Author Topic: JEF - Jefferies Group  (Read 604733 times)

orion

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Re: JEF - Jefferies Group
« Reply #350 on: September 24, 2012, 05:29:58 AM »
Just wondering: The negotiated price is $41.00 and the last closing price was >$48.00. Is such a large discount usual in such transactions?


ShahKhezri

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Re: JEF - Jefferies Group
« Reply #351 on: September 24, 2012, 05:44:42 AM »
No.  Depending on what LUK is after and what they think its worth...on the surface this looks like a pretty good deal for MLI.

matjone

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Re: JEF - Jefferies Group
« Reply #352 on: September 24, 2012, 08:06:48 AM »
  LUK is the 2nd largest position

Parsad, if you don't mind telling me, what is it that makes you choose LUK over Fairfax at this point?  Just the size difference?  Less leverage?  Don't like insurance?  I would imagine you have more confidence in Prem Watsa than an up and comer like Justin Wheeler, and the price/book ratios aren't that much different for the two companies.
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MVP444300

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Parsad

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Re: JEF - Jefferies Group
« Reply #354 on: September 24, 2012, 02:21:45 PM »
  LUK is the 2nd largest position

Parsad, if you don't mind telling me, what is it that makes you choose LUK over Fairfax at this point?  Just the size difference?  Less leverage?  Don't like insurance?  I would imagine you have more confidence in Prem Watsa than an up and comer like Justin Wheeler, and the price/book ratios aren't that much different for the two companies.

I like Leucadia's bet that the world is going to recover and inflation is going to be more of a problem than deflation.  I also thought that the underlying assets were quite undervalued, whereas the Fairfax's hedges were going to keep things neutral.  I like Fairfax right now, but I'll like it even better if it were a little cheaper.  Cheers!
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Parsad

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Re: JEF - Jefferies Group
« Reply #355 on: September 24, 2012, 02:58:32 PM »
I never understood the rationale behind MLI investment.
I think LUK has a big purchase lined up and need cash.With the cash coming from MLI , LUK is sitting at more than $1B in cash.

I think something is definitely up.

Cash (380) + MLI (427) + FMG (715) = 1,522

Have any details been made public as to when they receive the FMG proceedings?

I definitely think they have found or negotiated another target company.  The cash from Fortescue is to be received by the middle of December I believe, once Fortescue's new credit line is fully in place.  Cheers!
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giofranchi

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Re: JEF - Jefferies Group
« Reply #356 on: September 25, 2012, 01:27:24 AM »
  LUK is the 2nd largest position

Parsad, if you don't mind telling me, what is it that makes you choose LUK over Fairfax at this point?  Just the size difference?  Less leverage?  Don't like insurance?  I would imagine you have more confidence in Prem Watsa than an up and comer like Justin Wheeler, and the price/book ratios aren't that much different for the two companies.

I like Leucadia's bet that the world is going to recover and inflation is going to be more of a problem than deflation.  I also thought that the underlying assets were quite undervalued, whereas the Fairfax's hedges were going to keep things neutral.  I like Fairfax right now, but I'll like it even better if it were a little cheaper.  Cheers!

Parsad,
could you please elaborate on your thesis that inflation will be more of a problem than deflation?
I know that we will have inflation, and I know that the world is going to recoverů but when? I mean, this is what I see right now:
1) Levels of debt which are still at record high all over the developed world,
2) Asset prices which in general are high, and not many bargains can be found.
Given 1) and 2), why do you rule out a deflationary scare, before inflation and recovery finally kick in for real? I would appreciate your thoughts on this topic very much!
Thank you,

giofranchi
« Last Edit: September 25, 2012, 01:36:30 AM by giofranchi »
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frog03

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Re: JEF - Jefferies Group
« Reply #357 on: September 26, 2012, 06:26:55 AM »
What I currently don't like with Leucadia is that 1/4 of equity is the loss carry forward.  Contrast this with BRK's deferred tax.  With this alone, you go a long way justifying LUK trading at a discount to BV and BRK at a premium.

A_Hamilton

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Re: JEF - Jefferies Group
« Reply #358 on: September 26, 2012, 07:23:31 AM »
What I currently don't like with Leucadia is that 1/4 of equity is the loss carry forward.  Contrast this with BRK's deferred tax.  With this alone, you go a long way justifying LUK trading at a discount to BV and BRK at a premium.

Yeah, they seem to be doing everything they can to monetize it as rapidly as possible!

Here is a question on the DTA, why does Leucadia have any debt outstanding when they get no tax shield for having debt? RFP has a DTA that is worth more than its market cap and they are doing everything they can to pay down debt ASAP.

Cheers!

link01

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Re: JEF - Jefferies Group
« Reply #359 on: September 26, 2012, 08:18:01 AM »
What I currently don't like with Leucadia is that 1/4 of equity is the loss carry forward.  Contrast this with BRK's deferred tax.  With this alone, you go a long way justifying LUK trading at a discount to BV and BRK at a premium.

Yeah, they seem to be doing everything they can to monetize it as rapidly as possible!

Here is a question on the DTA, why does Leucadia have any debt outstanding when they get no tax shield for having debt? RFP has a DTA that is worth more than its market cap and they are doing everything they can to pay down debt ASAP.

Cheers!

What I currently don't like with Leucadia is that 1/4 of equity is the loss carry forward.  Contrast this with BRK's deferred tax.  With this alone, you go a long way justifying LUK trading at a discount to BV and BRK at a premium.

Yeah, they seem to be doing everything they can to monetize it as rapidly as possible!

Here is a question on the DTA, why does Leucadia have any debt outstanding when they get no tax shield for having debt? RFP has a DTA that is worth more than its market cap and they are doing everything they can to pay down debt ASAP.

Cheers!

luk funded some of its various investments during less financially repressed times when assets were not only cheap but it was concievable that a return to the formerly inevitable 'normal' business cycle upswing would stack the odds for profit strongly in their favor. in the process they would be able to maximize the value of their NOL's....time is money, after all, even with the monetization of NOL's. but i sense they are seeing, a la pimco's 'new normal' theme, a very uncertain outlook for business worldwide, not to mention relatively elevated assets prices from the Fed's QEternity money printing scheme, & growing political tensions, including class strife which is bound to swing the pendulum in a major way back to the favor of labor (ie, the middle class) at the expense of business which has been the main benficiary of 30 years of unchecked capitalism run amuck, imo.

it will be interesting to see whether luk pays down more of its higher cost debt considering the dearth of values- especially if you believe we've seen a secular peak in profits & margins- & the still abundant competition for them with so much liquidity sloshing around, or whether they sit tight & wait even more patiently for a major drop in asset prices. that's something that has frustrated them for a long time now.