rijk

spread out your buys, we still have another 50% downside before stocks start to be valued in bargain territory, i.e. single digit P/E 10 valuations...... regards rijk http://www.multpl.com/

parsad, very good to see that you keep such a good mood! regarding the wish list, i would be really interested in FFH however, FFH has hardly blinked while everyone else is crumbling, you reckon we can get FFH below $350 before this drama is over? regards rijk

http://www.zerohedge.com/news/kabooom-berkshire-hathaway-inc-outlook-negative-stable-sp?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29

Munich Re USG regards rijk

here is some good info on VIX ETF's, key learnings: - "But HOLY COW could being short this on a large scale murder you." - "Being short it has been a huge winner, being short it in size would have left you bankrupt several times" short above 35 max 10% should keep this safe...... regards, rijk http://caps.fool.com/Blogs/a-date-with-the-devil-peeking/597406

agree the risk of "doubling" which happened in 2008/2009 and the psychological strength you need to handle that, is the biggest risk there have only been 5 instances during the last 2 decades when the VIX exceeded 40 - may - jun 10 - peak 45 - sep 08 - may 09 - peak 80 - jul - oct 02 - peak 45 - sep - nov 01 - peak 45 - aug - oct 98 - peak 45 looks like a decent risk/reward if you want to benefit from market panick, as long as you enter > 40 and keep a modest position...... regards rijk

VIX at 38 now, time to short VXX? regards rijk

one element of the 2011 BOI restructuring plan was to convert approx €2 billion junior debt to equity at discounts up to 90% of face value in 2009 and 2010 BOI reported €1 and €1.4 billion "gains on liability management excersizes" (page 56 & 57 attachment) during the recent restructuring, approx €2 billion equity has been raised by debt to equity conversion at steep discounts (40-90%??) does anybody have an estimate for the 2011 "gains on liability management excersizes" figure? can anybody explain the theoretical process to calculate this number, for example, if €2 billion was raised at 40% discount, does that imply that the original face value of the debt was €5 billion and that consequently €3 billion would be reported as "gains on liability management excersizes"? regards, rijk http://www.thejournal.ie/bank-of-ireland-deal-knocks-e2bn-off-taxpayer%E2%80%99s-bill-162377-Jun2011/

agree that today, after a successful recapitalization, which looked doubtful not so long ago, the future looks a bit brighter for BOI and a long BKIR looks like the right bet...... however, if you enter the short IRE and long BKIR position, and BKIR increases while IRE stays flat, you make a 60% return more importantly, you have a market neutral position, even if BOI would go bankrupt, you would still earn 60% the only way to loose out would be for the spread to increase in the short term, forcing you to close the position and take a loss, or alternatively, the spread could stay at these levels indefinitely.... regards rijk

30 billion

"It is however impossible to arbitrage. Very strange." yes and no, direct arbitrage is blocked as the ADR program has reached it's pre-approved limit, so you cant buy BKIR and exchange them for ADRs, however, if you are patient, you can short IRE, buy BKIR (London SE) and wait..... looks like the size of the ADR program, definitely after the more than five fold dilution, is relatively small to the number of BKIR shares, consequently, IRE can be very volatile in the short term, long term, prices should get closer to parity..... regards rijk

"I find this IRE deal fascinating." it's a BKIR deal not an IRE deal, for some incomprehensible reason, IRE shares are valued at more than double ($1.52) the price of BKIR shares (€0.11) (1 IRE = 4 BKIR)...... I don't think that Watsa would have invested in the Bank of Ireland if he had to pay the IRE share price, yet all IRE ADR investors happily spend double on exactly the same investment???? regards rijk

thanks hester & pof fascinating story and incredible returns! looks like they beat buffett & watsa by a wide margin, do we really believe these figures? from reviewing annual reports and following the whole story, I have zero confidence in a clean sino forest it looks like chandler has plenty of experience with shady management that operates in difficult environments going to be interesting to see how this turns out..... regards rijk

what type of annualized performance do you get from $10 million to $5 billion in 20 years? regards rijk

excess supply could be closer to two years instead of five..... regards rijk http://www.calculatedriskblog.com/2011/07/goldman-sachs-lowers-estimate-of-excess.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+CalculatedRisk+%28Calculated+Risk%29&utm_content=Google+Reader

you are definitely on the right board.... nice & simple, top 2 investors in the world & sufficient dry powder just in case..... what else do you need? regards rijk

NVR sure was a good investment, their success seems to be related to using option contracts to buy land vs direct buying and pre-selling versus keeping inventories... this is the past, what's relevant now is the future, how durable are NVR's competitive advantages? having listened to several conference calls, it sounds like other builders are moving towards using more options to buy land and more pre-selling versus speculation..... so the "durability" might be in question, additionally, what used to be a competitive advantage in a down market might turn out to be a disadvantage in a recovery, example, PHM's $3 B land might become a competitive advantage once the cycle turns, availability shrinks and conversion from raw land to finished lots takes 1-2 years regards rijk

munich re trading below €100 are leaps available to retail investors? where are they trading? regards rijk http://www.reuters.com/article/2011/07/12/munichre-catastrophes-idUSLDE76B0DG20110712?feedType=RSS&feedName=financialsSector&rpc=43

this is a good article on potential housing opportunities stil haven't come accross a construction related company with moat that is currently trading below book value........ regards rijk http://investing.kuchita.com/2011/07/12/some-thoughts-about-housing-and-the-market/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheIntelligentInvestorBlog+%28The+Intelligent+Investor+Blog%29&utm_content=Google+Reader

several home buiders are trading slightly over tangible book value while this book value will rapidly and significantly increase when housing turns around does anyone have examples of construction related businesses with moats that are trading below book value? USG would be one such company, however it is trading at 2.6 x BV and has a weak equity buffer/staying power with equity $540 k, debt $2.3 B and cash $600, imagine it takes 2-3 more years for housing to turn around, USG would suffer from strong dilution in this scenario while some of the home builders operate at break even now with decent liquidity positions... regards rijk

buffett has repeatedly stated that it is only a matter of time for construction to rebound with family formations > 1 million and new starts < 500k since the sector is clearly out of favor, there might be some interesting opportunities here... most home builders that are still around have adjusted their business models to current economic reality and operate at break even levels at a fraction of the peak years activity.... an "orientational dive" in the sector yields the following quantitative information, feedback and qualitative comments would be highly appreciated..... the companies are ranked from strong to weak (financial staying power), i used average 2001-2004 earning to estimate earnings power, knowing that this method is far from accurate but represents, i hope, a conservative valuation approach MDC - very strong equity buffer/staying power, $1 B equity, $1 B debt, $1 B cash - earnings power $200 M and MC $1.2 B = P/E 6 - Whitman sold in 2010 with significant loss???? - $200 M fully provided DTA - P/BV= 1.2 DHI - strong equity buffer/staying power with $2.6 B equity, $2 B debt and $1 B cash - earnings power $500 M and MC $4 B = P/E 8 - $900 k fully provided DTA - P/BV=1.4 RYL - reasonable equity buffer/staying power $540 M equity, $900 M debt, $600 M cash - earnings power $200 M and MC $750 M = P/E 3.5!!!!! - P/BV = 1.4 - $250 M fully provided DTA PHM - reasonable equity buffer/staying power with equity $2 B, debt $3.4 B and cash $1.4 B - earnings power of $500 M and MC $3 B = P/E 6 - owns $3 B land, entitled land might get scarce and takes time to develop, looks like a good competitive advantage - $2 B fully provided DTA - P/BV= 1.7 LEN - reasonable equity buffer/staying power, $3 B equity, $3 B debt, $1 B cash - earnings power $600 M and MC $3.5 B = P/E 6 - $1 B fully provided DTA - P/BV= 1.3 - earnings from Rialto distressed real estate investment fund NVR - incredible ROA & ROE 2001-2005 - earnings power $350 M and MC $4.4 B = P/E 12 - P/BV=2.4 expensive…… - no losses during housing crisis??? BZH - cheap but no equity buffer/no staying power KBH - cash $800k, debt $1.8 B, equity $440k - high leverage, minimal equity buffer in case housing doesn’t recover soon - very cheap based on earnings power of $300 M and MC $750= P/E 2.5!!!!!! - too risky…….. TOL - earnings power $250 M and MC $3.5 B = P/E 14, too expensive……

Iceland has never been part of the european union Italy, Spain & Ireland are the remaining candidates...... regards rijk http://en.wikipedia.org/wiki/Accession_of_Iceland_to_the_European_Union

looks like you are reporting an annualized figure while other members report absolute YTD performance? regards rijk

>60% cash, excluding short term merger arb, not talented enough to copy fairfax's long deep value/short market but intelligent enough (time will tell) to be in the company of watsa, klarman, rodriguez to realize that current risk/reward is unfavorable..... regards, rijk

up single digits, mainly from SD and selected mergers, keeping high cash levels regards rijk