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  1. 100% agree here However, if CA doesn't reverse, but bails out PG&E, this might change my opinion on the stock...
  2. no one thinks the fires were on purpose in theory, insurance should cover, in practice, when the claim is that big, few if any want the risk my guess is Brookfield puts a few bucks together and buys out of bankruptcy court PG&E misses interest payment on 2040 notes; bonds, shares plummet Reuters January 15, 2019 By Kate Duguid NEW YORK (Reuters) - The price of bonds and shares in PG&E Corp (PCG.N) plummeted after the California power company failed to make a $21.6 million interest payment due Tuesday on its 2040 senior notes. Nearly all of the company's $18 billion in debt was trading down, while the share price has fallen 19.7 percent. In a form filed with the SEC on Monday, PG&E announced its intention to not make the payment. In response to a request for comment, the company cited the SEC filing, which also noted that "Under the indenture governing the 2040 Notes, PG&E has a 30-day grace period to make the interest payment before triggering an event of default." PG&E, which is the owner of the biggest U.S. power utility by customers, said on Monday it was preparing to file for Chapter 11 bankruptcy protection as soon as this month amid pressure from the potential $30 billion in liabilities linked to California's catastrophic wildfires in 2017 and 2018. Prices of shares and bonds have been falling since. The 2040 bond <694308GS0=>, which is worth $800 million and sports a 5.4 percent coupon, saw its price fall by 4.75 points on Tuesday. Its yield spread, which refers to the additional compensation demanded by investors to hold a risky bond over safer U.S. Treasury securities, rose by 4.77 percentage points.
  3. entirely agreed as for the fishing, though an investment might also require an amendment to state law?
  4. Seaspan results out https://mma.prnewswire.com/media/776731/Seaspan_Corporation_Seaspan_Reports_Third_Quarter_2018_Results.pdf?p=original
  5. I've been trying to wrap my head around the underlying value of research and development for Saas companies and was wondering if anyone could shares their thoughts. Alphabet, Amazon, and Microsoft are big spenders in this area, but how much is overspend and how much is worth every penny (16%, 13%, and 13 of sales respectively)? Does a hundred-plus-billion dollar mcap company spend R&D more wisely than a smaller one? This question reminds me of the Ballmer years at Microsoft during which so many great ideas were trashed. That said, any technology company worth its salt will spend more than 10% on R&D. From another angle, and looking down the chain, companies like Atlassian and Hortonworks are spending say 40% of sales on R&D. These two companies, despite developing very different applications, might pose as a couple interesting examples where high R&D spend relative to sales might contradict themselves in light of market valuation (then again maybe Hortonworks isn't really "hot")? Capitalizing R&D over time is not fair, but calling it an expense is not fair either...
  6. maybe they have plans w/seaspan?
  7. It's ending a capex programme so FCF is exploding. It's got a decent capital allocator at the helm and if he can't find any opportunities just reducing debt will be very good for the equity. It's at a good point in the capital cycle (new supply at multiyear lows). It's on c.5x FCF. Looks good to me. The bear case is one of explosive leverage? Is there anything else? From what I understand, Seaspan looks to clean up the balance sheet then pick up the pieces in the next downturn occurs in the shipping industry?
  8. The positions that FFH takes are no slam dunks and have significant risk, as well as considerable upside. I think they should be sized accordingly, such that even 2 of them blowing up should not impair the company. thoughts on Seaspan?
  9. Book value might be less of a measure for Berkshire's value the farther away the company gets from a big deal. When buying Burlington Northern, for example, book was closer to intrinsic value. There have been some other buys like PCP, but much of Berkshire's intrinsic value today is generated within the company's vast portfolio. My back of the envelope puts Berkshire worth around $369k/a-share using a (sloppy) DCF and adding back the cash on the balance sheet (since this is dead-weight for cash generation) then averaging out cash flow growth, you might want to add another 10% to the value of the operating businesses...then there should be a premium in the market for the value of Berkshire's float as well as the intangible value of assembling such a fabulous investment team.
  10. From what I gather, over the last couple decades, underwriting has taken into account the increasingly intensity and frequency of cat events. While the last decade has certainly been bad, it's been getting worse for a while. What one might want to consider, however, is if flood is privatized in the US. Insurers want the business but the impact on the housing market could be substantive, especially in poorer areas with flood risk.
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