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rijk

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Posts posted by rijk

    BYD Market Cap?

    in General Discussion

    Posted

    looks like the hype is over and reality has started to set in....how low does this have to go before Buffett starts adding to his position? think he mentioned that he would be interested to increase his stake at the right price during his visit last year.....

     

    Buffett's cost basis is around HK$ 8 so we are slowly getting there.....

     

    $9 billion doesn't sound all that expensive for a company with an objective to be the number one car company in the world by 2025

     

     

    there are some very compelling dynamics to invest in BYD:

    -exposure to the (future) biggest and fastest growing low cost manufacturing economy in the world

    -exposure to the economically ad socially desirable renewable energy sector

    -buffett "certified" vs your average chinese reverse merger set up

    -exposure to a currency with potential for appreciation

     

    could this be a great company but a not so great investment?

     

    do we need to wait until Buffett adds or is it about time to slowly start buying?

     

    regards

    rijk

     

     

    Sell Discipline

    in General Discussion

    Posted

    just to share ideas, what about buying OTM puts as insurance for a market crash/correction?

     

    for example, if you want to "insure" a nearly 100% increase in COP in 18 months (and an effective dividend yield of nearly 7%) you could buy jan 2013 $50 puts @ $2.40, this would buy you some ($50 put is only 2/3 ITM) protection until jan 2013 against capital loss and would protect a 7% dividend yield by sacrificing 3% return (1.5%/year) (maybe i should say sacrificing 6% return i.e. $2.40/$37.50 = cost basis, still only 3% per year)

     

    another example, if you want to "insure" a nearly 70% increase in LUK in 18 months, you could buy jan 2012 $25 puts @ $0.90, this would buy you some  ($25 put is only 3/4 ITM) protection until jan 2012 against capital loss by sacrificing 3% return.

     

    looks like this is kind of what fairfax is doing, only they use the index to hedge....

     

    any observations would be very welcome....

     

    regards

    rijk

    Fairfax Financial 13F

    in Fairfax Financial

    Posted

    looks like the increase of 16 million shares inlcudes conversion of pfd to common (approx 9 million shares)? the other additional 7 million shares were all purchased in Nov last year at approx $5.15

     

    http://www.dataroma.com/m/ins/ins.php?t=y&rid=915191

     

    it seems that there was some luck invloved with this investment as fairfax started buying in 2008 when SD was still a natural gas company and the Arena acquisition was still unknown...... without Arena, there's a good probability that SD would not have survived....

     

    http://www.gurufocus.com/StockBuy.php?symbol=sd&rec=1

     

    regards

    rijk

    Patient Capital - December 2010 letter

    in General Discussion

    Posted

    very interesting, these are the first and only performance figures that I have seen for the past decade that do not have one single down year while the market has crashed twice! the overal results are not spectacular but extremely steady and very safe....

     

    out of interest, does anyone know why mr maida left hamblin watsa? sounds like that was the perfect place for someone with his skills and mindset....

     

    regards

    rijk

    Major shift in sentiment on this board

    in General Discussion

    Posted

    shiller's pe10 has officially hit 24 which basically tells us to be extremely cautious as this figure will, sooner or later, revert to it's long term average around 16

     

    it would be interesting to learn from board members if

    - they take this indicator serious....

    - what their strategy is to minimize the damage when the eventual correction/crash hits.....

     

    is there a cost effective way to replicate Fairfax's equity hedging strategy or is cash the only real hedge for a small investor?

     

    i personally find it harder and harder to hold on to positions like COP & LUK which have increased by 60-80% over the last 12 months....

     

    http://www.multpl.com/

     

    regards

    rijk

    question buffett partnership letter 1969

    in Berkshire Hathaway

    Posted

     

    "The cash register really rang on one simple industry idea (implemented in several ways) in this area in 1968.  We even received a substantial fee (included in Other Income in the audit) for some work in this field."

     

    Any idea what the industry idea might have been?  Just curious, couldn't find anything on the Internet.

     

    regards

    rijk

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