Myth465

Seems like a good move. My guess is they will have a financials and then an industrial / manufacturing guy.

So all I have to do to get an 8% pop is do a little bitching on this board? Hmm... You know, I'm also not impressed with the stagnant FFH share price as of late. Worrisome. Management doesn't have any direction. Industry pricing is soft. Hate their website and its conspicuous lack of flash animation. Now excuse me while I check my portfolio. ;) I own about 14 stocks I may need your help with lol. Someone wants in.

I think Buffett by and large says what he thinks but also knows he is trapped by his position. He could very easily crash the market when its extremely jittery. I think he is negative when the market is high and people ignore him, and bullish when its extremely low. Other then that he doesnt have much to say. Lately he has been bullish on America coming back but I dont think he has commented significantly on the market. I don't think these things are mutually exclusive. Stocks could be like the USD, at the top of a very third rate class. He seems to be saying stocks are cheap, but may get squeezed by inflation if they dont have pricing power, find good stocks as inflation hedges vs holding cash or gold. It doesnt seem like some huge contradiction. It seems to me like he has realized that its not all black and white and this is just a shade of gray, am I missing something?

I find myself following TariqAli lead more and more. Only so many hours in the day, and at some point it starts to hurt more then help. I read most news on Gurufocus, this board, and 2-3 value blogs, also scan all the VIC ideas.

biaggio I do much the same. For Jockeys or other Good Companies at fair prices - L, LRE, SSW, FUR, and soon to be FFH, LUK. I try to hold unless significantly overvalued. For everything else i sell near IV or sell if I find something else.

I think you completely missed his point.

I generally like to trade value. Honestly you are screwed either way. Those that sold ATSG from $1 to $2.50 have to be a bit annoyed. For me it depends on whats out there to compete with the idea.

I would say its near book based on 9/30 or underbook based on 12/31 numbers (provided no cats). Basically without large cats they will have massive reserve releases for Q4. My theory is that they reserved adequately for what many thought was going to be a very active hurricane season and the season was very mild. They also raised prices significantly on offshore energy. Without cats all of this money will fall to the bottom line. You could wait until you have then numbers but the prices will simple move up once its all confirmed. I dont think they will trade above 1.2 BV given the soft market, but also feel that this is going to be a moving target. It will start again next year. They will do a Div, then trade down, then trade slightly above BV, then move back down heading into the season. Then we take a hit or not and it starts all over again. There may be other cats related to property as well but hurricane season seems to be what you want to watch (in terms of BV blow ups). I think we all feel like its a sure thing, unless you have large cats. Lol. I also hope everyone knows that one day they will come. I feel comfortable holding LRE and FFH through the season and also holding both above BV. Maybe 1.2 - 1.5 times. Most other insurers will be trades (from below BV to 1.0 - 1.1 BV).

Im a bit underwater too but am quite happy. Pulp prices have held up and havent crashed, the company is recap., and we get results and hopefully a bit of direction fairly soon. Everything else is really just noise.

I agree with SJ.

I dont like excess cash unless I trust Management. Most people do something stupid with it - such as MSFT trying to buy Yahoo. I feel pretty good though about WDC.

Why not AHL twa. I plan to buy hold FFH, AHL (via options), and LRE in my insurance basket. A small bit of AHL via June options due to a lack of a premium, then a slightly bigger portion of FFH, then a bigger slug of LRE which is at full size now. I pushed the pinks to $9.15

Thanks Bronco, I will put in a call to my Broker.

Every business is simple if you look at it like that, Enron makes money trading energy and is well run Simple! BAM seems to have hundreds of entities and related party transactions. This piece will sell to that, and bring in a third party for this or that, then they buy this, and spin off that and what not. I know its part of their asset management business but for me its tough to follow the details / big picture. Trust me BAMs accounting is far from simple, it may look pretty when its rolled up. Also there assessment of IV is useful but I prefer to do my own. They should be interesting now that they are on IFRS. The revaluations every few years should help quite a bit.

Hi all, Quick question. What do you do when you want to sell options, but they trade with no premium or a negative premium. I feel the price is good and want to book my gain. I have heard you can exercise and sell covered calls, if you want to hold or exercise and sell if you dont. Are those the best options? Also if the options trade with no premium, how would you be able to sell calls?

Thanks adding this tonight.

I would own gold if I had real money. If net worth is $100k, having $10k of gold seems pointless. You are screwed should civilization end. If its $100 million it seems stupid not to have at least half a mill in gold should S hit the fan.

BAM seems unnecessarily confusing.

I do exactly that based on Pabrais book. 10x earnings for a no growth business gives a 10% return to an owner which is an adequate return. I dont take out BV, I add cash and depending on the situation may subtract debt. If the business is growing I will give it an 11, 12, 13, 14, up to 15x multiple depending on the growth. I work with debt depending on the assets. If they are long lived with a strong business model then I ignore the debt (ATSG, SSW, basically REITs). If the debt can be paid off in 1 year worth of CF, I ignore it. If the debt is severe and basically is a significant part of the capital structure then I will subtract it or use a lower multiple (maybe 6-8). Very easy and works well. 10x FCF is fair value, I buy at 5X or so. Or 7x if its growing. You are right though he is double counted. You either use earnings power or asset values, I dont think you can do both.

Agreed Ucc. I think he has reflected on this quite a bit and honestly believes this was his worst investment (from a time and money standpoint). I think he learned a valuable lesson though about ROIC and that has made him quite a bit of money. I also believe that this may have pushed him more towards Fisher.

Lol very funny story. Egos are very interesting.

While interesting I wouldnt call those Plan A stocks. They are growing in IV but arent in the same league of Coke, Moodys (prior to the crash), or other world class stocks. Many would call Noble a plan B because its business is based on a commodity and it has no pricing power what so ever. If oil goes to $40 they are screwed, and this is coming from a guy with 25% of his port in oil and gas moratorium related stuff / a holder of ESV. Plan A companies are High ROIC, low capex requirements, growing, and pricing power. PVD would be a type A company. Having a portfolio of them at 50% off has only happened 1 time in recent history - 2009.

I think this sounds good but doesn't work too well for most investments. Guys typically end up giving back the gains over a certain time, after trying in vain to justify holding an overvalued / fairly valued stock. Monish and Younger Buffett - had it quite right inmo. Monish Pabrai - "Plan A is always to buy the Coke and Moody's of the world at 50% off. If you buy these type of businesses at that discount and it takes 2-3 years to trade at intrinsic value, you'll do very well. Intrinsic value will be much higher in 2 to 3 years. So 50 cents may be worth $1.30 or $1.40. This is always Plan A. But plan A is virtually impossible to execute across the entire portfolio because they are so very very rare. (Work Horse Positions) When plan A fails, we go to plan B. Plan B is to buy at half off, regardless of business quality (as long as you're pretty sure intrinsic value is very unlikely to decline). Most of Pabrai Funds investments over the years have been Plan B. ---- Parsad is even pithier. Buy cheap, sell dear. The trouble is whats cheap and whats dear. Thats where the expertise comes into play. ATSG was bought due to stress, and I ended up liking the business. At $2-$3, I said it was worth $10 conservatively. Once it hits $10 I will reassess and take some gains. I feel you run into problems when you start moving things around. You start with 8x CF, then 10x CF, then 12x due to the business being stable and annuity like, then 15x CF due to QE2. ..... Its tough to say whats the right multiple, but its easy to say whats cheap and dear.

The weekly economist. Roubini's Crisis Economics Stiglitz Freefall all are pretty good and available in audio format.

HarryLong you are much more eloquent than me. Thanks for the closed vs open loop comparison.