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Zorrofan

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    Natural gas

    in General Discussion

    Posted

    I think that article talks about oil. Shale oil and gas are very different. Gas they blow water into rocks to crack them and get the gas out. With Shale oil It hink they just take rocks out of the ground and crack them above ground which is relatively more expensive. It has different cost and risks drilling shale oil vs shale gas. I think shale oil is overrated too.

     

    You have to be careful not to confuse shale oil with oil shale...there is a difference.  If I recall correctly shale oil is oil trapped in shale rock similar to nat gas, and can be fracked just like nat gas. Oil shale is in the rock and can be mined similar to coal. Shell had a big deposit in Colorado it spent something like 40 years trying to figure out.......

     

    http://www.shell.us/aboutshell/projects-locations/mahogany.html

     

    cheers

    Zorro

    Japanese ¥en

    in General Discussion

    Posted

    More and more I feel this ends badly for Japan....why would I hold a low-yield Japanese long bond in depreciating yen while the government tries to restart inflation, further reducing the already low return in real terms??

     

    cheers

    Zorro

    What is the cheapest stable stock you know of when measured by CURRENT EV/FCF?

    in General Discussion

    Posted

    ITT Tech (ESI) is currently the cheapest I know of. But you have to go by the 2013 FS which are in the process of being restated to consolidate the PEAKS program, a pretty sizeable beast. $215 million senior debt, but the PEAKS trust has an unknown amount of assets (student loans receivable) intended to be used to service this debt. The company estimates that a sizable amount of receivables intended to be applied against the debt is impaired.

     

    Anyway, excluding the PEAKS program, ESI trades at 1x EV/EBITDA-allcapex 2013 according to a quick calculation using google finance's statements. Adding in the entire $215mil debt still gives EV/EBITDA-allcapex of 3, still quite cheap.

     

    Patmo,

     

    I notice you have TESB listed as TESB.EN rather than TESB.BR so I was wondering if that is just an different exchange?

     

    thanks

    Zorro

    Robin Williams Passed Away

    in General Discussion

    Posted

    Well, I'll speak from experience. In my yound adulthood, I was a phone suicidal prevention care provider for a year. It was too tough to me.

     

    I will not get into details, but suffice it to say that when someone was talking openly about suicide in a short to mid term period frame, the ultimate psychological saving rope that was teached to us was to help the person realize how bad it would be for people who cared about them. Sympathy and some kind of sane guilt was a powerful tool that helped to save lives. This was not meant to be a permanent solution, but a saving rope that was useful. Maybe things have changed over the last 15 years or so, but it did help.

     

    So I don't know if rkbabang cultural social acceptation hypothesis is true, but it might be.

     

    Feel true empathy about someone pain doesn't mean that you have to agree with what he does with it.

     

    +1

     

    from John Donne

     

    "No man is an Iland, intire of it selfe; every man is a peece of the Continent, a part of the maine; if a Clod bee washed away by the Sea, Europe is the lesse, as well as if a Promontorie were, as well as if a Mannor of thy friends or of thine owne were; any mans death diminishes me, because I am involved in Mankinde; And therefore never send to know for whom the bell tolls; It tolls for thee."

    Great Owner Operators for the Long Term

    in General Discussion

    Posted

     

    Zuckerberg? I doubt in 10 years Facebook will be relevant. It is no longer hip or cool (or whatever term kids use these days).  i watched an interesting interview where they interviewed three teenagers - the response was Facebook is what my parents use.  I just don't see it lasting the way Amazon or Google will....

     

     

    What do you think will replace it?

     

    If I Zorrofan knows that, then he'd be busy creating it.  Or at the very least investing in it. And I doubt he'd share it with us yet.

     

    I wish I had invented it - but the teenagers they interviewed on the show said that they and all of their friends were using Snapchat......my point is that it is way too early to put Zuckerberg in with the likes of WEB.

     

    cheers

    Zorro

    Great Owner Operators for the Long Term

    in General Discussion

    Posted

    Jeff Bezos

    Mark Zuckerberg

    Phil Knight

     

    Zuckerberg? I doubt in 10 years Facebook will be relevant. It is no longer hip or cool (or whatever term kids use these days).  i watched an interesting interview where they interviewed three teenagers - the response was Facebook is what my parents use.  I just don't see it lasting the way Amazon or Google will....

     

    cheers

    Zorro

    Canadian oil patch for sale!

    in General Discussion

    Posted

    Eric Nuttal on Market Call.

    He is inmo the top O&G Analyst in Canada.

    Up 45% YTD.

     

    I own PWE and Manitok and keep kicking the tires around Lightstream. 3 Names he hates....

     

    Eric Nuttal is a terrible investor

     

     

    Let's see....79.7% in the last year, 19.2% over the last 5 years versus a benchmark that did 7.7% over the last 5 years. I should be so terrible....

     

    http://www.sprott.com/products/sprott-energy-fund/

     

    What makes you think he is such a terrible investor??

     

    cheers

    Zorro

    The Profits of Doom

    in General Discussion

    Posted

    Personally I await the end of the world with an open mind, warm heart, fridge full of beer and a safe hidden behind my favorite piece of art filled with gold coins, a handgun, and an encoded map to my underground bunker located in Alaska. Let the revolution begin, comrades!  ;D

     

    (oh, and I plan on using all the doomsayer books I've accumulated over the years as fire-starting material)

     

    LOL - You're never going to make it without some twinkies!!  And since this is the Corner of Berkshire and Fairfax, maybe some DQ and a coke?

     

    cheers

    Zorro

    The Profits of Doom

    in General Discussion

    Posted

    Okay, I like to follow the lead of Charlie Munger, always invert, always look for the flaw in your thinking so when I get bored I like to read Zerohedge and a few of the other websites that lean to the bearish side..... yes, I am a bit of a bear myself currently but it really struck me today that some of these sites are very, very negative - the end of the world as we know it is just about here.  Then I noticed that this message is often " the end of the world as we know it is just about here, buy my book explaining how you survive and prosper in the economic collapse that's coming".

     

    Some sites have some interesting stats, good information that should make you think, but they also tend to trot out the same uber-bears and their warning of imminent doom. Marc Faber has been warning of the collapse of the US since at least 2006? Any day now, its coming.......

     

    Where do the rest of you stand. Do you just ignore these sites, do you find anything of interest there? Do you have a favorite site for economic data or are you like WEB, five seconds spent on macro is five seconds wasted?? 

     

    Look forward to your comments....

     

    cheers

    Zorro 

     

     

    Investment advice appreciated!

    in General Discussion

    Posted

    Are there any penalties for not paying any principal or interest before the 11 years are up? If not, this was a brilliant idea and any asset that rises with inflation should be profitable. If repayment begins after five years, it may still be a decent risk assuming she gets a decent job out of college. At worst, she might be a few $k in the hole, which is rounding error for grads who get decent jobs. If she's down 20% after 5 years and wants to be absolutely safe, she can sell her positions and use the remaining $26k to make payments and would have to save maybe $2k/year to make up the gap. But it's really hard to be down 20% over a five-year period if you're even halfway prudent (especially since she'll be averaging in to whatever assets she buys).

     

    I'd suggest Vanguard 500.

     

    What about something like Canadian banks (3.5 to 3.8% yield), FFH in case all H@ll does break loose and those hedges pay off (roughly a 2% yield) and finally some OAK (7.8% yield and invests in distressed situations).  my concern with the S & P 500 would be what happens if there is a black swan (europe?), Ukraine, Iraq etc etc.....

     

    cheers

    Zorro

    ECB Cuts Deposit Rate to Negative 0.1 Percent

    in General Discussion

    Posted

    Seriously? You are saying its the Germans fault that there are countries and their citizens who have been spending money they don't have and buying things they cant afford?

     

    No. He is saying that prices are information. When prices get distorted for a very long time, like we have had in Europe since the Euro was ill-advisedly introduced, information get to be very misleading. When information are misleading, people make very bad decisions. And bad decisions have the nasty habit of compounding their nefarious effects.

    We all agree Italy and Spain , also France I guess, must clear their own houses and start behaving responsibly and reliably. But what doesn’t work must be fixed: a monetary union, without a political and fiscal union has never worked. Show me one single example in history…

    By the way, I am not saying what Draghi is doing will work… In fact, I think it is only a palliative…

     

    Gio

     

    When Germany agreed to allow countries like Greece and Spain to join the EU the result was these countries were extended a "triple A" credit rating.  This enabled a country like Greece to go on a spending binge with a credit rating they would never otherwise ever had. And lets be honest - Germany, which was no longer competitive globally because of countries like China,  benefited for years by selling Greece and other countries within the EU goods on credit.  Now fast forward to the financial crisis, Germany again benefited when the Euro fell as Germany was once again competitive globally.

     

    Now I am not saying that countries like Greece, Spain and France are blameless - and yes they do need to get their financial house in order - but Germany is acting rather hypocritically. Germany benefited from the entire process and helped enable the entire process. Now that the Euro has once again risen (to the point Germany is less competitive globally) Germany is complaining about the result. 

     

    IMHO this is Europe's version of the US housing crisis but instead of giving don't ask, don't tell mortgages to people who couldn't afford them credit was extended to countries who have little or no hope of ever paying it back.

     

    My $0.02

     

    cheers

    Zorro

    An interesting idea for FFH

    in Fairfax Financial

    Posted

    I was thinking about FFH and the bind they have gotten into with the hedges and if there may not be a better structure where the hedges would not have to be used.  One idea is to IPO the insurance companies, sell say 30 to 40% and use the proceeds to allow Fairfax at the holdco level invest the proceeds in there normal distressed/value investments.  The insurance companies would use HW as there asset manager and use a more traditional mix of bonds at the insurance company level and dividend up excess capital to HW for investment.  This would allow HW to pursue its value/distressed investing which it is good at independent of the constraints of the hedges.  I think one of the issues with FFH is I am not sure investing insurance float in a distressed/value approach is appropriate.  The two other invest the float companies (MKL and BRK) invest in high quality companies and stay away from distress. 

     

    Packer

     

    Packer - how about a small modification. First, IMHO, without a doubt FFH should be buying quality companies for the 100% owned business portion (i.e. MRK and BRK). However take $2 billion, about 10% of the investment portfolio, and create a BAM-type investment fund (similar to what they just proposed for India). Get pension funds to kick in another $8 billion and you have a $10 billion distressed asset investment fund. Charge 2% plus a performance fee. FFH makes about $160 million, or 8% guaranteed, in management fees plus performance fees if the fund does well. And on top of the management and performance fees FFH has a 20% stake in the fund. 

     

    It works for BAM why not FFH?? Thoughts??

     

    cheers

    Zorro

    2014 networth poll

    in General Discussion

    Posted

    Nassim Taleb proposes 'anti-wealth' as a true measure of satisfaction with your financial position.  It is the difference between what you have and how much you want.  It seems much more appropriate than any absolute measure.

     

    I don't know about that.  I am pretty satisfied with my position, but I can't imagine being in a state where I didn't want more.    What would get you up in the morning?

     

    Personally, I'd hate being in that position (always wanting more). That isn't peace. I have plenty of things to wake me up in the morning (family, friends, learning, etc). When I get to a certain level, it's hard for me to believe I'd want more and more (at least to big degree). I'd prefer money to not control me. Rather, I'd much prefer to control it.

     

    Keynes was quoted as saying "Money is a fine servant but a terrible Master".  You may agree or disagree with his economic viewpoint but he did throw a heck of a party (so I'm told)  ;D

     

    cheers

    Zorro

    Shareholder interests vs Management Self-interest

    in General Discussion

    Posted

    I have been watching with some interest the recent interaction between AZN and PFE. PFE made what I thought was a fairly good offer for AZN, several large shareholders of AZN spoke in favor of the deal and yet management resisted. Now with PFE walking away the share price of AZN will likely drop quite hard tomorrow.

     

    So, the question becomes "Did management really act in the best interests of the shareholders or did they act in their own self-interest?" How often does management really act in shareholders best interests? Witness the recent KO controversy with regards to management compensation.  If you use management integrity as one of your screening criteria the pickings are IMHO getting a pick thin.......

     

    Looking forward to your thoughts,

     

    cheers

    Zorro

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