mpauls
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Posts posted by mpauls
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This might be of interest:
Fernbank Letter To EU (OPAP) (05.18.11): http://investinginknowledge.com/Fernbank%20Letter%20To%20EU%20(OPAP)%20(05.18.11).pdf
For what it's worth, we no longer own OPAP and only held a small amount in the first place.
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The issue comes down to currency risk. If their not in the Euro, you lose (as a non-Greek) whether or not the business is otherwise unchanged.
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lol, he said, "This resembles insider dealing as much as soccer resembles football." Soccer is Football.
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From the information gathered, I think this is total bs. Though, he may have walked the line, he technically does not appear to have done anything wrong.
I will be surprised if anything material about Einhorn comes from this. He already has a legitimate edge and does not need to take short-cuts. It is rare to see competent investors take short-cuts, because they can and do outperform on their own merit. Short-cuts are almost always taken by those who can't otherwise succeed-e.g. the likes of SAC capital.
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Can anyone share the performance statistics of the Private Wealth Management (PWM) industry? Other similar industry figures are also welcome.
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I'm happy with Virginia.
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Don't assume they are worth anything in your calculation of value.
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Matt,
First, thanks for the link.
Second, there's got to be a lot of phony baloney stuff on that list because the first five companies have net working capital that's ten times more than their market caps. Unlike the Chinese companies that took over NA shell companies that are virtually all frauds, some of these Indian companies have to be legitimate because of local scrutiny and regulation. How do you ferret these out?
twacowfca, I did not filter any of these out, just provided a list. If I were currently looking at Indian net nets, I would start by looking at the balance sheet to see what line items make up the bulk of working capital. Naturally, I'm first looking for cash & securities to be large, but the point is to identify companies that are likely to have easily identifiable assets of value. Next I'd look for companies without L-T debt or at least make sure the companies have the capacity to pay down debt. I'd then look at the income or P/L statements and eliminate most companies bleeding large amounts of cash. From there I would focus on the most compelling opportunities-clear catalysts are a definite plus. You could do simple background checks on directors, see how mgmt have allocated capital (divs or buybacks) in the past. One really big factor I'd pay close attention to is whether or not management are consistently raising capital through debt and/or stock issues. This is generally a bad sign. Like the problem with most money managers, the more assets the bigger the fees. Same mentality is true to a large extent in India, if the companies expand, Management's salaries increase-and you can point to an ungodly number of companies that have expanded for no other reason than for the benefit of Management remuneration.
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Though it is true there are a lot of closely held companies selling below net working capital, depending on the amount of money you have to invest and the country from which you are investing, you can definitely stir up the applecart in India.
Here's a potential second present for those of you paying attention. Hirco PLC
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Someone wanted to know where to find data on Indian companies. Consider this an early holiday present.
See the Attached PDF. Here is a Scribd link as well: http://www.scribd.com/doc/75608280/Indian-Net-Nets-13-Dec-2011
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You'll have better success in India.
Also as a rule of thumb, Countries that don't have well established securities markets will yield the best results, though from time to time the US, CAN, and EUR will offer attractive opportunities.
To do well with net-nets you have to be competent with financial statements and only pick out those that aren't bleeding cash or have some messy situation that few are willing to look into-yada, yada.
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Unless they return money to investors each year, a solid 10-20 years probably precludes them from a current Net-Net mandate. That is, they'd now have too much money to employ in net nets. I'm sure there is someone out there doing it, but if they are any good, they probably do other stuff too.
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"unethical" "sleazy" You guys are joking right?
Look, Countrywide engaged in seriously unethical and sleazy behavior that harmed people who basically could not defend themselves, shoved the crap out the door and repeated it. Klarman, sharp elbowed yes, bought the paper from (supposedly) sophisticated investors, or at least investors who could pay for the education and is now sticking it to the successor company (read partner in crime, BAC). A firm that on the face of it kept up the Countrywide traditions and seriously stretched (read broke) the laws repeatedly in foreclosure proceedings. Proceeding that materially harmed many people who could not afford legal defense.
And you feel queasy? I'm sorry this is business. On that premise you would never by anything in a bankruptcy case, where much turns on the fine print, sharp elbows and buying for pennies on the dollar. (I should add that I'm not an Ayn Rand type, quite the opposite really.)
There may be more to the story, but if the facts are as stated, I totally agree with NetNet.
I repeat this is just business; it's totally legal. it's not charity. and in this arena, all are sophisticated investors. He isn't selling cigarettes, which though legal are highly immoral. (No one seems to tut-tut about Loew's!)
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OK, Maybe I do understand. The quality of annual meeting questions have been in steady decline over the last few years. Many of these questions have nothing to do with Berkshire's underlying business. Looks like this is an attempt to get Berkshire oriented questions versus Buffett Munger motivated questions.
e.g. What Alpha said.
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please elaborate
What Hester said.
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I'm not exactly fan of this guy. I sat next to him and his cartel at the Berkshire Meeting a few years ago. Not to say he isn't smart, but I see several red flags with him.
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Same nonsense as a few years ago. Wall street experts showing their "expertise" yet again.
I'm copy/pasting from a few years ago:
EQUITY PUT CONTRACTS
Equity puts are very similar to selling insurance-the purchaser pays a premium and in return is protected from future loss. The loss in this case is a decline in the general stock market.
Berkshire sold puts and collected premiums of $5.9 billion up front, which Buffett invested. “Derivative premiums,” like insurance premiums, are invested until the contracts expire. These are European style contracts, meaning the seller (Berkshire) is liable only for losses that exist on the expiration date of the contract. The amended contracts have an average weighted expiration of ~10 years. In the meantime Buffett gets the benefit of the use of this money.
PUT THIS INTO CONTEXT
In December 1929 the Dow Jones Industrial Index was at about 370. In 1944, 15 years later, the index had fallen a total of 60% i.e. a 6% annual loss. In equivalent terms, Berkshire’s Equity puts would require payment of about $22 billion. To break even on this transaction Berkshire Hathaway would need to compound $5.9 billion at about 8%.
If markets are at par with the initial and amended strike prices over the next 13 years, Berkshire will not have made and will not be required to make any payment. Meaning, derivative float will explicitly become equity. In this case, the value of “Equity Put Float” will have definitely compounded well above 15% annually.
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Let me begin with the following disclosure, I am a mac user and I love their operating system.
Apple looks like they are in a great position to take advantage of the next big consumer item-the personal computer. Yep that's right. Functionality and innovation of the ipad and the power of OS X (btw, I hate ios). That said, I won't be investing in Apple.
What did Apple look like 10 years ago? What does Apple look like 10 years hence? What has to happen for them to maintain their current relative market position. I see Google really eating away at Apple's smartphone market. I also have serious reservations about Apple's treatment of their customers. Some of their actions behind the scenes are very suspect.
I think Microsoft is much easier to understand 10 years out (CF's from Enterprise). I also think they have something up their sleeve, but are content with their position and therefore are not in a rush to roll out new technologies that might benefit competitors and/or increase potential future competition-but this is just speculation.
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A conversation with Bill Gates Thursday, October 27 3:30pm PST
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Red Flag #1. I always worry about people managing such large funds.
Red Flag#2. Macro Fund.
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I wouldn't worry too much. Though it is true that your returns will be less going forward due to the funds size, you'll beat the market over periods of 5 years. You have to ask yourself, what is it you want in life? Will you get that with Fairholme? If the answer is yes then you have one less thing to worry about. If not, then it's time to identify a new money manager.
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Anyone have the rest of the talk?
Falcones Harbinger likely Toast, LightSquared network rejected
in General Discussion
Posted
All he has to do is start a new fund. There are plenty of institutional muppets out there.