cwericb

I have been told by real estate people that they a lot newer large houses where several rooms are sparsely furnished or bare simply because the home owners are at the limit of their budget. If you think that is scarey, read on. I am involved in the credit end of the building supply industry. When customers come in to set up a line of credit for the construction of a new home the conversation often goes like this. A well educated, well employed young couple are sitting in front of me and I say... “ Hi folks, so you are going to build a new home and all your financing is all arranged?” “Yes, everything is ready to go and our contractor is starting next week.” “Well that’s that’s great. So what is your new house going to cost?” They look at each other with a blank look on their faces and say “ Well we don’t know, but our payments will be $x,xxx per month.” “Yes well that’s fine, but do you know what the actual cost of the house will be when finished?” “Aaaaa... no, but our mortgage is $xxx,xxxx and our payments will be $x,xxx” “But what is the cost of the house?” ‘Aaaa, well I guess we never asked.” “So you really have no idea of what the house will cost?” “No, I guess perhaps we should ask, but we do know that our mortgage payments will only be $x,xxx ” “Well folks, you realize that your 3% mortgage rate could increase in five years from now when you renew your mortgage and your payments could jump substantially?” “Hahaha, well that better not happen, hahaha” This is NOT an isolated incident. The only reason I can see for this frame of mind is that these people have been brought up in a world where leasing is a way of life. They seem to equate a five year lease with a five year mortgage term. A mortgage is not a car lease. When rates rise you don’t ease into a cheaper model or walk away at the end of five years.

You guys can argue all the facts and figures you want, but perception is everything. The average small FBK shareholder sees two things. ABH offering $1.00 for FBK and MERC offering $1.30. The appearance is that FFH, as a major shareholder of FBK and ABH, is trying to force the deal through at $1.00. No small shareholder is going to be very happy with that and the perception is that FFH is trying to bully the deal through at the small shareholder’s expense and that does not help either Prem’s or Fairfax’s image.

Bought a little more today @$390. Hope it will slide over the next few weeks so I can pick up some more. Remember the bumpy forecast and FFH sure looks awfully good when the markets tank.

Part of what bothers me about this situation is what has happened to the "fair" in Fairfax? This is going to leave a bad taste in a lot of people's mouths long after this is over.

"The US operations have tax losses of ~$98M that would be lost in a transaction" Would that still be the case if the US mills were sold to a US company?

"Assuming the management doesn't do anything stupid after it falls through, of course." That's probably a generous assumption.

I was speaking to a business woman in Waterloo last week who told me that RIM owned 67 buildings in Waterloo. Apparently they occupy 1,500,000 square feet of office space in the city - 34 acres, and that is in a city with a population of a little over 100,000. Not much wonder they are concerned.

I had been wondering the same. Up 2%, down 2%, up, down, Its quite a roller coaster. I can see it trending down for a few weeks or up for a while but lately it seems to be swinging up and down on an almost daily basis.

I'm down to just 4 or 6k after dumping most at about 75 cents thinking I might buy them back lower. #$%^&*! Not tendering though.

Yeah Norm, but I still don't think Fabrice is going to get a free ticket to the annual dinner...

Taxlaw nearly took the words out of my mouth. In the first trading day of 2012 I was up by 50% of what I was up for the previous 12 months. Unfortunately not the 8% Ericopoly was up. Sure would be nice if this was the shape of things to come...

"you're smart and experienced enough to reverse engineer what they did to go -15%. you seem nonchalant about OP managing your money, having a bad year. they are not all smart. many are just good salesmen. they can be intimidating to the lay person. Were it me I would be sitting down with them, for hours if need be, and figuring out Exactly how they lost 15% of my capital. how much are they charging? what is the turnover of the portfolio? lost of questions" I have done most of what you suggest and I think the time is coming when I will have the confidence and time to manage my own investments, but for now I pretty well have to rely on someone else to do so. It also spreads the risk of my doing something really stupid :) At this point I am taking the position that I will give them a little more time, (but not much more). It is is something like the mutual fund that advertises how well it did last year. It doesn't mean that they will have a great year next year and the fund that didn't do as well may have a better chance of gains in the next year. Some of the money is invested with pretty good fund managers like Sprott and Chou so I will give them a little longer but it still ticks me off that with all their expertise, resources and information that a rank amature like myself can outperform them in both good and bad markets.

I have two portfolios. One self directed, the other “professionally” managed through RBC Dominion Securities and Foyston, Gordon & Payne. Despite some bad timing (FTR) and some gambles (RIM and TRE), my self directed portfolio was up 3%. My “professionally” managed portfolio was down 15%. I could put that negative 15% down to being aggressive, but when markets were doing better last Spring my self directed portfolio was up 6-7% while the other was only up 2-3% (at best). Unfortunately they manage 2/3 of my holdings. My financial adviser says I need to give it more time. That reminds me of the old Credit Union TV commercial where this gent comes on screen and says, “For years I went to my broker (pause) And the only thing that got broker was me.”

Happy holidays everyone and may 2012 find you all healthy and wealthy!

“where are the charges?” Just because it is difficult to obtain enough evidence to take a case to court certainly does not indicate there was no wrongdoing. Would you believe that everyone that exceeds the speed limit gets a ticket?

I am somewhat surprised and disappointed at Fairfax's roll in this opportunistic and incestuous deal. It's great for Fairfax, and a perfect fit for Resolute, but a pretty raw deal for us small shareholders who have stuck in there for several years. I bought in at $1.72 several years ago, a lot more at $0.53 and then took "advantage" of the rights offering at $1.01. After watching this drop from nearly two bucks to 70 cents I dumped a bunch at $0.75 just before the deal was announced. I'll do okay because most was purchased at the 53 cent level, but my timing has been pretty lousy. At $1.20-$1.40 it would still seem pretty cheap for Resolute and a lot more fair to shareholders, but I can't see that happening.

From a press release this morning: MONTREAL, Nov. 30, 2011 /CNW Telbec/ - Fibrek announced today that its Board of Directors, with the support of its financial and legal advisors, initiated a diligent assessment of the current situation and of the intention of Resolute Forest Products ("Resolute") to make an offer to acquire Fibrek, as previously announced. The Board of Directors will also fully consider any other strategic alternatives available to Fibrek and communicate Fibrek's views to its shareholders in due course. The Board of Directors fears that Resolute's unsolicited offer undervalues Fibrek and its future prospects. "The consideration offered under the Resolute proposal does not capture Fibrek's true value for its shareholders", said Pierre Gabriel Côté, President and Chief Executive Officer of Fibrek. Read more: http://www.digitaljournal.com/pr/506703#ixzz1fCkhsQD4

FBK was in the $1.60-1.70 this Spring. At $1.00 I feel like a victim of incest.

libor.plus1 Agree. I would want to see a report cleared by PWC before we really know the end result.

The actual interim report is here. http://www.sinoforest.com/schedules/SF-Release-Independent_Committee_Interim_Report.pdf

This is simply a political power play. Papandreou is a politician trying to cover his own political ass at the expense of everyone else. He holds a referendum and if he can convince the Greek people that they have no choice, then everyone probably benefits. If he can’t, than the consequences are their own fault. Either way, he can say that it was the people’s decision, not his, and he can attempt to hold on to power. What else would you expect of today’s politicians? Surely one would think that the other EU leaders would have anticipated this?

Between RBC and RBC Bank (US), I have a US checking account, a US savings account and several CDN bank accounts, a US Visa card, TFSA, an RBC Direct Investing account and an RSP through RBC Dominion Securities. With a click I can transfer between my accounts (instantly with most) and can see all the balances on one screen. Trading fees are now just $9.95 with $50K in assets which is not too bad if you don’t do many trades. I also find that I can ask just about any investing question through their e-mail center and get a reasonably quick response. I have recommended RBC to friends South of the Border who have summer residences in the area and they find having all their accounts in one bank on both sides of the border works very well. I just wonder if it will all work so seamlessly now that RBC has sold off their US branches. RBC seems to think so. DI fees are covered here http://www.rbcdirectinvesting.com/commissions-fees-schedule.html

Good post libor

"Last time I checked, it did not appear that either current management (i.e. those who have not been suspended) or the auditors really knew what was going on in the company. Do you think they know whether the company is solvent?" You may well be right in that, but one would think that after four and a half months into the audit that PWC would have some idea as to the solvency of the company. But that is not the point I was making. What I said was that your assertion that the payment was part of a Ponzi scheme simply could not be correct by definition. The stock is not trading. Therefore, there is no gain to be made. In turn, the payment could not be part of a Ponzie scheme. The payment may or may not be an indication of good news to come on TRE but it is certainly not bad news.

“A libel suit? Are you kidding me? For calling a company a fraud after the regulators halt shares and force management out? Jeezus do you really want to double down on another round of this Sino Forest bs? Cwericb, whoever you are, I have news for you. You got fooled. Duped. It's over. Such fierce loyalty to those who just defrauded you is amusing, but threatening me with a lawsuit is enraging. You should be suing the top management who defrauded you. My advice, try to learn something from the experience and move on, but don't threaten people with libel suits because they call a spade a spade.” Hester, Hester, Hester, calm down man. You seem to have trouble understanding the fact that libelling a company or their directors on a message board can have serious repercussions. I'm not threatening to sue you or anyone else, no one is libelling me, I was simply suggesting that TRE might take a dim view of you calling them a bunch of crooks in a public forum before anything is proven. Would you like me to cite some examples of posters being sued? Also, there is a big difference between a stock being halted and a stock being de-listed. As I said, you are being premature in saying the company is done, but I would hate to see your faith in Carson Block being shaken. You have been very vocal in your opinions that TRE is dead and gone and you agree with Carson Block’s accusations of the company being “a complete Ponzie scheme”. Just how surprised would you be to see this stock trading again in the new year? Once again, for the record. I fully expect that certain directors may have been involved in practices they should not have been. However, I think that this stock will be trading again once the dust settles. “If you understand how ponzi schemes work, you will not think this curious at all. Ponzi schemes work BECAUSE the operators do pay interest - at very attractive rates usually!” Oec2000. I am quite aware of how a Ponzi scheme works. But this stock is NOT trading. Therefore there is no advantage for TRE to pretend all is normal to gain new investors. Think about it. Sino has been accused of being a Ponzi scheme and are presently being investigated for that. If they were a Ponzi scheme and the company was shortly going to be exposed as such, why would they pay anything at this point? In fact if they were going bankrupt, payments made at this point could be seen as preference payments and overturned under the Bankruptcy Act. PWC would be well aware of this and would likely prevent such payments from being made if they thought there was any risk of bankruptcy.