ubuy2wron
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Posts posted by ubuy2wron
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I have wondered about two things will it increase the spread between A & B shares on a realtive basis, my answer to that question was yes B shares should trade at a slightly lower ratio over time all things being equal. The second question is will control ever come into question. The A shares are now effectively controlled by Warren but the amount of outstanding A shares will be declining over time. I have not thought that one thru.
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I see that Genworth is doing some kind of IPO in Canada has any one looked at this as a potential short. I admit I have not looked at this at all ,I believe that the RE bubble is alive and well especially on the wet coast where I live how ever other than selling my home I see few ways to profit from this from an investment point of view. Most of the publically traded reits in Canada are reasonably priced and there are very few builders in Canada that are public and the banks just do not have the same exposure in Canada re residential RE because the risk remains with the mortgagee unless the mortgagor declares bancruptcy.
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To reach the level of accomplishment that books are written about you and journalists quote you a large dollop of luck is certainly required. Warren was lucky enough to be turned down by Harvard University and went to Columbia as a result what flowed from that lucky occurance (at the time I am sure Warren was quite disappointed in his Harvard rejection) was a stream of events that made Warren the legend he is to day. 10,000 hours wil pretty much assure success ,luck will get you the penthouse and wisdom will allow you to keep it.I asked some acquaintances about if it was possible to foresee the luck factor components and set one's self up to be an outlier. They generally thought that you couldn't.
I think one can be deserving of great success (by constant learning and very hard work- yes this is vague) much like Munger likes to point out but maybe not to the extent of being the top 1-10 most successful people in the world.
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No, as far as I know, when they went in-house, they stopped managing outside capital. Cheers!
They should, Hamblin Watsa is possibly FFH's most valuable asset. They could be running a hedge fund with their track record ,while the conflicts may be a little difficult to sort out but I for one would like to own the 2 and 20 income stream that Hamblin Watsa could easily ramp up. It is a much less risky business than the insurance business as the hedge fund investor maintains all of the risk and it would give Prem the ability to pay his incredible team salaries which I am sure they richly deserve. It also partialy solves the problem of valuation for FFH, paying a significant premium to book for FFH is a difficult proposition for value investors which has been FFH shareholder base for a long time.
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$100-125 per square foot? Good Lord! I'm thinking of moving to Detroit next week! ;D In Vancouver suburbs, you would be lucky to find something for $350-400 per square foot. Right in the city, you would be fortunate to find something for $550-600 per square foot! It takes almost 65% of the average family's disposable income to support housing costs in Vancouver...crazy!
I don't expect things to get much better as the winter Olympics draw closer. A buddy of mine has been offered $15,000 for two weeks to rent his 500 square foot studio in downtown Vancouver during the Olympics. Some homeowners have already booked their homes for upwards of $40K for two weeks. Nuts! Cheers!
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I also live in Vancouver and yes it is a VERY liveable city that said IF there were anyway to sell short local real estate I woulddo so in a heart beat. Our real estate values are amongst the highest on the planet right now and after a brief down-turn in the mkt last fall prices and demand have actually started to tick up again. This is the only time in 50 years that Vancouver is more expensive than the best neighbourhoods of San Diego another VERY liveable place.
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Does HWIC manage any capital other than Fairfax and Co. money?
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Its simply a function of whether or not they can keep investing capital at 15+%, without knowing the future its impossible to tell if that will happen. Heck if the shares stay this cheap for the next 10 years, they'd have no problem earning 25% a year.
Oldeye you do not have to know the future only Prem has to know the future, given his investment calls in the last three years I suspect that he has made a pact with the devil to get a copy of the WSJ delivered every morning 3 years in advance. LOL
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The deals in Detroit re residential real estate are truely amazing. Detroit, especially some of the more urban neighbourhoods are down right scary in my opinion. Without a local partner on the ground being a landlord in Detroit would be a night mare. Better to buy an abandoned home knock it down and sell the lot at some future date. PS I am about to make an offer on a lot in Maui on a golf course for 25% of what it sold for 4 years ago.
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Sanj, Happy birthday....I looove this board kudos to you for keeping the discourse at a civil level. One observation is it just me or do value guys generally seem to be more gentlemanly in their temprement. It seems that momo guys are just ruthless in their take no prisoners approach to the world and investing.
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If all corporations were run by Warren Buffets or Prem Watsas or the like changes would not be required. Comments pro or con on the issue are appreciated. See link
http://www.nytimes.com/2009/06/07/magazine/07wwln-lede-t.html?_r=1&partner=rss&emc=rss
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Well since a large part of the FFh short a few years ago was an arranged short for FFh and its counterparty perhaps there is something similar going on with ORH. I certainly have zero knowledge re the players anyone who is short a stock as thin as ORH is REALLY playing with fire imo. I think it is interesting how Gretchen has clearly picked sides re FFH I think some in the financial press are as corrupt as heck I do not know Gretchen personally however I find nothing balanced in her coverage.
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At the end of Feb FFH was the only financial that I am aware of that was trading at a yearly high in fact it was trading at a multi year high valuation. Some of the rise could be contributed to reported CDS profits etc some could be attributed to a massive reduction in the short position. I suspect that the massively positive relative performance of FFH in the medium term has to be as result of short covering. Clearly not a factor that one would want to ignore or is immaterial. ICP the party identified in Gretchen's mild hatchet job is likely to have positions in CDS's not the stock but I am only guessing.
What shorts? No one is still shorting FFH. 250k shares is as close to zero as can be.
Who stands to benefit?
Perhaps we need to keep an eye on the May 15th to June 1st short interest change? The average change in short interest has only been +/- 20k-50k shares every couple of weeks. It would be interesting if this number was significantly larger between May 15 and June 1st.
Of course, this subject has been done to death. I wish I had $1. for every post that claimed the share price was going to skyrocket whenever these multi-million share shorts covered. Shorts covered, FFH earned $2B on CDS's and the stock didn't skyrocket (but there was a big move plus short covering between Sept. 15 and Oct. 1, 2008. 500k shares covered and price went up from $220 to $320 but then 500k shares were covered the following 2 weeks and the sp went down and then another 500k shares were covered the following 2 weeks and the sp went down again, almost all the way back down to $220 but not quite.). Therefore, following this stuff is pretty close to a waste of time, no?
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Gretchen has written many articles that have had negative slant re Fairfax. As has been well documented by the Deep capture blog she is part of a cabal of reporters and journalists who regularly report stories that further the interests of the short selling community
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I think the easy decision is buying FFH at attractive prices I suspect bad weather or disasters are the only events that will make FFH significantly cheaper on a relative basis and even then only for a fleeting period. The difficult part will be to hang on and not sell when things are going in the right direction. The single mistake that Value guys make with the most frequency is selling too soon it is entirely possible that this could trade @ 160% of book in the next decade this will be after it has generated a few years of back to back positive lumpy returns. Peak valuations are not set by value investors but by momentum players and trend followers.
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Martha Stewart went to jail for lying under oath, not for insider trading. She was never convicted of any securities laws. She was interviewed by law enforcement officers regarding her trading in Imclone she did not tell the truth it may have been to protect herself or her broker we just do not know.
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Jack< I am doing like many others here moving dough back and forth between US and CDN accounts to hedge my US exposure. I recently covered off my US debit and converted so I am long US. I am thinking that we are getting close to some kind of meaningfull pull back short term in the mkts commodities and US dollar VS CDN. These mkts have all been trading together stocks and commodities trade one way the currency ie the US dollar trade the other. Mkts go up US $ goes down. If my trading strategy is correct I will reverse this trade on a mkt pull back and go short the US dollar again. I think the CDN $ will get back to parity once we are in some kind of positive economic cycle again. The relative fiscal strength of the CDN economy is just so much better than our southern neighbours it will result in a currency that will naturally float in a positive direction to the Yankee dollar on a long term basis. I was lucky enough to buy a significant amt of US$ when the it was trading at a 10% premium to the US dollar in November of 2007. My plan at that time was to purchase a US vacation property. This single move has probably been the most profitable in an absolute sense I have made in the last two years. There is an old jewish saying its better to be lucky than to be smart, I know I was lucky. Many of my attempts at being smart in the last 2 years have not worked out so well.
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I think the old chesnut is "do not fight the fed" I suspect that if a group of hedgies tried to gang up on the fed and start a run I would bet the hedgies run out of ammunition first. Now if it is the fed vs the rest of the world the story would change. The dollar will collapse IMO the same way all currencies collapse printing too much money. If the printing presses are still running full bore in 12 months then maybe, the fed can reverse policy on a dime if they wish to. I would not want to be short the buck the day the policy revision was announced. Currently I am long US I actually think the CDN dollar will be back to par before another 12 months pass .
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With the currency weakening the numbers are probably about to get decidedly ugly. A refinancing at least is required if the reductions in the senior credit are more than 20 million then equity does not exist so a pik payment is like getting an interest payment in GM shares if you are a GM creditor. GM old shares have pretty much zero value new shares will likely have substantial value. It really is up to Prem and the banks how this deal is sorted out he pretty much has all the cards as he is driving the Abitibi deal and soon will be driving the SFK deal. With FFH trading at a discount to bv the low hanging fruit is just buy FFH and let Prem and the mkt sort out the SFK restrucuring. I have not seen Prem buying any more SFK nor have I seen any insiders rushing out to buy any paper . In the pulp and paper business it seems that tissue and cardboard are about the only spaces that really have any legs long term the parts of the industry that are selling into anything that has to do with print are facing the same bleak long term prospects there are cyclical issues overlaying secular issues and they are both awfull for a lot of players. You are right dingaan the debs are trading for probably liquidation values but are not many pulp and paper properties in fact going to be sold for scrap because that is the only thing that will bring the market back into supply demand balance.
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The debs are trading @ 33 cents looks like another disaster to me. Abitibi ,Brick, Sfk, CGS thats 4 zeros I know the game is not over as Prem is likely to end up with controlling positions in all of these but hopefully there are some lessons to be learned here
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Its cheap but perhaps deservedly so. Mr. Swartz really has stacked the deck in his favour as far as compensation is concerned. Salary, bonuses ,options, performance fees. This company generates a ton of investment fees for the investment banks so any buy recommendation or research is pretty suspect however they do seem to have a better track record than most in the levered buyout private capital space. Its probably trading below liquidation value.
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Also, to what extent do you guys think banks have written down their prime and jumbo prime portfolios?
I'm not really a bank investor, so I don't know how much of their portfolio these comprise.
However, I do know that out here in California, at the higher end, 750k+ with prime type of borrowers in good neighborhoods, prices are just starting to fall and foreclosures are just beginning. I know percentage-wise in terms of loans this may be small, but the loan values are just so huge, it must have a substantial impact.
I somehow doubt these have been written down, considering the "aggressive" accounting that's been taking place.
In most regions of the country the low end of the mkt inflated in value much more than the high end during the bubble years I expect that the percentage decline in the mid and upper ends of the mkt will be less severe than the subprime areas. You will have losses on the high end stuff to be sure but it will not be as dramatic as the low end. If you have a mortgage book that is mostly jumbo's with decent down payments and you have reserved 30% you will be fine if your mortg. book leans towards subprime and you have nuttin down and you reserved 30 percent you are already bankrupt.
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I now have FFH as my largest holding after going to zero in the run up in Feb I guess its a case of fools seldom differing. The fact that I can buy FFH @ 80% of BV is pretty compelling. I suspect that the EXTREME relative undervaluations that FFH has suffered from in the past are going to be much more infrequent going forward.
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Getting a shareholder list in Canada is pretty straightforward I do not have a clue in the US. My guess is it is also pretty straightforward unless the company wants to put up a fight then you probably have to get a lawyer. What you are probably looking forward to is a proxy fight however which is a very expensive proposition.
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There are lots of really smart people here. I think we all understand how the CDS market interacts with the underlying physical markets. My question is straight forward if you have insider informantion and you take a position in the CDS market based on that information have you committed a crime under the present rules?
Another Buying Opportunity In Berkshire?
in Berkshire Hathaway
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Dennis Gartman is basicaly a commodity advisor who sells a newletter which is widely read and manages a little dough on the side. His BRK call is a pair trade he is long GS and short BRK his thesis is Warren is over the hill and better to invest with a bunch of short term really bright traders. I think dissing Warren is a favorite pastime of those with a traders mentality. The stock charts for BRK and FFH appear to have an extremely close relationship for the last 3 months. The most interesting observation I can make is given BRK's position in GS the more profitable his call the less sense it makes.