Myth465

From 2007 - 2008 I watched about 7 well done peak oil documentaries. Its made me a firm believer. Also its just logical. As Grantham said these things are finite resources. Look at Mexico's production from their large field or just look at any E&Ps well production to get an understanding of how decline rates work. All the smart guys (Buffett, Rogers, Grantham, Pickens, Longleaf) are saying the same thing. Its moved beyond the Tin Foil hat crowd. I mean the US and Canadian militarys are both warning about it and global warming as our largest threats. I know we use a ton of oil. Something like 25%. If India and China on a per capital basis use anywhere near what we use, even half, even 25% of what we use then things get quite interesting. Think about it Buffett is so far ahead of everyone on this. He is past peak oil. He has already factored in a windfall profits tax into the equation, and decided to just by a railroad instead. Thats crazy smart.

Thats really tin foily and would have just caused severe backlash. My folks are from a third world country, where a mans value is measured by how much money he has, and how many kids he has. I feel like my moms only goal in life was to raise kids and go to school. Trying to take that away from someone or a society would be quite futile. I think we have too many people running around, but think nature will sort it out when things go too far. I have my popcorn and am just watching (I hope never to be in the show). China and India have both been featured in the Economist due to their very skewed sex ratios. Dealing with millions of men who lack women, from the ages of 18 - 28 is a problem I am glad we dont have. It will be interesting to watch.

I would guess it goes against his image (Grandpa Warren) and seems slightly tinfoily. Second populations have less kids as they get richer and enter consumerism, so I would guess developing developing nations would kill a few birds with one stone.

Always a good read. https://www.gmo.com/America/CMSAttachmentDownload.aspx?target=JUBRxi51IICB%2fZluSRlFTyyZjjwj1RweBvXmNiQLUx1%2fmxgEB10BA0GlcIybNDKIrnvvmwgCYeMDBsFSurqDaE1uUDTXUOPFEGZTygKLtyM%3d

Makes sense. Should I ever luck up I dont plan on ever betting the farm. First you got to get the farm though lol. I think its a healthy fear and one I look for when I evaluate long term holdings. I like betting the house, but dont want Managers to. I like hearing Prem and Buffett talk about it. Surprisingly enough I think Tom Ward has that fear as well.

Parsad congrats and thanks. You really have built an interesting network of people. Brian Bradstreet seems like the Ajit Jain of FFH. I dont think people realize how deep the FFH bench is.

What made you give that up?

I dont subscribe to anything. I rely on this board, and interviews which are typically aggregated by this board, gurufocus, and Wealth track. Most of these guys including Grant are interviewed quite regularly. If you are really interested you could probably access these via the library or university.

Thanks for the link.

I am hoping they have something planned. They just missed the biggest stock sale in the past decade and spent zero cash. Oil and gas prices were also around $40 and $4 and they spent zero cash. Hell DO was cut in half, CNA chopped down, though BWP held up decently. What are they waiting for? Now things are rich.

Seems like a smart asymmetrical bet on rising yields. If you could get 2 year leaps then it makes sense. Half the smart people predict inflation and the other half deflation. I have my hedges in place. This seems like a good way to guard against one, I would perhaps pair it with something. REITs are overvalued on an absolute basis but seem fairly priced based on where treasuries are at. 3% though is really short, I think perhaps people are pricing in a recovery in consumer spending and mall rents / activity. Its tough, timing has to be spot on for this to work. REITs will tank when rates rise. I just dont know when, its a tough game.

Lol I am not sure I would do much better than the Tisches. They like me appeared to have no risk control and got caught reaching for yield. Now they are a bit more conservative, but I dont know if thats the answer either. Prem and Buffett are geniuses because they get the yield without much risk. Buffett put a huge pile to work at 10% and Prem's team has probably the best bond returns I have seen. CNA should be buying BWP debt inmo. Its a nice way to get 6% + or so, but they probably dont want to mix subs. I think CNA will get a bit of media due to lack of involvement in Japan, but what I have learned is buyers want to see insurers who can underwrite. CNA was living off the FFH model. Lose money on insurance and make money on float. Thats great for Loews, but will get you below BV on the share price. DO did quite well. I think with the gulf reopen things can only get better. I have DO leaps and am hoping for a double if it hits $100 after all the rigs go back to work. The real question is what the hell is Loews going to do with all that cash. I hope they dont buy wet gas, or oil. I think they need to diversify or they will just become an Oil and Gas conglomerate with a bit of insurance. I would like to see something that is fairly stable, and something that consumes capital. Maybe a utility. I dont really like Loews having too much excess cash, the Tisches arent WEB.

Ya I believe Harry was right. CNA Surety was a license to print money. CNA could pay up now or pay up later or leave it sticking out there. I am sure the synergies and public listing savings make it a bit less expensive. CNA has an amazing piece of float. Imagine if rates were at 6%, or CNA had FFH's bond team. If only the Tisches either scaled up their investment prowess or let Buffett / Prem manage the float for a fee.

Congrats CNA goes down. http://www.businesswire.com/news/home/20110421005471/en/CNA-CNA-Surety-Sign-Definitive-Agreement-CNA

Any new insights on investing? Was anything shared on Sandridge / Commodities?

I agree. How bought next year we start a deal where you cover my airfare and I get you next year. Lets start with you ;D

Sounds like we really missed out.

That is quite interesting.

Thanks alot pictures and notes would be great.

Gentlemen we have a duopoly. Customers are determined to ensure there is a competitor so I am sure market share will be within a 40% - 60% percentage for both groups. 2011 will be the year of digestion, 2012 the year of integration, and hopefully by Dec 2012 we start the reward phase. Looks like I will have to hold onto my Leaps. Value investors seem to be lining up and down the space. A good chunk own WDC and another chunk owns Seagate. http://www.ocbj.com/news/2011/apr/19/report-seagate-eyes-samsung-unit-pending-western-d/

Lol, only if you put a bid in on some SD leaps at $13, or ATPG at $21. Owe this game would be much more profitable if I were better at timing these things. I cant believe S&P still gets any respect from the market.

Myth What am I missing that you were unable to get your order filled, when it traded below 1.60 most of the day. I ask that same question. Perhaps TOS's execution suck. I would guess bid was 1.56 and ask was 1.64 or something like that. Only 7500 shares traded by mid day or so.

Not sure how young you are or how much cash you have, but judging by your post you seem to be doing well enough. I have been doing this for 4-5 years and feel like I am just starting to understand whats going on. I can say it only gets easier, as your knowledge compounds and your circle of confidence grows. It must feel like taking candy from a baby for Buffett. They say a basketball feels like a tennis ball to a professional player, I think its the same in investing. I wish I had come to value investing earlier, and also wish I were investing in a world where macro didnt dominate the discussion. Inflation / deflation / gold / oil / silver is far more important then I would like it to be, but alas this is the hand we were dealt. It sucks to be a saver, but I dont think yield is too hard to find. You could put together a portfolio of preferreds / high yield which would give at least 7% or so. SSW preferreds are at 9% - 10%, FTR yields 7% or so, ATPG has 10% preferreds, SD 6 months ago had preferreds which were convertible and yielded 7% they have likely doubled. ICO, and FBK also had nice preferreds / debentures which have done well. Regarding a manager. I agree with Parsad, I just want someone smart who I trust. Today I would probably give my money to Zeke Aston, or Francis Chou. I like Bruce B, but his fund is too big, and he owns to much in Finance for me. Also I would likely built a porftolio of value investor owner managers. You dont get much better than LUK, FFH, BRK, perhaps MCF, FUR, L, and a few other guys with 10% - 20% positions. All these guys have cash and invest counter cyclically. You would have a team of players who are all top stars each looking for value in there respective games. I dont think there is a better steward out there for capital than Prem Watsa. I dont like the pricing on FFH (cats and declines in book value arent priced in), but when I grow tired of this my capital will go there or to people like him (Chou). --- I would probably invest 30% of my funds in long term holdings which I held on to (stuff like ATSG and the like), would put 40% with those owner managers, and would probably put 30% with a few fund managers. Similar to the guys at Cornwall capital, it sounds good and feels good but when you look at the returns most funds just dont do it for me. 5%-8% in good years and -15% in bad, just doesnt work. Besides the numbers, I dont like the process I hear from most managers. Thats probably the most important thing for me. Whats there process. Finally my unsolicited advice for the day is I recommend reading this thread. Being young I find myself thinking about it as well - http://www.fatwallet.com/forums/finance/1090030/

I was trying to buy 2500 shares, for 1.60. Perhaps I should go over the ask, but I hate doing that on an all red day. I think this will be a good quarter. I mean we have had 3 dud quarters with low volumes for all sorts of reasons. Record pulp, cost improvements, something has to give. I want in prior to the release, right now its 8% higher than my sales price and I can deal with that. Though this new position will be much smaller.

It seems like his sort of stock given his track record. My bid for half my shares back didnt get filled, I hate having to buy the pink shares, they dont trade much.