ECCO
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Posts posted by ECCO
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I think the WFC warrants are better than BAC's. Assuming 13% compund growth for WFC in the next 6.5 years, and a conservative (for WFC) multiple of 2 BV, the price should be around 120$ and this is my base case. If this happens, the stock will yield about 300%, the warrant will yield 850%.
For BAC, even if I ignore various risks, I assume they will average compound BV at 7%, and that in the end they will trade for 1.2 BV. The price should be about 45- 460% yield for the stock, 810% for the warrant.
WFC warrant's better than BAC warrants? We will know at the end, but for sure if you expect growth twice higher at WFC and a book value of 2 insted of 1.2, WFC warrants will perform better for sure. But that's certainly not what the market expect now. The market might be wrong and you might be right, but I would certainly not take your expectation as cash. Your expectation about WFC seems to be quite high to me.
Anyway, I wish they both perform well as I have WFC stock and leaps and BAC.wta.
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Its been a few years that I look at options but start buying-selling some 2 years ago only. So I consider myself beginner to this.
I just wonder what others think about this:
I have jan2013 WFC 20$ call that I can sell this morning for 9.80$ and switch them for jan 2014 that I can buy at 10.55$. Is it something Im missing here? The cost to switch and gain 1 year doesnt seem expensive to me. Again, do i miss something? What do you guys think about that?
Thank you.
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Last month I sold some jan2013 65$ puts on BRK-b for 6$. Its a first experience for me, I see that as some kind of selling an insurance.
I sold those puts on a stock I would like to buy at that price (65-6=59$). So I dont wonder to be excercise.
I have a margin but dont like to used it. In that case, Im being paid to have a part of my margin that garantee that I have the money to buy the stock in case the puts were excersice.
In that case, I think the risk is minimal.
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http://www.cornerofberkshireandfairfax.ca/forum/index.php?topic=4468.0
Here's the idea that was bring here by Parsad. Thanks again for bringing it. Right now I have a 100% gain on my jan2013 100$ puts. I think Salesforce should hit the 50$ area before next summer, so there is still money to do here on the short side.
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As for many of you, I dont have a lot of cash right now. Im thinking about selling some stocks to buy stock that are cheaper (the "sell 5 P/E stock to buy 3 P/E stock" strategie).
Even if the stock I sell is at 50% the price it should be, and I buy at 50% the price the other stock should be, I will get the taxe loss.
ECCO
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Here's an exemple of what can happened when you play with the big boys.
Microsoft said today that it has committed $5.8 billion in incentives, training and tools for members of its Microsoft Partner Network to get accustomed to the new products and services and to encourage them to sell them to their customers.
Another area of focus: Dynamics CRM, an area where there’s stiff competition from Salesforce.com, plus longer-term CRM players like Oracle and SAP. Partners are being offered 40 percent of the sale of each new subscription to Microsoft Dynamics CRM. Microsoft is just a bit player in the online CRM world for now, but as history shows, it rarely stays in that position for long.
ECCO
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Coming back to CRM.
Others might have had that feeling before, but considering today's price (154$), and the actual situation of the company, it look to me that theses days look like the ultimate timing to short this pos.
Some little company are coming more seriously in CRM field, small company like Microsoft, Google, etc.
I would not like to have to compete with them...
Disclosure: I own out of money jan 2013 puts.
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The original subject is "Nortel Accounting All Over Again", geez, why are you guys using this thread to explain way to value BRK?
You should give a little more respect to BRK and use another thread, no? ;)
ECCO
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Morgan Stanley’s Adam Holt this morning raised his rating on the stock to Overweight from Equal Weight, with a $200 price target, writing that workloads on “cloud” computing facilities, such as the company’s “Force.com” online platform, is going to rise 50% per annum, compounded, through the next three years
He sees $2.17 billion in revenue for this year, the same as his prior estimate, but for 2013 he sees revenue of $2.57 billion, from a prior estimate of $2.53 billion, and for 2014, he sees revenue of $3.23 billion, up from $3.082 billion previously.
That should produce non-GAAP EPS next year of $1.90, rather than the $1.80 he’d previously expected, and EPS of $2.43 in 2014, rather than the $2.31 he’d previously modeled. Holt models Salesforce earning $1.32 this year.
Holt’s $200 target is based on a 47 multiple of his projected free cash flow per share of $4.11 next year, which he suggests is a 1.3 times growth multiple
You're right Parsad, its like a repeat of the Nortel days. Amazing how history repeats itself!
ECCO
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Thanks for sharing Parsad.
I spend last thursday's night reading about CRM and was able to buy puts on friday's stock price pop.
Thats an incredible story. Insiders are selling as fast as they can, but the stock keep going up. There is 140M stock today and there will be 145M next year, so that mean 5M options exercised...I guess it wont be better for 2013 and later. As soon as it is exercised it is sold...
I just wonder who is buying this stock? What could be the reasons for someone to buy the stock? What are those people buying the stock right now are expecting?
In a few years, CRM story will be a nice case story.
ECCO
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About Chad Wasilenkoff. He's a Vancouver guy like you Parsad, im surprised that you dont have any comments to do on this one.
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My pick would be TVA group. (TVA.B toronto).
Disclosure, I own the stock.
ECCO
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I'm all mix up with this name.
Is it Bigliari, or Biglari, or Bilgari, or BigLiar???
;)
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I think this is why Buffett ssid he would get much higher returns (50%) with a smalller pot of money and how personally I have been able to outperform by about 19% per year over the past 10 years. I am surprised by how may "wipe-outs" I have had and still performed well. If could avoid just half of my "wipe-outs" (typically highly levered financial firms), I would have done better. My 5 year average of 26% hopefully is indicative of this. But comparing my funds to others managing money is comparing apples and oranges as I don't think many clients would be willing to deal with the odd small securities (many of my holdings trade less than amount I hold in the account) and LEAPs and I know I don't have liquidity and could not provide immediate redemption with many of these. If these techniques of concentration and neglect cannot be implemented by professionals then the only folks left are individuals that are the "do-it-yourself" types which would attracted to this board. Maybe someday this inefficiency will be arbitraged away when there are enough "do-it-yourselfers" doing this. I do enjoy the experts and academics who make our job easier by discouraging the "do-it-yourselfers".
Finally, these techniques are not rocket science and do not require a high IQ (a high IQ may be a handicap) to implement. What suprises is that small investors have no idea of the advantages they are giving up by sending their money to mutual fund managers who are playing Andre Aggasi versus thier option to play the "bumb" next door.
Packer
My story is almost the same as yours. I have an average annual compounded rate of return of 20% for the last 11 years. So if someone ask me, yes it is possible for the average investor to have some kind of exceptionnal return, my rate of return is not bs, it is real.
That being said, you cannot manage other people money the way I did manage my money. Over all those years, I always had between 5 and 15 stocks only. Most of the stocks I bought were small caps, and during those years, at many times, it happened that 2 or 3 stocks were representing 40% to 70% of my portfolio. Right now, I have 3 stocks that represent 67% of my portfolio. (FTP, TVA.B, GBT.A)
The other thing is that I have a passion for stocks, I bought my first stock 25 years ago when I was 15... So reading about stocks and searching for the next homerun is not a job for me, its a passion. It is clearly not the case for 99% of the people I know. For most people, investing is one of the most boring things they can do.
ECCO
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I too rebought FFH recently.
I figured why not pick up the dividend next month.
The $10.00 dividend in January was the first one I missed since FFH has been paying one.
I didn't like missing it.
I always wonder what to do near the dividend date. Why do you prefer to buy the stock at lets say 400$, get a 10$ dividend and then see the price go down to 390$, instead of buying the stock after the dividend date and paying the stock 390$?
Consistent with the practice of prior years, the amount of this dividend was determined taking into account the current operating results of Fairfax and its insurance and reinsurance companies and the current cash position at the Fairfax holding company. Consequently, as each year’s circumstances are different, this dividend should not be regarded as indicative of the amount of any future annual dividends.
Do you guys expect a 10$ dividend this year?
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0% for me.
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Watched also the movie and was disappointed too. Like it is often the case with movies, the first one was much better.
ECCO
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All shareholders are not in the same boat at Magna.... I can not believe it.
http://www.theglobeandmail.com/globe-investor/pension-funds-fight-magna-deal/article1590589/
ECCO
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Fairfax Financial Holdings Limited (TSX:FFH - News)(TSX:FFH.U - News) has agreed to issue 563,381 subordinate voting shares to a number of institutional investors at a price of $355 per share for aggregate proceeds of approximately $200 million. Fairfax previously announced its intention to complete the equity offering in connection with its proposed acquisition of Zenith National Insurance Corp. Fairfax intends to finance the acquisition with a combination of holding company cash and subsidiary dividends, and will use the proceeds of this offering to increase its cash position at the holding company. The acquisition is subject to a number of customary conditions, including regulatory approval and approval by Zenith National's stockholders, and is expected to close in the second quarter of 2010. Closing of this share issuance is subject to approval of the Toronto Stock Exchange and is expected to occur on or about February 26, 2010.
Fairfax intends to file a prospectus supplement to its short form base shelf prospectus dated September 25, 2009, in respect of this offering with the applicable Canadian securities regulatory authorities. Details of this offering will be set out in the prospectus supplement, which will be available on the SEDAR website for the Company at www.sedar.com.
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My guess is a 2.50$ or 3.00$ quarterly dividend.
ECCO
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Aside from the stock sale, Wells Fargo also is issuing $1.35 billion in stock to employees instead of giving them cash bonuses. The TARP compensation restrictions affected the size of cash salary and bonuses banks could award their executives.
$1.35 billion...hey, thats a lot of money!!! In fact, this represent a bit more than 1% of the company. We are now at 11% dilution.
ECCO
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Thank for the info.
I was wondering what would happened to my options today. Well, what happened is that I was unable to find them anywhere. They are still in my account (Scotia Discount), but when I ask for price their system dont find them. It also disappear on yahoo. I guess its gonna be resolve within a few days?
Am I the only one trying to find my options somewhere?
ECCO
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Following FFH delisting of NYSE, what happened to FFH options?
I guess someone already knows what will happened after dec 10th and that wont be that bad, otherwise options would have been beating down today. Right?
In my case, I called Scotia this morning and they were unable to give me any answer. The guy told me to call them back in a couple of days!!! Well, for sure I wont be the first one to know.
Does someone have an "official answer" to that question?
ECCO
What is the Big-Big Picture?
in General Discussion
Posted
Some here should read this classic:
http://en.wikipedia.org/wiki/How_to_Win_Friends_and_Influence_People
That might be one of the best move you could do in your life to read it.