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Investment Ideas / Re: HHC - Howard Hughes Corp
« Last post by Gregmal on Today at 02:18:57 PM »
I bought small position $90-$97 starting in late 2018, sold 1/3 of shares after strategic announce, will be a buyer again L90's and average down. hard to believe the upside/more bullish estimates of NAV if they shopped assets and this is the plan they came up with. 

In some ways, this is exciting as HHC was a toehold for me and now it has potential to become a real position, but I have the least confidence in the NAV here of all the other real estate stuff because it has the most variables.

Unfortunately, having seen and been apart of enough of these over the years, thats the narrative that is going to take a long time to get rid of. No more mystery about NAV, just a ceiling now quite a bit below what many thought.
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General Discussion / Re: What are you buying today?
« Last post by EricSchleien on Today at 01:55:02 PM »
Hi Stuart - The article from Feb 2019 is one I wrote. The article was based off a podcast that I recorded which you can check out here: https://ericschleien.com/podcast/anthony-waldichuk-national-stock-yards/


Best,
Eric Schleien


Bought more National Stock Yards (NSYC)

Same here. I suspect the pot. SEC action may scare some investors away from dark stocks and cause some selling. I am happy to oblige and provide liquidity if the price is right.

Not much public information out for NSYC, though from the Seeking Alpha post in Feb, 2019 it sounds very interesting - especially at a market cap of $9m. I emailed the company to see if they'll send annual reports on request. I don't like my chances, but it's worth a try.
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Strategies / Re: Are big banks value traps ?
« Last post by Cigarbutt on Today at 01:50:01 PM »
@wabuffo
The comments from 2009 are appreciated. The banks I liked the most then were also USB and WFC. M&T was also up there. In retrospect, I wish I had liked USB for longer. I differ on the hyper-regulated outcome (more below) in the long run but isn't it emblematically ironic that the Fed injected a huge amount of reserves to support their theoretical transmission mechanism framework to the real world while simultaneously forcing the banks to keep the excess reserves on their balance sheet and parked at the Fed for a stipend? Quite recently, the FDIC chair (who listens to these people in good times?) quietly mentioned that the systemically regulated banks had done well (risk-wise) but that the much of the risk had been transferred and still existed somewhere. "Where did it go?" she said and wondered (from the regulatory risk management point of view):"Have we done more damage than good?" These questions are always answered retrospectively.

@KJP
Your question about the cost of brick and mortar units and the relevant deposit funding aspect is very relevant. Forgetting the chicken or egg question about money creation for a minute and looking at what happened to the loan to deposit ratios over time, overall, at the big banks, growth in deposits has followed growth in loans. Funding from deposits has relative advantages and apart from the four levers of the Holy Grail, banks want a diverse source of low cost funds and diversification as well as FDIC backstop are useful. In the loan and deposit growth however, there has been some decoupling. For the loans, shadow banks (non-bank, online alternatives etc) have gained market share in certain segments. For deposits, the same has happened to some extent but (the last time I looked) US online banks' share of total deposits has increased only from about 2 to 6% over the last 15 years or so. What is interesting is that, traditionally, the growth of deposits has been closely related to the number of physical branches for the largest banks. This link has broken since the GFC, with banks (especially the largest 5 banks decreasing the number of physical outlets by about 15%) while growing deposits by more than 250%, suggesting that they are adapting fairly well to the online threat. Because of the way banking services are bundled, physical branches should be seen as profit centers and not as cost centers and it seems that a restructuring of their physical footprint is not incompatible with significant growth of the deposits. It seems to me that they also could develop online options themselves if the threat becomes significant for some services. So, you have to make up your mind if the physical branches aspect will turn out like Sears (could not adapt), the music industry (unbundling) or something else. I offer the opinion that the big banks will behave more like the pharmaceutical industry in the 70's and 80's. They will continue to offer regulatory collaboration (capture to a large degree) while offering a non-discretionary product, play the game which may involve holding more capital than considered necessary and deal with the occasional entrants by squeezing them or buying them, building an enduring moat.
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Investment Ideas / Re: HHC - Howard Hughes Corp
« Last post by thepupil on Today at 01:48:11 PM »
I bought small position $90-$97 starting in late 2018, sold 1/3 of shares after strategic announce, will be a buyer again L90's and average down. hard to believe the upside/more bullish estimates of NAV if they shopped assets and this is the plan they came up with. 

In some ways, this is exciting as HHC was a toehold for me and now it has potential to become a real position, but I have the least confidence in the NAV here of all the other real estate stuff because it has the most variables.   
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Investment Ideas / Re: HBC.TO - Hudson's Bay
« Last post by Parsad on Today at 01:41:44 PM »
Haven't been following this closely, but it looks like a definitive agreement has been struck at $10.30, a small price bump: https://www.businesswire.com/news/home/20191021005309/en/Hudson’s-Bay-Company-Agrees-Private-10.30-Share . Whether the vote will pass - I don't know.

They are getting a steal relative to the real estate.  The retail business is awful, but they should just shut it down to the core and lease out the rest of the real estate...or sell a good chunk.  Cheers!
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Fairfax Financial / Re: Is it time to buy Fairfax?
« Last post by Parsad on Today at 01:38:06 PM »
Every time it falls below book value, I see Brian Bradstreet buying some shares.  We shall know shortly! 

I think for long-term investors, who don't want to fiddle with their portfolio and just sleep at night...it's a buy!  Cheers!
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Investment Ideas / Re: HHC - Howard Hughes Corp
« Last post by Gregmal on Today at 01:34:44 PM »
Just announced:  https://investor.howardhughes.com/file/Index?KeyFile=400512570

Ouch. Talk about a let down.

Yes, I expected more.  Ackman has lauded Weinreb and Herlitz for years.  I guess they weren't on board with his plan. 

Here's the presentation for today's 5pm call:  http://www.snl.com/interactive/newlookandfeel/4265772/Transformation-Plan-Release.pdf

@$100 its interesting again, but just like a lot of other public RE, its cheap but so what? Now you have no catalyst and the dreaded "they shopped for a deal and couldn't find something that worked" overhang... will be keeping an eye on this for sure. But damn, theres so much in this market that either falls into the category of really cheap but dead money, or super expensive and risky. Hard to find anything in between.
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Investment Ideas / Re: HHC - Howard Hughes Corp
« Last post by KJP on Today at 01:30:35 PM »
Just announced:  https://investor.howardhughes.com/file/Index?KeyFile=400512570

Ouch. Talk about a let down.

Yes, I expected more.  Ackman has lauded Weinreb and Herlitz for years.  I guess they weren't on board with his plan. 

Here's the presentation for today's 5pm call:  http://www.snl.com/interactive/newlookandfeel/4265772/Transformation-Plan-Release.pdf

I love this from slide 5's description of the new CEO:  "Culture carrier and collaborative leader"
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Strategies / Re: Are big banks value traps ?
« Last post by wabuffo on Today at 01:29:37 PM »
Thanks for this post and the previous posts!  I learned a good deal.

For further reading on this subject I would steer you to JPM's Q3 conference call:
Quote
Glenn Paul Schorr, Evercore ISI Institutional Equities, Research Division - Senior MD & Senior Research Analyst:
I'm curious your take on everything that went on in the repo markets during the quarter, and I would love it if you could put it in the context of maybe the fourth quarter of last year. If I remember correctly, you stepped in, in the fourth quarter, saw higher rates, threw money at it, made some more money, and it calmed the markets down. I'm curious what's different this quarter that, that did not happen? And curious if you think we need changes in the structure of the market to function better on a go-forward basis?
 
James Dimon, JPMorgan Chase & Co. - Chairman & CEO:
So if I remember correctly, you got to look at the concept of we have a checking account at the Fed with a certain amount of cash in it. Last year, we had more cash than we needed for regulatory requirements. So the repo rates went up, we went to the checking account which was paying IOER into repo.
 
Obviously makes sense, you make more money. But now the cash in the account, which is still huge. It's $120 billion in the morning, and it goes down to $60 billion during the course of the day and back to $120 billion at the end of the day. That cash, we believe, is required under resolution and recovery and liquidity stress testing. And therefore, we could not redeploy it into repo market, which we'd have been happy to do. And I think it's up to the regulators to decide they want to recalibrate the kind of liquidity they expect us to keep in that account.
 
And again, I look at this as technical. A lot of reasons why those balances dropped to where they were. I think a lot of banks are in the same position, by the way. But I think the real issue when you think about it, is does that mean that we ever have bad markets? Because that kind of hitting a red line in that checking account, you're also going to hit a red line in LCR, like HQLA, which cannot be redeployed either. So to me, that will be the issue when the time comes.  And it's not about JPMorgan. JPMorgan decline -- in any event, it's about how do regulators want to manage the system and who they want to intermediate when the time comes.

Doesn't it sound to you like Mr. James Dimon is chafing a bit under the Fed's interest rate and regulatory regime?  He wouldn't have purposely held back liquidity by "working to rule" in order to force the Fed's hand?  I thought that his last statement: "it's about how do regulators want to manage the system and who they want to intermediate when the time comes." was verrrrrrrrrrry interesting!

Oh lookie here - some new news since the September repo market debacle.
 
https://www.reuters.com/article/us-usa-banks-rates-exclusive/exclusive-wall-street-banks-see-green-light-from-fed-on-reserves-sources-idUSKBN1WW2T6
Quote
"Wall Street banks believe they are getting a green light from supervisors to hold more Treasury debt and less cash after last month’s volatility in overnight lending markets, three industry sources told Reuters.  In private conversations with senior bankers, supervisors have attempted to make banks more comfortable with using excess reserves to lend in repo markets rather than hold onto more cash, sources familiar with the discussions said."

wabuffo
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Investment Ideas / Re: CTVA - Corteva Agriscience
« Last post by mwtorock on Today at 01:27:03 PM »
In the short term, price certainly will fluctuate. Part of the reason we can get it at discount is that it is not in favor of investors yet. The earnings power is depressed or hidden rather as it went through the spin off process and ran into a nasty headwind in its largest market. The company is spending 1B+ on R&D annually. If it is no growth situation, how much of that could be put back to bottom line? Those investments for future business understate the earnings. 

Is this company a global franchise with sustainable competitive advantages? and is the industry growing or declining? and how is the barriers to entry?

The answers to those questions are positive to me personally.
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