rjstc
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Posts posted by rjstc
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A funny thing happened while everyone was watching the indexes last week. A number of mostly better P&C companies hit 2011 highs. Including:
WRB
ACE
CB
ACGL
FFH
LRE
RLI
and even an also ran like TRH
Look for more new highs for these and others as buybacks kick in now that the hurricane season is over. :)
This is a great example of how following this board has really helped me. I would never have looked at RLI or especially LRE without reading posts here. LRE is especially great. Good company, shareholder oriented, very disciplined. Just the type I would like to own outright and just leave managers in place. Luckily I was able to get in a lot lower. Thanks for the ideas and any more like these. Ron
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I don't understand the outrage over the charge. Switch banks if you don't like it. For some reason I don't hear people get pissy about being charged for floormats when they buy a Chevy.
I think the outrage comes from the history of the business model. Remember, for most of the era of banking, the bank would PAY you for the right to hold your money. But now that banking is effectively an oligopoly that's propped up by the government, they are CHARGING you for the right to hold your money. 800,000 people left Netflix for less.
I think it was a very stupid business decision myself. If BoA had maintained completely free checking while the other majors started charging, they could have started rebuilding their relationship with customers. A good marketing agency would have had a field day on this. For a bank the size of BoA, the cost to hold these "marginal" accounts is not very much at all.
Banking is turning into Coke versus Pepsi: a market based on pseudo-collusion.
Wells Fargo started doing this roughly 20 years ago and it worked for them. Starting to run it more business like instead of trying to be everything to everybody (Like the government) is what they should be doing. For the small marginal accounts there are plenty of alternative choices for their accounts ie; small local banks and credit unions.
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I for one would be interested in your write up. ThanksI would diffidently take a look at Nestle, and I’m surprised no one has mentioned Total (TOT) a decent European oil major selling at a discount. I have a bit of the Spanish Media conglomerate Grupo Prisa class B shares (0.175 Euro Cumulative dividend) which are an absolute bear to value, but if I am reading the prospectus correctly I suspect the company will pay .05 Euros per share to class b share holders for 2011 and the remaining .125 Euros will boost the 2012 minimum dividend to 0.30 Euro per share. The shares of Grupo Prisa trade on the NYSE via an ADR (PRIS and PRIS.B) representing 4 shares of Prisa common stock. This is a small position 3% position for me, at my average of $6 (roughly where T2 bought their shares).
My favorite non US company and my most concentrated common stock position is in South African Bidvest (BDVSY.PK). The best way to describe Bidvest is a decentralized conglomerate. The company specializes in food services but has branched out to automobiles, retail, investment, transportation, and several others. Bidvest operates much like Berkshire in the way they acquire new companies. Bidvest identifies profitable companies with skilled management and fits the company into a vertically integrated niche within the Bidvest structure to enhance the profitability of the new company.
Since its inception in the 1980’s (I believe 83) Bidvest has been compounding at over 20%. It trades on the JSE at a P/E ratio of 13.5 right now and has a market cap of roughly 5.9 billion US. Over the summer management refused a ~4 billion dollar bid for their African food service division which accounts for roughly 50% of their revenue, so I’d say the whole company is worth more than the current market cap.
I started buying in 2009 in the $20’s, 2010’s when the P/E ratio when to around 12, and have been recently when the Dollar strengthened against the Rand. I might do a write up on Bidvest at some point if anyone is interested. The above is just some rambling off the top of my head.
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I agree he sure does and I'm sure as good as he is he'll do well for himself and his investors. I guess my thought is Buffett as an example really try's not to get involved in operating company management and stays in his area of expertise which is capital allocation. For Berkowitz his is stock picking and such. I just wonder if he wishes he didn't have the St. Joe distraction.He has over $200m of his own money in the fund. I believe he has "incentive".
Buffett has so many things going on. Member when he went to run Solly and moved to NYC? The thing is these guys have the bandwidth to be involved as long as it's related to business and investing. This is not hard labor at a mine. This is sitting around and "thinking".
I guess we would have to add the CF distraction to this.
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For a young investor (Or maybe any investor) looking at a long time horizon (Using one of your 5 punches) when Berkshire B as an example was recently down in the mid 60s that would have absolutely been a good time to buy.Buffett stated that most of us should have a punch card with 20 holes in it. If we can only make 20 investments in each of our lifetimes, we'll think about things a lot more differently.
I believe Buffett stated you can only really "time" the market over a few times in one's investment career.
So, let's say for market timing, you only have 5 holes. Do you guys really think now is a good time to use one of those punches?
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Junto; Great site. Thanks for the link.
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Inflexibility leads to paralysis.
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What might happen to Tea Party Republicans is what happened to Pelosi Democrats. Pelosi is to the Dem left what they are to the Republican right. Neither want compromise. One difference is in California Pelosi, Boxer, etc are unfortunately unbeatable.
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Packer, you make him sound like like he's the leader of the Republican Tea Party Group. Who think they are always right, everyone else is wrong, and unless you do exactly what they want will throw a "Canter" tantrum.We will see but I would not be surprised that the admin does someting to prevent this from occuring. You have to remember you are dealing with a college professor who thinks he is right and everbody else is wrong and has not developed a working relationship with the opposition. I hope they do get it right for everybody involved.
Packer
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Bank of America CEO Moynihan proves he's on borrowed time with Buffett
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These all helped me. There are of course other good ones not mentioned though
There's Always Something To Do - Peter Cundill
The King of Cash - Laurence Tisch
You can be a Stock Market Genius - Joel Greenblatt
Value Investing A Balanced Approach - Martin Whitman
Billion Dollar Mistake - Stephen L. Weiss
For range bound markets like lately - Active Value Investing - Vitaliy Katsenelson
Hidden Champions & Hidden Champions of the 21st Century - Herman Simon
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Thousands? Damn. I only got $1300 for mine!
Last I checked on Amazon it was around 2.3k
I had two books and sold one about six months ago. Sold it to a Canadian fellow on ebay for about $750.00. The asking prices were higher but at the time no one was paying them.
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We should start a thread discussing our best and worst investments.
My best in terms of dollar profit was Arizona Star, I built a significant position in the company right after 9/11 and held it until the buyout by Barrick. At the time we were purchasing shares at a valuation that implied less than $5 per ounce of gold in the ground.
Worst investment was WAMUQ, after Lehman, we had built a large position thinking it would not fail. We lost 95%. I still believe WAMUQ based on it's projected Loan Losses/ vs equity at the time should not have been allowed to fail and was stolen by JPM. Several weeks later TARP was announced.
My best were at times like now. BAC,C in early 1990s. PXD when oil prices were in the low teens and everyone thought they were going to go broke. DOX around the same time in the early 2000s. ACF around 2008. Also many futures contracts in the early 70s. Almost any of them because the Vietnam war was ending and we were starting a huge inflation surge because we hadn't matched any revenues to pay for it.
My worst was 2007-2008-2009 were YRCW, TLB, WPSL, & XLF.
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We told him that there was value in the business. That management seemed to be doing the correct things. That there was significant over-reaction by the market and nonsensical innuendo. That the business had enough cash flow to cover it's legal liabilities going forward and enough non-core assets available for sale to bolster Tier 1 Capital. That many of the analyst reports were making far-fetched guesses without actually examining the company's loan portfolio. I guess you are correct. We didn't tell him anything. Cheers!
Huh???
This is funny.
All of my posts in relation to you Parsad simply asserted the reality that your bullish opinion was based on the platitudes you so eloquently express above and not any independent fact based analysis of the perceived risks driving the stock price lower 1) the quality of the assets underlying reported book value and the corresponding assumptions 2) the risk to BV and solvency in a recession 3) put back risk 4) the risk to the company from a Euro implosion. You and others were/are just guessing.
Nothing about today gave you any greater insight into these risks.
SO ANOTHERWARDS YOU DON'T THINK BUFFETT PUT ANY THOUGHT INTO THIS. HE'S JUST GUESSING! Maybe he should call you more often to get your thoughts and insights so he doesn't make a huge mistep!
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At the time I don't remember any of them offering that type deals then. Now it has become more common like GE, Goldman. He does have the option to convert into common of BAC though. Will he keep it long term after he converts? I doubt it because he is so into WFC. The point is would he have made this investment if he thought there was a huge downside so he couldn't get his money back or convert eventually? I don't think he would have no matter how sweet a deal he was getting.WFC was a common stock investment, no? This is a sweetheart deal where he is taking essentially no risk and has all upside.
Point blank: If you can't see that ANYONE would have made the investment Buffett was exclusively offered, you are not being intellectually honest.
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Didn't Buffett just have a meeting with Obama and probably Geithner Probably this buy did more to settle bank fears for now than treasury or federal reserve could have done.
Also, wasn't it around the early 90s or so when everyone thought the banks were going to go broke because of commercial real estate loans etc. Wells Fargo was a gonner and yet he stepped in when nobody else would because he knew it was a screaming bargain. In fact doesn't he say sometimes it's so obvious that simple logic is all you need to know plus simple math.
He I'm sure he is buying more WFC but I'll bet he also is saying that the price of BAC has been knocked irrationally down by "MR MARKET" AKA Mungers to the point that it's a no brainer.
Also when he started originally buying up WFC C and BAC were both in the dumps also. BAC was selling off their headquarters building in SF, lots of assets in Japan etc. Both of them came roaring back.
So yes I own both BAC and C. This is a bargain time like the 90s. Or when oil was at $15 a barrel a while back. Or when people thought Obamas health care plan would mean a bust for all the pharmaceutical company's and they all nosedived.
So isn't that what you're supposed to do? Buy them when they really go on sale? I like what Peter Cundill said. He liked to buy sometimes when good values were hitting 52 week lows. But he really liked to buy when they were hitting multiyear lows.
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Munger; Please continue bad mouthing BAC. Also could you do a little more with C? I wanted to buy more BAC in the low 6s and C wasn't quite down far enough. Thanks for any help you can give.
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How about if BAC sells Country Wide to US government for $1. With all the debt US has it would amount to peanuts adding that in. BAC would be in good shape again. No run on bank. Stock market would boom led by BAC. US is already covering Fannie and Freddie among others so they have good experience in how to print more $ to cover. Different perspective.
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Now they have announced they are buying an offshore company like Microsoft did to utilize money held out of the US. Paying 10 times sales with stock that is been hammered. Brilliant business move.
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Who makes Tums and Rolaids? Its starting to look like potential for a lot of growth there. I have a some at home, in the car, at work, in my gym bag... If this market keeps going like this I think I'll open an anti-acid stand on Wall Street and sell shares.
Best cure for upset stomach...don't watch the markets. Go watch a movie or something if you aren't working today. S&P500 today is nearly the exact same level it was 13 years ago in 1998...13 years ago! It was overvalued then and it is undervalued today.
All this volatility is simply preparation for the next bull market which is 1, 2, 5 years away...who knows. But you are buying hamburgers today and you will buy hamburgers next year, and the year after, etc. Cheers!
These two statements say it best.There are some great buys right now.But you are buying hamburgers today and you will buy hamburgers next year, and the year after, etc. Cheers!
This is good advice that people should follow. During volatile times one thing I like to do is take a look around when I am out and about. People are still going out to eat. There are lines at Starbucks. The mall is packed by us and all the restaurants full on the weekend. The roads are jammed during rush hour. Life goes on and isn't dependent on the vicissitudes of the market. As Sanjeev says, this is the prelude to whatever comes next. At the end of the day, if this is the end of the world, or the banking/financial industry is going to tank or what have you, it really doesn't matter what stocks do. We will all be hoarding guns, ammo and canned goods anyway. At various times in his life Ben Graham spoke to the "what next?" issue in the context of volatile times. He often spoke and wrote about it during the cold war and the fear of nuclear attack. I'm paraphrasing, but he essentially said that it is impossible to plan for something like a nuclear attack and the stock market will be the least of our worries, so we might as well assume it won't happen and hope for the best. So you buy cheap and hope Mr. Market takes care of you like he has in the past. That's all you can really do.
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Value Trap? Sears Holding!
Unless Eddie can liquidate some of the commercial land and other assets (Craftsmen), this one is a trap. Their department store business is dying.
While it generates free cash flow, it is in a slow, deteriorating drop with it's core customers slowly disappearing...those born before 1970. Those born after aren't buying there anymore. Their catalog business has too much to compete with online. It's a cigar butt and has been for the last few years. But the last puff is one really long painful one!
If he can take the cash flows and invest elsewhere, great! But so far he's overpaid for stock buybacks, and spent the rest keeping this sucker afloat. Buyer beware! Cheers!
Fairholme?
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Interesting. I lived in Taiwan from 1957 until 1960. The mainland people could look at the potential by looking right across the straits. Not like Hong Kong which was a colony at the time but at the real, from the bottom up, do it yourself way. The Taiwanese hated the Japanese because of the history of their brutal occupation. The Taiwanese were little more than native Indians in the US. Then came the Mandarins. At first there were wagons, each pulled by a water buffalo. The only cars were the ones left by the Americans that were there to defend the island from invasion. Quemoy and Matsu were being shelled daily. The factories were the most primitive you could imagine. All you had to do was let the people have hope. The freedom to better themselves without the strict restraints of their government controlling their every moment. Not everyone likes the fact that now the island has lots of skyscrapers. Lots of pollution. But you could not deny the obvious. They had an economic miracle. Deng could see that as long as the mainland kept their ways, they would be a big, strong, controlled 2nd rate nation. But to be a world power, a first rate power, you had to loosen up. They knew they could never catch up with the US the way they were going. They weren't so worried about Europe. Japan yes. But mostly they knew they had to open up to compete with the US who they also greatly admired for their wealth because of their economic system. And sitting just a few miles off their coast like looking at a test tube was the proof of how to do it. The Chinese love business. It's in their blood. My Chinese friends buy land because it's something you can value. They rarely sell. It will be interesting to see where things go when the going gets tough. But like history shows. They are very adaptable. I enjoyed reading your thoughts. Thanks
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In many states like California a very large percentage don't even speak English well, don't know the history of this country or care. They can tell you all about their countries though and what their flag looks like. But can't tell you what the stars on the US flag mean. So why would they even care about or understand what the debt limit is or what's going on in our government.
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Here's an interesting take of the problem by Howard Marks
http://www.marketfolly.com/2011/07/howard-marks-on-us-debt-ceiling-oaktree.html
Greek Referendum On Eurozone Deal
in General Discussion
Posted
Sounds a little like what caused our housing mess. No one could say no to the people who wanted to borrow money but never could have paid the loans back in the first place. But the lenders in the interim were making some money and hoped to kick the can down the road to someone else.