LC

AIG needs to do what is best for AIG shareholders ;D

The more I own Sears, the more I think it's a play on recovering home values across the country. I think EL is holding on until then so he can realize full value for the assets he has.

I took cash from operating activities and added back the after tax effects of cash from the sale (4bln) and after tax interest savings from debt reductions.

FCharlie, I agree with just about your entire post. I don't think it was a bad deal, I think it was a fair deal. The reason I say that is that I believe increased competition in western Canada will have a reductive effect on the margins of those stores. So if we say something like 300m of FCF from Canadian ops, at a price of 5.7b you're looking at 19x FCF before tax or 13.3x after tax. I think that is a fair price. And if margins do wind up eroding in Canada, they will have made a good deal. Why the market doesn't seem to care is beyond me, but I agree that the best thing they can do is simply buy back shares at excellent yields.

well...you have a US operation which will (i'm guesstimating) will generate around 600m of FCF. Safeway generated 900m in FCF last year. Canada generated 23% of their op. inc. last year, so if you take that percentage you're looking at US ops generating $690m of FCF....but let's be conservative and say $600m) then you're looking at 4.9b of long term debt...if they pay that down with 2b, you can cut interest payments from ~260m per year to ~155m per year. This adds about $65m to the bottom line after tax So now if you're running at $665m of FCF, and you have about 2 billion of cash for buybacks, the market is only pricing your operations at 6.0x free cash flow. If you take the split as per their share of operating incomes ($693m FCF + $65m of interest savings), the market is assigning a FCF multiple of 5.3x

Remember they have about 5b of debt, including an underfunded PBO. I'm not sure what they plan on using the cash for. I would hope they pay off a bit of debt (at least anything related to the Canadian operations) then keep buying back more stock. Their last five years of buy backs have been impressive. I think cash from US operations should be enough to cover their interest and pension issues. I will say their Canadian ops have been far superior to their US ops, probably due to less competition. The revenue split was 85-15 between the US and Canada, but the operating income split was 67-23

They figure that Safeway will be going out of business, or at least losing money, hence the asset sale.

I totally agree. For Nintendo, their lifeline is their blockbuster characters. Mario sells Wii units, not the other way around.

Now might be the time to invest in a capital heavy project: at least that is what the Fed wants us to do via their policies. How often can companies access debt at such low rates? How does deleveraging play into this equation?

Models and bottles! That is, open up a bar next to really depressing/boring workplaces (financial institutions, gov't agencies, etc.)

Wow, great work! Thanks for sharing. If I may ask (and I would never ask that you divulge your secret sauce), where did you get the data to automate this process? The reason I ask is that I had been thinking of doing the same for quite some time, but I couldn't figure out where to get the share count data.

I doubt that...frankly I am in awe of the levels of thrift and practicality you have achieved. I agree with Kraven's words, "More power to you!"

Just going to throw in my two cents from a shareholder's perspective: Microsoft just needs to keep doing whatever it takes to keep windows and office relevant. Those are their cash cows. Everything else they do is just fluff to keep Microsoft in the news so everyone renews windows/office.

Anecdotal industry tailwind: after a conversation with my girlfriend's father, I learned the DOJ ans state governments are clamping down on disability access in buildings withouT elevator lifts. The ADA originally stated that buildings with less than 4 stories did not need to be retrofitted with elevator access. Now apparently the govt (at least in wash dc) is requiring any building with a second story > 3000 sq ft to have a lift installed.

Even in the US they are slowly increasing exposure. They sponsored a study in Washington DC which recorded the economic benefits of HIV prevention and are making headway in NYC. I sold my position in the 9.85 range, but I am looking to re-enter in the 9.00 range or if there are significant developments operations-wise. My thesis about a year ago was that they had 2-3 years before competition truly emerged to commoditize the business. I think they are still about 2 years away from that happening.

Nate, I've been meaning to ask you this for a while now: why do you choose to invest with a net-net basket approach a la Graham? I am sure you know Warren and Charlie's take on the question. I am curious what the reasoning is behind your choice of investing philosophy. Louis

I think Risk is very difficult to measure accurately. I think it's easy to fool myself into thinking what "risk" is. Permanent loss of capital is a strong definition, but as you can imagine it is a very general definition. The way I define it to myself is that risk is "the potential of a business to lose value".

Simply contact Investor Relations and request that a copy be mailed to your address!

I'm somewhat skeptical...wouldn't their prices be very dependent on the cost of oil/gas? Additionally you are exposing yourself to catastrophe risk (oil spills, lawsuits, etc.).

Amcon is a convenience store distributor (cigarettes, beverages, candy, etc) in the middle-US. They also operate a few (15 total) health food stores in Florida, Oklahoma, Nebraska, Missouri, and Kansas. They are the ninth largest convenience store distributor nationwide. Do they offer anything special? Not really. But for 46 million you're buying a business with stable operations, minimally capital intensive, paying down debt, and paying a small dividend. Inventory turned 28.5x in 2012. They average about 26 turns/year over the past 10 yrs. 10 years of financials tell the story: http://www.gurufocus.com/financials/DIT And shareholder letter for mgmt's vision: http://www.amcon.com//Portals/0/Documents/AnnualLetters/2012.pdf This is a small, simple company that I think the newer and/or less professional members (like, say, myself!) might be interested in valuing. LC

I don't know which browser you use, but if it is Firefox get the "Nuke Anything Enhanced" add-on. . I use this whenever I want to print portions of a page on the web. It allows you to remove anything from a webpage. You can click on an object, right click and select "Remove this object", and it will be gone until you hit reload. What is nice is that if you remove stuff you can then print the page without the stuff you don't want. To print a single post from this board you could 1) Select the entire post that you want to print 2) Right click and you will see two options: "Remove Selection" and "Remove Everything Else". Hit Remove Everything Else and you will have just that post in your browser window with everything else gone. 3) Then you can print it as you normally would. 4) After you can hit refresh and the page goes back to normal. Thanks for the tip! I will check if google chrome has something like this.

May I ask what prompted the letter to Mr. Buffett?

I don't understand why this stock has been stuck in the $3-4/per share range for such a long time. I think potential investors are unsure of Malone's plans.

If possible, perhaps more print options? As it stands, printing will bring up the entire thread. There are times where I would like to print a single post.

Brilliant exercise! Thank you for the time you took to explain that, I just learned at least three new things to keep in mind. Very interesting the ways the parent co can set spinco into motion from the start!