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Bruce B. on CNBC - 12PM ET


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"Bruce was in top form inmo"

 

Really ?  He almost made me want to short JOE and I don't short anything.

 

He read Einhorn's report and really doesn't disagree with any of it.  Then the obvious question why in the world do you then own it Bruce ?

 

He didn't seem to really have a reason for owning it.  Just general statements.  New airport, no state tax, beachfront properties.

 

Maybe he doesn't want to give away too much, but he went on that show knowing he would have to answer that question about Einhorn and that is all he had ready to answer with ? 

 

I appreciate the fact that the properties could go from having virtually no value to multiples of value of development started booming down there.  But man he sure did nothing to articulate a reason to buy it, while Einhorn can dot the i's and cross the t's for you in explaining why you should sell it.

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I tend to agree with the prior post about Berkowitz not sounding very convincing.

 

In addition to St Joe, I thought his case on financials was a bit on the weak side.  Leverage, no mention.  Margin of safety limited to tangible book value (what does this mean when these companies are leveraged 10-1 officially and probably much more so in reality).  I understand Bruce wants to communicate with his shareholders but his (over)exposure in the media and in the financial field seem too much to me.  A good short?

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I don't know about Joe - but here are my thoughts.

 

Some of the great investors of our time look at a franchise and estimate a value over a 10 - 20 year period.  Clearly, BB thinks that the land is something that holds great value over time. 

 

He isn't worried about this year or next year.  He sees huge potential - that is his point.  Einhorn may be more focused on the now, BB has visions in his head.

 

He is taking the same approach to AIG.  What will the franchise be worth 10 years from now? 

 

Reminds me of Buffett with Amex back in the Salad Oil days (or so I read).  Can you imagine the criticism Buffett would get now on the internet if it existed? 

 

So frankly I have no interest in St Joe.  I can't make changes, but BB can. 

 

My 2 cents.

 

 

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He didn't seem to really have a reason for owning it.  Just general statements.  New airport, no state tax, beachfront properties.

 

 

My take away was FU. I am here to make my investors money. I will not tell you why I really own it until I have bought all I want. Right now it serves no purpose. Though it was said in a nice and friendly way.

 

Why does he own Sears. He never tells you why he really owns something. He has kicked the tires around Sears, Joe, AIG, and all his holdings and sees something we dont. I dont get it so I dont own them.

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I tend to agree with the prior post about Berkowitz not sounding very convincing.

 

In addition to St Joe, I thought his case on financials was a bit on the weak side.  Leverage, no mention.  Margin of safety limited to tangible book value (what does this mean when these companies are leveraged 10-1 officially and probably much more so in reality).  I understand Bruce wants to communicate with his shareholders but his (over)exposure in the media and in the financial field seem too much to me.  A good short?

 

Margin of safety limited to tangible book value -- he probably means that historically they trade below tangible book for only short periods of time.  In other words, as going concerns they will most likely trade well above tangible book in the future.  Translation: there is little risk of P/B compression because the crash already came and capital was already raised (in his mind anyway). 

 

 

 

 

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I agree that he seemed a bit evasive, but IMO part of it is that he's a director of the company now so I'm pretty sure he has to watch what he says legally speaking.  I doubt he's going to do a tit for tat in pubic.  If he wanted to do that he would have done it at the value investor's conference.

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As an investor since day one in the Fairholme Fund....and a guy who has followed Berkowitz for much longer....

 

 

Still think the consistency principal is one even the brightest of us (them, not me, I'm average) must fight.  Bruce is making huge media statements these days.  As Munger says, "When you say it or write it .....

 

In the past Bruce has blown out of many things he's bought, sometimes rapidlly.  We will see, we will see.

 

Media attention can make things hard especially if the media turns against you.  Where's Cialdini?

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