ericd1

Here's an interesting site on Chinese fraud... http://labemp.wordpress.com/2011/03/08/ccme-buyer-beware-the-reasons-i-never-invested/ In case you didn't see this today -- PUDA Coal - Fortunately it was a tiny position http://www.zerohedge.com/article/latest-alleged-chinese-fraud-puda-coal-nyse-puda-alfred-little-has-266-price-target-80-downs

Not sure if I am following your theme but perhaps these might fit... EBIX - Intuit - Both create their own software DG FastChannel (DGIT) - Centralized delivery system for shows, advertisements, etc to over 30,000 media outlets from 5,000 advertisers. They delivered 80% of this year's Super Bowl ads. 40% growth rate - ad revenues increasing - pretty good moat and excellent market share.

I agree FBK has a lot more potential than MERC, but I also think it is going to take quite a bit longer realize the gains. Both in basket make sense especially if the prices remain high through '13!

FFH - It's not indicated on the sheet, but MERC's results are in Euros, straight out of their year end 10k. When I realized that the only reason FBK made any money last year was because of their settlement (5.5M), I wanted to look at a comparison of operating ratios, so currency denomination didn't matter. IMO FBK has some serious operational issues. Their gross margin (without benefit of energy production) is about 4-5% lower than MERC and their operating profit is ~14% lower. Unless I'm missing something (which often happens) it is going to take FBK some time to improve their operational efficiency. FBK has a 7.5% expense related to delivery that MERC doesn't so, perhaps that's part of the problem. Maybe there's something in their contracts, or the costs to deliver the product to port, or elsewhere; but it really hurts their profitability. As I mentioned it appears MERC's bottom line will immediately benefit from higher pulp prices, while FBK won't (a 10% price increase barely makes up for the 5.5M settlement) let alone the other operational issues. If FBK can fix these issues their profits will increase nicely, but I expect their results this year will be flat with last year. MERC looks like they'll earn ~3.00 euros/shr, up 50% from last year's 2.00 on a 15% increase in prices. I just noticed my P/B and P/E ratios in the sheet for MERC are understated because I didn't convert the earnings in Euros to US$...

IBM has merit I'm long IBM

Frankly I'm very surprised by Sokol's purchases. Most executives know and understand the possible impropriety that could result from such actions, even if he isn;t part of BRK's 'investment committee of one'. That said I doubt that he needed the $3.4M. Hopefully he'll donate it to charity and clear the air.

After taking a closer look at FBK and MERC, I moved my position to MERC. The reason I switched was because I felt MERC was better positioned to take advantage of this cycle of rising pulp prices. It still appears undervalued to me trading at a P/E of 4.0 to 5.0 times next 12 months earnings. It appears FBK has many multiples more of long-term upside, but it could take several years to realize its potential. Until the major revamping occurs I don't see a catalyst to substantially improve their operations. In other words, I expect the market to reward Merc more in the near-term than FBK. Longer-term FBK has more upside, but because of my concerns that management may not implement many of the ideas discussed, I went with Merc to capitalize on the rising prices. I ran a spreadsheet comparison (a little more than a back of the napkin) based on sales increases (prices) and it shows Merc's superior operating leverage. (attached) Perhaps I should add back FBK and hold both, but I'm not convinced. Am I missing the forest for the trees? (sorry about that one)...

There have been occasions where I have sold for 'tax reasons'.

Bring it on FFH - I made the switch a month ago!

I live in Illinois and earlier this year the legislature in their infinite wisdom raised personal taxes from 3% to 5% and corporate rates from 4.8% to 7% "temporarily" for four years. So far I haven't seen any spending reduction measures from the legislature! "The bill, which passed the House in a 60-57 vote late and the Senate in a 30-29 vote." http://www.foxbusiness.com/markets/2011/01/12/illinois-lawmakers-pass-massive-income-tax-increase/#ixzz1I0VxAxs3 Recently Caterpillar's CEO wrote Gov Quinn mentioning he has been approached by several other states with tax incentives to leave IL. Cat is one of the largest employers in the state. IL is not very 'business friendly". I need to move to a tax free state, maybe even to Switzerland like the 60 minutes video! I'd gladly pay 12.5% instead of double or triple that rate!

60 Minutes had a piece on tax havens and US companies fleeing the US...It was interesting... http://www.cbsnews.com/sections/60minutes/main3415.shtml

I'm not familiar with multiple prior years calcs. That's a new one on me. I found this online...(About.com)..But you should check with your tax preparer about your own personal situation... "You need to pay in at least enough tax through a combination of withholding and estimated payments to avoid the estimated tax penalty. To avoid the penalty, you will need to pay in "at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller," according to the IRS."

Probably the wrong Eric and also not a tax attu, but as I understand it...if you make quarterly estimated tax payments (equal pmts) that are 110%+ of the previous years taxes paid you can pay the balanced owed on April 15th. Don't know what the rule is if you dont pay estimated taxes.

Here's the prospectus. Suggests 25-35 positions 80 percent equities up to 20 percent debt. Can hedge covered calls derivatives etc. "patient long-term" investments. http://www.sec.gov/Archives/edgar/data/1486174/000031577410000186/dn1a-a.htm Great place to find ideas!

Sorry I don't agree that renewables suck - the technology isn't available today, but it will be. I expect to see a microbe developed that produces hydrocarbons. That will help solve the transportation issue, maybe even electrical production. Ultimately solar will prevail - the sun provides more than enough energy to power the planet. That will take innovation in conversion and storage. Some modern day Einstein will figure it out. With Dr. Venter and others working on it I believe its possible. http://www.nytimes.com/2009/07/14/business/energy-environment/14fuel.html Take a look at MBLX (on my watch list) They have developed a bio-degradable plastic that's starting to sell. They have a plant in a JV with AMD. They are also working other 'fuel seeds' (In Canada and Texas).

Fidelity promotes their fixed income capabilities but I haven't used their online search etc. So I cant speak to it. Large spreads are common and some issues probably difficult to source. Barrons and wsj have listings of wider traded issues. I don't know how to 'cream it' but have been able to find mis-pricing and buy appropriate chefs issues etc. If I were going to research these I would look at the holdings of the better distressed bond funds - third ave Focused credit and others for ideas

My question is how do you find these before the spread disappears...

How to start one... http://www.ehow.com/how_6827992_start-closed-end-fund.html Certainly not an expert here but I would think a partnership is easier and less costly to start as well as operate (legal fees, IPO fees, no exchange listing fee etc). CEFs seem to be nice cash cows for their managers We could always buy controlling interest in a CEF and then liquidate it or turn it into a mutual fund and recoup the discount.

:) Thanks Kilt - still holding quite a few of the preferreds picked up in the Spring of '09 as the basket is still yielding ~8%. I haven't found many bargains in preferred land...but around the first of the year (thanks to Ms Whitman) I switched a lot of my preferreds that were in taxable accounts into CEF munis with a ~9% yield (12% tax equil yield). Up about 5% on those and I believe there's 15%-30% more upside. (PMF, PMX, BLE) - I'm a little concerned about the premium on the Pimco CEF's but they are leveraged and the yield is on market price. I also added National Bank of Greece (NBG) 9% Prf-A around the same time. It was yielding 12.7%. Today it's yielding 11.3% and have a 13.6% gain. It probably won't get to par for a while but there's still some upside here. Greece is obviously risky. Waiting for interest rates to start moving up then may consider some inverse rate ETFs...

Equities ~25 positions in 10 or 12 industry baskets - diversified, but not equally weighted.

I sold my iShares Japan Small Cap today (SCJ) +10% in a week...Initially thought I would be holding for 6-12 months. No fun making money on a disaster so I'm making a donation to UNICEF.

There are many different choices on the fixed income side...preferreds, high yield, tax-free, emerging markets, global govt/corp bonds... I'm retired and sleeping very well with about 50% in a basket of fixed income products yielding ~8%. If the market gives me a fat pitch I have reserves...

And there are those that believe Buffett has lost his touch...Are you kidding!!! With billions to invest Buffett's high quality deal was great...But for some board members with smaller amounts to invest the returns in preferreds were even better... :)

I skeptical...not of the story...but how the situation was handled. I would like to believe phone calls or letters to the responsible executive would have produced some action. Getting to the right person is paramount in these kinds of situations and it might take a shotgun approach (multiple letters) to the executives.

I'm not sure the "buffer" needs to be in cash. I look at some bond funds (CEF, ETF, MF) as a reasonable substitute for cash. I'm willing to trade a couple of points of decline for extra yield rather than hold cash. Don't forget there's also an opportunity to grow the fixed income part of the portfolio. It doesn't have to be an anchor. Good gains can be made with fixed income investments - For example preferreds in '09, muni's this year and I racked up some nice gains years go when high-quality long-term bonds were yielding more than 10% and yields dropped to 5% in a couple of years. Where and what you invest in also depends on the type of account - taxable vs tax-advantaged. I've seen a few different strategies for spending from multiple accounts, but at least for me, tax vs tax-advantaged really clouds the picture. For example, someone recommended using up all the money in your taxable accounts before ever touching the tax-advantaged account (if possible). That statement by itself doesn't make sense to me. If you have huge gains in the taxable accounts it could cost more in taxes if you sold those than withdraw from tax-advantaged accounts. Plus what if tax rates change? And we know they will. Heck the 15% dividend rate was only recently extended for two years... In addition to the investments there's another way to fund living expenses - use a home equity line of credit. I have one and would draw on it if both my stocks and bonds tanked together and I didn't want to sell at the time.