Myth465

It sounds like you are simply a guy who doesnt like commodities or commodity businesses. I can respect that. They are crappy businesses, but can be very profitable investments. I dont like them either, but I believe in the oil story (As does Buffett and Grantham). I prefer sustainable businesses, of high quality but I dont see myself making much money with Coke, MSFT, ADP, Mastercard, AON, or the 5 or 6 other large cap ideas that meet these requirements. I have a few gems in the small cap world, but for me I go where the value is. At this stage in my career I like deep value, and that usually means a commodity business. I own a number of oil companies and companies driven by the oil cycle. I agree its a crappy business, but I see 50 cent dollars with fairly pessimistic projections. I also think anything more than very basic modelling in general is fraught with error and a waste of time. There are plenty of ways to skin a cat (though I have never tried) and plenty of ways to make a dollar. I can understand why you avoid the oil patch (probably for the same reason I avoid the Uranium patch). I have no idea how Soros or Jim Simons made money but, both of them have a pretty big chip stack and I wouldnt go around quoting Buffett to them. Similarly I wouldnt do it with T Boone, Jimmy Rogers, or Sprott. Plenty of ways to skin a cat, and earn a buck. With that said, this is a commodity thread, and just about every value investor worth his salt has a commodity investment, and likely owns a commodity business or 2.... Also the one thing in life I am certain about, is few things relating to business are certain.

The gold story is not necessarily doom and gloom. Think of it as the new money...uninflatable or deflatable by self interested sovereign entities. Years of unsustainable overspending and dillution of the value of the global default currency is what produces the doom and gloom. Returning to a gold standard or partial gold standard will simply reveal real value (and realize previous losses).. a process that is necessary to return global markets to free trading. OIl prices respond to supply, demand, cartel manipulation and global liquidity induced speculation... hardly a formula for purchasing power stability or a store of value. Perhaps we have different goals. I am not trying to store money, more so make it. I like the oil story catels and all lol. You may be correct about gold, but the transition sounds pretty doomy and gloomy to me. I always want to go out and get a gun and some can food after hearing a gold bull :-[. It just doesnt strike me as happy times. Also I dont think gold will be the currency. The powers at be will push for something that will be inmo just as problematic. (I also have my doubts about free trade, without some ground rules, it seems like a race to the bottom). I like a good bull market story and I believe in the oil one. With regard to gold, I hope we will muddle through a few more generations with the USD front and center. That seems the least painful option for me and those I care about but I know its highly unlikely.

I think a deal is done in terms of a high level agreement. I think all the key players know how this will play out, and investor relations is kind of a waste of time at this point. Debt will be paid off, and the details will be worked out between all the key players before we hear anything. Thats my 2 cents. I like the Deb move, but would have preferred them to retire all. As someone said perhaps there is some reason out there.

I agree, though FFH seems to be a deep value shop. I have only been watching for a few years, but I believe higher quality businesses would be better or they would end up like LUK with a bunch of dingy assets. Though its worked quite well for LUK. I would like to see better integration of the insurance units. I dont know much, but we are going to have 10-15 subs with different names and of significantly different sizes. Why not integrate these into regional businesses and rename / rebrand them. Though I have never run an insurance company so what do I know.

I think everyone is implicitly or explicitly making predictions about the future. Even Buffett in the recommendation is assuming high margins, pricing power, and other benefits of quality businesses persist. While many are making assumptions about the future, I dont think anyone here has made investments made on correctly predicting these outcomes (except for maybe buying gold directly). Even engaging in a discussion about how to protect against inflation is basically assuming / predicting a future which entails inflation. lol. With that said, Buffett himself predicts inflation in the long run, as does anyone else with any sense.

Im an oil guy. Though I agree with Uhuru we will have a series of rolling recessions if peak oil is correct. I prefer supply and demand to doom and gloom.

I dont see buybacks in significant fashion. I also think FFH may be right at book with the losses and dividends. Buying at .95 book value is no real bargain considering they could keep acquiring other insurers at BV. Also we have had too many issues to be buying back so soon. I think capital will continue to build and acquisitions / expansions will continue.

And the Saga continues. I have my popcorn ready.

I cheat. 80% of my ideas come prescreened ;D by the best professionals money can buy and some really sharp non professionals. With that said I analyze very few stocks a week. I review 2-3 dozens though and only look at cheap ideas that have the right risk reward for me. I probably move in and out of maybe 20 ideas a year. I have a 9/5 though so I get it how I can.

I think people are way to focused on this, and ignore alot of high quality businesses.

I hope im smart enough like you are, and continue to simply trade value. I will always be a FFH shareholder, but will only pony up when I see value + a catalyst. I think if one is intellectually honest, its hard to see FFH getting revalued based on underwriting. That leaves investment gains and a hard market. I dont see significant gains in the portfolio, and believe I will have an op to buy at a lower price once we get a hard market (likely caused by a cat or fall in the markets which sends the stock and BV down). As a young poor fellow I cant justify holding most of my portfolio in FFH.

This week was better than last. Even a few majors are coming around on WDC, and the rebound in ATPG was a nice surprise. With that said I am still looking for a few ways to raise cash and plan to hold onto what little I have. Rabbitisrich - How do you feel about the changes at HALL, relating to the big owner being able to sell shares. SD has run quite a bit, but I think we could see $11 or more if the stock sell and new play works out. I have been thinking more and more about it, and they can only drill 250,000 worth of land. There has to be something planned for the other 60% outside of the new stock sell.

Gannon is the gift that keeps on giving. I find 2-3 very simple way of looking at value is all you need. I use the same method at WB, except I think most getting 10% return year after year is fair for the owner. I look for situations which will deliver 20% return and wait for Mr. Market to pay up. http://www.gurufocus.com/news.php?id=120357 http://www.gannononinvesting.com/blog/15-valuation-walkthroughs.html

I agree but nothing I can do except for try to compound my wealth. People these days arent even open minded enough to engage in meaningful debate / conversations. They are simple slaves to Olbermann / Maddow or the far right, or even worse basically disinterested. This board and its posters are of the highest quality and we have been doing this for 2-3 years by my count. I dont think many have moved from their perch. If I were god, things would be different but I am just a lowly guy trying to ... This too shall pass.

Its all opinion based on ideology. These are the best 2 links I could give you. Commentator's Disease - http://www.fredoneverything.net/Commentators.shtml I often see victims of Commentator’s Disease arguing against the minimum wage on abstract grounds of economic theory. It is what commentators do—bandy abstractions, railing for or against Keynes, assaulting their ideological opponents with pointed phrases. They have never had to do the arithmetic of forty times the minimum wage minus taxes minus bus fare minus rent and gotta pay the cable because it is the only thing they have after work. They have never had to choose between the electric bill and a new coat as winter comes on. The commentators don’t realize that not everybody is like them. Those with IQs of 140 and up (130 gets you into Mensa, I think) unconsciously believe that anything is possible. Denizens of this class know that if they decided to learn, say, classical Greek, they could. You get the book and go at it. It would take work, yes, and time, but the outcome would be certain. They don’t understand that the waitress has an IQ of 85 and can’t learn much of anything. Conservatives think in terms of merciless abstractions and liberals insist that everyone is equal. Not even close. Further, people with barely a high-school education and low-voltage minds regard any intellectual task with utter discouragement. Some commentators urge letting people invest their Social Security taxes in the stock market. To them it is a question of abstract freedom and probably the Federalist papers. The commentators are smart enough to invest money. I’ll guess that at least half the population isn’t. Go into the tit bar (does it still exist) in Waldorf, Maryland, and ask the dump-truck drivers and nail-pounders what NASDAQ is. Liberal commentators want everyone to go to college, when about a fifth of people have the brains. Conservatives think that people can rise by hard work and sacrifice as certainly many people have. Thing is, most people can’t. Commentators only see those who made it. Good link, worth the read of the whole thing. ------ 2nd link is more of a quote. John Maynard Keynes - The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas. I believe this applies to us all. Most of the bad or great ideas out there that are being proposed can be tied back to 5-10 economists. Strange isnt it. ------ We are all just bloviating based on our political ideology / mindset. Buffet's dad was a raving conservative, him and gates are left of center. Its just personal choice. Its a great way to blow off a few hours of work, but I wouldnt take it too seriously. There are an army of accountants, economist, and political hacks on both sides of the issue that one could argue almost anything. I would just go with the one that feels right, and try not to be so dogmatic about the whole thing.

Too hard pile for me but sounds like you have 1x down, 9x more to go.

I be interested in knowing where you stand, but can understand if you cant discuss current or past investments.

A said day for the value investing community. At least he lived a full life.

broxburnboy - Its quite ironic that deficit hawks are also war hawks. Interesting times.

Just got my LRE dividend today, not bad. Talk about returning capital to SH.

You guys are keeping me busy with these non investment related articles. Thanks for the link. Still working through the diet info.

Or honor their promises and pay their bills (deadbeats), by raising taxes. Pensions are crazy, but its more so because they have been underfunded and used as a political tool by both parties.

My guess is Swiss Re. LRE is your biggest position, I thought FFH was number 2.

Very good article on valuation . http://www.gurufocus.com/news.php?id=120188

Its been long in the making.