Ballinvarosig Investors
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Posts posted by Ballinvarosig Investors
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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.Implicitly, people are stating with their wallets that they trust the US government to pay them back more than they do most US corporations.
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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).
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Arrrghh, so much promise, but I can barely hear a thing :'(
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It's hard to argue with SUR. Combined ratio well-under 100% for as far back as you can go, selling at 0.8 of book value, averaging 15% book value growth in the last 5 years, book value itself is strong, comprising mostly of safe, fixed income securities.
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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.
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Isn't that enough for you? ;DI know that this is supposed to increase the price of Chinese imports but what other implications are there for this move?
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.
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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)
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http://www.ote.gr/investor/Uploads/synopsi_1st_sem_2010_gr_new.gifActually, RLI combined ratio for surety insurance is better than SUR (77.5% average for 2005/2009 and 79.5% respectively) although RLLI being 10 time smaller in written premiums. There seems to be no advantage in scale for SUR. Or if SUR management is outstanding, RLI management is still better!
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?
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.
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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.
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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.Tilson is actually doing the right thing, so long as he's rolling into a position & hedging each tier as he goes. (1) 20% now to lock in the existing drop (2) 30% on a div cut/asset seizure (3) 40% on media coverage of the spill following a hurricane (4) 25% (10% balance+15% hedge gain) to ongoing foulups.
The worst case assumption is a sale to Shell (assumed) subject to a liability cap provided by the UK government (effectively a TARP type emergency measure to protect UK pensions). If BP actually survives, the investment will end up looking like WEBs Coke & will be talked about for years.
SD
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/
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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.
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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.
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You're kind of contradicting yourself there. As you've stated, Harry Long has been on record regarding Fremont Michigan for quite some time.Come on :-X That's just not fair - You got to post at least 1 idea, if you are going to keep making that statement. From what I have seen you appear to like the same type of insurance companies as the Chanticleer guys - http://www.chanticleeradvisors.com/faq.cfm
Secondly, he does have a point. People here are supposed to be value investors, so it's amazing that anyone could recommend something like MFC. Maybe you have some insight that I don't, but I see a lot that scares me, balance sheet that isn't exactly transparent (who knows what sort of corporate bonds they hold), high variable annuity exposure (even sideways equity markets will hurt MFC), etc.
The AIG debacle should serve as a lesson to insurance investors. If you don't completely understand everything you're reading about the insurer, you're at risk of 100% capital loss
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Only because he didn't fill the form out properly!
http://finance.yahoo.com/news/Biglari-Holdings-Inc-prnews-1654543524.html?x=0&.v=1
San Antonio, TX, June 4 /PRNewswire-FirstCall/ -- Biglari Holdings Inc. (NYSE:BH - News) announced today that it has terminated its exchange offer for shares of Advance Auto Parts, Inc. (NYSE:AAP - News) because the registration statement condition to the offer had not been satisfied as of the expiration date. Accordingly, any shares tendered in the offer will be returned promptly without expense to the tendering stockholders. -
Remember Warren Buffett was hauled infront of the SEC for buying Wesco stock after he and Munger nixed the merger with Financial Corp. of Santa Barbara. When Buffett and Munger bought stock, at least they were decent enough to pay the original merger price and not screw shareholders.The class-action risk is also pretty significant now with Sardar buying back shares at a lower price than when Biglari Capital was sold to BH. Cheers!
It's actually getting more and more sickening to see Biglari trying to portray himself as the next Warren Buffett.
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By the way, are we even allowed talk about Biglari Holdings anymore?
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I notice that Biglari Holdings has rebounded substantially from its recent low of $257 a share. Well, not we know why!
http://houston.citybizlist.com/YourCitybizNews/detail.aspx?id=80157
SAN ANTONIO -- Chairman and CEO Sardar Biglari has bought Biglari Holdings Inc. (NYSE: BH) shares worth $5.08 million, according to an SEC filing.Biglari bought 16,845 shares in the San Antonio-based restaurant chain at an average price of $302.12 apiece. The shares were bought through Lion Fund LP, whose general partner, Biglari Capital Corp., is headed by Sardar Biglari.
Biglari Holdings shares closed trading Wednesday at $296.50.
The company runs Steak n Shake restaurants and the Western Sizzlin chain, which was founded in Augusta , Ga. , and is now headquartered in Roanoke, Va.
Last year, the company reported net income of $6 million, compared with a loss of $23 million in 2008.
Here's a link to the actual SEC filing - http://www.sec.gov/Archives/edgar/data/93859/000092189510000893/sc13da1807428lio_05272010.htm
Cooley has bought a few shares as well.
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Taxation at the holding corporation level in Europe is higher than that of a similar US holding corp, so that explains part of the discount.Trades at a 25% discount to its publicly traded major holdings
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Have any folks here dipped their toes into European stocks that are getting pummeled?
Telecoms stocks such as France Telecom (FTE), Deutsche Telekom (DT), Telefonica (TEF) are huge cash generators with 10% dividends, strong balance sheets operating in oligopolistic markets.
If telecoms aren't for you, then you've got several large cap insurer with strong balance sheets, generating huge cash flows and selling below book value, Aviva (AV), Allianz (AZSEY).
Veolia (VE), Groupe Danone (DANOY) and Total (TOT) are other large cap companies trading at low P/E's and paying high dividends.
I'm not specifically touting these stocks, just illustrating that relative to US stocks, Europe looks cheaper. Is anyone actively investing in this domain?
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I don't know about investments, but it sure is fun watching CNBC now. Last month during the 52-week highs, their guests couldn't have been more bullish. Now they can't get out of the pool fast enough.
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Microcap performance from late 2007-2009 was horrible. I had RLOG and ITEX which at one stage lost over 75% of their value despite the businesses being fine.After thinking about it, it may be a good strategy as I noticed the 2 small illiquid holdings I have hardly move in recent panic selling
I think the reason why they haven't declined too much as of late has simply been because they were so completely oversold in March 2009.
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ZeroHedge
Remarkable statement from Klarman.Seth Klarman was speaking at the CFA Institute earlier, and in typical fashion cut to the chase: in summarizing the current market, the Baupost founder said he "sees few bargains in the current environment and predicted on Tuesday that the stock market could suffer another lost decade without any gains." And the punchline: his description of market conditions which he compared to "a Hostess Twinkie snack cake because everything is being manipulated by the government and appears artificial." Such facility with words, there is a reason the man runs a $22 billion fund and his book "Margin of Safety" has been out of print for years, and sells for a $1000 on ebay.Some more of Klarman's relevant perspectives from Reuters, where we learn that he is neck deep in Constant Maturity Swaps:
"Given the recent run-up, I'd be worried that we'll have another 10 years of zero returns," Klarman, who rarely speaks in public, said at the CFA Institute's annual conference in Boston.
"I'm more worried about the world broadly than I've ever been in my whole career," Klarman said.
Inflation is a risk that Klarman said he is particularly concerned with given the government's high rate of borrowing to bail out the financial system. Baupost has purchased far out-of-the-money puts on bonds to hedge the risk, he said.
The puts, which Klarman said he viewed as "cheap insurance," will expire worthless even if long-term interest rates rise to 6 or 7 percent. But if rates rise to 10 percent, Baupost would make large gains, and if rates exceed 20 percent the firm could make 50 or 100 times its outlay.
Typically, Baupost focuses on out-of-favor stocks and bonds. Klarman cleaned up in 2007 and 2008 buying distressed debt and mortgage securities that later recovered.
One area Klarman said he is currently scouring for potential investments is private commercial real estate below the top quality. Publicly traded real estate investment trusts, however, have "rallied enormously" and are "quite unattractive," he said.
And speaking of Baupost's $22 billion, Klarman said he may return cash to investors, as the fund is now 30% in cash and there are few immediately investable opportunities.
"We are thinking about actually returning it if it got higher," Klarman, who rarely speaks in public, said at the CFA Institute's annual conference in Boston on Tuesday. "We are trying to walk a tightrope."
"I've always thought that size was a negative," he said, adding that bigger size often means investors become less nimble.
before the financial crisis hit markets, the firm opened up to new investors for the first time in years, Klarman said, deciding that more capital might be helpful to pursue certain investment opportunities. "We went to our wait list for the first time" in years, he recalled.
In hindsight, the move proved especially smart, as it would have been extremely difficult to raise new money at the height of the financial crisis, he added.
"We'd rather underperform a huge bull market than get clobbered in a bear market," he said.
For those who wish to read Klarman's massively popular and out of print Margin of Safety, they can find a pdf version here.
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Apparently his fund focuses on international opportunities these days. His old fund (Himalaya Capital) doesn't appear to have made any filings with the SEC and his new fund (LL Investment Partners) hasn't either. The only investment of record that he appears to have made is a 2% stake in BYD.people have a link to li lu's sec filings?
Treasury Yields at New Lows
in General Discussion
Posted
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.