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JEast

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Posts posted by JEast

    Wilbur Ross: Long-Term Bonds Are Huge Risk

    in General Discussion

    Posted

    Similar to the GMO discussion, the difference could be explained via timeframe preference.  If you are Buffett, one does not need to take the hint of risk when you have great operations working for you.  If you have a timeframe of a year or three, then you can be in the Schilling/HamblinWatsa camp.  I see no real diametric view as I like bonds shorter-term and do not like them longer-term.

     

    I have placed several bids this year for some 25-year zeros with no success yet since every time we get a new micro scare, bonds rally.

     

    Cheers

    JEast

    CYPRUS savers take 10% hit

    in General Discussion

    Posted

    Call me a skeptic, but this Cyprus stuff seems to be a red herring.  Why has the Russian government introduced itself into the conversation?  Maybe this has less to do about the banking system and has more to do with the Russian underworld.  Just a thought.

     

    Cheers

    JEast

    Prem Watsa And Jeremy Grantham Have Completely Opposite Views On Commodity Price

    in General Discussion

    Posted

    Just a few years ago we were talking about 'peak oil' (maybe still are).  Now we have more NG than we know what to do with it.  History is full of these types of examples, but we seem to always think this time is different.

     

    Another example, I just read that a few years ago the folks in Alabama found a cypress forest.  O.K., big deal right.  Well, the forest was 10 miles off the coast!!  Carbon dating indicated that the trees are 50,000 years old.  If so, then I guess global warming started back then as the seas are still rising -- right?  I thought of Munger when I read the story when he indicated that an extra degree will not change things much, deal with it.

     

    Grantham may be exactly right in 40+ years, or more, but his outlook just seems too Malthusian as in we are going to run out of food, and everything.  The USDA indicates that 2013 will plant the most acreage ever, and if we have a normal growing season, the US will produce more bushels of grains in our history! Hard to be running out of stuff when supply exceeds demand.

     

    Cheers

    JEast

    Betting Against JGBs

    in General Discussion

    Posted

    I love Hayman Capital's analysis and commentary.  On the other hand, I have disagreed with the analysis for the last six (6) years when I first heard it, I recall around '07.  I am still in the deflation camp, or at least non-inflation.  Maybe we are getting closer to the doom JGB story, but if we have a market setback, as many fear, then it may take another six years as investors will finally abandon stocks and flood bonds.

     

    Cheers

    JEast

    Fairfax Annual Letter?

    in Fairfax Financial

    Posted

    With respect to the hedging, I am somewhat indifferent.  If you own BRK, you sleep like a baby and if you own FFH, you sleep like a 5 year old. Shades of gray here.

     

    My bigger concern is trying to make Crum & Forster look good when they are not.  If one was to add back in all the things that were put into runoff or just shutdown, they have never written below 100% since we bought this turd. And as for redundancies at C&F, none over the previous 10-years that I have seen.  Doug -- take the pens away and go to .4x of surplus.

     

    On the other hand, we have ORH that was formed/carved out of the old TIG purchase.

     

     

    Cheers

    JEast

    The Waiting Game

    in General Discussion

    Posted

    To paraphrase one of the patriarchs of value investing, 'buy 50¢ dollars when you can'.  I understand everyone's apprehension of a frothy market, but does not the market climb the wall of worry?

     

    Here is hoping that a fella's waiting game does not turn into The Crying Game as a fella might get a surprise!!  Could not resist the reference for you movie buffs out there.

     

    Cheers

    JEast

    Poker

    in General Discussion

    Posted

    As all investors dabble in some form of gambling at some point, I came across an interesting statistic on playing poker.  Kyle Siler, a social scientist from Cornell University, looked at 27 million online poker hands in 2009.  His insight was that the more hands a player won, the less money they actually collected. Sound familiar with trading too much?

     

    Another data point to follow the Buffett/Munger rule to invest infrequent and when you do, invest big.  Or per Charlie, "Stock-picking is like gambling; those who win well, seldom bet, but when they do, they bet heavily".

     

    References if you are interested.

    http://www.ncbi.nlm.nih.gov/pubmed/20054621

    http://www.ozpoker.net.au/poker-strategy/kyle-silers-poker-study

     

    Cheers

    JEast

     

    Wow! Venezuela currency devalued by 46,5%

    in General Discussion

    Posted

    The longer a populist stays in power the more the brain drain for the country accelerates and the longer the populist stays in power.  A very perverse outcome. 

     

    I too know many expats from Venezuela.  As an extreme case, my expat friend’s parents left the country to move back to Italy -- after 50-years!!  I can only imagine what it is like to leave your home of 50-years when you are approaching 80.  To make matters worse, the father was a district judge that was essentially forced to leave his adopted country.  But they saw the writing on the wall and made the correct decision to leave several years ago.

     

    Cheers

    JEast

    The Shipping Man - Matthew McCleery

    in Books

    Posted

    [amazonsearch]The Shipping Man[/amazonsearch]

     

    One of the better books at looking inside an industry.  Though published as a novel, one can read between the lines and probably figure out the main characters.  From the back cover (and I agree) - Part fast paced financial thriller, part ship finance text book, The Shipping Man is required reading for anyone with an interest in capital formation for shipping.

     

    Fairfax a strong buy?

    in Fairfax Financial

    Posted

    The board has a love / (oh no) relationship with FFH.  For the ones that have been owners for a long time (6-15 years) it has always been 2 steps forward and 1 step back.  Nevertheless, I would agree that the arc is being built.  Unfortunately, it is truly unrecognized by the investing community and reason for an earlier comment on why some are holding so much cash given FFH's price.  Over the years, I have been in the camp saying over and over "I love these guys"  then  "Oh No what just happened" :)

     

    Cheers

    JEast

    (FFH owner going on 13 years now)

    A Rising Tide Lifts All Ships!

    in General Discussion

    Posted

    I understand the concern, but why would the markets not continue to rise when the earnings yield is 5x (or more) than folks are earning in bond funds.  Folks are tired of low rates as they just received their yearend statements reminding them and are moving elsewhere just like the FED wants (I can hear Helicopter Ben saying -- finally).

     

    Sell in May and go away!

     

    Cheers

    JEast

    Class 8 Vehicles

    in General Discussion

    Posted

    I would tend to agree on the age perspective as the average car on the road today is near 11-12 years when the average for turnover used to be 8-10 years.  Of course both people and businesses are putting off capital expenditures that they used to fund, but have for now been going the repair route -- see ORLY, AZO and others.

     

    I would suspect that momentum may change in 2-3 years and reason to start looking now.  PCAR and CMI are surely the cream and reason they are at 3x book currently.  Had my eye on Williams Controls but they were just recently bought out.  ShahKhezri - thanks for the RUSHA idea.

     

    Cheers

    JEast

    Class 8 Vehicles

    in General Discussion

    Posted

    I was speaking with a top salesman in heavy duty trucks at a super bowl party and he indicated that Class 8 vehicles are the oldest they have every been.  Normal turnover for vehicles is 4-6 years and the average age in North America is now over 8 years.  Any comments on any value plays in the space from parts companies to emission controls.

     

    Cheers

    JEast

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