Williams406

Queen Casper for just over a year. Love it.

I haven't done a deep-dive performance analysis but was familiar with Fairholme in early 2000's. Tech and growth hit hard for a couple of years whereas Fairholme had things like Markel/Berkshire that were not hit hard. I'd guess relative performance in 2000/2001 alone was very profound for Fairholme relative to S&P 500. Longleaf knocked it out of the park during that era as well. The 15-year performance leaves out those early 2000's years.

+1. as trump would say, sad! Agreed. We're better than that--let's raise our game. Did anyone else notice Mnuchin's left nostril flare slightly when Corker said...

I know next to nothing about Paulson's operation but is this Merger Arbitrage Fund his only fund?

All preferred.

I observed several senators on both sides of the GSE issue referencing conversations they had recently had with Watt. Lots of off-the-record conversations at lunches, meetings, cocktail parties, etc. Hearings like yesterday's are where you try to get your opposition, on-the-record, boxed in by having them state they will or won't do something. Crapo was trying to get Watt to commit to the idea that stopping the NWS wasn't a precursor to recap/reform/release. Like Mnuchin during confirmation hearings talking bipartisan solutions while refusing to relinquish the option of unilateral action. I'm not sure how to assess the risk of disruption to the housing finance market from a Treasury draw, but I've always thought a draw would be an unforced error for the administration. If that occurred, you should try arranging to receive a buck for every time you hear "bailout" in the news. I think the chance of Watt acting alone here are slim to none. Risks for preferred shareholders? The equity cushion--even with the cessation of the NWS, if that's the only step taken--will remain thin for a while. Settlement offer for some fraction of par where Treasury negotiates hard. Resolution could still be far off even if there is intent to recap/reform/release on the part of administration.

No Free Lunch, Was the Breitbart article you reference the Carney piece from April 7? http://www.breitbart.com/economics/2017/04/07/phony-obamacare-attack-aimed-at-luring-conservatives-to-support-a-hedge-fund-windfall/

I don't know the answer to this, but it would be interesting to see how Lynch's returns were distributed. When he started in the late 70's, he ran a small fund. Later, it was large. Did he post massive early returns and begin reversion as fund assets grew? It wouldn't surprise me. Overall performance for him is remarkable.

This takes some real doing, does it not? Short of decapitating entire rows of tulips with a weed-whacker while riding a bicycle through Amsterdam, I can't even imagine...

Working from memory, I think DFA's growth vs. value stats had the 1990-1999 decade as the worst relative performance for value while the decade ending in 2015 was the third worst. Sandwiched in between was the early 2000's which saw a very dramatic reversal in favor of value. This doesn't offer much about active vs. passive, but does speak to the performance of some of the value funds on the list: 20-year numbers include the tail end of the 90's growth trumping value big time and 15-year numbers won't capture the full effect of the 2000-2002 halcyon days for value managers. I also ditched a number of the value funds on that list in 2009--my exact words were "I don't need anyone's help in losing this much money."

My bet here centers on a few things: a) Housing is a very big deal. Mess it up or have it turn down on your watch is a nightmare for any administration. Of course you'll blame it on the last office holder, but voters largely will hold the current administration responsible. Not the last administration. Not Clinton or Bush policies or Acorn. There are not many surer ways to get slammed in mid-terms and getting just four years in the White House. The Trump team doesn't control all the levers with respect to the housing market, of course. b) FNM and FRE have been integral to housing and remain so. The administration does have a lot of control over this housing lever. c) Replacing them with something different represents a much riskier and more complicated action than revising what is already in place. d) The clock is ticking. FNM/FRE reform may not be top priority, but I view additional Treasury draws as significant unforced errors and believe the administration would as well. Negotiate tax reform, infrastructure all you want. But you better have your FNM/FRE ducks in a row well before year-end. e) Recap and release won't make you popular with FNM/FRE's enemies--and they have power--but you can raise (and market the raising) a big chunk of capital for government and benefit current shareholders. I have concerns about the terms here, but believe the administration chooses a path that benefits both government coffers and shareholders. In short, I think this administration chooses to control what they can control with respect to housing by choosing the simple, less risky path represented by recapping/releasing FNM/FRE and present their plan well within six months. The stock price says I'm wrong and that has been the case...once or twice.

Wayne, Given that you are calling Sweeney case "the only game in town" what you think is realistic to hope for coming out of Sweeney's court for FNM/FRE bulls? Over what timeframe?

Under such a scenario, a TBTF bank that is disintegrating is not focused, at least in the near term, on playing a role in a new mortgage program. In other words, FNM and FRE's main competition under some proposals would be impaired/distracted temporarily. Also, I don't think there is much overlap between the voices saying "Break up the TBTF banks" and the voices saying "Let's let the TBTF banks replace FNM/FRE". I place low odds on TBTF banks being broken up.

"Danish citizen don't take any BS from the Danish Government and Administration - especially not from the Danish IRS. [The name of the Danish IRS is "SKAT", which translate directly to both "HONEY" [and "TAX"], btw.]" That's classic: "SKAT" translates a bit differently in English but nonetheless fits closely with how many view the IRS in the U.S. I'd be willing to copy you Danes here and re-name the IRS.

Right, Hardincap. Berkowitz isn't the only one who hears the clock ticking. Mnuchin doesn't have the luxury of waiting to deal with GSE's until after tax reform happens (nor do I think he has waited). That's why I lean toward him taking simple steps as Cherzeca mentioned sooner rather than later if he can. Doesn't lock him in to a specific pathway but is that much less capital to come up with. Makes sense to me. Which means there is a high likelihood I'm off-base somehow...

Sure I think there is chance they don't happen. Not willing to say anything like better than even odds on that. But, if the administration moves forward with some recap and release plan eventually, I think they have to scapegoat the prior administration (not hard) and any argument they make like that is stronger if they can say, "we stopped it as soon as we could." Taking the NWS money for a couple of quarters without at least cordoning off the funds pending "investigation" or something opens the door for a headline like: "Treasury Secretary Mnuchin spotted in velvet tracksuit, shiny new lamborghini, and giant styrofoam cowboy hat after Treasury receives possibly illegal funds from Fannie/Freddie." Or something like that. If you want to claim an income stream is illegal, it's best not to accept it at all. GSE reform clearly does not seem to be top priority, but I wouldn't be surprised if there are actions taken on Fannie/Freddie even before things like tax reform are squared away. The dividend could go through. It might not, and if it does not, there are a few forks in that road.

My biggest concern with respect to Fannie at this point: Squirrels! Distraction, that is. In fairness to the attention spans of the key players, I really mean some sort of urgent crisis that moves a Fannie resolution to the back burner, or making a resolution that is favorable to shareholders tough to pursue right now. Before the election I viewed any resolution as legal. Now I weight a political resolution as far and away the key resolution driver. And the stars certainly seem to have aligned powerfully on this front. Anything disrupting political resolution here hits preferreds and commons hard. We'd still have the legal backstop and possible resumption of political force to fix things but it would get ugly in the interim and the worst case scenario here is about as bad as it gets. I'm in big and like the odds very much, and I'm really ready to see something put on the table finally for shareholders.

Cardboard, I'm really glad to hear things look/are better. Peace and good fortune to you, and resilience for the next curveballs life throws at you. That was a great game last night. The two football games I've watched this year are the Super Bowl and the Florida State-Michigan game. Both looked over at half and turned into tight games.

If having too much cash is a problem, buying airline stocks has historically been a pretty good solution. No opinion on the current environment.

20 years ago I would have regarded this thread as containing easily the most valuable information on the entire COBH site.

Tede02 I agree with your broad point that many market participants are chasing performance, though that kind of seems akin to saying I woke up this morning. Most won't stick with indexing. They will be on to the next strategy that looks good in the rear-view mirror. Most simply do today what they should have done 3-5 years ago with perfect hindsight. To what extent one should be invested in stocks is one question. How one chooses to access the capital markets given their skills, temperament, etc. is another. I'm totally with you on the point that investors are usually their own worst enemy.

Sean and Niall reluctantly shuffle up to their dead friend and colleague's door to deliver the bad news. "Siobhan, we're sorry to have to tell you that Seamus died today at the Guinness brewery during his shift." After sobbing uncontrollably for five minutes, the widow asked what happened. "He was found floating in a vat of Guinness." Did he at least die quickly? she wondered, hoping for some small comfort. "Well...he did get out to pee three times."

Today's prices: Probably BRK, JNJ, USLM. I'd return not expecting to have made a lot but unlikely to have lost my shirt due to business value erosion. I like the Lindt response--love the product but don't know the company well. If price were right: BF-B, VRSK, GOOG I'd say TDG except if technology exists to transport me deep in to space, not sure how relevant TDG's products would be. Musk and/or Bezos would probably be involved in the space transport somehow. Tell me what sort of fuel/technology is involved in the interstellar travel and I might change my answers.

Notorious, will you share your elevator pitch for the LIF buy? Thanks.

Factor in premium changes as well as deductible amounts. I spoke with an insurance broker who said nearly everyone not qualifying for a subsidy has seen a huge jump in premiums, but also an increased deductible. So a bit of a double-whammy. Most of his work is with individuals and not businesses, so his insight, assuming its accurate, may not translate as consistently on the group-plan side. Also not sure if that is true across the country or not. I suspect the ACA is having a big impact on both hiring and firing decisions. If your costs as an employer to provide health care to full-time workers goes up significantly, something's got to give.