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Investment Ideas / Re: MKL - Markel Corp
« Last post by rolling on Today at 02:42:23 AM »
Look man, I don't post that often, so listen up.  Hold onto your Markel.  Find something else to think about.  If you sell, you will pay taxes and possibly do something dumb with the money.  If you keep holding you be got a world class company whose interests are aligned with yours and if the market cracks they will be opportunistic and add assets at low prices.  Nobody ever said they are relieved to have sold their Brk shares.
I am relieved I sold my Brk shares :) (sorry, had to say it)
But you are right. It all comes down to what you do with the resulting money and if it is worth the taxes.
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Investment Ideas / Re: MKL - Markel Corp
« Last post by villainx on December 15, 2017, 10:21:29 PM »
I want to say that they got as low as 1.2x-1.3x BV a couple of years ago and I did add a teenie bit to my position. In hindsight, it showed to be effective to sell when the company was trading at 2x BV and buy closer to 1x. I think the days of MKL trading 2x or 1x BV are gone forever, so 1.2x and 1.8x may be the entry/exit points.

I think if that's what you were thinking of doing, might as well wait until it does get closer to 2x to sell, when things are a little more outrageous. 
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General Discussion / Re: Druckenmiller on CNBC
« Last post by rb on December 15, 2017, 09:59:01 PM »
Interesting comments. Thanks for posting the link to the video.

Some of my takeaways (feel free to correct any errors as I watched the video earlier today):
1.) going back 700 years inflation averaged 1%; inflation was much higher in the 70s but perhaps that is the outlier. Perhaps current rate of inflation is perfectly normal.
2.) current phase of innovation (greatest in over a century) is likely what is resulting in low inflation and this is not a bad thing.
3.) if current low rate of inflation is normal Fed policy of low rates and quantitative easing is wrong. He feels fed should normalize rates/Fed balance sheet as soon as possible.
4.) by June of 2018 we should start to see some impact of all the central banks reversing quantitative easing.
3.) current low global rates and global QE is creating bubles in all financial markets. Free money will tend to do that.
Some thoughts:

1. There weren't great statistics being kept half a millennia ago. So I wouldn't put much stock in the inflation rate of 1682.

2. Not really the greatest phase of innovation in over a century. Introduction of AC motors, etc was way more significant. Though we can argue about the timing. Anyway if there's so much innovation why are productivity gains so small? If innovation is what's keeping inflation low that's because it's causing a large expansion of aggregate supply. If that's true we should see big productivity gains.

3. This actually makes no sense. Why should Fed policy be wrong? Just because he likes high rates? If the rates are artificially low why isn't there a shortage of credit?
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General Discussion / Re: Druckenmiller on CNBC
« Last post by Viking on December 15, 2017, 09:35:42 PM »
Interesting comments. Thanks for posting the link to the video.

Some of my takeaways (feel free to correct any errors as I watched the video earlier today):
1.) going back 700 years inflation averaged 1%; inflation was much higher in the 70s but perhaps that is the outlier. Perhaps current rate of inflation is perfectly normal.
2.) current phase of innovation (greatest in over a century) is likely what is resulting in low inflation and this is not a bad thing.
3.) if current low rate of inflation is normal Fed policy of low rates and quantitative easing is wrong. He feels fed should normalize rates/Fed balance sheet as soon as possible.
4.) by June of 2018 we should start to see some impact of all the central banks reversing quantitative easing.
3.) current low global rates and global QE is creating bubles in all financial markets. Free money will tend to do that.
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General Discussion / Re: Do you think Bitcoin is a safe store of value?
« Last post by hobbit on December 15, 2017, 08:42:33 PM »

Very good stuff in this blogpost.
Thanks for posting.

SD

You're welcome.

@DeepSouth can you understand you're a masochist from my point of view? Anyway, let's just all vote with our wallets and things will work out at some point :)

I honestly don't understand your point of view. I'd say the empirical end result of your policy desires leads to decade long depressions and wild and violent swings in inflation and deflation. It's not masochism to desire an entity with the power to smooth out economic cycles and encourage growth. The federal reserve is one of the few things the US government gets mostly right. If you're terrified of your savings being withered away by low single digit inflation but don't want principal risk for your savings buy TIPS.

I own bitcoin because I think the risk/reward is fair from here even though I think most bullish arguments for bitcoin are very stupid.

The policy of the last ~120 years led to huge bubbles and (long! 20+ years at times) subsequent recesions while an organic market won't have recesions lasting longer than a few years. I concider loving that ewuivalent with loving pain.

On top of that an organic market rewards its participants more fairly in the sense that good decisions lead to financial reward while the current system rewards having the right contacts at the policy maker for the most part.

even though I disagree with you completely, I think its beyond the point right now since bitcoin core has a zero chance of being a viable currency due to technical limitations. On top of that bitcoin's inability to replace gold gives it a total value of 0. Good luck
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General Discussion / Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Last post by Midas79 on December 15, 2017, 08:21:20 PM »
Tax bill: http://docs.house.gov/billsthisweek/20171218/CRPT-115HRPT-%20466.pdf

am i correct in saying that the bull case for the prefs now is that because of this tax bill the DTAs are worth less and thus they will have to take a write down and thus this will force trump/mnuchin to act to "set them free"?

There is a ton more reason behind the bull case for prefs, but the direct and immediate impact of tax reform is that it forces Mnuchin/Watt to address the capital buffer issue with actions and not merely words (paraphrased... Watt: "dangerous to have no capital buffer."  Mnuchin: "No more bailouts.  GSE's won't be killed, aren't going anywhere.").  Don't mistake that with being the entirety of the bull case for prefs.

Well put.

If Trump signs the bill before Dec 31 then the GSEs will have to immediately write down the DTAs and the clock for the Mar 31 draw starts ticking for Mnuchin and Watt.

Part of the bear case, or at least the not-so-bull case, was that the whole process could be dragged out much longer and it would depress the annualized ROI on the junior prefs, even if they recover to par. That is mostly off the table now imo.


Aside: a quick search of the tax bill for terms like "GSE", "Fannie", "Freddie", "preferred" etc. gave no results.
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What Corker got for his "yes" vote...
http://www.ibtimes.com/political-capital/donald-trump-gop-leaders-could-be-enriched-last-minute-tax-break-inserted-final

Republican congressional leaders and real estate moguls could be personally enriched by a  real-estate-related provision GOP lawmakers slipped into the final tax bill released Friday evening, according to experts interviewed by International Business Times.

Sen. Bob Corker, who was considered a potential no vote on the bill, abruptly switched his position upon the release of the final legislation. Federal records reviewed by IBT show that Corker has millions of dollars of ownership stakes in real-estate related LLCs that could also benefit.
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General Discussion / Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Last post by cherzeca on December 15, 2017, 07:46:29 PM »
Tax bill: http://docs.house.gov/billsthisweek/20171218/CRPT-115HRPT-%20466.pdf

am i correct in saying that the bull case for the prefs now is that because of this tax bill the DTAs are worth less and thus they will have to take a write down and thus this will force trump/mnuchin to act to "set them free"?

tax bill should increase the future value of Fannie Mae->better value for unlocking the warrants, from governments point of view.

+1

fnma had $6B provision for income tax in 2016.  if taxable income doesnt change, the tax savings should be around $2B.  capitalized that at the PE ratio you prefer, say, 12.5X, means common equity is worth $25B more.  treasury gets .80 of that, or $20B in enhanced valuation.  build a lot of infrastructure with that, especially if used to support leverage the way trump seems to want it to be.
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Investment Ideas / Re: AMZN - Amazon.com Inc.
« Last post by clutch on December 15, 2017, 06:20:18 PM »
Hey all:

Yet another story about AMZN and how they have nice, good, well paying jobs!

http://www.mirror.co.uk/news/uk-news/amazon-drivers-forced-deliver-200-11668823

This report is not unique to the UK, there are similar stories coming out of the USA.

Yeah, the Daily Mirror, ok. Finding an overworked delivery person in the holiday season isn't hard at any company, I'm pretty sure. But because this is about Amazon, it makes for good click bait for a tabloid.

Yeah ok, check out the interwebs!  They are rife with stories of the terrible conditions inside of AMZN warehouses.  One commonality with the delivery drivers is that AMZN hires temp agencies to put distance between themselves & the workers.  They are trying to manufacture plausible deniability.

If you go to the Google, you will be overwhelmed with stories of poor working conditions at AMZN:

https://www.thestreet.com/story/14312539/1/amazon-warehouse-employees-discuss-grueling-work.html

http://www.theblaze.com/news/2017/11/27/undercover-reporter-reveals-brutal-working-conditions-at-amazon

https://www.thesun.co.uk/news/5004230/amazon-warehouse-working-conditions/

https://www.nytimes.com/2015/08/16/technology/inside-amazon-wrestling-big-ideas-in-a-bruising-workplace.html

https://www.vanityfair.com/news/2016/03/amazon-warehouse-theft


There are dozens & dozens of other articles through the years.  Poor treatment of workers is a common thread.

Of course, AMZN is not the only company engaged in this.  TSLA is notorious for hiring "contract" workers and then having them work silly hours that results in wages less than minimum wage.

Have you googled "walmart poor working conditions"?
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Investment Ideas / Re: AMZN - Amazon.com Inc.
« Last post by DTEJD1997 on December 15, 2017, 05:59:21 PM »
Hey all:

Yet another story about AMZN and how they have nice, good, well paying jobs!

http://www.mirror.co.uk/news/uk-news/amazon-drivers-forced-deliver-200-11668823

This report is not unique to the UK, there are similar stories coming out of the USA.

Yeah, the Daily Mirror, ok. Finding an overworked delivery person in the holiday season isn't hard at any company, I'm pretty sure. But because this is about Amazon, it makes for good click bait for a tabloid.

Yeah ok, check out the interwebs!  They are rife with stories of the terrible conditions inside of AMZN warehouses.  One commonality with the delivery drivers is that AMZN hires temp agencies to put distance between themselves & the workers.  They are trying to manufacture plausible deniability.

If you go to the Google, you will be overwhelmed with stories of poor working conditions at AMZN:

https://www.thestreet.com/story/14312539/1/amazon-warehouse-employees-discuss-grueling-work.html

http://www.theblaze.com/news/2017/11/27/undercover-reporter-reveals-brutal-working-conditions-at-amazon

https://www.thesun.co.uk/news/5004230/amazon-warehouse-working-conditions/

https://www.nytimes.com/2015/08/16/technology/inside-amazon-wrestling-big-ideas-in-a-bruising-workplace.html

https://www.vanityfair.com/news/2016/03/amazon-warehouse-theft


There are dozens & dozens of other articles through the years.  Poor treatment of workers is a common thread.

Of course, AMZN is not the only company engaged in this.  TSLA is notorious for hiring "contract" workers and then having them work silly hours that results in wages less than minimum wage.

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