repositioning? Or do you believe that nothing needs to change and that they’re right and everyone else in the market is wrong? Further off that; would the following help? -NYSE listing -A real buyback -Monetizing big pieces of the equity portfolio if so, why aren’t they doing this?

I agree its a wrench but investing is about deciphering this type of stuff. You should have seen the type and style of investment I employed in 2012-2014...And after a while you get tired of making excusing or saying "valuations are nuts"...maybe they are, maybe they arent, but the only certainty is that 1) what you are doing isnt working and 2) you are likely wrong. Theres always a risk adjusted approach to investing. Its something thats taken me time to learn and appreciate but in no way should a guy who's been doing this professionally for half a century be oblivious to this. One look at long term charts tells you its ideal to maybe be a bit of a perm bull...or at least not be massively net short...you seem to have a bit of a bearish outlook(my inference from your post)...so....is it at all ironic that now Prem is vowing not to be bearish anymore, perhaps right when you'd want to be? I dont have a problem with people being wrong...its part of the game and how you learn and even at 60/70/80 with investing, you never stop learning. But Prem for lack of a better term just seems clueless and/or chasing his tail and refusing to learn with the US investments. Didnt(as Eric also mentioned) he vow to only buy quality companies a while ago and then sold them a short while later and got back into junk? I typically have a rule of thumb that if something isnt working after 3 years its probably best to reevaluate and figure out why and if you cant then you're best to move on. So again in that context, Blackberry...what was his thesis at $40 or whenever he started buying? Or RFP at $20....what was he like "yo, in 8 years theres gonna be a pandemic that busts the supply chain?"....some of these are inexcusable and the problem is theres a super high correlation/thread amongst most of his public investments....problem companies and secular decliners. I dont buy at all the renewed BS about how "RFP pivoted perfectly" and "BB is dominant in auto"....those things have been known for a while so its silly to get hyped about them now just cuz the stocks have moved(which psychologically always seems to be more believable when price action validates it, although its not one and the same. Stocks go up/people buy into the bull case and vice versa). My issue is Prem just doesnt seem to have consistent or logical framework based on the aggregate of everything experienced over the past decade. Unlike some others, no, I dont think crapcos catching a bid means he's turned the corner....not at all. If someone was in GME for 5 years from $50+ and got lucky, I still wouldn't say that although I'd have respect if they flipped it on the spike. However imagine someone being long GME and at various points down MASSIVELY from some of their purchase points, and then getting a total gift(if you've been an UBER BEAR from the past DECADE! how do you not blow out of these positions on such a short term move?!?!)..and just sitting tight and making excuses for continuing to hold? So as SJ kind of mentioned, its still the thought process. I dont think we can say thats changed until he AT THE VERY LEAST, liquidates something. As we all know, unless you're willing to monetize, your discount to NAV in the public markets doesnt mean shit and can persist in perpetuity. However(as is on display currently as I clean house in the REITs), the second you put things in play or start ringing the register that discount to NAV can disappear quick....when TF is he going to start ringing the register?

Couple things.... 1) When every day is a new day, the "you're talking about the past...." rhetoric gets old. The past matters. 2) All the vague "they've turned the corner" stuff...yet they still arent exactly transparent to a degree that would actually confirm it is true. @ERICOPOLY had a good point in a separate thread about how Prem has basically refused to disclose certain stuff, or even just answer basic questions about the short book. 3) For an entire DECADE, we had the greatest bull run probably ever. EVERYBODY made tons of money, except for a couple people who inexplicably seemed to strike out on almost everything they touched, consistently. It was breathtaking how they managed to consistently pick disasters when you could throw darts at a board and make gobs of money. FINALLY, in 2021, even the absolute poo poo, like GME and AMC even went bananas...but now folks are all enamored with, and impressed with the equity portfolio? LOLOL WTF? The dog finally has its day on paper, and people are pleased...what an incredibly low bar. The majority of these companies are still crap, no different than GME is still garbage despite it run and so is AMC. Take your gift, sell, and move on. Still refuses to do so. He still "knows better" on things he's been repeatedly wrong about. Just as he's waiting for the "right price" on BB. As Ive said a million times, 1) why get into in the first place? 2) why stay in if you cant even capitalize on insanity like a $20 print. 3) Its at $10, where it was when he started this project, best case he gets what? What it trades for earlier in the year? Move on already. 4) There is still nothing concrete that really emphasizes ANYTHING has been learned. What, he finally agreed shorting in a raging bull market is a bad idea??? Oh thank god! How blessed we are. But whatever. To each their own. Covid presented the greatest gift an investor ever could have asked for and this even there has been a total dog. But the bar is low and we're pleased with a measly 30% and his crapco's have increased in price so all is well I guess..... I mean asking for a real buyback is too much, asking him to liquidate losers is too much, asking for a real NYSE listing is too much...the guy is still scared of short seller boogey men or whatever and that comes at the expense of a better valuation for shareholders....I mean he's one of the only guys I follow who can basically do no wrong to some, despite more or less refusing to do some very, very EASY things to reward all the loyalists.

Why was that his or FFH shareholders problem? BB was a disaster...NOBODY wanted it, including many outfits who actually knew tech. Prem and FFH have NO credibility in tech..insurance, sure, commodity(poor results aside) maybe, you get my drift. Tech? WTF and rather than cut bait, which is one of the benefits of public market investing, he decided to waste what? 7-8 years on this project? At best throwing good money after bad trying to bail out a losing investment and at worst as a project that had motivations outside of his fiduciary responsibilities.

Come on man. Saying Prem has other priorities that come before maximizing shareholder value isn’t impugning anything. He s fully earned that through his actions and lack of interest in correcting mistakes. Even when every Joe Schmoe is begging him, “sell the past mistakes in a gift of a market”…he still won’t. And while we can say “maybe he knows better”… he doesn’t. Virtually every public market investor I know outside of John Paulson and David einhorn have better records than Prem Watsa over the past decade. Basically everyone has known better than Prem and rather than humbly admit that he keeps going.

LOL then why are we still here? There was NO reason to get involved in Blackberry outside of glory. Being a hero to a Canadian icon and getting credit for being the guy spearheading "the turnaround"....they shopped the entire company, and NO ONE wanted it, even thought BB at the time had like half the MC in cash! Thats why this dude ultimately ended up reneging on his fake buyout bid. Meanwhile, nearly a decade later, its still NOWHERE...every one of even the blind loyalists screams SELL BB.....and yet...... yes totally hollow. Perhaps you guys who have been muddling in this loser have the correct read.... not me. The only logical reason he's in BB is because status/ego, IE nothing that benefits shareholders.