Myth465

Lets put down our valuation calculations and pick up our economics 101 calculations. Supply and demand hasnt been repealed. We have the dumb money rushing in, which increases the demand for the stocks. When does that end? What scares them out?

Lol sorry about that Alert.

You guys are falling for the okedock. This has nothing to do with budgets and is just an attack on left leaning unions. The solutions proposed by politicians wont address any of the problems. I agree with Zarley. Bronco you are too focused on yourself ;). When I say Americans, I dont mean Bronco. You are not Americans, you are some rich / upper middle class guy who kinda gets the short end of the stick. Not rich enough to say screw it, I dont care, but not poor enough to pay no taxes. I suggest getting into that top 2%, or scaling back. I hope to join you one of these years on my way to that top 2%. --- Hell we agree on the solutions (they are obvious) but I wont give a man credit for lip service and screwing over teachers. Teachers dont make squat and deal with brats all day. They have earned their keep and deserve a full pension and crappy pay inmo or higher pay with a 401k. Cops and Firefighters deserve a full pension, but only after working till 55 or 60 or if injured in duty. That pension should be a rational amount and shouldnt have much to do with the last year of salary (no gaming).

I was with you guys for a bit but have switched sides, I now think what these guys are doing is nuts. I dont think blaming state workers is the solution. Some of them are overpaid, and a few have rediculous pensions but the core part of the problem is Americans want things but dont want to pay for them. The pension mess could be fixed by one GASB change. Bring pension costs onto the budgets and account for them fairly and accurately. Also mandate full funding with conservative market return projects which adjust based on market valuation. Then states and unions are free to do what they want but it ends the backroom deals and shooty accounting. Its time America got its priorities straight and put up (pay for what they want) or shut up (cut services honestly without trampling over teachers). One again the right is all talk but no substance and the left has no balls. Whats written below gives me hope though. Some 30,000 students and public sector workers rallied at the Wisconsin State House in Madison Thursday to oppose Republican Gov. Scott Walker’s bid to eliminate almost all their collective bargaining rights and slash pay and benefits. Public schools in Madison are closed for a third day in a row today as teachers continue to protest. A vote on the measure was delayed after Democratic senators refused to show up and fled the state—leaving the Republican-controlled State Senate without quorum. We speak to John Nichols of The Nation magazine, Madison teacher Susan Stern, and Wisconsin Democratic State Senator Chris Larson.[includes rush transcript- partial] Thats my political rant for the day.

I would say about 1X BV is a fair price to buy at and hold up to 1.5 BV. FFH is worth more than book, but no one will pay it till underwriting improves. The real goal inmo is to hold as an owner and earn the future growth in BV with goals of at least 15% a year (they will be lumpy). As far as trading I would get in during a hard market, or when you know more about the investment portfolio than Mr. Market. I kinda agree with insurance analyst your premium to book depends on consistent earnings based on Interest and Dividends (adjusted for current / future yield) and underwriting profits.

This is quite easy to predict. Yes. The key though is tell me when? I think we are overvalued and will stay that way until we dont. I agree with Jim Rogers. When the market is due for a pull back it finds a reason to pullback. I predict the next thing (Euro Debt, Our Debt, Exchange Rates, Inflation, Muni Bonds) will be blown out of proportion sparking a pullback. When is the key. I havent sold much and dont have much cash. Currently looking around for things to sell.

I would highly recommend a manual of ideas interview and summary of Singleton as a nice alternative. I am sure you can find it if you search the web.

More color. http://www.gurufocus.com/news.php?id=122821 They will lose the proxy fight, and will waste millions doing it.

ok22, that was one of the most sobering and honest critics of FFH I have seen on the board. Welcome and I look forward to your future posts. Hopefully we shares some holdings. I would like to read more of your critics. I hold 1 share of FFH and hope to buy in sooner or later.

Results are as expected and Q1 is not looking much better unless we sell off from mid Feb to March. Though investment gains should be there due to SD and other holdings. I think FFH is a great buy, but still dont quite understand those who think its worth 1.5 to 2x book value with these underwriting results. ---- I think you guys are fishing with the "conservative" underwriting mantra. These things at some point tend to flow through the numbers. FFH hasnt been a great underwriter and has been an investment story as long as I have known it (which isnt long). I take the numbers as is and view future reserve releases as nice unexpected bonuses.

I think thats a question few people can ever answer.

Well I read half of it 6 months ago and havent found my way back to it. I think its a must read as an investor but would prefer an audio book. The best investing book hands down is Roger Lowenstiens the making of an american capitalist. I couldnt put that thing down.

You have to combine it with Verizon. Frontier swallowed a business bigger then them. All old numbers are fairly useless. You can review the presentations and use the pro forma numbers.

Partner, I have ~ 7% of my portfolio in FFH & 3% in BRK-B...would you take 7% + 3% of added cash and add to these holdings? Before the additional cash I am ~ 25% cash. I focus on MOS and catalysts outside of macro considerations. This is what I do in general. As merkhet has said everything is expensive so I am looking to raise cash. I am at 5% and will sell some of the ideas below as things work-out. Cash percentage is going down as everything goes up. Its a nice problem but whats a guy to do. ---- I think cash should be allocated to the best ideas, and ideas with sufficient margin of safety. I also tend to shift cash to ideas where the catalyst is in place / playing out. This really juices returns. I had 15% in SD and 15% in ATPG and 7% in FBK. There is also 20% in ATSG. I sold some other ideas and also added cash to the portfolio. I bought trading positions in SD and ATPG due to catalyst playing out. Both went up 10% - 20% and I can now sell these leaps to raise additional cash. I think having core ideas (5-20), then allocating cash to the ones where the catalyst are playing out can really juice your returns. I bought more FBK because the sector is "hot" and people are watching it. It is no longer a sleepy pulp procedure. It will get taken out or will go up. I have sat on it for a year, and the new capital will benefit because the stock should move fairly quickly. Earnings could disappoint again though (not sure how with record pulp prices).... ------ TX and I made out like bandits putting capital into ATSG after the turn. Like I said I hold a core position to protect against a strong move up, then push in more chips after the business turn and hopefully prior to the stock turn. Thats how I plan to allocate new cash.

Fairholme response. This is getting interesting. That’s the opposite of a take-over. Fairholme Funds has absolutely no intention of taking over anything. We are giving the company back to all its shareholders. It’s a dividend of governance.” http://www.gurufocus.com/news.php?id=122772 Gives short sellers some credit. “This is not about strategic alternatives. This is about who is running the company. The board is hiding behind a false sale process. The business plan is broke. No one will buy it until it is fixed. I’m surprised Morgan Stanley is playing along. The only purpose of this exercise is to entrench the board. Is Morgan Stanley not collecting fees for that? No counterparty will take this board or management seriously. They have no mandate and must go.”

http://www.google.com/url?sa=t&source=web&cd=1&ved=0CBIQFjAA&url=http%3A%2F%2Fwww.amazon.com%2FDistant-Force-Teledyne-Corporation-Created%2Fdp%2F097913630X&ei=yWZcTcjpAY6ctweCtLmCDA&usg=AFQjCNHzc_fqgmhH-pMYWG_zYxAj7PvWXQ&sig2=uoXkb_mKTG3Em1C8OA9CGA Amazon.com: Distant Force: A Memoir of the Teledyne Corporation Biglari has read the book and references it interestingly enough.

Yep I am halfway through the book. I believe Buffett considers him #1 and its hard to argue with that guy.

Lol thats a good honest answer. I think we will see you up there sooner than you think.

The question is Parsad when are we going to see you up there speaking?

Neither. Its smart inmo. FBK has a marketing issue though, and the US plants are dead weight at the moment. Its cheaper, but a broken horse right now. You would be correct to trade value and get the cheaper play, but you may end up riding the wrong horse and miss the rest of the race :). You have to ask yourself - Do you feel lucky? Is FBK a broken stock due to ownership, management, size, and US subs? With all that gibberish. I would split the difference and sell a decent amount (maybe half) in a non taxable account and use that to buy FBK. No taxes and you smell like a rose either way (unless it all collapses in some violent pullback). Kuppy was right to split the difference on the 2, I wish I had followed his lead and used options.

Great article. I like this paragraph. Hopefully the ad nauseum comparisons stop at least here - This new reverse split will no doubt draw further comparisons between Biglari Holdings and Berkshire Hathaway . That comparison infuriates many in the investment community who believe that Sardar Biglari is still wet behind the ears, has much to prove in order to even be mentioned in the same breath as Warren Buffett and is already hurting his case by making some very un-Buffett-like moves. Only time will tell.

Nice tribute to Cundill at the beginning. http://www.bengrahaminvesting.ca/Resources/Video_Presentations/Guest_Speakers/2011/McElvaine_2011.htm

LOL. So funny because its true. I paid 1.56 a few days ago.....

I feel trapped. I like my top 4 holdings which make up most of my capital. I wont sell them due to all of them being undervalued. I am selling off smaller fully value holdings but that wont protect me much. I think we will stay overvalued for a while, and then gap down on bad news generated by China or Europe.

This has me jittery as hell. My port is up 25% YTD and maybe 40% over the last 3 months. Alot of that is oil though. Perhaps time to take some chips off the table. Also considering a move to Oz interestingly enough. http://finance.yahoo.com/tech-ticker/china's-economic-%22hard-landing%22--will-cause-a-commodity-crash,-says-gary-shilling-535929.html?tickers=fxi,eem,gld,copx,jjc,^dji,^gspc