JEast
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Posts posted by JEast
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Anyone interested in shorting BRK and buying FFH at these levels. The mark-to-market change at FFH has to be nice, but unsure on the losses they are going to report for Sandy and crop insurance. The market seems to think the losses will negate the portfolio gains. Somewhat tongue in cheek comment here, but there also seems to be huge disparity in the two.
Cheers
JEast
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I discussed Hartford with an analyst friend living in Japan. His thesis (after attending meetings on the Japanese annuities) was that Hartford was a horrible investment due to their Japanese liabilities. I thought the exact opposite due to one lone fact. What happens if the Yen weakens? Well, those liabilities are reduced -- depending on how the company has hedged their Yen exposure. In other words, I have been slightly bearish on the Yen and thought HIG had a potential catalyst, among other catalysts too.
I posted sometime last year, that the HIG warrants were the most undervalued thing around at the time. Still like the warrants and purchased more in December.
Cheers
JEast
Disclosure: Long HIG+
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Business observation: At least he was flying commercial :)
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Is Mr. Bass a US dollar bull? I find it interesting that many say the world financial system is unsustainable -- but against what? If the Yen sucks, the Renminbi sucks, the Euro sucks, does that mean we are going to end up with a Loonie bubble :)
Cheers
JEast
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As disclosure, I love the commentary from the guys at GMO. However, I still can not take the Jeremy Grantham’s Malthusian rundown argument that the earth is in terrible shape and we are going to run out of resources. As such, I present Larry Siegel's response he calls A Bar Room Argument Among Friends titled 'Fewer, Richer, Greener'.
http://larrysiegeldotorg.files.wordpress.com/2012/01/fewer-richer-greener_siegel_2012_03_021.pdf
Cheers
JEast
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One alternative is to buy more -- as they are cheap.
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JEast
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His book on crony capitalism is good too - 'What Would Ben Graham Do Now'
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JEast
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Correct cpan. The decline in manufacturing is the decline in people employed, not that manufacturing will disappear, and is equivalent to the agriculture analogy that was identified in the talk. My take-a-way point was that we need to quit worrying about getting manufacturing jobs back because they are not coming back just like the farming jobs never came back. Of course we produce more food now than in the 1920s and we will manufacture more in 2020s than we did in the 1960s, just not with as many people.
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JEast
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My comment about that I would hire a 2-year roughneck over a 7 year college degree implied that I did not want a college grad that took 7 years to complete a 4 year program :)
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JEast
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Rebirth of the North American work ethic? Let's hope so. I am not that familiar with how the great white north has coped, but from my front porch most are looking for hand-outs and 6-7 years of college. More roughnecks and entrepreneurs is a welcomed change. I would hire a 2-year roughneck over a 7 year college degree any day of the week.
Cheers
JEast
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A few more folks have reported on Sandy. Of note, RenaissanceRe reported $130m after-tax impact -- Ouch. Ouch with respect that this represents an estimated 10% of net premiums. Did not seem to bother the market though and not necessarily a good metric, but interesting. In reference, ORH is running a little over $2b in net premiums.
http://investor.renre.com/phoenix.zhtml?c=65065&p=irol-newsArticle&ID=1769123&highlight=
Cheers
JEast
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All long-term shareholders will be disappointed if some shares were not repurchased as it went below $340C a few times. However, I suspect only a minimal amount was purchased as they want to keep the cash balance above $1B. As several P/C companies have now reported their Sandy impact, some were less than expected like Berkley at only $50m pre-tax. Odyssey may escape with the low attachment points, but think we are going to take a hit on business interruption and crop though.
Cheers
JEast
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It’s highly likely that by the end of the year equities will no longer be the largest strategy, and that has never happened before”, said Ken Heinz, president of HFR, the data provider.
http://www.ft.com/cms/s/0/e23a646c-40b6-11e2-aafa-00144feabdc0.html#ixzz2FQd7D9ta
Contrary indicator?
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JEast
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The thought arose from yesterday's comments on the gut reaction of banning guns was -- can a society actually ban a ubiquitous cultural identity. Of course it can be done, but the question is can it be done successfully. It is hard to change a culture as we learned from prohibition and from value investing in turnarounds. Also, we appear to be learning to some degree with the war on drugs. With more guns in the US than there are people (est. 400m guns, 315m people), is the discussion on banning realistic or should the 2nd level possible topic be to quit medicating our disturbed/troubled young people in school then abandoning them when they get out at age 17 or 18.
Side note: This discussion can not be non-potitical as it involves multiple levels of government from the federal constitution, to state rights, down to municipal jurisdictions that is 100% political.
No Cheers Today
JEast
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Thanks for the observations as the (in-the-money) near term call options look a little funky. Not quite, but reminds me a little of the FFH calls back in the day when out-of-the money leaps were selling at on 12-13% time value as the market thought FFH was going bankrupt.
Cheers
JEast
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Not that we long-term holders care that much, nevertheless, 4th quarter MTM should please those market types though.
The Cunningham booked gains are $160M, and RIMM alone should look favorable from the September 30th value. The big question is what the Sandy attachment points will be for Odyssey, but expect a significant amount for the business interruption to be booked. Also, unsure what crop losses will be on the negative side as most are normally booked in the 4th quarter. For the conference call, it was noted that this was not a significant business line for FFH, but my gut says be prepared for bigger numbers than hinted at.
Cheers
JEast
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Great panel discussion with Richard Koo and Bruce Greenwald on what the world economy is facing. Richard Koo's 'Balance Sheet Recession' and Bruce Greenwald's 'Decline of Manufacturing'. I have been in the Balance Sheet Recession camp since Richard's book was first published in 2003, but Bruce makes a compelling argument that is persuasive (or maybe I am falling into the narrative fallacy).
Found via http://www.valueinvestingworld.com
Cheers
JEast
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Still below the Hubbert Peak, but interesting as to when the next plateau will be.
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS1&f=M
Cheers
JEast
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The Washington Post (WPO) will pay all its 2013 dividends ($9.80 per share) before the end.
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JEast
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Maybe this should be in the investment ideas, but Torstar has been taking it on the chin this year (price wise). It is in, or approaching the value camp entry point. The same could be said for Glacier Media. Any of our Canadian value hounds want to comment?
Cheers
JEast
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I have seen the idea floated a few times and have recommended it myself, but never thought a political body would take it seriously - too logical. Well, Spain is stepping up to the plate!
Cheers
JEast
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The P&C Industry would probably be called 'robust' more than 'antifragile'. This recognizing that the industry could, though remotely, have a spiral effect where one insure collapses, that causes another to collapse, etc... that would eventually cause governments to intervene.
Cheers
JEast
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[amazonsearch]Antifragile: Things That Gain From Disorder[/amazonsearch]
Due to be released at the end of the month, I recently finished an early copy. If you consider this the 3rd edition to the trilogy, Fooled By Randomness, then Black Swan, -- it was worth the wait and a nice book. If you read the Black Swan, then you know about creeping determinism and the turkey problem.
To reveal creeping determinism, or `abstract blindness' I am reminded of the WWII bombers that returned from German bomb runs. The ones that returned were all shot-up and full of holes. The General asked, `what can we do to protect the bombers'? A smart mathematician said put extra armor where there are "no" holes. Where There are No Holes!
When looked thru the lens of abstract blindness, one realizes that the bombers that did not return were the ones with holes in them that no one could see. This dove tails into the Antifragile’s frequent reminder that absence of evidence , is not the same as evidence of absence -- meaning (in my view) just because there is 30 years of data that says it has never happened before does not mean it will not happen (the turkey problem). Enjoy the read!
Cheers
JEast
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As Herman Munster used to say, 'Darn, Darn, Darn'.
The west coast boys must just be waking up and pushing up the prices -- go back to sleep!!
Cheers
JEast
TV- how much do you watch
in General Discussion
Posted
No TV for two years now. But do miss 'Deadliest Catch' for some reason.