Author Topic: JEF - Jefferies Group  (Read 599227 times)

FrankArabia

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Re: JEF - Jefferies Group
« Reply #330 on: September 20, 2012, 10:50:57 AM »
Jef is still a second tier investment bank...still don't see a reason why they would ever take a huge stake in this mediocre franchise


berkshiremystery

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Re: JEF - Jefferies Group
« Reply #331 on: September 20, 2012, 11:38:34 AM »
Agree. The only sad thing is that they already had $1b in cash & equiv. What will they do with this new cash? Pile it up? Could they find a decent acquisition? Special dividend?

Cash is never a bad situation, as long as you just don't sit on it for years.  They will find a use for it when others need it most.  LUK is the 2nd largest position in our funds after BAC.  Cheers!

On pure valuation LUK seems more compelling than BRK currently,... and therefore I own it.
« Last Edit: September 20, 2012, 11:43:27 AM by berkshiremystery »

FrankArabia

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Re: JEF - Jefferies Group
« Reply #332 on: September 20, 2012, 11:42:17 AM »
I don't think its even fair to compare this to BRK. from what I can see so far, LUK has a bunch of sub par businesses while BRK is backed by some of the world's best. Of course there is going to be a valuation gap but the question is why isn't it bigger?

berkshiremystery

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Re: JEF - Jefferies Group
« Reply #333 on: September 20, 2012, 11:51:12 AM »
I don't think its even fair to compare this to BRK. from what I can see so far, LUK has a bunch of sub par businesses while BRK is backed by some of the world's best. Of course there is going to be a valuation gap but the question is why isn't it bigger?

Yup, you are probably right,... but for me it's only the size of the equity base,... simply Darwinian,... who can compound money easier in the next decade, some big $177b King Kong or some smaller $6b turtle ---> Mohnish's thesis. If you would force me to choose at a water pistol gun point,... and threaten me to make me wet,... where I had to choose between these two,... who would more likely outperform over one decade,... BRK vs LUK,... I would purely bet on LUK.
« Last Edit: September 20, 2012, 11:57:46 AM by berkshiremystery »

ShahKhezri

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Re: JEF - Jefferies Group
« Reply #334 on: September 20, 2012, 11:57:07 AM »
With the recent transaction, I'm also thinking of switching from L position to LUK.  L's way of finding investments is to reinvest money through sharebuybacks...LUK has a history of making these transaction's and now they have "fortress LUK" to do it with.  Further, this move would diversify since almost 60% of my portfolio is FFH/MKL/Y from CNA.

FrankArabia

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Re: JEF - Jefferies Group
« Reply #335 on: September 20, 2012, 12:03:43 PM »
I looked at Lowes myself. Looks like a bunch of sub par businesses lumped together. Can't see how they're going to be generating great returns in the years to come aside from the share buybacks. I do own one of their subsidiaries Diamond though but I think that is a weak link that needs to be sold.

giofranchi

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Re: JEF - Jefferies Group
« Reply #336 on: September 21, 2012, 09:26:40 AM »
The Brooklyn Investor on Leucadia FMG Note Resolution:

http://brooklyninvestor.blogspot.it/2012/09/leucadia-fmg-note-resolution.html

Personally, I feel safer now that LUK is out of it.

giofranchi
Portfolio: AAPL, AMZN, BABA, BOSS, BRK.B, FB, FFH, FIH.U, FINX, FWONA, GOOG, IBB, JPM, LBRDA, MKL, NKE, QQQ, SFTBF, SMH, TCEHY, V, XBI, XT

Parsad

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Re: JEF - Jefferies Group
« Reply #337 on: September 22, 2012, 02:21:40 AM »
Agree. The only sad thing is that they already had $1b in cash & equiv. What will they do with this new cash? Pile it up? Could they find a decent acquisition? Special dividend?

Cash is never a bad situation, as long as you just don't sit on it for years.  They will find a use for it when others need it most.  LUK is the 2nd largest position in our funds after BAC.  Cheers!


Sanjeev, I thought you had concerns about the lack of successors who could emulate the C&S way.  How did you get comfortable?

I became more comfortable with Justin Wheeler after I found out he was the one behind the National Beef acquisition.  I think he would do fine looking for ideas for LUK if something happened to Steinberg & Cummings.  Cheers!
« Last Edit: September 22, 2012, 04:06:12 PM by Parsad »
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tombgrt

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Re: JEF - Jefferies Group
« Reply #338 on: September 22, 2012, 03:10:57 AM »
That's what I already said here before Parsad! ;D I don't think we should underestimate the power of combining a talented guy with the support and training given by Steinberg and Cummings. He'll get plenty of preparation before they leave him all alone. Hell, it could take another 5 years or who knows, even longer... And it's likely that they will stay somewhat involved behind the scenes.

I doubt he'll be anywhere as good as Steinberg and Cummings, but I'm confident that he'll do at least decent and work in shareholders' interests.

Compared to BRK, LUK is small and flexible. They don't need to install a buyback system, invest in capital intensive businesses to secure certain cash flows, sell put options on the markets that expire years from now, ... to secure the future in some way. If they want to continue this great story, the most important thing is training Wheeler to be the best he can be.

« Last Edit: September 22, 2012, 03:22:08 AM by tombgrt »

berkshiremystery

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Re: JEF - Jefferies Group
« Reply #339 on: September 22, 2012, 04:08:45 AM »
That's what I already said here before Parsad! ;D I don't think we should underestimate the power of combining a talented guy with the support and training given by Steinberg and Cummings. He'll get plenty of preparation before they leave him all alone. Hell, it could take another 5 years or who knows, even longer... And it's likely that they will stay somewhat involved behind the scenes.

I doubt he'll be anywhere as good as Steinberg and Cummings, but I'm confident that he'll do at least decent and work in shareholders' interests.

Compared to BRK, LUK is small and flexible. They don't need to install a buyback system, invest in capital intensive businesses to secure certain cash flows, sell put options on the markets that expire years from now, ... to secure the future in some way. If they want to continue this great story, the most important thing is training Wheeler to be the best he can be.

The LUK hamster wheel has a great chance to move for another decade forward,... only with an exchange of hamsters,... and some newly trained champion hamster in it  ;)    ....