Saluki

Trimmed some more NFLX for a small loss. Still think it's a great company, and I still have about half my original position, but I am fully invested and there are a couple of other things I wanted buy so I needed to free up some cash.

Bought a decent starter position in VTS. I may add more on the dips, but I see it a $0.50 dollar, not a multiyear compounder so I don't want to chase it. Started a small position in TV and SWBI. I'm fully deployed so unless I sell something, everything will be small positions.

I trimmed a little NFLX on the pop after earnings today. It was in my Retirement account and I sold when it got back to green. Still have the rest of it in my taxable account and despite the almost double from the bottom, I'll still about -15% on it because I tried to catch that falling knife. My better half complains that I'm late to everything, but when it comes to buying I seem to be early all the time.

I noticed that big price jump too, but there doesn't seem to be any news on Fairfax India today. I did see this piece on India, generally: https://www.cnn.com/2023/01/19/business/india-economy-world-economic-forum-davos/index.html If people diversify their supply chains away from China, then India is an obvious beneficiary, but they have been talking about this since 2020, so I don't know if that's it. It's not a stock with a lot of volume (my brokerage account makes me do 2 step authorization when I want to trade it), and volume looks average today, so maybe it's just a fund that was sloppy about putting a position on.

Fairfax India Announces the Passing of Board Member Alan Horn https://finance.yahoo.com/news/fairfax-india-announces-passing-board-220200763.html Sad news. I met several of the Fairfax India people at the Fairfax AGM prior to the pandemic. I don't remember if he was one of them (I'm terrible with names), but they all seemed like nice people.

Added a little more STNG again today. I've been nibbling when it dips below $50. They've been buying back a lot of stock in the past month and if their average charter stays at what it was in Q4 (no guarantees) they will hit $20 EPS because of the operating leverage according to the conf call. It could go the other way, but with all the disruptions to supply going on in the world I'm willing to roll the dice.

I think a fair way to do it that benefits the patient shareholders like us is to do a rights offering. That way, you can issue ATM shares if you believe they are undervalued and it won't be newcomers who benefit from the new investments. The only people who won't directly benefit are shareholders who don't want to participate and will get some dilution. But I think it's better for long-term planning to have long term share holders so I think a rights offering is the way to go.

Bought a little more Fairfax India and some STNG on the dip.

Honestly, I'm a dinosaur and I just walked into the Schwab office that was a couple of blocks from my office because I wanted to something that I could access overseas and not pay fees and my better half recommended them. I didn't try to optimize, but if I had large cash balances (I'm usually fully invested) or did margin trading (they charge less than Merrill, but still very high) I would chosen something different based on my needs. I like to keep it simple and I didn't want more than one account anyway, but decided to do it 1) for the no-fee international ATM thing, and 2) I'm a chickensh1t, and I was increasingly uncomfortable with just investing with one broker when the SIPC insurance is $500k per account. I vividly remember Lehman and Bear Stearns and I don't want to be a creditor one day asking for a favor.

I'm a US person but I like having Schwab in addition to my main account for another reason. Schwab doesn't have many offices so to entice people to join, as you mentioned, they refund ATM fees when you use someone else's ATMs. When I travel internationally my regular bank doesn't have branches abroad and sometimes the ATM fees in other countries are shocking if you only need to take out a small amount of walking around money. I used Schwab a lot for that and have always been reimbursed the foreign ATM fees. This year I opened a Revolut account and used it with no problem (or fees) when I travelled abroad. I only trade stocks in Merrill account at my desktop b/c I don't like the app, but Schwab has a decent, easy to use mobile app that works well and is intuitive.

I sold some FFH in my retirement account and bought Fairfax India. Bought some STNG and OXY in my taxable account.

I'm not a bankruptcy lawyer, but if I recall correctly they should be able to claw back some of that money that he shifted around to other entities to (allegedly) avoid paying creditors. I believe there is a 6 month lookback for unrelated parties (you are a restaurant and paid the meat supplier right before you filed, but not the liquor distributor), and two years for related parties (you transfer assets to an affiliate that you control, or to your brother in law etc). In some states, the lookback is four years instead of two. Punitive damages are meant to punish and deter outrageous conduct. A billion sounds like a lot, but when Ford decided that they shouldn't fix the Pinto gas tanks even though they knew people would die horrible deaths by literally being burned alive because it was less expensive to pay people off in the cars that blew up than to fix every car, that's the type of thing punitive damages are for. I don't know if you know anyone that has lost a child. It's something that you wouldn't wish on your worst enemy. Imagine if that happened to you and that while you are grieving someone on internet was telling millions of people that you don't even have a child because it was all made up. And then that persons unhinged followers are driving to your home and filming you and calling you and demanding that you dig up your child's coffin and do a DNA test to prove that you are not lying. And that emails showed he knew he was lying but kept doing it because he was making so much money from it. Is that something that deserves punitive damages?

I trimmed some positions and bought a little more Coupang and ATEX. I think the truckers strike in South Korea and sabre rattling by North Korea is giving a nice opportunity to add to CPNG on the overselling. It's now at the price it was prior to the most recent blowout earnings call. ATEX is still selling for less than the value of the value of their FCC licenses (in my opinion) and it's a capital light business that should do well in inflation b/c the licenses were paid for in past dollars and the contracts should come in future dollars at higher nominal prices without needing to expend more in capex. I added to JOE and GOOG yesterday, but I am already really overweight on these and am reluctant to keep adding more unless it goes from a great deal to "are you kidding me!" Full transparency: CPNG and ATEX are small positions and GOOG and JOE are my number 2 and 3 positions behind BRK

For a great comedy, we started watching Los Espookys. It's got Fred Armisen in it, so it's got a weird Portlandia meets Gabriel Garcia Marquez. Highly recommend. For drama, we are watching The White Lotus, which is also great.

I know it's not finance related, but I decided to try my hand at podcasting. Here's the first episode I did with my buddy where we discuss the scandal with the Bob Dylan autographed books that were signed by Autopen and sold for $600 each. Let me know what you guys think. Also, we don't have a name yet and "two lawyers, one podcast" was rejected by friend for some reason So name suggestions are welcome.

Sold some FFH in my retirement account and redeployed it to Fairfax India on the dip today. Nibbled a little on GOOG and JOE again, which are already my 2nd and 3rd largest position (and overweight) but at these prices I find it hard not go into hoarder mode and buy more with everything coin I find between the couch cushions.

Anyone looking at this now? It was over $100 during the early days of the Ukraine/Russia war, now it's $35. It was trading at this price when Potash was ~$220 a ton and they were breakeven on the Potash and making money selling water to frackers. and now Potash at $ 562 a ton. https://ycharts.com/indicators/potassium_chloride_muriate_of_potash_spot_price and their cost of production hasn't really changed a lot, so most of that goes to the bottom line. I also think that now that energy prices are higher, it should help their water business, which primarily sells to frackers. The water sales make sense when gas/oil prices are high, because fracking uses a LOT of water and there aren't many people in the desert who have water to sell you. The risks are obviously that this is such a small company that they are price taker, not a price maker. Their market cap is a few hundred million vs the $53 billion entrerprise value for Nutrien. If the bigger competitors can increase output or the Ukraine war ends suddenly and the production there and Russia/Belarus that could cause the price to drop, that could kill demand. But on the other hand droughts and the disruption in the food supply from the war could cause a demand increase for Potash because rising food prices make fertilizers a necessary investment to meet demand.

Added a little META, FFX India, MU and ATEX. Trimmed a little FFH and ATCO (I am hoping the take private vote fails and I can buy it back lower, but at this price if it goes through then I am not getting much by holding till the end).

I believe the performance fee kicks in at the previous high water mark ($13?). If the FFX India gets repriced higher, FFH will not only get a performance fee, but they will also benefit from marking to market the big slug of FFX India that they bought back in the tender. The new (terrible) accounting rules make you report unrealized gains/losses as income. FFX India is up 10% today, I wish I had bought more yesterday

I trimmed a little of my FFH position yesterday in my retirement account, which saw a bump, and redeployed it to more Fairfax India. Fairfax India is still selling below the previous FFH tender offer, and as the world starts travelling again BIAL will be able to unlock value. Seems like a favorable time to add shares. An IPO will give clarity on the pricing of the sum of the parts, which I believe the market is undervaluing.

Great combined ratio even with the hurricane losses! The new accounting treatment requiring mark to market accounting for losses/gains in the investment portfolio is silly, and make a lot of companies like FFH and BRK look absolutely terrible in a market rout like now. Still, it's a great time to buy. It's still right around the price ($US500) at which they did a tender for shares, and Prem is a cheapskate so this a bargain. Less than book value for a great insurance company and great stock picker. I own a big slug of this and a big slug of ATCO, so while I'm not happy with the takeover offer price, whether it's approved or rejected, I think I will do okay either way. I also own a small bit of Fairfax India (which I also think is cheap now), so I wouldn't mind if he made a fair offer for that and brought everything in house. And maybe the new share buyback tax will encourage FFH to do another tender before the window closes. it was 20% below book a few weeks ago. At these prices, buying back shares at about 10% below book is still a great way to allocate capital.

it's up about 25% in two months. If it was in retirement portfolio I would probably sell too and buy back in a pullback, but in my taxable account it's all short term gains

Sold some ATCO from my retirement portfolio and picked up some more JOE. If the deal goes through, I'm losing a few nickels, if it doesn't, I can buy it back later at the pre-offer price with no consequences. I'm still holding my much larger position in my taxable account and I plan on voting against the deal. If the deal goes through, hopefully it will be after Jan 1, but if it doesn't go through, I may add more on the dip.

Good point. Too much many ships built during the boom more than a decade ago and very bad rates for a long time after scared away a lot of future investment/capex in this sector. Another year or two of bad rates and more of the weak hands would've been shaken out. But IMO2020 didn't cause a lot of scrapping. Then the pandemic disrupted the sector at first but built up demand sent rates for everything (containers, drybulk, VLCC, product tankers) on a tear. I think it saved a lot of companies that no bank or hedge fund would be interested in. Part of the appeal of a consolidating industry is the presence of a few good capital allocators (Sokol) and access to a lot of cash (Prem).

I too had hoped to own it for a long time. I do own FFH too, so I'm not so broken up about it. With the new builds that they have under contract (locked in pre-inflation at 30% below what other people are buying ships for now), which they have locked in leases for, this looked like it had a really bright future. Sokol and Chen cleaned up the balance sheet, put the revolver finance system in place, kept growing the top line, it looked like the best in show among shipping companies. I do think $11 was too cheap for this. The only reason I haven't added recently is that I have a lot already, and I saw cheaper stuff out there that I like more. I have owned it since 2018 and bought more on the dips. It was nice getting a decent sized dividend while watching the business get better and being able to add along the way because the market didn't agree with me. This kinda reminds me of the Dell going private deal. There, however, Southeastern was a big shareholder who opposed the deal. Because it's a mutual fund, they couldn't hold non-public companies and weren't going to be able to participate the way FFH is with this one, and Southeastern (Mason Hawkins) was pushing for a better deal from Dell or other bidders. There won't be other bidders here because the bidders own almost 70% of the float, and I suspect most people owning it don't have diamond hands and may sell on the news. The buyers will be arbs who are buying because they want to approve the deal. If it is approved, I hope it happens after January 1 so I can put off the taxes.