Ballinvarosig Investors
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Posts posted by Ballinvarosig Investors
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Very disingenuous title.
Prem Watsa has not "bailed out" The Bank of Ireland at all. The Irish taxpayer has been stung most by having to purchase billions of Euro worth of toxic land and development loans at an inflated price, also by providing liquidity (in reality, cash for trash), and also by pumping in billions of Euro more than Watsa has for an even smaller stake. The ECB is also on the hook as it provides funding at below market cost for the bank (loans/deposit ratio is over 160%). In reality, Watsa basically got a stake in a bank at a fair price. Had he not invested, the IMF would merely have provided the Irish government with the money anyway.
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I don't know if anyone has noticed, but recently it has become a lot harder to find mispriced large caps (which actually turn out to be mispriced) than nanocaps or microcaps. This is because the systems or bots often operate above certain liquidity thresholds.
I have to say, I do not agree with you on this point.
Over the last five years, we have had the S&P500 Index trading between an all-time high of 1,576 and and a historic low of 666. The S&P500 as you know accounts for the most liquid and most traded stocks in the entire world, it is the mainstay of the quantitative universe. If the quant systems were as good as you're saying, then they should have absolutely cleaned up in such a volatile market.
Forgive my ignorance, but is that not a contradiction in your argument? Your quantitative system is basically only good for the data that you have available. If you're talking about the best opportunities being found in the nano-cap/micro-cap universe, surely these results will not even be evaluated by the system, afterall, a lot of these guys will not be on Yahoo/Fidelity/CapitalIQ/etc.? I know from personal experience, that if you wanted your system to cover the entire universe of illiquid and neglected stocks, you would need a sizeable team of folks searching under rocks for new listings and transferring the hardcopy/pdf data from existing listings into your dataset. Even if I devoted all my time, I simply could not keep up with this, so inevitably, there are bargains slipping through my fingers every day. As a matter of interest, am I the only person that maintains a personal database of statistical information on stocks not maintained on the usual channels? Since the universe of securities is simply too large for any one person, I have always wondered if you could simply split the work load with a group of like-minded individuals, sharing the information with each other. Imagine having an informational edge over just about everyone in the entire world? That would be something ;DSo, my conclusion, which I have stated before, is that the rational discretionary value investor should be looking for securities which are ignored, rather than controversial situations such as BP during their crisis, which they may believe to be misunderstood.
Also on the point of the micro/nano-cap universe, it's easy to say the best priced bargains reside in this domain, but the reality of finding them is really, really hard. If you were in this area in 2007 (i.e. like Paul Sonkin or the Westwood Mighty Mites fund to name but two), you would have sustained appalling losses. Harry and Parsad, you will both be well aware of just how difficult it is working in this area from your experience with FMMH and ITEX.
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Even with the most soundest of systems, surely there will always be a dependency on human emotion? Suppose back in 2007, we had a universe that consisted of entirely of funds run by similar performing, computer-based, systematic approaches. As investors start pulling their capital from funds (human are irrational, it won't matter to them that their systematic approach works), the systematic approach will still get clobbered in a wave of forced selling and liquidity being pulled?Computer systems are not hampered by emotion, so if one wishes to compete with them, one must become more-computer-like and less emotional (aka, prone to personal attacks, psychological distortions, etc).
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Harry, are you familiar with Plato's Allegory of the Cave?
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It doesn't look very interesting to me, especially considering how cheap profitable insurers are....It will be particularly interesting to see how the Penn Millers situation pans out (PMIC). Even if they can find a buyer, I far prefer, as most long term poster here know, a great insurer such as CNA Surety (SUR) selling for a discount to book than a firm such as PMIC.
Is anyone here long PMIC?
Have you looked at LON:BEZ by any chance? Excellent track record with prudent reserving, great combined ratio history, and a solid balance sheet. They have taken a pasting due to Japan/Aus/NZ cat losses, however, I would be inclined to think that these are likely to be one-time losses. Company is trading at just a fraction over book value. If the cat losses they have sustained actually are one-time only losses, this is trading at ~5 times earnings. Worth keeping an eye on at very least, I think.
No one was keen on my ProAssurance Corp suggestion that I made nearly a year ago, they have just been knocking it out of the park for the last few quarters. Trading at a measly 1.1x book value, despite the fact they've grown book value by 20% on average over the last five years. I continue to hold until shown otherwise.
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Fast-forward to 41:24 for a synopsis on this book (kudos to you, manualofideas).
http://manualofideas.com/audio/henry_singleton_teledyne_by_manualofideas-dot-com.mp3
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I have to say I'm with you on this, I just don't understand this investment at all. I know here in Europe, it has taken the Korean automakers nearly 20 years to try and get a toehold into the European market (they went bankrupt in the process and needed a state bailout). Even now, the likes of Kia are selling only a fraction of the vehicles that VW and Toyota sell, despite the fact they're cheaper, as reliable and in some instances even better-specced. BYD are going to have the same problem even if they can make a car as good as the likes of Toyota or VW. I reckon it would take another 10 years after continuously delivering quality cars, that people would take them seriously in the West, and that's on top of another decade they'll probably need to actually get to the level of Toyota/VW.I've never understood this investment and I don't think this is going to help either.
If BYD are going to compete on price instead, then they're up against Tata, who are selling a petrol car for $2,500, and a fuel efficient diesel model for $2,700. If that's the future of the auto industry, then BYD might as well get out now, as no one will ever make any money in selling a car for so little.
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Apparently the company have denied the accusation - http://www.marketwatch.com/story/byd-sales-department-restructuring-but-no-layoffs-2011-08-30
Something seriously wrong is happening at BYD for their auto sales to be collapsing when their Chinese competitors are increasing their sales. I suspect that BYD cars must be really awful if they can't even compete in the domestic market.
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I don't know why everyone on this site is focusing on BAC so much. There are banks out there in much, much better shape than BAC, but in many cases are only a little more expensive. NYB is one such bank that springs to mind, great and proven management, no excessive leverage, solid and improving numbers, etc. Looking a NYB, I know I can sleep at night with the knowledge that it's cheap at these prices and it would take a financial holocaust to take them down. BAC on the otherhand scares me, my only surprise is that the Countrywide acquisition didn't take them down already.
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Look guys, if you seriously think that Warren Buffet looks at the balance sheet of Wells Fargo, his second largest investment and says "I can't make any sense out of this, let's hope that everything works out for the best" then you're completely wrong. Of course Buffett can't track down every single asset, but I guarantee you that he is doing his due diligence. We know from Alice Schroeder that Buffett is absolutely paranoid above risk control, there is simply no way in the world that he is going into his second largest investment in the blind. I would suspect he is talking to managers, talking to customers, I bet he is even reading those hundred page mortgage securitisation prospectuses that Michael Burry used to short the mortgage market a few years back.
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I love his analysis as well and would and have put money on it. I have answered the question about the balance sheet before. The answer is simple, but perhaps not satisfactory. In terms of how you get comfortable with it . . . you just do. You have to take a leap of faith. Banks are a black box in that way. You will never be able to analyze their assets in a way that will give you 100% comfort. But at the end of the day, how is this so different from other companies that are non-financials?
I thought this was supposed to be a value investing forum?
I can assure you, when Warren Buffett invests in a financial, he certainly does not take any leaps of faith. The numbers are all out there, if you're diligent enough, you will find them.
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I think some of you guys are missing the woods for the trees. The issue here really isn't the debt per se, it's the deficit. Last year, the United States spent $1.5 trillion above what it took in from taxes. $1.5 trillion is 10% of American GDP. You take that kind of money out of the economy, and you're looking at another severe recession, or possibly even a depression. The deficit spending certainly isn't sustainable, however I think that the Tea Party movement is ignoring the impact that it has made in preventing our recent great recession from becoming a great depression. My big fear at the moment is that what if this global Keynesian splurge is the only thing that is keeping the global economy ticking along.
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Bill Miller's downfall were his awful investments. When you're in the middle of a crash in a market (be it housing, tech, whatever), you don't try and catch a falling knife, especially when you're dealing with leveraged companies. I can't say I ever had time for Bill Miller. While he might talk the talk of being a value investor, he certainly didn't walk the walk.they smell blood in the water. this is what ruined Bill Miller.
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it may well still be a viable proposition and has a certain value - perhaps not $25, but somewhere in excess of the $2-3 per share it was selling at.
Can I interest you in a lottery ticket? ;D
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Xenia is the spokesmodel for numerous brands, including: Audi, Burger King, Visilab Sunglasses, and Casino Lugano
:D
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Nothing on EDGAR yet, can anyone reproduce the filing?
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Surprised so many of you have been caught out by RIMM; where is the margin of safety?
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Have a look at Limoneira, Maui Land and Pineapple too, and Keweenaw Land Association too. Returns on equity have gnerally been pretty rubbish, I'm not really too sure why you would go near the sector to be honest though.1. I'd LOVE to get farmland as it involves very few assumptions, but I've been unable to find much (CRESY, AGRO, BWEL.PK)
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I think you misunderstand. The difference between Chanos and yourself is that he is offering a very specific product as opposed to someone like yourself who is driven purely by generating an overall return. His speciality is being short, and he does that extremely well, outperforming the market by 7-8%. For example, if you had the wherewithal to have been invested in him in 2007, you would probably have outperformed the market by 100% in the next two years.Oec, my point was that Chanos existence is moot. The same investor could have gotten better results than being long the ETF and long Chanos, by simply being long the ETF and holding the same capital allocated to Chanos in a T-bill! You can carve up the turkey any way you want, but it's still a turkey. Cheers!
As for fishy conduct from Block, Sino Forest got battered again today. The shorts might have been wrong about Fairfax, but it doesn't mean they're wrong about everything, as I suspect they are here.
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Tanzanian Royalty Exploration (NYSE TRE) are changing their ticker symbol because they believe that some investors are shorting the wrong stock! You couldn't make it up.
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That's because being short is not an natural investment position to be in. The market increases by 6-7% on average. Just to break even, he needs to outperform the market by 6-7%, and that's before you even consider his costs.Have you ever seen Chanos' results? They are horrible.
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Have to completely disagree; it's a terrible letter where the author contradicts himself completely. How can you say you find shorting distasteful, smug, arrogant, and parasitical, yet actually then be able to hold a short position? This position seems equally as contradictary as some of the opinions I have read on here such as a few folks suggesting that shorters should not be allowed to short a stock ahead of issuing a report on it. If we take that logic, then anyone long on a stock should be forbidden discussing it for fears that they're trying to pump it in order to get out at a higher price.Terrific letter! Cheers!
What I do agree with you on is that there definitely needs to be more discloure on short position holdings.
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;D"Step 2 - Identify a sector of the markets that is weak. Currently Chinese companies. Back in the day, Insurance companies. No one wanted to invest in insurance during the lead in to the Gulf War... What is all this Hempton isn't a bad guy crap? I haven't replied in a while because I'm tired of posting and hearing nothing but the replies of henchmen paid to help pull off a fraud"
Oh come on now! The insurance sector might have been "weak" ten years ago, but at least everyone knew that it was real. The Chinese sector on the other hand isn't so much "weak", but rather non-existent. The litany of frauds exposed over the past year has been relentless and if you had went long on any stock that had a report issued on it by the likes of Muddy Waters then you would have lost almost all of your investment.
Excuse the pun, but some folks can't see the woods for the trees.
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Can you tell us why you're short MSFT? Looking at the revenue growth and the maintenance of margins, it certainly isn't immediately obvious to me why you would want to be short them.
TRE - Sino-forest put.
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