JEast

Nice idea, but why not other small banks as there are a plethora of small banks selling at 20-50% of (not book value) but tangible book value. Most are fairly liquid and many are even paying a dividend! Just my 0.02 :) Cheers JEast

I am aware that some shorted the China 25 Index successfully last year. Now with the all the stimulus that the world and Chinese government has pumped into the system, it appears that some of this is going back into Chinese stocks again. Anyone preparing to hedge again? Cheers JEast

Yes, thanks for sharing the Maersk presentation. The slow steaming is helping with the over capacity situation in addition to more vessels going to the scrap yard. With respect to "super slow steaming", the engine manufactures will likely adjust their future instructions. However, I would not expect many liners to actually use the 10% load as stated as a one year test is too short a period to determine causality. At best, 40-50% will be used by most as lower loads will eventually increase maintenance costs and/or breakdowns. As for Seaspan, another very acceptable quarter as all counter parties are performing as contracted. Plus, 2010 looks promising for deliveries based on the recent conference call. If so, the big cash flows will start to flow thru in 3rd and 4th quarters of 2010. Cheers JEast

Buy on the rumor, sell on the News !! For us old timers, we don't notice FFH price moves unless they are 40% or more :) Therefore, the recent 10-15% move is barely worth mentioning. Cheers JEast

True about the new alternatives and reason Morningstar only gives them a narrow moat status. However, if I look out 2-4 years, will there be more consolidation? The other item I am looking for is who is going to be the clearing house for the eventual return of engineered financial products like CDS and others not named as of yet. That is or will be a big prize for someone. This new clearing house also may be mandated by the G-8 or G-20 based on future global regulation. Cheers JEast

Just checking to see if anyone had any comments about NYSE Euronext. Much like CME, they appear to have an oligopoly to some degree. Though not super cheap, they do have the captured market and depending on how you value their goodwill, maybe currently at 1x book. Cheers JEast

I know most are tired of posts about deflation and comments about debt deflation and Irving Fisher, but I just find our current economic situation so very eerily similar to '29-'32 and the Japan experience. Based on the most recent data, it appears the PPI in the attachment below will not be in recovery for sometime. Cheers JEast

Bet on Interest Rate Rise Goes Wrong - Cost to Exit. Ouch! and from the supposedly smart ones. http://www.bloomberg.com/apps/news?pid=20601087&sid=aHou7iMlBMN8 Cheers JEast

I have been fortunate enough to know about Irving Fisher's theory in -- "The Debt-Deflation Theory of Great Depressions". The more prescient is what he calls the "consequences in nine links" on page 342. I posted these nine points several years ago as one of the bull cases for FFH's bond portfolio when we at one time had a minus $1B or so on a mark to market basis. Anyway, if one is interested, you might want to read up on the Japan experience via Richard Koo's books "The Holy Grail of Macroeconomics: Lessons from Japan's Great Recession" and "Balance Sheet Recession: Japan's Struggle with Uncharted Economics and its Global Implications." http://www.amazon.com/Holy-Grail-Macroeconomics-Lessons-Recession/dp/0470823879/ref=cm_cr-mr-title http://www.amazon.com/Balance-Sheet-Recession-Uncharted-Implications/dp/0470821167/ref=cm_cr-mr-title Cheers JEast

FYI http://www.ft.com/cms/93ece7c0-07af-11dd-a922-0000779fd2ac.html Also there is an interview with Mandelbrot. Cheers JEast

Yes, the Hunt Brothers is what I was referring to, but if my memory serves me, the big push for the advertisements was in the '73-'75 time frame. Also thinks for the Current TV episode. Current TV is interesting on occasion. As a side note, they have not been in the black yet and Al Gore is one of the major investors. Cheers JEast

Has anyone heard of such events. Though all of us have probably seen the commercials for a few years of "Sell Your Gold", but I just became aware of such events in houses. It is set up much like a Tupperware or Pampered Chef party. Would or could this imply we are approaching a top? I thought this was very odd and reminded me of the great silver boom when people were selling their US quarters and half dollars at record amounts. Cheers JEast

A potential Category 4 storm currently south of Okinawa and on a path that could take it over Tokyo by Thursday -- and just when I thought we made it through the season. http://www.reuters.com/article/worldNews/idUSTRE5951AL20091006?feedType=RSS&feedName=worldNews Cheers JEast

An FYI from Barrons on key words to watch out for onpotential Financial Shenanigans: Now that most regulatory filings are easily searchable on the Internet, investors can troll through the documents for key phrases suggesting something could be amiss -- let's call them dirty words. http://online.barrons.com/article_email/SB125150839847868595-lMyQjAxMDI5NTIxOTUyMDk4Wj.html#artCommBookmark Cheers JEast

Are the Hoisington folks correct? Maybe the Bond market has it right for the next year. Executives at Kroger Co., the largest U.S. supermarket chain, blamed deflation for a 7 percent drop in earnings in the second quarter. http://www.bloomberg.com/apps/news?pid=20601087&sid=ame31IjWda6w Cheers JEast

The chorus is nearly unanimous that the dollar will continue to fall, that gold will continue to rise, that inflation is in the not too distant future, and that foreign investors (especially China) will start selling U.S. Bonds. However, the Bond Market appears to be ignoring these apparent facts, as the masses know them, now that the 30-year is on the verge to cross below the 4% mark again (3.99% as I write). What does the Bond Market know that the chorus does not know? http://www.bloomberg.com/markets/rates/index.html Cheers JEast

Just a follow-up since the 30-year is approaching the 4% mark again. If inflation is indeed around the corner, it appears to be several years down the road and the Hoisington folks are on the right track. Japan's core consumer prices dropped 2.4% in August year-on-year, the fourth successive month of record falls. http://news.bbc.co.uk/2/hi/business/8279832.stm Cheers JEast

Noticed this on Bloomberg today which should bode well for both BRK and FFH. Muni Yields at 42-Year Low as Sales Slow http://www.bloomberg.com/apps/news?pid=20601087&sid=aD9rZdPKnDf4 Cheers JEast

Thanks for your previous comments. To make my thesis as simple as possible, this is mainly a replacement value play. Even with the depressed prices for assets, the replacement costs to have what SSW already has on the water is above the current selling price. Anyone can make the argument (as the market has) that the liners are going to walkaway from their charters much like ZIM has done to Danaos or that the banks will withdraw credit. However, with respect to the former, Maritime Law is on Danaos' side as I read it as the owner can just keep the cargo for unpaid bills if they want to. The other point is that SSW is really leveraged to China companies and indirectly to the Chinese government which makes me believe that these companies will not walkaway but will maintain the status quo. Also, China is expanding and they want solid partners. If you can obtain a very cheap asset then one does not have to ask for as high a charter rate either to get the same return. Plus many liners want to de-leverage their balance sheets (like COSCO) and that is what SSW is there to do. Whether SSW buys new assets, or not, really just depends on price. I would not suspect any action for the remainder of the year as they are building their surplus, but would not be surprised for some activity in the first six months of next year. Again, I am agnostic if it is a positive or negative as it depends on the price and what they will do with the new asset. Also, this is a long-term investment as it is going to take some time. However, I am of the believe that as one looks back five years, or so, much like FFH, one will think the $5-$8 range was very cheap. As a side note, the previous article about $20M for 6,500TEU appears to have just been a rumor, but we shall see. Cheers JEast

It appears the El Nino is producing hell in Australia, see the pictures. http://www.dailymail.co.uk/news/worldnews/article-1215443/Australia-dust-storm-sweeps-eastern-coast.html Cheers JEast

As the annual meeting was over the weekend, I was looking for an announcement so I guess this was it. In addition, management promised another announcement before the next quarter's report on the delivery schedule. However, I would assume that this may be the end of deliveries for this year. Next year is the real test as the bigger ships with larger cash flows are due to be delivered based on preliminary comments. If so, the dividend should gradually go back to previous levels sometime in 2011. The potential real surprise is if Seaspan uses their close relationships with the Chinese banks, which are flush with cash, to maybe buy a few discounted ships over the next 6 months or so. As their current rate on loans is fixed at approximately 6.1%, better deals/rates may be available for the agile management team. Cheers JEast

As many are aware, our friends at Morgan Keegan were one of the early attackers of FFH. So this and other settlements could not happen to a nicer group. Unfortunately, Regions Bank bought Morgan Keegan in 2000 and has been cleaning house ever since. http://www.marketwatch.com/story/fund-investors-lose-money-and-lawsuits-2009-09-20?link=kiosk Cheers JEast

We still have time, but as of September 21st there has been no Atlantic land falls this year. We know that this is an El Nino year (though on the mild end) but in a contrary view to the masses of global warming and etc, can record low Sun Spots account for some decreased activity. Based on recent data, we are approaching record sunspot lows. Much like Darwin, when you see something surprising write it down immediately. I found the following quote very surprising, "The year without a summer, which was 1816, was during a grand minimum in 1800 to 1830 when Europe became cooler", Perry said. http://www.cjonline.com/news/local/2009-09-20/earth_approaching_sunspot_records http://www.global-warming-and-the-climate.com/images/sunspot-lenght-&-teperature.gif Cheers JEast

Not to beat the drum on deflation in Japan, but can Japan save anymore? Apparently so as the Louis Vuitton bags are no longer in vogue. “I’m not drawn to Louis Vuitton at all,” said Izumi Hiranuma, 19. In addition, Wal-Mart Stores finally turn a profit after seven years. Anyway, thought this NYT article interesting and counter to the last theme we on the board had that excess cash was being spent on luxury items. http://www.nytimes.com/2009/09/21/business/global/21yen.html?_r=1&partner=rss&emc=rss Cheers JEast

One also may want to take a look at "Happy Accidents: Serendipity in Modern Medical Breakthroughs" which, in my view, has many messages and thoughts for value investors. Also it will explain why Buffett would never invest in a bio-tech. http://www.amazon.com/Happy-Accidents-Serendipity-Medical-Breakthroughs/dp/1559708190/ref=ed_oe_h Cheers JEast