Author Topic: JEF - Jefferies Group  (Read 604564 times)

giofranchi

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Re: JEF - Jefferies Group
« Reply #590 on: June 15, 2013, 02:10:25 AM »
Thank you Gio!
I see people comparing LUK to BRK and said LUK is a mini-BRK. BRK has free insurance float to invest, but LUK does not have that luxury.
What kind of synergy should we expect from the merger of LUK and JEF? More efficient deal making?

Those are good questions. And the fact LUK lacks the luxury of having free insurance float to invest is a valid point. As twacowfca’s remark that Cumming & Steinberg will be tough to equal is also certainly true (I would add not only in straight shooting communication with shareholders…). Simply put, I still ignore the answers, or I don’t feel comfortable enough with them yet. Both Mr. Handler and Mr. Wheeler are young and there will be plenty of time to watch them carefully and to get more confident with the new management, both their strengths and weaknesses.

giofranchi

Giofranchi. As I have told you before I really respect your thinking.
   I own LUK and have for a while. In fact it is one of my larger positions. I trusted Cumming & Steinberg with investing my money and was very confident in their acumen.
   Just like my belief in Buffett, & Watsa I just can't see them just haphazardly turning over their portraits without being VERY confident in their successor choices. I also suspect that they are still very in tune with the continuing brush strokes being made. Ron

I agree.  The jury is still out, but the extradinordinary action of turning over the keys to Handler is inconsistent with any other sensible hypothesis than the idea that Steinberg and Cumming hold a  firm conviction, based on close observation, that  Handler is as good a value investor, holding the same values, as they are.  :)

Ron and twacowfca,
yours is good reasoning indeed. No doubt about it! Anyway, I think conviction about a business is something not entirely rational… I might be very well wrong about this, but let me ask you a question: if we agree on all the facts and numbers, do you think that it automatically entails we share the same degree of conviction about a business? Though I am an engineer and I tend to rely heavily on facts and numbers, I have gradually come to the conclusion that the right answer is: not necessarily. And yet, think of how easily you can buy and sell a business today… just a few clicks on your mouse are required… And that’s the reason why you MUST have conviction! Because, otherwise, you are going to commit errors. Imo, no one who lacks conviction will be spared! That’s exactly why
Quote
investing is most intelligent when it is most businesslike
I “feel” I need to watch Mr. Handler and Mr. Wheeler a little bit longer, to get back to the same degree of conviction I had when Mr. Cumming and Mr. Steinberg were at the helm. At the same time I understand that your “feeling”, and therefore your behavior and investment choices, might be different. I respect them. :)

giofranchi
« Last Edit: June 15, 2013, 02:12:18 AM by giofranchi »
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twacowfca

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Re: JEF - Jefferies Group
« Reply #591 on: June 15, 2013, 03:42:51 AM »
Thank you Gio!
I see people comparing LUK to BRK and said LUK is a mini-BRK. BRK has free insurance float to invest, but LUK does not have that luxury.
What kind of synergy should we expect from the merger of LUK and JEF? More efficient deal making?

Those are good questions. And the fact LUK lacks the luxury of having free insurance float to invest is a valid point. As twacowfca’s remark that Cumming & Steinberg will be tough to equal is also certainly true (I would add not only in straight shooting communication with shareholders…). Simply put, I still ignore the answers, or I don’t feel comfortable enough with them yet. Both Mr. Handler and Mr. Wheeler are young and there will be plenty of time to watch them carefully and to get more confident with the new management, both their strengths and weaknesses.

giofranchi

Giofranchi. As I have told you before I really respect your thinking.
   I own LUK and have for a while. In fact it is one of my larger positions. I trusted Cumming & Steinberg with investing my money and was very confident in their acumen.
   Just like my belief in Buffett, & Watsa I just can't see them just haphazardly turning over their portraits without being VERY confident in their successor choices. I also suspect that they are still very in tune with the continuing brush strokes being made. Ron

I agree.  The jury is still out, but the extradinordinary action of turning over the keys to Handler is inconsistent with any other sensible hypothesis than the idea that Steinberg and Cumming hold a  firm conviction, based on close observation, that  Handler is as good a value investor, holding the same values, as they are.  :)

Ron and twacowfca,
yours is good reasoning indeed. No doubt about it! Anyway, I think conviction about a business is something not entirely rational… I might be very well wrong about this, but let me ask you a question: if we agree on all the facts and numbers, do you think that it automatically entails we share the same degree of conviction about a business? Though I am an engineer and I tend to rely heavily on facts and numbers, I have gradually come to the conclusion that the right answer is: not necessarily. And yet, think of how easily you can buy and sell a business today… just a few clicks on your mouse are required… And that’s the reason why you MUST have conviction! Because, otherwise, you are going to commit errors. Imo, no one who lacks conviction will be spared! That’s exactly why
Quote
investing is most intelligent when it is most businesslike
I “feel” I need to watch Mr. Handler and Mr. Wheeler a little bit longer, to get back to the same degree of conviction I had when Mr. Cumming and Mr. Steinberg were at the helm. At the same time I understand that your “feeling”, and therefore your behavior and investment choices, might be different. I respect them. :)

giofranchi

Feeling is important. This is an aspect of what separates us from computer algorithms.  Numbers and algorithms should be more objective, and often they are.  What's behind the numbers is what really counts. Words are rich in  meaning with the power to create or destroy. I believe our world was created through words, imbued with meaning and purpose far deeper than mere algorithms.

Steinberg and Cumming are a tough act to follow.  Handler has demonstrated excellence in one domain.  Does he understand the power of words to build value in another?  Lets read his first Leucadia shareholders letter.
« Last Edit: June 15, 2013, 04:06:24 AM by twacowfca »

rjstc

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Re: JEF - Jefferies Group
« Reply #592 on: June 15, 2013, 12:51:00 PM »
Steinberg and Cumming are a tough act to follow.  Handler has demonstrated excellence in one domain.  Does he understand the power of words to build value in another?  Lets read his first Leucadia shareholders letter.
  " Agreed".

giofranchi. If I could split my investible funds equally between you and twacowfca I "feel" that I would be perfectly satisfied with the results. In that I have great conviction. Until proven otherwise.

Leaning on the next alternatives available I have conviction investing with Buffett, Watsa, Cummings/Steinberg (now their chosen successors), Gayner, Parames & a few others. I had been a very early investor with Berkowitz and Van Den Berg but I came to have less conviction with them so I no longer invest with them for various reasons.

I also understand and respect your rational ideas about LUK now. I think in the end we pretty much end up in the same place. I'm not great at math. The numbers I use are simple, what have you shown me. The conviction is would I like to be in business with you as a partner or absent that who you pick to carry on for you, until proven otherwise.  Ron
   
« Last Edit: June 15, 2013, 10:11:52 PM by rjstc »

bargainman

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Re: JEF - Jefferies Group
« Reply #593 on: June 16, 2013, 10:30:55 PM »
Parames & a few others.

Just curious, is there any way to invest with Parames?  Just read a bit about him, would like to hear more.. Maybe we could start another thread?

rjstc

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Re: JEF - Jefferies Group
« Reply #594 on: June 16, 2013, 11:05:41 PM »
Parames & a few others.

Just curious, is there any way to invest with Parames?  Just read a bit about him, would like to hear more.. Maybe we could start another thread?

You can invest in the funds he is involved in but I find them a little expensive. What I do is follow what he's doing & if I like what I see I follow. Such as BMW preferred and EXOR & Wolters Kluwer which have done well since I've bought them.

twacowfca

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Re: JEF - Jefferies Group
« Reply #595 on: June 17, 2013, 03:17:55 AM »
Parames & a few others.

Just curious, is there any way to invest with Parames?  Just read a bit about him, would like to hear more.. Maybe we could start another thread?

You can invest in the funds he is involved in but I find them a little expensive. What I do is follow what he's doing & if I like what I see I follow. Such as BMW preferred and EXOR & Wolters Kluwer which have done well since I've bought them.

Following what Parames is doing is a very good strategy.  Based on valuation,  Parames rotates in and out of maybe 80 or so mostly European companies he has identified as being better businesses with family ownership and/or ethical management.  He pretty much does what Buffett did up until the 1980's wham a change in the tax law made it expensive for corporations to flip stock investments.

 In Europe, there is absolutely no taxable event when funds like Parames sell shares they bought for a profit. Taxation of profits is delayed until an investor in his funds sells his shares in the fund at a profit.  Even then, shares in one of his funds can be rolled over to another fund tax free.  :)

As a result of the favorable tax regime,, Parames gets in and out of the  stocks in the set that he likes a lot more frequently than Buffett did when he employed that same strategy. :)
« Last Edit: June 17, 2013, 03:26:14 AM by twacowfca »

frog03

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Re: JEF - Jefferies Group
« Reply #596 on: June 17, 2013, 04:25:16 AM »
Following what Parames is doing is a very good strategy.  Based on valuation,  Parames rotates in and out of maybe 80 or so mostly European companies he has identified as being better businesses with family ownership and/or ethical management.  He pretty much does what Buffett did up until the 1980's wham a change in the tax law made it expensive for corporations to flip stock investments.

 In Europe, there is absolutely no taxable event when funds like Parames sell shares they bought for a profit. Taxation of profits is delayed until an investor in his funds sells his shares in the fund at a profit.  Even then, shares in one of his funds can be rolled over to another fund tax free. 

As a result of the favorable tax regime,, Parames gets in and out of the  stocks in the set that he likes a lot more frequently than Buffett did when he employed that same strategy.
**********

Twa, this is not quite true for the capital gains.  Some countries, like Spain where Parames is based, have nominal capital gains for funds when they sell their stocks, about 1% if my memory serves me right.  In France, on the other hand there are no such gains.  For European investors it is usually a good thing to hold a top performing fund as you get both market beating performance and much better tax treatment.

Parames gets good recognition for good reason but his track record is not as good as Thierry Flecchia leading the Flinvest Entrepreneurs fund and before this a couple Oddo funds.   Flecchia has better net performance than Parames despite higher fees.

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buylowersellhigh

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Re: JEF - Jefferies Group
« Reply #598 on: June 19, 2013, 07:54:11 AM »
Any news on LUK lately?  Has come down to almost book value.


jouni1

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Re: JEF - Jefferies Group
« Reply #599 on: June 19, 2013, 08:06:43 AM »
Any news on LUK lately?  Has come down to almost book value.

jefferies net profit dropped 34%. on another note; this is why i read this forum. been beating myself up for missing this ever since the p/b started running away.

guess i'll start building a position. i'm almost certain handler can give me 10+% a year at book value.

http://blogs.wsj.com/moneybeat/2013/06/18/jefferies-second-quarter-net-drops-34/?mod=yahoo_hs
« Last Edit: June 19, 2013, 08:12:22 AM by jouni1 »