giofranchi

wellmont, imo it is not enough. I am always invested in productive businesses, and yet sometimes I am aggressive in my business dealings and sometimes I am defensive. To behave always the same way, irrespective of what’s happening around you, doesn’t make a lot of sense to me… On this topic I think the 2013 semi-annual report by the GoodHaven Fund is a very good read. giofranchi

At The Poker Table With Icahn And Dell, Playing For High Stakes http://seekingalpha.com/article/1570842-icahn-enterprises-lp-iep-at-the-poker-table-with-icahn-and-dell-playing-for-high-stakes?source=email_rt_article_title giofranchi

I agree… it is astonishing… just like many other things that happen in this country… (twacowfca, I think I will use my Canadian Passport pretty soon! ;D ;D). Having turned into a long tailed event, do you expect it will cause a significant further drag on results for many quarters to come? giofranchi

Third Point sells YHOO shares to Yahoo http://www.marketfolly.com/2013/07/third-point-sells-yhoo-shares-to-yahoo.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+MarketFolly+%28Market+Folly%29 giofranchi

Q2 2013 Results twacowfca, any comment? Thank you, giofranchi 2013-07-25-pr.pdf q2-2013-fs.pdf

Likes financials (BAC): …and technology (MSFT): and explains what could happen with BAC if interest rates were to rise: Hi hellsten, please take a look at the Pzena commentary in attachment: it is from Q2 2008. Citigroup stock price closed Q2 2008 at $167.6, it bottomed in March 2009 at $10.5, and closed yesterday at $52.25. If you had heeded Mr. Pzena’s advice, 5 years later you would still have less than 1/3 of your initial capital… This means at least two things to me: 1) Expressions like “world-class franchises” are almost meaningless… either you know exactly what you own, or you don’t. And imo to know mega-banks very well is extremely difficult. 2) You might certainly think the market will keep on advancing for a while, and you might certainly choose to play that advance. But, “to party like it is 1999” is dangerous here… There is a time for aggressiveness and a time for caution… Imo now is the time for caution. This doesn’t mean I am not invested in businesses that I think I know very well, that I like very much, and that I think are undervalued… In fact, I am always invested! It simply means that I am playing it safe. giofranchi Commentary_2Q08.pdf

'Southern Europe Walks On Thin Air' by Mr. Charles Gave giofranchi Southern-Europe-Walks-On-Thin-Air.pdf

Al, I had previously missed this post of yours… FFH had first started to be 100% hedged when the S&P500 was at 1060. That certainly doesn’t mean their average hedge level today is 1060… in fact, I guess it should be higher! The right way to look at equity hedges imo is the following: As of March 31, 2013, equity and equity-related securities were worth $4,797.0 (Common stocks) + $593.0 (Preferred stocks) + $1,322.2 (Investments in associates) = $6,712.2 million. If equity hedges represented approximately 104.5% of that amount, they translate into a short position worth $6,712.2 x 1.045 = $7,014.25 million. The cumulative losses of 2010, 2011, and 2012 because of equity hedges are ($1,528.2) million, and in Q1 2013 they recorded another loss of ($592.8 ) million. For a total of ($1,528.2) + ($592.8 ) = ($2,121) million. Now how much would a short position worth $7,014.25 million have to rise, and correspondently how much would the market have to fall, to recoup a ($2,121) million loss? 2,121 / 7,014 = 30.24%. To keep protecting 100% ever increasing investments in equity and equity-related securities, FFH surely realized some gains, but also must have somewhat averaged down on its short positions. Don’t you agree? Am I completely off the mark here? giofranchi

Not really… I am a tennis player… But I love and admire everything that is masterful!! ;) Cheers! giofranchi

After all, even for a genius of golf of Mr. Mickelson’s caliber it took 20 years to win his first Championship Open! :) Scottish Open + Championship Open in a row: the first one in history to achieve such a feat. Congratulations Mr. Mickelson!! 8) giofranchi

--Jeff Saut http://streettalklive.com/daily-x-change/1771-is-this-a-2007-redux.html --Justin Mamis http://www.raymondjames.com/inv_strat.htm giofranchi

http://video.cnbc.com/gallery/?video=3000183755&play=1 I know this interview has already been posted in another thread. But I think the investment thread about a specific company should contain as much info about that business as possible. The more complete the thread, the better. In the future I think it is difficult that anyone will look specifically for this interview… Instead, I think a lot of people will continue to visit the IEP thread and learn about the company. And in so doing they will also automatically find and listen to this interview. Parsad, if my reasoning is wrong, please delete this post of mine! :) Cheers! giofranchi

King Icahn is a good biography. It's a bit dated as it was written in the mid 90's but gives a good story of his career and life to that point. You can download its pdf file on the IEP - Icahn Enterprises thread. giofranchi

A recent article. giofranchi leucadia-poised-to-continue-strong-long-term-returns.pdf

giofranchi

Well, that would be float gathered at an underwriting loss, right? But what if year after year you have gathered it at an underwriting profit? Would you compare that to equity? giofranchi Not necessarily. You can book a 90 CR and then have a cat loss and revise to a 99 CR. It was profitable underwriting, but the readjustment probably hurt you. Well, jay, mine was a rhetorical question… of course you won’t compare that to equity… because it is not equity… exactly like deposits are not equity… even sticky deposits… in a deflationary scare or financial panic withdrawals will always hurt banks… the same way unexpected cat losses would hurt insurance companies… that’s why you should always be careful not to rely too much on what you don’t own, any form it takes! giofranchi If people are withdrawing, then they are not sticky. The best deposit franchises have increased their deposits during this deflationary time. Jay, all I am saying is that sticky deposits are not equity... Equity = 1 Sticky deposits = 9 Debt = 0 Total assets = 10 If you do something stupid and your assets decrease 10% in value, you are bankrupt no matter how sticky deposits are. Don't you agree? giofranchi Disagree. Banks were dead on a MTM basis. Deposits helped recap them. I thought depositors and bond holders weren't touched... Instead, I thought tax payers money had recapitalized banks... giofranchi

Sunrider, yours is a very good explanation! Thank you very much! :) But, please, tell me: when you have total assets that are $2 trillion and 10 times equity, how could you really be sure about your judgment of their quality? And you must be sure practically about all of them! Because they are so much larger than your capital. In the case you are not sure, you are left only with the assumption (hope?) they won’t default. Do I understand this correctly? I ask, because I am well aware it is not my game! giofranchi You would be correct here Gio! The only thing I can say is that there is so much oversight on bank capital and quality, that there probably is pretty good judgment by the regulators from that perspective. Any leveraged institution is risky, but I would say the U.S. banks after all of the recapitalization, oversight, reduction in risky assets and debt, could not be in much better position. We do not know the quality of all of the underlying assets, but from a rational view, they must be multiples better today than in 2007! Cheers! Parsad, You clearly know much better than I do! Anyway, I always have a very hard time to detach an investment from the person I am investing with... And I also have an hard time to understand how a single person like Mr. Buffett could oversee such an incredible ammount of money as BRK assets are worth today... Let alone $2 trillion managed by... Who? Hundreds of people I guess... BAC CEO surely is important and powerful, but probably is no WB and must oversee 8-9 times BRK assets... I know it is me and only me... But once something becomes so large, I always worry all its parts are too difficult to keep under control, and mistakes will be inevitably made, sooner or later... But, hey!, BAC is rocking, so what do I really know?! giofranchi

Well, that would be float gathered at an underwriting loss, right? But what if year after year you have gathered it at an underwriting profit? Would you compare that to equity? giofranchi Not necessarily. You can book a 90 CR and then have a cat loss and revise to a 99 CR. It was profitable underwriting, but the readjustment probably hurt you. Well, jay, mine was a rhetorical question… of course you won’t compare that to equity… because it is not equity… exactly like deposits are not equity… even sticky deposits… in a deflationary scare or financial panic withdrawals will always hurt banks… the same way unexpected cat losses would hurt insurance companies… that’s why you should always be careful not to rely too much on what you don’t own, any form it takes! giofranchi If people are withdrawing, then they are not sticky. The best deposit franchises have increased their deposits during this deflationary time. Jay, all I am saying is that sticky deposits are not equity... Equity = 1 Sticky deposits = 9 Debt = 0 Total assets = 10 If you do something stupid and your assets decrease 10% in value, you are bankrupt no matter how sticky deposits are. Don't you agree? giofranchi

Well, that would be float gathered at an underwriting loss, right? But what if year after year you have gathered it at an underwriting profit? Would you compare that to equity? giofranchi Not necessarily. You can book a 90 CR and then have a cat loss and revise to a 99 CR. It was profitable underwriting, but the readjustment probably hurt you. Well, jay, mine was a rhetorical question… of course you won’t compare that to equity… because it is not equity… exactly like deposits are not equity… even sticky deposits… in a deflationary scare or financial panic withdrawals will always hurt banks… the same way unexpected cat losses would hurt insurance companies… that’s why you should always be careful not to rely too much on what you don’t own, any form it takes! giofranchi

Hoisington Quarterly Review and Qutlook Q2 2013 giofranchi HIM2013Q2.pdf

Sure, as long as you call it "equity" when Wells Fargo takes in a deposit and loans it out -- because year after year they make a profit from that. I don't think Tyler Durden would call the loan portfolio "equity". I don't know how Tyler Durden would call what... and I don't care! I call what I own EQUITY, and what I owe LIABILITIES. Until now it has worked well enough! ;D giofranchi

Well, that would be float gathered at an underwriting loss, right? giofranchi That is how it works out, yes. Don't you remember in 2005 when Montpelier Re (MRH) lost 70% of shareholder equity in one quarter? I mean, holy shit! And they were underwriting at a profit for the years leading up to that event. For what I know history is full of runs on banks also!! giofranchi

Well, that would be float gathered at an underwriting loss, right? But what if year after year you have gathered it at an underwriting profit? Would you compare that to equity? giofranchi

Isn’t this like saying that float gathered at an underwriting profit is almost like equity? ??? giofranchi

Ahahahahahahahahahahahah!!!!! I must be the dumbest person living on earth! Because I understand 1 out of 10 things that you write! And I say 1, becuase I am too ashamed to admit it really is 0.5!! ;D ;D ;D giofranchi