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Politics / Re: This is Where the Left is Taking Us
« Last post by LC on Today at 08:56:01 PM »
  Skools are going to have a very time recruiting students!  Why spend $100k & 4 years to make $20/hour when you graduate?
Looks like you just solved the problem of inflated student loans.

Isn't it great when you can take care of the poorest of society AND help prevent future financial hardship, all in one fell swoop? Thanks for adding a second-level benefit I hadn't thought of!
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Fairfax Financial / Re: Fairfax 2018
« Last post by Viking on Today at 08:54:45 PM »
Petec, You said ďMore broadly a lot of Fairfaxís investments are fundamentally jockey businessesĒ. This is true. But some purchases like Blackberry were complete dogs; i was invested in Blackberry when FFH was just getting started and by the third conference call i understood that Baisilie was a complete ding dong. He was great for Blackberry when it was getting started and when they dominated but when the market was pivoting to Apple/Samsung he was completely lost. (Fortunately i sold my complete position at a loss of 15%,i think, which would have been closer to 80% if i had not sold and instead drank the Kool Aid Blackberry management was serving). Not only did FFH not sell, they then kept doubling down when it was clear management was terrible. My point is if I was able to identify that Blackberry was being run by a ding dong after 3 conference calls why was FFH not able to come to the same conclusion? It was not difficult. A year or so later Apple was selling for $60 a share. With what FFH had learned a out the cell phone business (after owning a big chunk of Blackberry for a year) why were they not able to capitalize on Apple trading at $60? If they have a choice of doubling their money with a quality name like Apple or tripling it with a dog like Blackberry something in their DNA makes them want to pick the dog (just to prove how smart they are because even a dummy could make the Apple pick and they need to show how smart they are).

I think what i am finally understanding is i have evolved over the past 10 years as an investor. I am more in Buffettís camp in terms of buying quality. Whereas FFH has remained in the Graham camp of buying statistically cheap companies regardless of how stinky the business is. So when i look at buying FFH i am quite often disappointed with the decisions they are making on the investment side of the business (which stops me from buying the shares).

There is a simple answer. Fairfax is not going to change :-) So i need to move on and stop being disappointed in what they are doing. They obviously feel the Graham approach is best and i hope it works out for the company and shareholders.
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Politics / Re: This is Where the Left is Taking Us
« Last post by LC on Today at 08:54:02 PM »
Quote
Why isn't the left doing anything to reduce out of wedlock births?   

...

 ???

...

Why is it that every logically sound idea by a conservative here needs to be frivolously picked apart down to one sentence that you can disagree on? I'll ask you straight up, which is preferable, in their totality? A bastard child that happened by accident, or one that was planned for by two adults looking to start a family?

Then stop trying to de-fund planned parenthood.

And in terms of your assertion about "every logically sound argument by conservatives" - give me a freaking break. He went from talking about a living wage to making SWEEPING GENERALIZATIONS about how "THE LEFT" teaches people:

Quote
Why isn't the left doing anything about teaching people how to get ahead in life?  Don't get pregnant, don't get anybody else pregnant, stay in skool, be honest, don't get hooked on alcohol, drugs, or gambling.  Show up for work 5 minutes early...stay 5 minutes late.  While working, put in an honest effort.  Have a presentable demeanor.  Educate yourself, and look for self improvement.  Spend your money and have fun, but always save 10%+.  Stay away from debt & save & invest for the future.

But pointing out an obvious falsehood draws your ire? Talk about bias.
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Fairfax Financial / Re: Fairfax 2018
« Last post by StubbleJumper on Today at 08:38:58 PM »
Seaspan is a good example... listen to Prem talk about the aquisition and all he does is talk about how wonderful David Sokol is and what a great track recod he had at mid-American and BRK (it is all about the jockey). This is the same guy that BUffett had to fire for lack of ethical behavior. Now FFH has $1 billion tied up. My point is Sokol has his warts and Prem is all promotion when he talks about him. How about talking about Seaspanís business (moat), what it is specifically that FFH loves about the company that warrants a $1 billion investment for FFH shaareholders. Yes, the jockey is i portant but surely there are 3 or 4 other things that FFH loves about Seaspan.

FFH is not a private company; shareholders should get the straight goods with a minimum of hyperbole or promotion.


As for position sizing, as Iíve said before itís important to distinguish between whatís convert and whatís equity. From an equity downside perspective Blackberry is under half a billion. That may still be too high for some tastes, but itís not a billion. Same goes for Seaspan, even after the coming warrant exercise.

I donít see a risk in an oversized position in value cyclicals because theyíve been so clear that they still see macro threats. They didnít go all in in the February sell off and I doubt theyíre doing it now. I hope Iím right.



I don't at all buy the argument that the position size is mitigated because part of the position is on the higher portion of the capital structure (ie, debt).  For both Blackberry and Seaspan, if operations should happen to deteriorate, how does FFH exit their debt position?  The obvious answer is that the bonds will come to maturity and they'll simply be repaid, right?  So where does the cash come from?  Let's get real.  For Seaspan in particular, if FFH hadn't loaned them money, *nobody* would have loaned them money.  For FFH to be repaid in cash, Seaspan or BB need to float new debt to somebody else and use the proceeds to write a cheque to FFH.  So, who is going to loan $500m or $1b to either of those companies so that FFH can repatriate its capital?  IMO, the current answer is nobody.  If nothing changes between now and when that debt comes due, FFH will likely end up having to roll it.

If you want to go down the extreme road of financial distress, being slightly higher on the capital structure is better, but then again, recovery prospects are still typically only pennies on the dollar.

So, let's hope that everything goes well with the investments that constitute a large position size!


SJ
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Fairfax Financial / Re: Fairfax 2018
« Last post by gary17 on Today at 08:30:22 PM »
Petec
Whatís your thought about all the share based compensations?
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Investment Ideas / Re: COF - Capital One Financial
« Last post by HJ on Today at 08:23:58 PM »
This company has gotten caught up in many things in the past several years, it's like death by a thousand cuts.  Nothing earth shattering, but just a couple hundred million here and there every other quarter.  They just never seem to be able to put together, call it 3-4 quarters of consistence performance.  The write off of the Taxi Medallion portfolio, the energy write downs, the UK protection fee scandal, most recently the anti money laundering fine, maybe there is another round of energy related losses coming with oil where it is, ..., ...  None are company sinking type of errors, but when added together the company just haven't done as well as the portfolio of business say they should.  Make you wonder a bit whether Fairbank is just putting all his management focus on the credit card business, and not managing the other pieces of the banking business as aggressively as he should, or just don't have enough good lieutenants to properly man every piece of the pie. 

All that said, the thesis remains the same, and the valuation is cheap'ish, and I think the business, while still among the more cyclical of banks, maybe not as cyclical as its past would indicate.
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Investment Ideas / Re: EZPW - EZCorp
« Last post by Gregmal on Today at 08:15:57 PM »
I've only started following this recently and I think this is a good business, but am not impressed with management at all. They literally spent half the call making excuses and ducking questions about why they refuse to repurchase stock at these prices. They seemed to have a poor understanding of cost of capital, and seem to be of the belief that they're doing a great job... You don't want management who blows off issues raised by a big chunk of shareholders because they think they know better, when their long term track record is at best in the ballpark of mediocre. Just my 2c
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Fairfax Financial / Re: Fairfax 2018
« Last post by petec on Today at 07:46:27 PM »
Seaspan is a good example... listen to Prem talk about the aquisition and all he does is talk about how wonderful David Sokol is and what a great track recod he had at mid-American and BRK (it is all about the jockey). This is the same guy that BUffett had to fire for lack of ethical behavior. Now FFH has $1 billion tied up. My point is Sokol has his warts and Prem is all promotion when he talks about him. How about talking about Seaspanís business (moat), what it is specifically that FFH loves about the company that warrants a $1 billion investment for FFH shaareholders. Yes, the jockey is i portant but surely there are 3 or 4 other things that FFH loves about Seaspan.

FFH is not a private company; shareholders should get the straight goods with a minimum of hyperbole or promotion.

Well, Premís no longer the one doing the talking so you wonít have to listen to him so much any more.

On Seaspan specifically he does talk a lot about Sokol (who was once so respected by Buffett, donít forget, that many considered him to be the likely next CEO of Berkshire) because Seaspan is primarily a capital allocation story. Iíve written about how much cash it is generating on the Seaspan thread, if youíre interested. Prem has also talked about the value they see there. Heís not going to talk about the moat because it hasnít got one, but then nor really did Midamerican. At heart FFH arenít moat investors when it comes to equities (although I would argue they generally are when it comes to operating businesses). If that puts you off, Iíd advise buying Markel or Berkshire instead.

More broadly a lot of Fairfaxís investments are fundamentally jockey businesses. There are some incredibly impressive people running even some of the smaller subsidiaries. I like that, and for all Premís mistakes I think heís done a good job of assembling a brain trust and creating a culture in which they stay.

As for position sizing, as Iíve said before itís important to distinguish between whatís convert and whatís equity. From an equity downside perspective Blackberry is under half a billion. That may still be too high for some tastes, but itís not a billion. Same goes for Seaspan, even after the coming warrant exercise.

I donít see a risk in an oversized position in value cyclicals because theyíve been so clear that they still see macro threats. They didnít go all in in the February sell off and I doubt theyíre doing it now. I hope Iím right.

As for catalysts, I havenít a clue. But they own a lot of cheap stuff (Iím trying to find a platform that will let me buy Grivalia) and I didnít foresee the value reveal/creation at Quess, ICICIL, First Capital, etc. One of the things I like about Fairfax is the value creation is so lumpy and untrusted by the market that it never seems to get priced in and you can buy it for free. But I accept you have to trust that itís here. You canít model it.
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Investment Ideas / Re: EZPW - EZCorp
« Last post by DTEJD1997 on Today at 07:36:17 PM »
Hey all:

EZPW's released earnings.  They appear to be reasonably good.  The market reacted with the stock moving up $.75/share.

Unfortunately, they took another write down on Cash Converters in Australia.

Latin America seems to be growing & expanding nicely. 

Any thoughts?
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Investment Ideas / Re: PNNT - PennantPark
« Last post by DTEJD1997 on Today at 07:16:13 PM »
Hey all:

PNNT announced earnings today after the market closed.  Earnings of $.20/share, that was a couple of cents higher than analyst's expectations.

Looks like the dividend will be maintained at $.18/share.

Conference call in the morning.  Will be interesting to hear of progress/valuation on the O&G equity that they have.

Any thoughts?
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