Ballinvarosig Investors

Most of the macro analysis is akin to reading tea leaves. However, I think there are a few measures that can be used as a guide to measuring the affordability of the market. The first is the historic P/E ratio. Markets tend to be dear when the ratio is close to 20, and cheap when it's closer to 10. This ratio isn't foolproof - see the Great Depression. The second is size of the stock market compared to an economies GDP. Gurufocus actively maintain this metric for the United States. Buffett has never stated it, but I believe this is the metric he uses when evaluating a market. Finally, you simply cannot ignore credit conditions in an economy. Private sector/public sector debt, M3, etc. This kind of data is usually more fuzzy, but the trends are useful. Other than those things, I wouldn't usually apply macro factors to investment decisions. I would be interested to read what other metrics value investors use. Parsad?

Management is as greedy and selfish as Biglari? Did you look at Fremont's compensation table for 2009? Did you compare it to other similarly sized insurance companies? I picked three at random, (AAME, ASAM, GAN) and in two cases, executive compensation was a multiple of what Fremont's management is earning, and in the other case it was marginally higher. If anything, these guys earn less than the industry average. To be honest, now that Biglari's true colours have been revealed, I'm glad that Fremont took action to block the Steak n' Shake takeover. There's no reason why management can't continue to plough ahead on their own, growing the business by 20-25% every year.

What do you think? Book value is $47.6m (much of which is in safe fixed income securities), market cap $33.9. The only thing that bothers me is that a not insignificant part of the equity portfolio is in mutual funds. All investments are of investment grade and fall within the top two tiers set by the ratings agencies. A.M Best have an A- rating for what it's worth. Combined ratio has stayed consistantly below 100 over the last 5-6 years. Reserving has remained conservative in the meantime. My only concern is that as they've grown their lines of business, the loss ratios have started to creep up.

I wonder who was responsible for getting that article published. A certain Mario G. perhaps? ;D

Since when have Microsoft and Google been beaten? Anyway, I don't know what the smartphone market is like in the States, but I do know that here in Europe the techies that formerly embraced the Iphone are now deserting in droves to the HTC/Android platform. The same techies a few months back were telling me that HTC were a company to watch, and that the likes of Nokia were old hat were to be avoided. The Peter Lynch school of stock-picking isn't a strategy I embrace, but maybe in this instance the techies have an insight that we mere mortals may have missed ;D

http://www.sec.gov/Archives/edgar/data/93859/000092189510001065/pre14a07428_07062010.htm If this is the case, why is he being compensated on simple book value growth?

I'm sorry to say, but if Tim McElvaine honestly thinks that this is value investing, then he has lost his mind. I wrote a post about banking and Greece on these very forums awhile back.

True, but I'm only going by past behaviour. With Fremont Michigan and Steak n' Shake, he filed a 13D from the outset.

As ragnar states, Biglari has filed a 13G , therefore he will not be allowed to sit on or influence the board.

Wouldn't have anything to do with the fact that GE is the parent company of CNBC, would it? 8)

http://www.businessweek.com/magazine/content/10_27/b4185064551500.htm?chan=rss_topStories_ssi_5 This time, it's different 8)

I wouldn't think it's just Boomers. http://www.bea.gov/newsreleases/national/pi/pinewsrelease.htm With an increasing rate of savings, much of this is likely to find its way into Treasuries.

I don't think it's a given that people will dump treasuries, at least not in the short-term. Remember, United States citizens have only 2% of their household worth invested in treasuries. If we were only to return to the long-term historical average of 5%, we would see yields plunge from even these low levels. Is this a completely ridiculous outcome? I don't think so, I am just trying to illustrate that when a trade becomes entirely one way, investors expectations may not always follow.

http://www.ustreas.gov/offices/domestic-finance/debt-management/interest-rate/yield_historical.shtml The 10 year has went from nearly 4% at the start of the year, to under 3% today, the lowest levels we've seen since the market crash back in March. The 2 year is now at an all-time low. I think it's interesting that the market has once again foxed the consensous of investors expectations (i.e. the future is inflationary and treasuries are a terrible investment).

Whitney Tilson is wrong about BP

Arrrghh, so much promise, but I can barely hear a thing :'(

Biglari continues buying - http://www.sec.gov/cgi-bin/own-disp?action=getissuer&CIK=0000093859 He really is trying to grab every vote he can to ensure that his compensation package passes! He now controls just over 14% of BH stock now. The key to whether this passes will be the institutional investors who control 36% (as of April this year). Other than Gamco (holds 9%), we have no idea of the intentions of other large shareholders like Dimensional, Vanguard and Fidelity will do.

Isn't that enough for you? ;D According to the Chinese commerce minister, average profit margins for exporting firms are a tiny 1.8% - http://english.peopledaily.com.cn/90001/90778/90861/6936424.html All I know is that I wouldn't want to have any exposure to a Chinese exporter at this time.

There are also a few companies listed on the pink sheets that have large land banks and trade at a discount to intrinsic value. Limoneira (LMNR) J.G. Boswell - (BWEL) Keweenaw Land Association (KEWL)

Scale advantages, if any, would come out in the expense ratio, so one would have to compare the expense ratio for surety business at RLI to SUR's expense ratio. However, even though those comps are real, in reality, it is often a thorny problem, in practice, to allocate certain expenses directly to one line or another (but it can be done). RLI and NATL are high quality, no doubt about it. Has anyone looked at OTE? http://www.ote.gr/investor/Uploads/synopsi_1st_sem_2010_gr_new.gif Look at that pile of debt that falls due next year. Either they're going to have to try and refinance at much higher levels, or else raise equity.

That brought back memories of one of the smartest female investors that I've known, my Granny. When she lived in the United States when she was young, she invested in stocks like General Electric, AT&T and General Motors in the 50's/60's/70's and basically sat on them until she could use the huge profits to enjoy a comfortable retirement. A great company at a fair price will more than look after itself in the long-term.

Please excuse my ignorance if I'm wrong, but I haven't heard a thing about Tilson hedging his position. I only read the headline where he spoke of a 4% long position in BP (which he says he's increased since then). If you could direct me to where he's spoken of his hedging, I'd be grateful. Secondly, I don't think this could possibly be compared to Warren's Coke investment. Back in 1988, Coke was still a leading beverages brand that had fallen out of favour with Wall Street (look at the cash flows of KO even when it was supposedly "lagging" Pepsi - http://www.fwallstreet.com/postimages/24-1988-ko.pdf), rather than being subject to a substantial impairment. For the record, Goldman Sachs have come out with a liability of $130 billion - http://news.firedoglake.com/2010/06/11/bps-total-liability-80-billion-and-counting/

Tilson is an ass. Firstly, even the oil "experts" can't seem to agree on how bad this will be for BP, so I doubt Whitney has any extraordinary insights that they don't have. Secondly, why would you risk your capital on an open-ended liability when there are stocks out there that have been similarly decapitated (HAWK, ESV, etc), but without the risk of being sued into bankruptcy. Right now, getting into BP is a pure speculative play.

There's a very basic, free screener on Yahoo - http://screen.yahoo.com/stocks.html My Fidelity brokerage account has a much better screener, but the data is sometimes patchy and out of date. Unfortunately, there is no substitute for keeping your own records as many companies might only file though OTCMarkets.com or their own website (and not with the SEC). I own one company (Boston Sand and Gravel) whose only financial statement of record comes though the mail.