finetrader

This article sums up what every investor think at this moment. http://www.theglobeandmail.com/globe-investor/global-investors-flooding-into-equities-again/article1910566/

How much of your portfolio is dedicated to FBK? For my part, FBK is 32% and I am considering reducing this to 15-20%.

Isn't this ratio less valid than before since a lot of companies in the S&P500 are heavily active abroad? ex: Caterpillar have plants and operations in emerging countries that if I'm right are not counted in US GDP.

My view is they paid half of it so that they still have cash on hand as a cushion

In my opinion, and if management would want to be more shareholder friendly and a little more aggressive, they could start paying an annual dividend of .10$/share right now. a .10$/sh equal 13M$. They are gonna save 1.5M$ from the deb repurchase this year and 3M$ annually after they've paid it in full. Also with the actual NBSK price, they generate FCF 10M$/quarter.

yeah.. 15 - 20 million each Q, 2-3x cash flow and pulp price seems to be heading up again... Exchange rate sucks - that's the only -ve. Share price sucks too... go lower so we can buy more, or go higher so we can feel richer

wow, that is a very inspiring statement have fun in Sydney.

Well I am certainly no expert but I have been buying 5-6 month expiration calls with strike price about 50% higher than VXX price on a 1:1 #share basis ratio. Sometimes (like right now) I am short VXX without any call protection but on a small position of my portfolio.

I would wait for VIX to go pretty low (close to 10) and then the volatility on this index could be lower (if that's ever possible : volatility on a volatility index..) then buying calls on VIX could be a good risk/reward bet. But to me buying VXX is like throwing a football against a 100M/h headwind

the best way to protect against a market correction and an economic slowdown is via shorting an index or buying puts on an index. VXX: the contengo is just too costly to absord and it is better in fact to profit from it by shorting VXX. I also buy calls on VXX to limit maximum losses to 50% if VIX shoots much higher. The cost of thoses calls is about 15% annualized. I would prefer to buy calls on the VIX but the premiums are just way too high. The profit you can make with the contango by shorting VXX is about 7-10%/month if VIX stay constant. Also by being right a few consecutive months, you are effectivively taking the lead because your short position will now be a smaller amount. A 10% increase on the VIX will correspond to a increase of less than 10% on your original position. For me it is like time is on your side.. Does it make sense? well for me it does.

I'm not sure, but it seems that NBSK can be added to the mix for the rayon market. If real, this could explain in part why NBSK price is steady high. 'However, the exception is NBSK (Northern Bleached Softwood Kraft) in China as dissolving pulp customers in the rayon market are reportedly adding NBSK to their mix, DB noted. ' http://www.paperage.com/2010news/12_14_2010market_pulp_containerboard_db.html

commentary about nbsk pulp start about in the middle of the interview. http://watch.bnn.ca/commodities/december-2010/commodities-december-30-2010/#clip394958

True that Fbk has not been correlated to the TSX lately.. but my biggest worries in being heavily invested in FBK is an economic slowdown. Hedging with TSX puts would work in this case. By purchasing TSX puts on my FBK position, worst case scenario is: pulp price go down while the economy keeps on improving I am not aware of any new additional supply of NBSK pulp, so a pulp price decrease would have to come from a weaker demand. -a slight decrease in demand in a global economic growth is possible but, I figure I am kind of prepared for this situation by purchasing FBK on the cheap. -a severe decrease in demand is most probably going to happen with an economic slowdown (the reason why I'm thinking buying TSX puts to protect from it. -Also, as a speculation move, the market has been going up lately, and is not undervalued in my opinion, while FBK hasn't move, so being long FBK and short the market might be profitable. Overall, I see more positive than negative doing this

so far so good... http://www.foex.fi/ I'm expecting development concerning debenture repayment soon. Maybe after that they can start paying a dividend.. Stock is cheap. I'm thinking of buying more ( I have quite a lot right now though) Maybe I'll buy more and hedge for market risk with some puts on TSX index.. but i'm still sucking my thumb

Go Habs Go! The young players in this team are starting to shine.With a good group of veteran and an intimidating goalie, this should bode well for playoff season.

They acquired RBK business by using debt http://findarticles.com/p/articles/mi_qa3636/is_200612/ai_n17193385/ I think that explain why 80% of financial charges were allocated to the RBK mills. They paid 160M USD for it in 2006, not sure they would receive as much would they sell the mills today.

A few years ago, Sanjeev posted a job offer on this board (well on the old msn board). A guy he knew was looking for a financial analyst. Looking to land a job in the investment industry I sent him my resume. Sanjeev then told me that the guy was looking for someone with a CFA. At that time, even if I had a bachelor degree in electrical engineering and no work experience in the investment industry, I tought I had everything I needed to succeed in the investment business. After all, I was a value investor, and I had read everything about Berkshire and WEB. (I remember someone saying that reading all of Berkshire's annual reports was as good as having an MBA) But I have to admit that what I learned since then, especially going through the financial crisis while simultaneously doing the CFA's reading was ,what I believe to be, a pretty good understanding of the big picture of the financial market. What I said to myself at that time was something like 'ah yeah, alright, you want it, you're gonna get it' So here it goes, about 3 years later, currently studying for CFA level III.

Steady pulp price is very welcome. It is nice to think that at this rate of FCF and actual share price the payback period is about 3 years on an equity investment. also I can't believe the january future price.. http://www.cmegroup.com/trading/agricultural/lumber-and-pulp/wood-pulp.html I tried to go long the january futures with IB but they don't trade this product.. that's unfortunate

concerning depreciation.. many company will use different depreciation method: an aggressive rate for tax purposes an a less aggressive rate in the income statement so that they can show higher earnings to investors.

:)

agree with you on the revenue side but what are the expense associated with this additionnal energy production? Without more info , I'm assuming that the 20,9M$ in credit is the value of this thing.

Btw, I spoke to IR this morning, and they told me that they now have the ability to repay the debenture with cash. Before, under the previous loan, they had covenant that restricted them in doing so. I really think that with 25M$ in cash on hand, an unused line of credit, and significant FCF, they should be able to repay the debenture with cash in 2011. At this point, diluting equity with share price around 1$ would be a very bad move for shareholders.

I think you probably nailed the dynamic concerning NBSK inventory during the past few quarters. thanks

no dilution needed! pay the debenture and after if FCF is still abundant, start paying a dividend!

talk about a lack of interest... 2 callers asking questions only.. I should have ask a question about their dividend policy.