MrB
-
Posts
1,182 -
Joined
-
Last visited
Content Type
Profiles
Forums
Events
Posts posted by MrB
-
-
Does anyone publish a comprehensive list of all TARP warrants that trade on public markets?
Would any of you hedgies out there know how many TARP warrants for smaller banks trade in secondary markets for accredited investors like secondmarket?
I think the ones listed in the table of the attachment is a comprehensive list. Please let the board know if you find any other.
Another source http://www.caminuscapital.com/CaminusWeekly_12.pdf
It's in the second bullet point.
Set out all the variables. Put some numbers to it, and you'll see the change in both exercise price and shares per warrant. Remember that each adjustment is quarterly, so you get some excellent compounding on both.
mrb/plan/merkhet,
ok, i have done what you suggested, and i can see that.......
There is a excel spreadsheet in the FFBC warrant thread you can use. I think you are referring to the Buffett' warrants? In that case they expire in 2021.
-
This is insane; cost of litigation
If you don't have time to read the whole thing, just look at the charts and read page 9.
-
On those numbers he compounded by 10% and the market by 7%
Generally only 15% of professionals outperform the market and Bogle's research pegs 0.5% of fund managers outperforming by more than 3 percentage points, so he is right up there.
Attached the calc's I ran and another I had lying around.
-
The formulas are basically all the same, because the banks/AIG all sat down with the same people. The language evolved in one way over the years; it became clearer. So start with the latest ones first; AIG being the best example, because it actually shows you the formula. Then look at the recent FFBCW filing, which shows the adjustments in practice. So although on the one hand the language is complex, on the other hand they do eventually spell it out...with examples of the formula...and now with a real world exercise...
-
Very good advice SD.
Very tough to execute though, but in the long run to keep your training pure is the smart thing to do. Also, you have to be 110% sure you want to be the guy that gets excited by reading 10-k's late into the night. Unless you really enjoy it, it is a pretty sad way to spend your life. That is probably why so few investors are good at it, because frankly for most people it is too darn boring.
-
Mr B, what are your plans with that document? I offer a small audience.
Well, you did contribute; let's not forget that.
No plans, just part of the annual letter. What exactly do you mean? Email me if necessary.
-
Sure, add me to your list. You can use me as a kind of benchmark. When you get to me you know you have hit rock bottom!
-
Correct.
-
It looks that at least a few (Berkowitz, Chou) read the fine print. It may be time to discuss it in the blog.
The attached adds a bit more...
-
b) the number of shares you can purchase for each warrant you hold.
I was reading the FFBCW prospectus the other day and noticed that it mentioned increase in warrant shares in the context of non-ordinary divs and share repurchases:
In the case of cash dividends or other distributions. If we fix a record date for making a distribution to all holders of our common stock of securities, evidences ...
FFBCW already paid dividends and recently adjusted the strike, but not the warrant shares, because if the latter is under a certain decimal (I think 1/100th) then it accumulates until it is more than that. Point is you can see the formula in action.
-
Suggestion:
Make a list of the people you want to have lunch with; having coffee might work out cheaper. There are probably at least 50 people in Ontario worth seeing.
If you run out of names then start a thread on this board and ask people for names in the industry they think are worth having coffee with. Ask George over at Ivy for names.
Turn your post above into a letter and keep it to one page and write to all those people and add in there what it is specific to them that you want to learn more about.
Then hand deliver it as much as you can, with a hand written note pointing out that you dropped in to deliver it.
Then hold thumbs. You will be surprised who replies.
It worked for me, because I was simply thinking. Honestly, what do I have to lose? Every Buffett, Chou and Watsa that replies make up for all those asses that could not be bothered.
P.S. With the upcoming Fairfax AGM you will have a flock of great managers flying in from all over the world.
-
Both!
-
-
Is Munger still running that portfolio? I thought I heard rumours that Li is running it now?
-
I'm a BIG fan!! Cannot wait to read it.
-
I'm biased, but I do think in this case the difference in AUM is an important consideration. It is much more difficult to outperform with $10Bn than with $1Bn. Haven't checked the exact numbers for quite a while, but there is a big difference.
-
The prospectus for the warrants is on EDGAR, in or around Spring 2009.
The warrants are dilution potected, in the case of a common stock issue. They are not buy back protected. In the event of a buy back you get a larger pie piece if you keep the warrants, same as holding the common.
It would not surprise me if these banks buy in some warrants at some point in time through the open market, probably closer to conversion dates. For now, I cant imagine a CEO forgoing his bonus to reduce dilution 6 years down the road.
UCCMAL,
Just to clarify. When the warrants itself are repurchased or do you mean the warrants do not adjust when the stock is repurchased?
-
-
1 If AIG issues Common Stock as a dividend or distribution to all holders of Common Stock, or subdivides or combines Common Stock, then the exercise price will be adjusted based on the following formula:
EP1 = EP0 x (OS0 / OS1) Say 5% stock dividend
EP1 = 42.86 = the exercise price in effect immediately after the record date
EP0 = 45.00 = the exercise price in effect at the close of business on the record date
OS0 = 1,899 = the number of shares of Common Stock outstanding at the close of business on the record date prior to giving effect to such event
OS1 = 1,994 = the number of shares of Common Stock that would be outstanding immediately after, and solely as a result of, such event
Upon any adjustment in the exercise price, each Warrant will evidence the right to purchase (A) the number of shares of Common Stock obtained by multiplying (B) the number of shares of Common Stock purchasable immediately prior to the adjustment by the © exercise price in effect immediately prior to the adjustment and dividing that product by the (D) exercise price in effect after the adjustment. All anti-dilution adjustment calculations will be made to the nearest hundredth of a cent or 1/1,000th of a share, as applicable. No adjustment will be required if the calculation results in a change to the exercise price of less than ten cents; however, any such amount will be carried forward and applied in any subsequent adjustment of the exercise price.
A = (B*C)/D
A = 1,994 = each Warrant will evidence the right to purchase the number of shares of Common Stock
B = 1,899 = the number of shares of Common Stock purchasable immediately prior to the adjustment
C = 45.00 = exercise price in effect immediately prior to the adjustment
D = 42.86 = exercise price in effect after the adjustment
-
How many have actually read the prospectus fine print of these warrants? Has anyone noticed that some of these warrants, but not all, have adjustments of not only the exercise price but also of the number of warrants? AIG's for example does not include this provision and might explain why they are priced "cheaper" when tested with a Black and Scholes..
This is a feature that I have always liked but never confirmed. Actually I did not even want to ask about it ... when you find something like this you do not want it to spread like wildfire. Berkowitz hinted at this feature in a recent letter so maybe it is time to have a more detailed discussion of the anti-dilution provisions.
Are there other non-standard features in the warrants worth noticing?
I haven't seen that provision. What language refers to a warrant adjustment?
Hmm, I must be reading this wrong, but the BAC A warrant seems to adjust not only the strike price down, following a dividend, but also the warrant shares up in proportion to the ratio of the pre-div strike to the post-div. This is in contrast to PlanMaestro's AIG hint, which not only does not protect against share issuance and divs below a 12 month hurdle, but also adjust warrant shares down.
My eyes are wonked out. It looks excessively favorable to warrant holders.
EDIT: The AIG warrant seems to also have an upward adjustment to shares issuable.
This is the language right??
If AIG issues Common Stock as a dividend or distribution to all holders of Common Stock, or subdivides or combines
Common Stock, then the exercise price will be adjusted based on the following formula:
EP1 = EP0 x (OS0 / OS1)
where,
EP0 = the exercise price in effect at the close of business on the record date
EP1 = the exercise price in effect immediately after the record date
OS0 = the number of shares of Common Stock outstanding at the close of business on the record date prior to giving
effect to such event
OS1 = the number of shares of Common Stock that would be outstanding immediately after, and solely as a result
of, such event
I only see adjustments to the exercise price??
-
One file. Couldn't resize http://dl.dropbox.com/u/17361702/1985-2000.pdf
-
If you don't ask, then you don't have to tell the world they said "no". I think Moynihan knows that it is 50/50 that they would be granted the chance to buy back shares or increase their dividend right now, so why risk having to tell the press you were denied that request, when you know that in 6 months or a year, you will have no problem getting approval.
Fix the problems and the rest takes care of itself over time...don't over-reach, don't assume, don't have grandiose visions until everything is fixed. If shareholders are impatient, then that is the shareholder's own issue to deal with. Cheers!
Reminds me of the recent statement by the CEO of AIG at Davos that they fixed the company and are looking to start making acquisitions again. I was thinking, "Oh no, here we go again. Off to the races". Presents a problem, because I kind of like the AIG story.
On another note. 13 Feb interview with Berkowitz on Bloomberg where he talks about BAC again
http://www.bloomberg.com/video/86252524/#ooid=V0bjFpMzqbpJflf8Oz2YTRBLxk3NgtZe
Has some great advice right at the end for investors...."No free lunch" You have to do the homework.
-
I still don't understand why FFBCW are so cheap.
Neither do I
-
List your top 3 books for understanding moats please.
in General Discussion
Posted
1. Competitive Strategy - Michael Porter
2. Good to great - Jim Collins
3. Blue Ocean Strategy - Kim