Myth465

Damn where the hell was I. Someone should have sent me an email or something.

This is all very interesting. In hindsight Blockbuster should have paid 100 times earnings for Netflix or even Red box in the early days. It would have saved the company. Any number of companies probably should have bought Google or Apple in the early days as well. They could have paid upwards of 100 x earnings if they got in early enough and would be better off today.

T Bone thanks alot for the analysis and Zorro thanks for the link. It pretty much echos what T said. Very interesting. I may look at 2013s on CHK as a small speculative position. 2.5 years should hopefully be long enough. I also viewed some of there presentations and I think you are right the CEO's style is a huge turn off but may be a great asset. I still worry about the commodity and will spend sometime looking into natural gas. T Bone what do you read? How do you get to the level of detail you have for the land drilling equipment and other related bottle necks? I have picked up on the decline rates and the drill to hold / hedging factors, but dont have a great grasp on the equipment. With deep water its a bit easier. You can easily see that a 400 ft rig cant drill a deep water well. You can tell that HERO and HAWK have crappy rigs that wont be working unless its plug and a abandon work or other more high quality rigs are already put to work. With land it seems like there are a bit more variables, I know PTEN and Nabors tend to have older rigs and PDS and HP have newer better equipment but am not sure whats required for shale wells and what the specs / supply demand ratios on those are. Anyway thanks alot for the best, there are definately plenty of things to think about. In the oil space my favorite ides are ATPG, and SD. I am looking into Petrobank after the barrons and gurufocus write ups. For gas it seems like no one is as knee deep in it as CHK. I also like Ensco as a driller, but feel that cash flow will continue declining for some time. What are your picks?

Soros is the worst guy to follow. He moves in and out of stuff so much and last I heard he wasnt running the money in his fund. He retired again.

WHats funny is Harry and Marty Whitman have the same rules for selling. Marty said his stocks have gone up 100% and he has sold and then it goes up 200% more, for the momentum guys. He will now no longer sell unless its grossly overvalued as long as he doesnt need the cash. http://www.gurufocus.com/news.php?id=1182

I never quite looked at it. The discount is almost an advantage in terms of growth.

We could just as easily call this guy - Bronco. Lol To be fair a guy making $250k is a poor rich guy. Im a poverty stricken rich guy, or a middle class non rich guy. Where is John Edwards, we really are living in 2 Americas. Thanks for that link, its pretty funny.

twacowfca - I have responded to bits of his article (Drilling) and believe that he is just another flame thrower (Glenn Beck with a PHD). With regard to his beliefs, I believe they speak for themselves. Im slightly biased, as a Black male, his views on slavery are asinine. Bronco - this is the weirdest thing. We disagree so much on the analysis and rhetoric but your suggestions are pretty easy to accept. Again I think that's a good idea. I dont think we should subsidize plant closures but it doesn't make sense to trap capital abroad (MSFT, WDC). I like carrots and sticks though. The Dems in my opinion have dropped the ball. How do you lose business support (after bailing them out) and the populist angle (The Tea Party has that market) is beyond me.

Oh sorry bout that. I deleted it. I can see that everyone wants to look at this from a valuation perspective. I think that's the wrong question, unless you have unlimited patience and capital. I can see that T Bone is aware of the momentum and story issues but is more focused on the value. My post didn't add much value and just reiterated the same thing so I deleted it. To sum it up I think T and Watsa are right in the long term, but it may be painful in the short term should we March up to 12000 and NFLX has a good quarter or 2. Judging by the O&G post and his comments above T Bone has his research ducks in a row. I can take a 10% position going to 5% or even 0% on the count of market sentiment but wouldn't be able to stand a position growing overtime slowly dominating my portfolio. It reminds me of Barton Briggs with his oil short, and the great Keynes quote about markets and solvency.

This guy is obviously doing something right. 40% for 17 years, no leverage. http://www.gurufocus.com/news.php?id=107953

I think Nokia and RIM have serious long term issues. With Garmin, MSFT, and WDC - I think the fears are overblown but not on the phone makers. Harry is right about one thing. We are living in a winner take all world of oligopolies. I just got a blackberry and am not that happy with it. Its functional but lacks a cool / crisp factor. I miss my Windows Mobile phone and though I hate Apple the Iphone is pretty damn cool. You will have 2 - 3 Smartphone leaders, and 2-3 cheap phone manaufacturers for the 3rd world. Nokia needs to give up on Symbian and adapt Andriod. This is coming from a guy who had a Symbian phone in 2001. With that said you could probably make money on it at some point / price.

You guys stop screwing up the quotes. One of the reasons I think Harry is an asset to the board, is he understands the market isnt rational and doesnt try to fight it. Thanks for the Kenny Rogers quote. Also the CEO could issue a bunch of stock to buy cheap assets screwing up your thesis. Its what I would do if I thought my stock was overvalued.

Humm, Selective facts. Wasnt he pro offshore drilling prior to being against? http://www.nytimes.com/2010/03/31/science/earth/31energy.html?_r=1 Wasnt the ban in relation to a small spill in the gulf, which is the largest leak of Hydrocarbons in the history of the US? Wasnt the ban enacted once the spill became known as Obama's Katrina? But, no you are right forget Occums Razor, this is all related to Kenyan roots, and Anti-colonialism. Columbia Journalism Review this week called the D'Souza article "a fact-twisting, error-laden piece of paranoia" and "the worst kind of smear journalism--a singularly disgusting work." I know - thats a liberal rag with an Anti-colonialism bent.

I know its a liberal rag :) http://www.economist.com/node/17095319 Barack Obama and business WINSTON CHURCHILL once moaned about the long, dishonourable tradition in politics that sees commerce as a cow to be milked or a dangerous tiger to be shot. Businesses are the generators of the wealth on which incomes, taxation and all else depends; “the strong horse that pulls the whole cart”, as Churchill put it. No sane leader of a country would want businesspeople to think that he was against them, especially at a time when confidence is essential for the recovery. From this perspective, Barack Obama already has a lot to answer for. A president who does so little to counter the idea that he dislikes business is, self-evidently, a worryingly negligent chief executive. No matter that other Western politicians have publicly played with populism more dangerously, from France’s “laissez-faire is dead” president, Nicolas Sarkozy, to Britain’s “capitalism kills competition” business secretary, Vince Cable (see article); no matter that talk on the American right about Mr Obama being a socialist is rot; no matter that Wall Street’s woes are largely of its own making. The evidence that American business thinks the president does not understand Main Street is mounting (see article). A Bloomberg survey this week found that three-quarters of American investors believe he is against business. The bedrock of the tea-party movement is angry small-business owners. The Economist has lost count of the number of prominent chief executives, many of them Democrats, who complain privately that the president does not understand their trade—that he treats them merely as adornments at photocalls and uses teleprompters to talk to them; that he shows scant interest in their views on which tax cuts would persuade them to hire people; that his team is woefully short of anyone who has had to meet a payroll (there are fewer businesspeople in this White House than in any recent administration); and that regulatory uncertainty is hampering their willingness to invest. Related items Ignorant but not antagonistic That Mr Obama has let it reach this stage is a worry. But negligence is not the same as opposition. True, he has some rhetorical form as an anti-business figure—unlike the previous Democrat in the White House, Bill Clinton, who could comfortably talk the talk of business. Mr Obama’s life story, as depicted in his autobiography and on the campaign, was one of a man once mired in the sinful private sector (at a company subsequently bought by The Economist), who redeemed himself only by becoming a community organiser; his wife had a similar trajectory. There are the endless digs at Wall Street and Big Pharma, not to mention the beating up of BP. He remains a supporter of “card check”, which would dispense with the need for secret ballots in establishing a trade union. His legislative agenda has centred on helping poorer individuals (the health-care bill, part of the stimulus bill) or reining in banks (the financial-reform bill). The only businesses he has rescued are the huge union-dominated General Motors and Chrysler. Against this, it could have been much worse, especially given the opprobrium that now dogs Wall Street. A president who truly wanted to wage war on business would have hung onto GM, not rushed to return it to the private sector. Card check has not been pushed. The finance bill, though bureaucratic, is not a Wall Street killer. With the exception of a China-bashing tyre tariff and a retreat on Mexican trucks, Mr Obama has eschewed protectionism. A lot of government cash has flowed to businesses, not least through the stimulus package. And above all his policies have helped pull the economy out of recession. So what should he do? The same leftist advisers who have led Mr Obama into his “anti-business” hole are doubtless telling him that it is just a matter of public relations: have a few tycoons to stay in the Lincoln bedroom; celebrate Main Street’s successes, rather than just whining about bonuses; perhaps invite a chief executive to replace Larry Summers, the academic who announced this week that he was standing down as the president’s main economic adviser. Well, maybe. But once again this is advice from people who have never run a business. The main thing that is hurting business is uncertainty. Mr Obama was right to tackle big subjects like health care and Wall Street, but too often the details were left to others. Why, for instance, should a small American firm hire more people when it still does not know the regulations on health care, especially when going above 50 workers will make it liable to insurance premiums or fines? Fiscal policy is even more uncertain, thanks to Mr Obama’s refusal to produce a credible plan to rein in the deficit. Why should any entrepreneur plough money into a new factory when he has no idea what taxes he will eventually be asked to pay? These are questions that business needs answering in a businesslike way—and so does America. Otherwise the horse will not pull the cart. ---- Barack Obama and corporate America No love lost Corporate America’s complaints about the president keep getting louder Sep 23rd 2010 | NEW YORK SPECULATION that Barack Obama will appoint a businessman to a senior job in his administration reached fever pitch this week, after the White House announced that Larry Summers, the president’s principal economic adviser, will soon step down. It is hard to find an American boss nowadays with a good word to say about the current administration, and the absence of anyone with a business background in Mr Obama’s inner circle is invariably mentioned as a reason why. The perception in corporate America that the president is actively anti-business, or at the very least doesn’t “get it”, has started to “have a psychological effect on how firms invest”, notes one well-informed insider, who used to see this as a “seven out of ten problem” but now rates it as a ten. Discontent that started as mostly private grumbling not long after Mr Obama entered the White House has recently gone public. Ivan Seidenberg, the chief executive of Verizon, a telecoms giant, used a recent speech in Washington, DC, to accuse the president of creating an “increasingly hostile environment for investment and job creation”, claiming that the administration’s regulatory expansion into “every sector of economic life” is making it “harder to raise capital and create new businesses.” Jeff Immelt, the boss of GE, has said that the administration is not in sync with entrepreneurs. The US Chamber of Commerce, a business lobby, has complained that the Obama administration has “vilified industries”. And so it goes on. The Business Roundtable, another influential trade association, has published a 49-page list of current policies which, it claims, inhibit economic growth. Last month Dan Loeb, a hedge-fund manager who is famous for writing intemperate letters to company bosses, circulated a letter accusing Mr Obama of, in effect, undermining free-market capitalism and the rule of law. What stings most is that Mr Loeb is a former classmate of the president’s and was a big donor to his election campaign. Scary stuff. Yet does Mr Obama really have a case to answer? Certainly, some of the wilder allegations by some businesspeople should never have left the 19th hole. Mr Obama has consistently made it clear he favours a mixed capitalist economy. The big incursion of the state into finance took place on his Republican predecessor’s watch. And although he doubtless went further than a McCain administration would have done to help GM and Chrysler survive, he has stuck to his pledge to return them quickly to private ownership. He used this year’s state-of-the-union message to commit himself to helping corporate America double its exports, and has appointed a council to propose ideas for promoting more innovation (though, says one member, “The administration is doing more talking than listening, and several of us are already worried we’ve been suckered into a PR exercise.”) Moreover, the main reason so many American bosses are down in the dumps is the sluggish economy. Mr Obama inherited the recession from his predecessor, and the economy has recovered, somewhat, since then. Besides, it was corporate America, in the shape of the Wall Street banks, that was largely to blame for the depth of the recession. It might have helped Mr Obama’s relationship with business if he had gone on less about “shameful bonuses” on Wall Street; but some shame was surely in order. Even a Republican administration would have been obliged to reform financial regulation, and, though there is a lot to quibble with in the Dodd-Frank act, the administration responded to requests from Wall Street to kill some of the more alarming reform proposals from Democrats in Congress. One way it did this was to punt the proposals on to regulators for their consideration—which is why business is now able to complain about its “uncertainty” over what the full impact of Dodd-Frank will be. Mr Obama might reply that uncertainty is preferable to the alternatives that were considered by Congress. Uncertainty is a common charge from complaining businesspeople. According to one senior White House official, it is “shorthand for ‘We don’t like health-care reform, don’t like Dodd-Frank, don’t want our taxes to go up’.” On taxes, the administration points out that even allowing all the Bush tax cuts to expire would return tax rates only to what they were under Bill Clinton, which was hardly a terrible time for business. There is also a nasty, mostly inherited, fiscal problem which business leaders agree needs solving. It will require deep spending cuts, but may also necessitate somewhat higher taxes. As for health-care reform, many business leaders favoured the idea, complaining that the current system is increasingly a drag on the competitiveness of corporate America. But the bosses do have a point; it is hard to imagine that a president who really understood the depth of America’s economic problems would have pushed ahead with such a huge, disruptive reform at that particular moment. And it is also true that many of the details of the bill remain to be worked out. Uncertainty also hangs over energy prices, despite the apparent failure of cap-and-trade legislation. Many big firms, including electric utilities and others with long investment horizons, believe that a price on carbon is inevitable sooner or later, perhaps through regulation, since the Environmental Protection Agency is empowered to treat carbon dioxide as an air pollutant. They would prefer certainty to the current confusion. So it would be tempting to conclude that Mr Obama’s business critics protest too much, especially as their failure to create jobs in America coincides with earning huge profits and sitting on record amounts of cash. Better to point the finger of blame at the White House, they might well think, lest it be pointed at them. Except that, as a person with first-hand experience of Mr Obama’s decision-making points out, the “atmospherics really do matter”. The mere perception that the administration is anti-business is “starting to make the bosses of Fortune 500 companies more risk-averse,” says a billionaire who used to run one of America’s leading internet firms. Another valid criticism is the absence of any former business executive in the cabinet, meaning that there is no “go to” person for corporate America. “Surely he could have given us commerce secretary. Who has even heard of the current guy?”, wails one veteran boss. (The current commerce secretary, by the way, is Gary Locke, a professional Democratic politician and former governor.) For all their attempts to reach out to business, Rahm Emanuel, Mr Obama’s chief of staff, and Valerie Jarrett, a senior adviser charged with “public engagement”, haven’t cut the mustard (Mr Emanuel is almost certainly on the way out as well). After all, notes the veteran, just like his boss they have “never had to make payroll”. As for Mr Obama, when he meets businesspeople at fund-raisers and the like, he too often shakes hands and moves on, leaving them feeling he was more interested in a photo-op than a conversation. He caused offence and disbelief a while back by turning up for a meeting with a group of prominent chief executives and then reading to them from a teleprompter. The absence of a former business executive in the White House has hurt Mr Obama in other ways, too, reckons the former official. For instance, there has been no one to cast an eye over speeches to root out words that might inflame business sensibilities. Nor anyone to point out that there might be economic costs to shutting down all offshore oil exploration in response to the gulf oil spill, or that railroading BP into stumping up $20 billion for clean-up efforts might strike many business leaders as playing fast and loose with the rule of law. And there is something about having run a big firm that gives a cabinet member the ability and clout to speak truth to the president about the need to address a particular problem “right now”, says a former official. This would have been a particularly valuable counterweight to the influential but rather ivory-tower academics in the current White House. Who might Mr Obama recruit from business to the cabinet? Jamie Dimon, the boss of JPMorgan Chase, would be an interesting choice as treasury secretary, but Wall Street is probably still too toxic a source of candidates for high office and, besides, Mr Dimon’s recent criticisms of the administration have done him no favours. More plausible, and certainly less controversial, choices in the rumour mill include Anne Mulcahy, the former boss of Xerox, Eric Schmidt of Google (who resisted Mr Obama’s earlier solicitations, but may now be asked again) and Roger Ferguson, a black former Federal Reserve governor who now runs TIAA-CREF, a big fund-management firm. Recruiting the right corporate executive, or even two, might make the world of difference to commerce’s perceptions of the president, especially on the heels of some recent pro-business measures, including tax incentives for investment and research and development. It looks as though the time has come for Mr Obama to stop attacking the fat cats of business and try stroking them instead.

This was a value trade for me. I expected share price to increase with pulp prices or a take over. With that said I plan to hold for a while. I would like them to run the company debt free, take a bit of cash to try to implement efficiencies, and to pay a div with the rest. A commodity company like this doesnt need debt. The share price would take care of itself and we would get paid while we wait. BV doesnt mean much to me. I would sell if Management planned on doing something stupid with the cash. The next call will be very important.

Interesting interview. Buffett always impresses me everytime I hear him speak. He is probably one of the most humble guys I have ever come across. I really enjoyed it, especially Part 2. You dont hear many people say the things he says.

Those where my typical prior thoughts as well. I felt an Insiders livelihood is tied to the company and its not in his best interest to move all in unless the stars and moon lines up. Damn you guys. Yall are basically saying no hard and fast rules. You have to think.

No prob. Also I see what you mean, FUR brings up alot of results, due to further being used in every thread. Here are a link to help you get started. http://cornerofberkshireandfairfax.ca/forum/index.php?topic=1296.0 Feel free to ask any other questions you have on FUR. Here are my last few updates, thoughts, and the way I view valuation with regard to FUR. Berkowitz used to sit on the board and I believe it is his way to play commercial realty (outside of General Growth). I would get used to offerings. They will buy loans, sell part of them, collect cash, take over buildings, and repeat. I think they will raise cash when they need to, and thought it would be via private placements to Berkowitz. If loans get repaid they get 15% - 20% returns. If not they get buildings for cheap. Concord and Sty Town are free call options. I like Sty cause it really kicked up the share price. I bought more at $11, sold at $14 and would buy today if I had excess cash. I bought in 2008, when they were doing REITs. When REITs came back they switched to loans, and I guess they are now looking at buildings. My family did mom and pop SFHs and I have always been interested, this is also my way to learn about RE without the headaches.

Thanks Parker, I bought FTR a bit ago. The Goldman presentation is very good and I think Management is very talented. The things they are focusing on should drop to the bottom line. What do you think of LNET bonds. I think its a good move and would like for them to pay out 8 million in dividends. It would make it more FTR like, and would give those who are waiting a reason to stick around.

This comment made me think and I am considering updating my process to include it. When I look at where I have been screwed on Deep Value ideas, I have noticed that there was insider selling or no new buying. What do you guys think. I think with regard to regular deals insider buying / ownership isnt needed, but probably is required on deep value. Thanks for the comment Baoxiaodao.

Search the board. I posted a write up and valuation awhile back. Basically Ashner appears to be very smart and owns alot of stock. His specialty is commercial Re and everyone thinks it is crashing. We are betting that the Jockey can take advantage of it. Ashner raised money and has been spending it on loans and other busted assets. Him and Berkowitz own a turn of stock and we are betting that he will make us money through the downturn. Bet, and collect the div while he works. The Div may be cut though with this transaction.

I think shorting a story stock is a bad idea in general. I could pitch this / FFH/ SD / FBK / any other value idea to my friends and coworkers, and they would all buy this. Blockbuster just went bankrupt, and Netflix is the only game in town except for Red Box. Thats a great story, everyone is buying, and then justifying. Humans are rationalizing creatures, not rational ones. Hell I would love to own it, but the little value investor inside wont let me buy. I would short a crippled company with no many that is bleeding cash in a horrible industry if I had to.

Lol none taken, I thought I was watching the WWE. I think politics is useful in terms of investing but think you have to look at it on an Industry / Company basis. This is too high level. Companies with US facilities win, companies looking to move abroad probably have to redo forecasts, and companies in the process of moving abroad are screwed.

I think perhaps we should keep politics off the board. I think after a certain point it doesn't add much value, everyone is fairly entrenched, and we are all here to make money / expand our mental models. With that said - your points seem to contradict each other, This would make businesses less likely to move plants thus saving more jobs. You can create jobs with carrots and sticks. Sounds like the stick is coming out, and you want the carrot. Fair enough. I think we need a mix of both.

I think these list can be problematic. I think they generate a list of anyone with a good shareholder letter and an ok record. I think it would be more useful to have a list of owner managers with a rule that you can only post 2-3 names, and you have to post a thesis paragraph explaining why its a good investment for the next 5 years. I would post L, FUR, LRE.