scorpioncapital

It is interesting to note that some of the biggest yearly returns for the market ALSO occurred during the Great Depression (alongside some of the biggest yearly drops). It is not at all clear that large and mesmerizing crashes this time around won't be followed by just as mesmerizing gains.

My thought is to not duplicate investments. That is to say, one investment should do instead of three, if they achieve the same aim.

Does anyone know if the line on most balance sheets called 'common shares and paid in capital' represents the total money that shareholders have put into the business to get it started? Can it be inferred from this measure the returns and efficiency of the business? For example if a business had this capital as $1 billion and now the market cap is $3 billion that investors put in $1 billion and now that stake is worth $3 billion after x years?

Check out this quote from Common Stocks and Uncommon Profits: "As already explained, our laws, and more importantly our accepted beliefs of what should be done in a depression, make one of two courses seem inevitable. Either business will remain good, in which event outstanding stocks will continue to out-perform bonds, or a significant recession will occur. If this happens, bonds should temporarily out-perform the best stocks, but a train of major deficit-producing actions will then be triggered that will cause another major decline in the true purchasing power of bond-type investments. It is almost certain that a depression will produce further major inflation; the extreme difficulty of determining when in such a disturbing period bonds should be sold makes me believe that securities of this type are, in our complex economy, primarily suited either to banks, insurance companies, and other institutions that have dollar obligations to offset against them, or to individuals with short-term objectives. They do not provide for sufficient gain to the long-term investor to offset this probability of further depreciation in purchasing power."

They did say at the last Leucadia AGM that Ackman was kind of impulsive, maybe this is an example of that.

How do these puts work? You get $110 for every contract and if the stock is below $15 before Feb 19 (say $14.75) you may be excercised and must buy 100 shares ($1475) - $110 = $1375 or $13.75/share? If you are not exercised or the stock is above $15 you get to keep the $110? Are there any collateral requirements? To the poster about Leucadia - The main feature I like about it is that the managers of the company truly understand capital allocation, investing, and accounting. I mean, in a very deep and creative way, similar to Warren Buffet. You are not buying a great business with a big moat like say Walmart or Procter and Gamble, it's a totally different thing - BUT, the end goal is similar, to compound a particular sum of money at certain desired rates and try to stay out of trouble and making foolish business decisions. For the last decade or so, the company has sold at a premium to book, one having to believe the growth rate and management were worth that premium. Today, with the crisis, I believe LUK is selling at or slighly below a conservative estimate of book value so you don't pay extra for the growth rate and management.

My reasoning goes like this: I think the odds of hitting $10 is about 1/3. The odds of staying around $15 is about 2/3. So the expected buy price should be $13.20/share. Since I'm an optimist, my buy order is in at $14 :)

While I'd love to buy LUK at $10, I am not at all certain it will ever get there. At $10, it would trade (and this is my opinion of adjusted values) somewhere between 33%-50% of book. That seems preposterously low unless this is the Great Depression v2.0