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What are you buying today?


LowIQinvestor

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I have been buying more tanker stocks, including NAT, FRO (albeit they have a reverse stock split upcoming) and TNK. I think there is a lot more upside in them, and when oil begins to turnaround, tankers will benefit from contango. Until then, they benefit from oversupply of oil, and the increased demand for double hull tankers.

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If you look around there is a lot of smart money sitting on it....Berkshire sitting on $58B.

 

 

Berkshire doesn't sit on money as a market timing tool. They always have tons of cash looking to deploy. Also they are going to use $20B+ for the precision castparts merger....

 

In my opinion Berkshire does use cash as a market timing tool.  Sure they might not take a top down macro approach, but they are constantly looking to do deals.  If they can't find enough attractive deals to put the cash to work, it builds up on the balance sheet.  Same net result.  If the market dropped 50% tomorrow you would expect Buffett to put most of the cash into the market. Likewise, if the general market doubled tomorrow he might sell some stock positions and would be unlikely to find many deals so cash would increase. To me, that is market timing.

 

Oh sure if you put it that way yes I definitely agree. It is just a matter of degrees and outlook. For example Buffett says he doesn't care what the Fed does or the macro. But buffett has a huge heads up on the economy from his operating companies and he uses it to devastating effect.

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KCLI

Me too - $38 is roughly 55% of book value, seems like it is over sold after maybe some did not get cashed out at $52.50. Not super cheap on earnings basis, but I think it is a safe, stable investment as company has been around over 100 years, insiders own almost 70%. I suspect insiders know they could sell whole company for close to book value if they wanted too. Company itself was buying stock back around $45 level in past couple of years before going private at $52.50. I like it for a couple month trade until I hope it returns to mid 40s.

 

KCLI is a very conservative regulated company so it is kinda easy to put a band around the value.  It has been trading between $38-50 for 3 yrs. Now that they did the tender, it goes below $38, why? It's still the same company. Ok it may be a bit less liquid because it now trades on OTC but if you look at the volume it is as high as when it was on Nasdaq. It doesn't have to file with the sec but it is an insurance company so they have to file tons of stuff with insurance regulators.  After the tender, its book value per share is about $1 higher. And ok they said they'll earn about $0.15 more now that they won't have to file with the sec.

 

Basically the same company as before.....

 

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Sold 2/19/16 BBRY Puts @ 7 for $0.56

 

Also, sold all of my OUTR and converted to LEAPS @ 35 for twice the exposure. Cut my dollars at risk in by 2/3 and doubled my exposure sharewise.I feel better about this - If I'm wrong, I'll lose quite a bit less money. If I'm right, their current FCF at 40-50% of the market cap and flowing into buybacks should drive the price substantially higher than $35. They've got 12 months to prove themselves.

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