Myth465

Thats interesting, and rough. Smart idea, but ........ No real way to game that one. "I'm pretty sure he didn't like his family back then," said Christina Cameron, an heir and a great-great-great grandchild of Burt's.

Kudos Val, perhaps more people are also thinking on the subway then I thought lol. Didnt think oil was so elastic. I am sort of disappointed in myself, I and most here knew oil was frothy, but I didnt take enough off the table. I guess in a pullback though its never enough. Most of my producers are hedging so this swings shouldnt have too big of an impact, but the share prices really are wiping around. Between margin changes, attacks on big oil subsidies (probably the right thing to do and I am glad its limited to 5 companies none of which I own), and the macro / geopolitical picture - things should be interesting going into summer. These swings are getting nuts. I think the fair price for oil is between $80 - $90. We seem to be dancing around so much. Also who keeps deleting threads?

http://www.gurufocus.com/news/132189/microsoft-buys-skype-for-85-billion My thoughts expressed far more clearly. With the Skype deal, I'm left to value eyeballs, synergies and future expectations – three things I'm decidedly poor at deciphering or putting a number on. In the end, management better present a pretty convincing argument for why Skype, and why now. Not in the comments area an update relating to the conference call.

Howard Marks - It has been demonstrated time and time again that no asset is so good that it can't become a bad investment if bought at too high a price. And there are few assets so bad that they can't be a good investment when bought cheap enough ... No asset class or investment has the birthright of a high return. It's only attractive if it's priced right."

I agree, my thesis on FFH is falling apart. Now that its off the NYSE it seems to trade more rationally. Even after the losses in Q1, it regained its footing pretty quickly. Prem has proved that removing it from the US exchange was a step in the right direction.

Thanks for bringing the opportunity to the board. Also I agree with Tariq, the guy knows what he is talking about.

I like Skype. Not sure what MSFT would do with it. EBAY lost alot of money on it...... I think in my analysis I may have to discount cash on the balance sheet for these tech companies.

This is a difficult concept for alot of people. All my friends always ask me how much the stock is when i tell them about ideas. They then tell me that at $60 the stock is a bit expensive. Its a tough one ;) Also after a split, a few guys are always like so by year end it will be right back to where it was ....

Very good analysis of the current market. http://www.businessinsider.com/gary-shilling-house-prices-2011-3#yes-with-mortgage-rates-so-low-houses-look-cheap-1

The returns are nice, but if you are wrong you get crushed in a situation with high inflation. I like what FFH did because they bet $1 to make $10 on a situation that is either unlikely or has a low probability of working out. They were able to protect the portfolio with relatively few dollars. I think they are right about the historic case for deflation, but the Fed has drawn a line in the sand saying it wont allow deflation. As a guy with a few dollars to his name, I make it a point not to fight with the Fed or its massive balance sheet / bully pulpit. The upside to downside inmo would need to be higher. Ideally you want an inflation bet with a 5 to 1 (upside to downside) and a deflation bet with 5 to 1 or 10 to 1 (upside to downside). You could cover your portfolio or a good chunk of it. You pretty much would only lose in a normal market (or stagflation or some other deal), but would be fully hedged. If you are good at picking stocks the rest of the port would do quite well. Also the fact that FFH sold the bond means to me that they expect higher inflation at some point or they think they can do better than 8%. Probably both given FFH. 25 years feels like forever. I am looking forward to buying 30 year government bonds at 15%. That would set someone up for 2 decades of out-performance if the cycle repeats. The only decent option I have come across in the retail space is ROIC warrants. They may be chopped off at the knees though. If long term rates trade down to 2.5% then reits will be doing quite well due to yield bigs. If Management performs, rates stay low, and things workout you would get 8.5x return. Management though said they will do something about the warrants in a few quarters so I am not sure what will happen to my hedge. Lets hope for a quick return of capital and return of capital lol. ----------- ERICOPOLY, not sure what your fair share is - but I see a future where you will be paying more. Hopefully I have the networth / income to join you. I will probably be just as upset :D. 10% just doesnt seem great to me. Calls can be addictive, I like the pair trade though.

I looked into forming a partnership in 2008. I always thought if I got into this business I would want scale. Maybe 10 properties with a few partners. That way we could withstand a one off disaster. At the end I concluded that realty is a tough way to make easy money :).

I bump heads with a few people here and there (especially concerning economics and politics). At the end of the day people will have their opinion, and should have their opinion. I think once neither is budging or receptive its time to agree to disagree and move on to something else. I enjoy a spirited debate as much as the next guy, but at some point you are just yelling at each other. When it gets there I think its time to find better things to do. We all know what they say about arguing on the internet..... Just my thoughts.

This is why I stick to REITs and Equities. My folks owned houses and while its great if you dont have much else to do with your capital inmo it isnt worth the headaches unless you can get a 20% return assuming no inflation in rents or housing and with an adequate allowance for vacancies / repairs. One roof, crummy tenant, or just bad buy can screw up even the most conservative ROI calculations. I can get 10% yield with low risks in the market, now if only I could find cheap long term leverage......

Eric would you take a 10% taxable yield. I guess I am asking is what would make you look at bonds / FI vs. equity?

I feel like a bet on deflation should be cheap, and have massive upside. Similar to FFH's position. If you are right here you make 7% - 15% or so. Decent, but no tremendous upside.

No very little in the way of new rental accomodation has been built during this RE crash either, vacancy rates are dropping across the board rents are going up. As I mentioned in an earlier post Avalon Bay one of the largest apt Reits in the country remarked on increasing rents at 7% in their latest lease renewals and a sharp decline in tennants moving out to become home owners. The sub-prime owners who are at the heart of both the bubble and the crash are becoming renters again and taking a few people with them. If your credit is destroyed you have no choice you rent move in with family or become homeless those are your choices pretty much. Some of the distressed properties are being purchased by owner occupiers who sat on the sidelines and can not believe their luck or wisdom. Other properties aqre being purchased by individuals for 2nd homes which they may or may not rent the rest are being bought by landlords to be rented. This is the only new stock of rental availability. These landlords will be selling these homes in 5 to 10 years to their tennants when they have repaired their credit at elevated prices to todays prices and if they can not they will be quite happen to keep the homes with rents which will be much higher than todays rents the perfect Dhando investment. Interesting thesis. With commercial realty rents came down because new owners had lower costs and could cut rents and still make excellent returns. That what I thought would happen here, but your thesis is better. I am guessing commercial realty had excess supply and demand destruction via businesses going under. Here we similar demand and supply numbers, just a shifting of the rent vs. buy. Your thesis makes perfect sense. Thanks. Realty is very powerful in the minds of people. Many of my second generation friends believe the way to wealth is to buy a house and rent it out at a lose for a number of years. Sooner or later rents will rise and the value of the home will rise and you will be wealthy. There is no talking them out of this belief.

I think this is going around, I have the same symptoms. I cant follow Bruce into these ideas (mainly because I dont understand them and dont have the time to figure them out), but have always thought he was a top notch guy.

I'm sure he's still lurking on this board, so Bronco consider this my official request (rallying cry?) that you create a new account and return to active duty immediately. The value of this board is lower without your membership.

I can say you have done an amazing job of building a top notch community. My only comment is keep doing what you feel is right, its worked thus far.

He is retired now though. I found this a very insightful interview and will be raising / holding more cash going forward. I believe he is right about rates moving up to at least a zero real return position. This is also the best investing podcast I have found to date, she asks really good questions and typically interviews pretty good guests. http://wealthtrack.libsyn.com/paul-mc-culley?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+trillianmedia%2FJVWE+%28Consuelo+Mack+|+Wealthtrack%29&utm_content=Google+Reader

vcfa you sound like Jim Rogers. I tend to agree, I think it would cause massive turmoil for a week or 2 and then would be just fine. Plus a vacation to Greece or Portugal would be dirt cheap.

The guy in the mirror is my favorite client, and even he still drives me crazy. But yes you are correct. I guess I wouldnt mind managing money, as long as its the right kind of people. But everyone is the right kind of person, until they arent it seems.

This is the first time I have seen this line and not cringed lol. In retrospect I should have taken more off the table. SD is a bit high on a cash flow basis, but very low on a net assets basis (but just about every oil company is). What I like about this team is they understand present value like no other. They are working extremely hard to bring as much of that production forward as possible. I loved the line about the $1 billion dollar Trust if possible, and like the fact that equity appears off the table. Hopefully debt is too. It will be interesting, for now I plan to hold. Also very interesting comments about Eagle. A CHK JV will also be interesting. Drill baby drill.

Thanks for the post. With all the doom and gloom its easy to forget that the world goes on and things are getting done. Humm I need to change some of my reading.

I honestly dont want to manage money. Im the most rational person I know and even I turn into an emotional basket case when my portfolio is down 25% in a few days. After 5 years, I have learned to avoid the sell button, but the average guy has to be going crazy. Thats just too much stress. I wouldnt mind doing something in Finance, but picking up the phone and explaining whats going on 25 times on a down 3% day would get old. Congrats for getting so far Shane, I am sure someone will see value eventually. Regards.